Neptune Awards $200 Million Contract to Siemens and Prepares for Construction of Undersea Energy Transmission Line between New Jersey and Long Island.

RALEIGH, N.C. & NEW YORK -- Long Islanders Will Have Much Needed Access to Power from the New Jersey PJM Grid with Siemens HVDC Technology and Pirelli Energy Cables and Systems

Neptune Regional Transmission System (RTS) has awarded Siemens Power Transmission and Distribution (PTD) a contract worth more than $200 million to construct an undersea high-voltage direct-current (HVDC) transmission link between Sayreville, New Jersey and North Hempstead in Long Island, New York. Neptune RTS, the project developer, will make the electrical connection available to supply electrical energy from the New Jersey grid to cover increasing demand for power on Long Island. The project will be implemented by Siemens, who will engineer and supply the HVDC system and Milan-based Pirelli Energy Cables and Systems, which will provide the 65-mile long submarine power cable. The total contract value is in excess of $400 million. Construction will begin in August 2005 and the system will begin operation in mid-2007.

"It is critical that we develop new technologies to provide more flexibility in the transmission and distribution of our nation's power supply. This system will provide the reliable, consistent and safe transmission of power from the New Jersey PJM Grid to Long Island, a need punctuated just this week when New York saw another record peak electric demand," said Dave Pacyna, president and CEO of Siemens PTD. "Siemens and Neptune RTS have been working together with federal, state and local political and regulatory leaders whose support and vision have been paramount to ensuring the success of this project. Together with Pirelli, Siemens is proud to put its technologies to work to improve our country's energy infrastructure."

In addition to providing technological expertise, studies, and engineering services during the project development, Siemens will provide the initial operation and maintenance services for the system during a five year period.

"Neptune RTS's mission is to develop commercially viable energy solutions for the U.S. With energy demand increasing worldwide, high-voltage direct-current transmission will play an increasingly important role, especially as it becomes necessary to tap energy reserves whose sources are far away from the point of consumption," said Ed Stern, president of Neptune RTS. "We selected Siemens because of the company's experience implementing this highly complex project successfully in other cities and their ability to provide seamless, end-to-end solutions from planning and development to construction, operations and service. This partnership will demonstrate the power of innovation to meet our nation's energy needs and help lower energy costs for consumers."

HVDC technology is used as an alternative to conventional alternating current (AC) transmission because it is the most efficient way of transporting large quantities of energy over long distances. HVDC transmission systems also are controllable adding more flexibility and stability, limiting the effects of disturbances such as blackouts.

In addition to enabling energy purchases from New Jersey, the Neptune system will enable energy purchases from suppliers in Pennsylvania and Maryland potentially benefiting the greater New York area.

About Siemens PTD

The Siemens Power Transmission and Distribution Group (PTD), headquartered in Erlangen, Germany, is one of the leading global players in its market sector. As a product supplier, system integrator, solution designer and service provider, Siemens PTD ensures - for utilities and industry alike - the efficient and reliable transmission of electrical energy from the power plant to the consumer. With a worldwide workforce of about 19,200 and operations in more than 70 countries, PTD had sales of EUR 3.6 billion and a Group profit of EUR 238 million in fiscal 2004 (ended September 30). Further information at: www.siemens.com/ptd.

About Siemens

Siemens AG (NYSE:SI) is one of the largest global electronics and engineering companies with reported worldwide sales of $91.5 billion in fiscal 2004. Founded more than 155 years ago, the company is a leader in the areas of Medical, Power, Automation and Control, Transportation, Information and Communications, Lighting, Building Technologies, Water Technologies and Services and Home Appliances. With its U.S. corporate headquarters in New York City, Siemens in the USA has sales of $16.6 billion and employs 70,000 people throughout all 50 states and Puerto Rico. Thirteen of Siemens' worldwide businesses are based in the United States. With its global headquarters in Munich, Siemens AG and its subsidiaries employ 440,000 people in 190 countries. For more information on Siemens in the United States: www.usa.siemens.com.

About Neptune

Development and equity financing for Neptune (www.neptunerts.com) is being provided by Energy Investors Funds (EIF) and Starwood Capital Group Global LLC. EIF currently manages five private equity funds that have made over 65 diversified investments with a combined underlying asset value exceeding $5 billion. EIF, which is 100% management-owned, was founded in 1987 as the first private equity fund manager to invest in the power sector. It is currently one of the principal investors in the Path 15 Upgrade project now under construction in California, an 84-mile electricity transmission line that will provide up to 1500 megawatts of capacity to northern California . (For more information visit www.eifgroup.com.)

Starwood Capital Group Global LLC is a privately held global investment management firm based in Greenwich, Connecticut, that specializes in real estate-related investments. Its clients include many of the nation's leading public and private retirement programs, university endowments and foundations. Starwood has completed over 300 transactions representing assets in excess of $8.0 billion and maintains offices in Tokyo and London in addition to its four US offices.