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FERC Issues Notice of Proposed Rulemaking for Pay-for-Performance Frequency Regulation

/ Source: GlobeNewswire

TYNGSBORO, Mass., Feb. 18, 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 Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) on February 17, 2011, that requires each of the grid operators under its jurisdiction to structure their regulation market tariffs to provide pay-for-performance.

Under pay-for-performance tariffs, grid operators would implement a pricing structure that pays faster-ramping resources a higher price for their service. Because Beacon's flywheel systems react in seconds to a grid operator's control signal – a response that is exponentially faster than conventional fossil fuel-based regulation resources, pay-for-performance tariffs would enable the Company to earn increased revenue from any regulation services it provides in those markets. Such markets include the New York ISO, where Beacon is already operating a regulation facility that is expected to reach its full 20 megawatts of capacity in the second quarter of 2011.

"FERC's vote to propose new pay-for-performance market rules is a major step in recognizing the superior value that faster-responding regulation resources bring to the grid," said Judith Judson, Beacon vice president of asset management and market development. "Our experience in the field has shown – and FERC agrees – that faster is better. Fast-responding resources provide important grid stabilization benefits and, as studies indicate, can reduce the overall amount of regulation needed and therefore lower associated costs to consumers. We're very pleased with FERC's decision to issue this NOPR."

Frequency regulation is an essential grid-stabilizing service that has typically been performed by slower, less effective, and inefficient fossil-fuel generators. Flywheel-based storage is a proven clean technology that provides regulation service faster and more effectively than fossil fuel-based resources, with zero fuel consumption or CO2 emissions. Furthermore, 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.

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 .

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, and include statements related to Beacon's ability to regain compliance with Nasdaq listing rules. 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