updated 2/2/2011 7:16:54 AM ET 2011-02-02T12:16:54

TYNGSBORO, Mass., Feb. 2, 2011 (GLOBE NEWSWIRE) -- Beacon Power Corporation (Nasdaq:BCON), a leading provider of fast-response energy storage systems and services to support a more stable, reliable and efficient electricity grid, announced that the PJM Interconnection recently began the formal process to implement pay-for-performance regulation pricing in its geographic area, the largest electricity market in the United States. With pay-for-performance pricing, Beacon would be eligible to earn increased revenue from any flywheel-based frequency regulation services it provides in the PJM region.

PJM chief executive Terry Boston presented his organization's 2010 performance metrics report to the Federal Energy Regulatory Commission (FERC) on January 20, 2011. In the presentation, Boston highlighted PJM's Regulation and Storage Markets and provided information on planned "future enhancements." PJM's goal, as stated in the presentation, is to "develop and implement a 'pay-for-performance' regulation market pricing structure to stimulate participation of advanced technologies." The full PJM performance metrics presentation is here: http://www.ferc.gov/EventCalendar/Files/20110120100702-6-PJM-print.pdf

"We appreciate PJM moving toward a compensation approach that would provide payment proportional to the effectiveness of the service delivered, rather than just the capacity offered," said Bill Capp, Beacon Power president and CEO. "Multiple studies have shown that faster-responding resources such as flywheels can deliver improved performance and value by reducing the overall need for regulation procurement and thus should be paid more for the superior service they provide. We believe there have been real benefits from the pay-for-performance model first developed by ISO New England, and we expect other grid operators to adopt this approach in the future. We applaud PJM's intention to provide appropriate compensation to higher-value storage-based regulation resources."

The first procedural step in implementing pay-for-performance regulation pricing in PJM has taken place, with the topic reviewed and discussed by stakeholders at a Markets and Reliability Committee meeting on January 19, 2011. A document outlining the issue and PJM's intention to address it has been posted on the PJM website here: http://www.pjm.com/~/media/committees-groups/committees/mrc/20110119/20110119-item-05-regulation-market-performance-incentive-problem-statement-clean.ashx

Beacon Power recently energized and connected eight megawatts (8 MW) of flywheel energy storage at its first grid-scale frequency regulation plant in Stephentown, New York, and is continuing to install and commission flywheels to reach the full 20 MW capacity of the plant. Frequency regulation is an essential grid-stabilizing service that is typically performed by less effective, inefficient fossil-fuel generators. Flywheel-based storage is proven clean technology that can provide the regulation service faster and more effectively than fossil fuel or battery-based resources, with zero fuel consumption or CO2 emissions. And, unlike battery-based systems, the storage capacity of Beacon's kinetic energy flywheel technology does not degrade as a function of charge/discharge cycles, time, or temperature.

Future adoption of performance-based regulation pricing in the open-bid markets is also expected to enhance the way U.S. and foreign-based vertical utilities value Beacon's technology. This would be especially true in the context of cost/benefit analyses they provide to their regulators (including public utility commissions and FERC in the U.S.) when seeking approval to purchase any new regulation resources.

About Beacon Power Corporation

Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacon's Smart Energy MatrixTM, now in production, being operated and earning revenue, is a non-polluting, megawatt-scale, fast-response flywheel-based solution designed to provide less expensive, more sustainable and effective frequency regulation services to the nation's power grid. The Company's business strategy is both to supply frequency regulation services from its own plants and to sell systems directly to utilities or grid operators in parts of North America and selected international markets. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com.

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: The Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation's current views about future events, financial performances, and project development. These "forward-looking" statements are identified by the use of terms and phrases such as "will," "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be able to comply with the conditions or ongoing covenants of the Federal Financing Bank loan for our Stephentown, New York, facility; our need to comply with any disbursement or other conditions under the DOE Smart Grid grant program; a need to raise additional equity to fund Beacon's projects and our other operations in uncertain financial markets and at a time when the Company's stock price is relatively low; conditions in target markets, such as that some ISOs are taking longer than others to comply with FERC's requirement to update market rules to include new technology such as ours, and also such as that frequency regulation pricing is lower in the short-term than at many times in the past; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of current conditions in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.

CONTACT: Investor Relations Contact:
         Chris Witty
         Darrow Associates
         646-438-9385
         cwitty@darrowir.com

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