Renewable Natural Gas Generated from Microgy, Inc.'s Huckabay Ridge Facility to Generate Electricity in LCRA Power Plants PORTSMOUTH, N.H., Dec. 4 /PRNewswire-FirstCall/ -- Lower Colorado River Authority (LCRA) and Microgy, Inc. today announced an agreement for the purchase, for an eighteen-month period, of all Renewable Natural Gas (RNG) generated from Microgy's Huckabay Ridge facility in Stephenville, Texas. In addition, the agreement contemplates that the parties will work together regarding the potential purchase by LCRA of carbon offset credits and renewable energy credits produced by the facility. Once completed and fully operational, the facility owned by Microgy, a subsidiary of Environmental Power Corporation, will generate up to 2 million cubic feet of RNG per day from cow manure and other agricultural wastes for use in any of LCRA's three natural gas-fired power plants, and is also expected to generate approximately 200,000 metric tons of carbon offset credits per year. With an expected commercial production of 650,000 mmBTUs of natural gas per year, Huckabay Ridge will be generating the equivalent of 12,700 gallons of heating oil per day from the manure of approximately 10,000 cows at the 8- digester site. The biogas produced at the facility will be treated to commercial natural gas standards, compressed and transported via pipeline to LCRA power plants. The facility, currently under construction, is expected to be generating gas at full capacity by the end of the first quarter of 2007. "This purchase agreement with Microgy demonstrates our commitment to providing clean, renewable energy to the people of Texas," said Dan Kuehn, executive manager of wholesale power services at LCRA. "In addition to developing new sources of sustainable energy, this arrangement will help to protect the natural resources we value so highly." "Texas is home to a growing agricultural community, and this agreement is an important step towards developing a truly renewable energy source from the state's dairy farms," said John O'Neill, Chief Financial Officer of Environmental Power. "The environmental benefits of our energy generation match LCRA's commitment to environmental stewardship, and we look forward to working together to provide the state with a reliable, renewable source of natural gas." About Environmental Power Environmental Power Corporation is a developer, owner and operator of renewable energy production facilities. Its principal operating subsidiary, Microgy, Inc., holds an exclusive license in North America for the development and deployment of a proprietary anaerobic digestion technology for the extraction of methane gas from animal wastes for its use to generate energy. For more information visit the Company's web site at http://www.environmentalpower.com/ CAUTIONARY STATEMENT BY ENVIRONMENTAL POWER The Private Securities Litigation Reform Act of 1995, referred to as the PSLRA, provides a "safe harbor" for forward-looking statements. Certain statements contained in this press release, such as statements concerning planned projects or projects under development, our sales pipeline, our backlog, our projected sales and financial performance, statements containing the words "may," "assumes," "forecasts," "positions," "predicts," "strategy," "will," "expects," "estimates," "anticipates," "believes," "projects," "intends," "plans," "budgets," "potential," "continue," "targets" "proposed," and variations thereof, and other statements contained in this press release regarding matters that are not historical facts are forward-looking statements as such term is defined in the PSLRA. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: uncertainties involving development-stage companies; uncertainties regarding project financing, the lack of binding commitments and/or the need to negotiate and execute definitive agreements for the construction and financing of projects, the sale of project output, the supply of substrate and other requirements and for other matters; financing and cash flow requirements and uncertainties; inexperience with the development of multi-digester projects; risks relating to fluctuations in the price of commodity fuels like natural gas, and our inexperience with managing such risks; difficulties involved in developing and executing a business plan; difficulties and uncertainties regarding acquisitions; technological uncertainties; including those relating to competing products and technologies; risks relating to managing and integrating acquired businesses; unpredictable developments; including plant outages and repair requirements; the difficulty of estimating construction, development, repair and maintenance costs and timeframes; the uncertainties involved in estimating insurance and implied warranty recoveries, if any; the inability to predict the course or outcome of any negotiations with parties involved with our projects; uncertainties relating to general economic and industry conditions, and the amount and rate of growth in expenses; uncertainties relating to government and regulatory policies and the legal environment; uncertainties relating to the availability of tax credits, deductions, rebates and similar incentives; intellectual property issues; the competitive environment in which Environmental Power Corporation and its subsidiaries operate and other factors, including those described in our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, well as in other filings we make with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. CONTACT: Rich Kessel, President and CEO of Environmental Power Corporation (603) 431-1780 Public Relations Contact: John Abrashkin, Ricochet Public Relations (212) 679-3300 x121 Investor Relations Contact: John Baldissera, BPC Financial Marketing 1-800-368-1217 DATASOURCE: Environmental Power Corporation CONTACT: Rich Kessel, President and CEO of Environmental Power Corporation, +1-603-431-1780, ; Public Relations Contact: John Abrashkin, of Ricochet Public Relations, +1-212-679-3300, ext. 121, ; Investor Relations Contact: John Baldissera, of BPC Financial Marketing, 800-368-1217; both for Environmental Power Corporation Web site: http://www.environmentalpower.com/

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