Power Engineering - EPCOR Power to acquire Primary Energy Ventures

14 August 2006 -- EPCOR Power L.P. and Primary Energy Ventures LLC announced today the Partnership has signed a definitive agreement to acquire Primary Energy Ventures.

Primary Energy Ventures wholly owns eight combined heat and power facilities in the United States with an aggregate generation capacity of approximately 454 MWs and 3.1 million lbs./hr of thermal energy, and owns a 15.4 percent equity interest in Primary Energy Recycling Holdings LLC (PERH). PERH wholly owns 4 energy facilities in the United States with an aggregate generation capacity of 284 megawatts and 1.9 million lbs./hr of thermal energy, and a 50 percent interest in a pulverized coal facility. The acquisition price is $380 million (U.S.), consisting of $310 million cash and assumption of $70 million of lease obligations, subject to closing adjustments.

The transaction is anticipated to close in the fourth quarter of 2006, subject to certain closing conditions, including the receipt of certain waivers from Primary Energy Recycling Corp. ("PERC"), and the receipt of required regulatory approvals.

"This acquisition is an opportunity to strengthen and grow the Partnership, while maintaining our core commitment to stable distributions over the long-term," said Brian Vaasjo, President of the general partner of EPCOR Power L.P. "With facilities fully contracted to investment grade counterparties, the acquisition of Primary Energy Ventures further diversifies our fuel types and enhances our geographic footprint. The people and facilities of Primary Energy Ventures are among North America's foremost energy recyclers, and their addition will build upon the Partnership's expertise in power generation from renewable sources such as waste heat, small hydro and biomass. This acquisition strengthens the Partnership's position in the U.S. market and provides a platform for further growth."

"We are very excited about this agreement with EPCOR Power L.P.," said Thomas R. Casten, Chairman and CEO of Primary Energy Ventures LLC. "Primary Energy Venture's extensive knowledge of the U.S. markets and industrial energy supply will strengthen the Partnership's capability to grow throughout North America, while immediately adding additional technological and customer diversity. Likewise, this transaction expands the resources available to meet the needs of our customers."

The purchase price of the acquisition will be temporarily financed with a bank bridge facility with permanent financing to be arranged after the close of the transaction. The permanent financing is expected to consist of an offering of units by the Partnership representing approximately 70 percent of the purchase price with the remaining 30 percent financed with debt and the assumption of leases.

Primary Energy Ventures, headquartered in Oak Brook, Ill., is a privately-held owner and operator of on-site combined heat and power and recycled energy projects. The fuel types of the eight facilities owned in whole by Primary Energy Ventures and the five facilities owned in part by Primary Energy Ventures include natural gas, waste heat, wood, tire-derived fuel and coal. All of the power facilities have long-term power and/or steam off-take contracts with maturities ranging from 2008 through 2020.

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