DG Energy Solutions Purchases California Biomass Plant; Employees Retained, Upgrades Planned.

SAN DIEGO -- DG Energy Solutions LLC announced today that it has purchased the Fairhaven Power Plant near Eureka, Calif., from Fairhaven Power Co. Inc. The 18-MW biomass plant is fueled by wood waste that includes bark, sawdust, wood chips and wood shavings obtained from the region's sawmills.

DG Fairhaven Power Co. - a new subsidiary of DG Energy Solutions - will operate the plant using the facility's current employees. The company has plans for $2 million to $3 million in environmental upgrades at the facility, plus additional upgrades to further improve the plant's reliability.

"The opportunities for new and expanded power generation at this plant and in the Humboldt County region are intriguing," says DG Energy President and CEO Steve Mueller. "We're certainly looking to increase plant efficiency, but that's only the beginning. Soon we look to possibly team with the community to increase our site capacity with wind and wave power. We think it will be great for the region, providing more energy independence."

Over the past 18 years, the plant has consistently generated 120,000,000 kWh per year using some 260,000 tons per year of wood waste. All of the power is sold to Pacific Gas and Electric under a long-term power purchase agreement. The plant is certified by the State of California as a renewable energy generator.

The Fairhaven Plant is DG Energy's second biomass facility. In 2003, DG Energy acquired the Telogia Power Generation Facility in Telogia, Fla. The Telogia plant has been operational since 1988, supplying green power initially to Progress Energy Corp. and now to Seminole Electric. It is fueled with 170,000 tons per year of wood waste and non-recyclable paper products that are sourced throughout Florida and Georgia.

Mueller expects that DG Energy will build or acquire four to five additional biomass plants throughout the United States over the next two years.

San Diego-based DG Energy Solutions LLC is one of the nation's leading integrated energy companies specializing in outsourced ownership of cogeneration, central plant, biomass and district energy systems throughout North America. DG Energy has $100 million in assets and has regional offices in New Jersey, Florida and Oregon.

Among other projects, it operates a cogeneration facility that supplies energy to a plastics company in Rhode Island; a chilled and hot water plant for the NFL Film Studio; and a heating and cooling plant for Philadelphia's University of the Arts. It also is building five 800-kW power plants for Home Depot stores in New York City and Long Island, N.Y.

For more information, see www.dg-energy.com.