Business & Finance
Business and Finance
Business and Finance
Mon, February 23, 2009 Beacon Power and American Electric Power Sign Agreement for One Megawatt Flywheel Regulation Plant in Ohio
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 it has signed a contract with American Electric Power (AEP), one of the largest generators of electricity in the U.S., and one of its operating subsidiaries, Columbus Southern Power Company. The contract will entail building a 1-megawatt Smart Energy Matrix regulation facility at an AEP site in Groveport, Ohio. The system, which will be connected to the grid within the operating region of the PJM Interconnection (PJM), will provide flywheel-based frequency regulation services.
"AEP is a major player in our nation's electricity markets and we value their assessment of our system's performance," said Bill Capp, Beacon president and CEO. "This agreement, along with one we have in place with National Grid, provides Beacon with the opportunity to share detailed operational and performance data with two of the largest utilities in the world."
"We are a leader the U.S. in the utilization of utility-scale energy storage systems, but it is vital that we continue to increase our knowledge on how best to deploy and integrate different storage technologies into the existing electricity grid," said Craig T. Rhoades, vice president – Customer Services, Marketing and Distribution Services for AEP. "We're looking forward to assessing the operating performance of this flywheel energy storage system."
When the 1-megawatt flywheel system is installed and connected, Beacon will begin providing regulation services directly to PJM and earning commercial revenue from such services. AEP will provide the site and certain integration services in support of the project, and in exchange gain in-depth knowledge about the performance of Beacon's system and its impact on frequency regulation and grid stability.
The agreement calls for Beacon to deliver, install, test and operate, at its expense, a 1-megawatt Smart Energy Matrix. AEP will provide and/or install materials and services needed to interconnect Beacon's system to PJM, including the foundation, electrical transformer, associated wiring and connection to power lines. AEP has already completed the necessary system impact study and executed an interconnection agreement. Installation of the Smart Energy Matrix is scheduled to begin in mid-year 2009.
About American Electric Power
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning more than 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.
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; 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 generally. 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.
