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Landmark Energy Storage Tariff for Frequency Regulation Approved for Midwest ISO Power Grid

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^{Published in Business and Finance on Tuesday, December 23rd 2008 at 9:51 GMT, Last Modified on 2008-12-23 09:53:35 by Market Wire}  

TYNGSBORO, Mass.--([ BUSINESS WIRE ])--Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, announced that its flywheel energy storage systems will now be able to provide frequency regulation under a new tariff designed specifically for "stored energy resources" on the Midwest Independent System Operator (ISO) power grid. The favorable ruling by the Federal Energy Regulatory Commission (FERC) on December 18, 2008, created the first energy storage-specific tariff in the United States. The Midwest ISO is expected to become the largest or second largestcompetitive market for frequency regulation in the nation.

"This decision by FERC is the most progressive and important step yet taken by regulators to encourage open-market access for energy storage technologies," said Bill Capp, Beacon president and CEO. "The commissioners voiced their appreciation of the benefits that energy storage can bring to the grid, including higher reliability and lower CO₂ emissions. In approving this tariff, they have underscored that technical innovation remains a top FERC priority."

Judith Judson, director of regulatory and market affairs for Beacon, added, "We believe the Midwest ISO market rule structure is an excellent model that other ISOs might consider for their markets. We have encouraged that thinking in our comments and regulatory filings related to other ISO regions. The Midwest ISO is to be commended for its forward thinking and timely actions in developing this new tariff. We're also grateful to FERC for its visionary leadership and recognition of the value of stored energy resources for grid regulation, including Beacon Power's fast-response flywheels."

In voting unanimously to approve the tariff structure, several FERC commissioners cited the benefits of energy storage in providing the regulation ancillary service. Commissioner Suedeen Kelly said, "I also wanted to note my support for the role that stored energy resources will have in the ancillary services market. These are important resources and I believe the market will function better by allowing them to participate."

Implementation of the new Midwest ISO Ancillary Services Market tariff is scheduled to begin on January 6, 2009, while the provisions of the tariff that relate to stored energy resources, which include Beacon's flywheel systems, are currently scheduled to become effective in June 2009. The Midwest ISO will use the time between the opening of the Ancillary Services Market and the implementation of the stored energy resource tariff provisions to develop, test, and integrate the additional software and systems required to accommodate these resources.

The official FERC press release can be found here:

[ http://www.ferc.gov/news/news-releases/2008/2008-4/12-18-08-E-3.asp ].

A video of the proceedings of the FERC hearing on December 18, 2009, is here: [ http://ccrealserver.gmu.edu/ramgen/ferc/121808/ferc121808.smi ].

(The discussion and vote related to the Midwest ISO tariff begins at the 1:08 mark.)

About Beacon Power

Beacon Power Corporation designs, develops and is taking steps to commercialize advanced products and services to support stable, reliable and efficient electricity grid operation. The Company's primary business strategy is to commercialize its patented flywheel energy storage technology to perform frequency regulation services on the grid. Beacon's Smart Energy Matrix, which is now in production, is a non-polluting, megawatt-level, utility-grade flywheel-based solution to provide sustainable frequency regulation services. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit [ www.beaconpower.com ].

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: This Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation's current views about future events and financial performances. These "forward-looking" statements are identified by the use of terms and phrases such as "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so, especially in view of the current situation in the financial markets; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be successful in obtaining DOE loan guarantee support for our New York facility; conditions in target markets, including the fact that some ISOs have been slow to comply with the FERC's requirement to update market rules to include new technology such as the Company's; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; the uncertainty of the political and economic climate, and the different electrical grid characteristics and requirements of any foreign countries into which we hope to sell or operate, including the uncertainty of enforcing contracts, the different market structures, and the potential substantial fluctuation in currency exchange rates in those countries; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property, including the effect of the patent litigation initiated last year against us, which we recently settled; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of the current situation in the financial markets. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.