Utah Power Cuts Ribbon at Pilot Battery Storage Project; New Battery Technology Expected to Enhance Service to Customers.

Business Editors

CASTLE VALLEY, Utah--(BUSINESS WIRE)--March 25, 2004

Utah Power held a ribbon cutting ceremony today as it begins operations at its newest facility, a local pilot project implementing a new energy storage system technology that is a first-of-its-kind project in the United States and is designed to enhance local electrical service.

Known as the Castle Valley VRB Project, Utah Power is in the final stages of placing this facility into service which is designed to enhance electrical service to its customers in the area. On hand for the event was Rich Walje, executive vice president for Utah Power/PacifiCorp.

"We are pleased to be opening this new facility designed to help us address some of the electrical service issues in this area until a more permanent solution can be achieved," Walje said. Utah Power continues planning for the future upgrade of this circuit.

Walje explained that due to increased electrical demand on this circuit, the company has been experiencing challenges in delivering power to its customers from LaSal to the Westwater area. He also stated this is the longest distribution circuit in Utah Power's service area.

"Simply put, this project will allow Utah Power to store electrical energy in a special battery system during off-peak times and distribute the stored energy during high-peak times of the day," Walje explained.

The project was constructed for Utah Power by VRB Power Systems, Inc. (RSX Venture Exchange:VRB) of Vancouver, British Columbia. VRB Power Systems controls the patent on the Vanadium Redox Battery Energy Storage System (VRB-ESS) employed at the Utah Power site.

Brad Williams, Utah Power's director of business technology, explained the process by which the energy is stored and distributed. Using two tanks filled with liquid electrolyte containing vanadium sulfates and a flow cell between the two tanks, a chemical reaction within the cell forces electrons to move across the electrodes. During the late-night and early-morning hours when demand for electricity is low, the battery is charged by moving electrons through the cell and storing the resulting energy in chemical bonds in the vanadium-based electrolyte.

This chemical reaction is fully reversible, allowing energy to be both stored and delivered. During the daytime, peak hours the battery will discharge as the electrons flow out of the battery and onto the electrical system. This combined system is designed to provide 250 kilowatts of electricity during peak demand, or enough to supply approximately 50 homes.

Williams also pointed out the safety aspects of the system which include: the electrolyte is stored in tanks located inside the building, there are no harmful heavy metals used in the system, there are no resulting emissions, the process is self-contained and fully automated within Utah Power's building at the site, and the system is fully monitored with control capability at Utah Power's Dispatch Center.

Also on hand for the ribbon cutting event was Tim Hennessy, CEO of VRB Power Systems, Inc.

"We are pleased and excited to be part of this Utah Power project," Hennessy said. "We have successfully implemented this technology in other projects located in Australia and South Africa and anticipate similar results here."

Walje said Utah Power officials will be gathering and studying data from this project and will evaluate how the technology performs and integrates with the existing electrical system. The design of this system also has the potential to be relocated to another site if needed in the future.

Utah Power is the state's largest electric utility, serving about 675,000 Utah customers with reliable, safe, low-cost electricity. Utah Power is part of PacifiCorp which serves more than 1.5 million customers in six Western states and is one of the lowest-cost electricity producers in the United States with a generation capacity of about 8,300 megawatts of energy. For more information, visit www.utahpower.net.