GE Energy, Bechtel Sign Front End Engineering Design Agreement for AEP's Second 'Cleaner Coal' Project; 630-MW Plant Planned for West Virginia Site.

ATLANTA -- GE Energy (NYSE:GE) and Bechtel Power have signed their second agreement with American Electric Power (AEP) to move forward with plans for an integrated gasification combined-cycle (IGCC), or cleaner coal, power plant.

Under the agreement announced today, GE and Bechtel will proceed with the front-end engineering design (FEED) phase for a proposed, 630-megawatt IGCC plant in Mason County, West Virginia. Appalachian Power, an AEP subsidiary, would operate the plant, which would be located next to Appalachian's existing Mountaineer power plant.

In September 2005, GE and Bechtel signed a FEED agreement with AEP, one of the nation's largest electricity generators, for a proposed IGCC project in Meigs County, Ohio. If the two projects receive all of the necessary regulatory approvals, they would be among the first IGCC plants to be built in the United States in the past ten years and the first of this scale.

The FEED process for the West Virginia project is expected to conclude in mid-December 2006. Procurement and construction could start after certain regulatory milestones are achieved.

West Virginia Gov. Joe Manchin cited the proposed Appalachian IGCC project in his 2006 State of the State address, noting: "This is great news for economic development in the state. As one of the first commercial-scale coal gasification projects, this proposed plant will allow us to lead the nation in the development of cleaner coal technology for power generation. Plus, coal gasification offers future opportunities to produce clean liquid fuels and chemical feedstock for other industries."

Edward Lowe, general manager of gasification for GE Energy, called the latest announcement with AEP "another major step forward for cleaner coal technology, which continues to build momentum. Today's IGCC technology can play a significant role for power producers expanding and diversifying their energy portfolios for the 21st century."

"As one of our potential launch customers for the IGCC Reference Plant, AEP has been an important contributor to the plant design process. This early collaboration with potential launch customers results in increased customer value that cannot be delivered through transactional relationships alone," said Lowe.

If awarded the contract for the next phase of the West Virginia project, GE would supply the IGCC technology for the new plant while Bechtel would handle engineering, procurement and construction. GE and Bechtel offer an IGCC Reference Plant--a standard commercial offering for IGCC projects in the United States, via a single point of contact for project developers.

GE's IGCC technology converts coal into a cleaner burning fuel, which is used in a gas turbine combined-cycle system (featuring GE's advanced Frame 7FB gas turbine technology) to generate electricity. "Cleaner Coal" IGCC is a product of ecomagination(TM), a GE corporate-wide initiative to address challenges such as the need for cleaner, more efficient sources of energy, reduced emissions and abundant sources of clean water.

GE's IGCC technology generates lower sulfur dioxide, nitrogen oxide, mercury and particulate matter emissions than a traditional pulverized coal plant, making the use of coal for power significantly cleaner. The process also uses less water than a traditional plant and can be more economically retrofitted for carbon capture, further strengthening its environmental benefits.

About GE Energy

GE Energy (www.ge.com/energy) is one of the world's leading suppliers of power generation and energy delivery technologies, with 2005 revenue of $16.5 billion. Based in Atlanta, Georgia, GE Energy works in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels. Numerous GE Energy products are certified under ecomagination, GE's corporate-wide initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges.