The World Leader in Clean Small Turbine Energy Generation CenterPoint Energy April 9, 2008

1 What is a Capstone turbine? In layman's terms, “A miniature jet engine that runs at speeds up to 96,000 rpm and generates electricity and heat. Electrical power output: 30 kW to 5MW range Highly Reliable Ultra low emissions Multiple fuels; natural gas, propane, diesel, biodiesel, methane/biomass Simple/cost effective design Low maintenance Combustion chamber Exhaust output Recuperator Fuel injector Air bearings Compressor Generator Air intake Cooling fins Turbine

2 One moving part: TurboGenerator shaft 95 U.S. Technology Patents Spring Foil Shaft Air bearings - No oil or grease Air cooled - No liquid coolants

3 Inverter Based Electronics

4 Regulated DC Bus Engine Control Module All digital DSP control Controls turbine operation Wide speed control range Sensorless generator control Small and lightweight Built in dynamic brake Built in system power supply Air cooled Battery Control Module All digital DSP control Transient power control Bi-directional power control Manages battery charge/health Air cooled Load Control Module All digital DSP control Built in neutral Built in protective relays Built in synchronization Built in paralleling capability Grid Connect or Stand Alone No transformer required 100 kVA rating Air cooled IEEE 519 compliant UL 1741 certified NY & CA state certified for direct-to-grid interconnection 4 th -Generation Power Electronics

5 MultiPac Standalone –Island Mode –Up to 30 Units Grid Connect –Parallel to grid or other source –Unlimited Units

6 Products Capstone product line C30 = 30KW C65 = 65KW C200 = 200KW Capstone has pre-engineered packages to 1MW C600 = 600KW C800 = 800KW C1000 = 1000KW Controls

7 Company Highlights Capstone is the world leader in small turbine power generation 20 Years building turbines Over 4,500 units shipped Over 18 million hours of operation Proven technology with customer demonstrated availability and reliability MTBF of 13,000+ hours for the C65 MTBF of 15,200+ hours for the C30 More than 50 distributors worldwide Factory Remanufacturing program Factory Protection Plans (FPP) Supported by Authorized distributors

8 Market Drivers for CHP Rising Energy Prices Grid Capacity Constraints Power Security Climate Change

9 Gas Turbine Comparison Highest Efficiency Less than 4 MW

10 C1000 ISO Efficiency High Part Load Efficiency

11 Fuel Flexibility C30 & C65 Natural gas Low BTU gas down to 325 BTU/Cu. Ft LPG Liquid fuels Diesel Kerosene Bio Diesel Jet fuel C200 Natural Gas Low BTU gas LPG Liquid fuels in 2009

12 Vertical Applications Best Value for Onsite Energy Generation Secure Power CCHP Resource Recovery CHP

13 Market Segments Hospitals Hotels Schools Large Retailers Resource Recovery U.S. Gov’t LandfillsWaste Water Plants Telecom Digesters

14 Microturbines vs Piston Engines Capstone MicroturbinesTraditional Piston Engines Ultra low emissionsLocal air permits and exhaust cleanup required Low maintenance – Six hours per yearHigh maintenance – Oil changes, Coolant, Spark plugs On board digital electronicsExternal controls without power electronics Integrated utility protection & synchronizingRequires external relays & control equipment Lightweight & small footprintMore than twice the weight & footprint

15 CCHP Case Study: Ronald Reagan Presidential Library and Museum The Issues: –Overcome potential power supply issues and rolling blackouts –Keep exhibit building containing retired Air Force One jet cool, comfortable, and well lit The Solution: –16 C60 microturbines running on clean- burning natural gas supply 95% of the facility’s electricity –Three 129-ton direct exhaust-fired absorption chillers create 387 tons of refrigeration for cooling –Exhaust from the microturbines provide hot water to heat the pavilion Savings: –Over $300,000 in annual operating costs –$823,156 incentive reduced installation cost 30%

16 C1000 CHP C1000 Cooling towers Absorption chillers

17 Hybrid Electric Vehicle Case Study: DesignLine / Hybrid Buses The Issues: Run low emission vehicles in densely populated areas Increase fleet efficiency Reduce maintenance Improve reliability The Solution: The buses' Capstone turbine generates electricity to charge batteries, which run electric motors. The batteries are charged overnight and the turbine system recharges them when operating. The vehicles are fitted with remote monitoring which means Designline engineers can talk to the on-board computers monitoring performance and carry out diagnostic checking.

18 Secure Power Case Study: Boeing Data / Telecom System The Issues: –Protect data and phone networks and equipment from grid outages –Minimize noise and vibration –Allow minimal environmental impact The Solution: –A Capstone C30 microturbine was installed in a pre- existing enclosure near the building’s loading dock –The natural gas powered microturbine provides electric power 24x7 to the network and equipment –The microturbine ensures uninterrupted service in the event of a grid power outage –The Capstone technology was preferred over UPS batteries and genset engines due to their noise, emissions and vibrations The Capstone C30 demonstrates its small footprint on site at Boeing. Installation was simple, with the turbine placed in an existing enclosure.

19 Green Building Case Study: Oregon Health & Science University 16 Story 400,000 SF medical facility Grand Opening January 19, 2007 Five C60-IHCP’s Units provide 300kW of power and building heating U.S. Green Building Council awarded Platinum LEED certification – The highest level of certification granted

20 Case 1: One-MW vs Grid 1 MW of Generation –Grid: National, So. Cal, ConEd –16x C65 Standard –16x C65 CARB 8,000 hours of operation Full Power and Standard conditions Source:

21 Case 1: One-MW of NG 1 MW of ICE Generation –Jenbacher J320-C86 (1.06 MW) –16x C65 Standard –16x C65 CARB 8,000 hours of operation Full Power and Standard conditions

22 Case 2: 500 kW on Diesel #2 500 kW of ICE Generation –17x C30 Liquid (510 kW) –Caterpillar C18 (500 kW) –Cummins QSK23 (570 kW) 8,000 hours of operation Full Power and Standard conditions

23 Jim Crouse, EVP Sales & Marketing (818) Doug Demaret, Sales Manager (818) Jason Klovski, Inside Sales (