AES Alamitos Reaches Agreement With the South Coast Air Quality Management District; Settlement Reconciles Past Allegations and Allows Future Operation.

Business Editors

ARLINGTON, Va.--(BUSINESS WIRE)--Dec. 14, 2000

The AES Corporation (NYSE:AES) announced today that AES Alamitos LLC, which owns and operates a 2,083 MW natural-gas fired electric generating facility in southern California, reached an agreement with the South Coast Air Quality Management District (the "District") that resolves allegations of third and fourth quarter 2000 emission violations at the Alamitos facility and also provides an abatement plan for AES Alamitos that allows plant operations going forward.

Under the terms of the settlement, AES Alamitos agreed, among other things, to:

      --  commence installing selective catalytic reduction ("SCR")
        devices on four uncontrolled units at AES Alamitos as soon as
        the pending permits are issued;

      --  until such SCR is installed, dispatch all generating units in
        accordance with "environmental dispatch", which means that the
        units with superior emission control technology are operated
        first;

      --  comply with all provisions of the District's emission trading
        program;

      --  pay a $17 million fine.

AES Southland also will cause SCR to be installed on four additional units at AES Redondo Beach and AES Huntington Beach.

Mark Woodruff, President of AES Southland, commented, "This settlement allows us to remove the uncertainty relating to the alleged exceedances. More importantly, it also clears the way for AES to use its plants to serve the electricity needs of the State in the months and years ahead. We are moving forward as quickly as we can to install the SCRs and we appreciate the cooperation we have received from the leaders of the District."

J. Stuart Ryan, Executive Vice President of AES, stated, "The dramatic increase in demand for electric energy placed us in a bind regarding the nitrogen oxide emission allowances that were available to us. By closely working with the District, we have found a fair way to respond to this emergency situation. This was a very difficult situation all around. The District's mission is to protect the quality of the air that people breathe. It is an admirable mission and one that AES strongly supports. At the same time, AES's generating facilities are important to the state of California during its dire need for electricity. We are pleased with this resolution that addresses air quality concerns by the installation of SCR, while allowing our plant to continue to run to meet southern California's electricity needs."

AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Canada, China, Colombia, Dominican Republic, El Salvador, Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, Sri Lanka, the United Kingdom, the United States and Venezuela.

The company's generating assets include interests in one hundred and thirty nine facilities totaling over 49 gigawatts of capacity. AES's electricity distribution network has over 920,000 km of conductor and associated rights of way and sells over 126,000 gigawatt hours per year to over 17 million end-use customers.

In addition, through its various retail electricity supply businesses, the company sells electricity to over 154,000 end-use customers.

AES is dedicated to providing electricity worldwide in a socially responsible way.

For more general information visit our web site at www.aesc.com or contact investor relations at [e-mail]. The list aes-pr-announce is an automated mailing list and can be found on the investing page of our web site. Those who subscribe to this list will receive updates when AES issues a press release.