H Power Corp. (NASDAQ: HPOW), a leading fuel cell development company, today announced that it has signed an amended and restated $81 million operating agreement with ECO Fuel Cells, LLC (EFC), a company wholly owned by Energy Co-Opportunity, Inc. (ECO). ECO, H Power’s marketing partner, is an energy services cooperative of more than 300 rural electric cooperatives serving more than 18 million customers in approximately 83% of the counties in the U.S. The amended and restated operating agreement now provides for ECO to market H Power’s portable products, including the recently introduced EPAC™ 500 fuel cell based power source. In addition to the amended operating agreement, H Power and EFC entered into three additional agreements, a Sales and Marketing Services Agreement, a Test Reporting and Field Services Agreement and a Memorandum of Agreement (MOA) for a sustainable fuel cell community project.
Under the operating agreement, H Power and EFC have outlined a delivery schedule that calls for H Power to begin shipping residential cogeneration units (RCU) in the third calendar quarter of 2002 and deliveries to be completed by calendar year 2008, with the substantial majority of the deliveries scheduled to take place in calendar years 2005 to 2008. The schedule also includes the recently launched portable EPAC™ 500. Approximately $76 million of the agreement will be allocated to RCUs. Pricing for the RCUs will decrease on an ongoing basis as reductions in component costs, increased operating efficiencies, and reduced distribution costs, among other factors, are realized. H Power and EFC will meet on a quarterly basis to ensure that any changes to the delivery schedule will be made in the best interests of completing the delivery schedule on time, and in meeting the requirements of EFC’s customers.
Under the terms of the Sales and Marketing Services Agreement, EFC will work with H Power to identify potential markets, applications and distribution channels for H Power’s fuel cell products. EFC will continue to proactively promote H Power’s fuel cell products for residential markets and will create new marketing and distribution channels for H Power’s products.
Under the terms of the Test Reporting and Field Services Agreement, EFC will support H Power in the installation, maintenance and servicing of H Power’s products. Under the MOA, H Power and ECO will work together on the development of a sustainable community that includes the generation, storage, transmission of hydrogen, and distribution of hydrogen based fuel cells.
H Power will pay ECO up to $5.4 million through December 31, 2003 in exchange for ECO’s services under these agreements.
H. Frank Gibbard, Chief Executive Officer of H Power Corp., commented, “We are very pleased to have broadened our relationship with EFC through ECO and to have reaffirmed our $81 million contract under which EFC will purchase our stationary and portable products. H Power and EFC now have in place comprehensive agreements that fully support both organizations’ efforts to commercialize fuel cell systems, as well as to support these fuel cell products after their installation. Our strengthened relationship with ECO will allow us to ship our direct hydrogen and reformer-based products to an expanding customer base.”
Bill Cetti, President and Chief Executive Officer of Energy Co-Opportunity, stated, “The reaffirmed operating agreement demonstrates our commitment in marketing and servicing H Power’s fuel cell products. We strongly believe that this operating agreement allows us to offer to our members an alternative to today’s product offerings that will meet their energy needs. We are excited to continue developing a marketing and field service program with H Power that can be beneficial to ECO, H Power, and most importantly our customers.”
About H Power Corp.
H Power Corp. (NASDAQ: HPOW) is a leading fuel cell development company, focused on near-term commercialization of fuel cell systems. H Power has designed proton-exchange membrane (PEM) fuel cell systems to provide electricity for a wide range of applications including residential cogeneration products for homes, and power units for mobile applications. H Power is addressing markets for its products in the U.S., Japan and Europe through its relationships with Energy Co-Opportunity (ECO), Mitsui, Osaka Gas, Kurita Water Systems, Gaz de France, PSA Peugeot Citroen, Fortum Oy and Naps Systems Oy, Air Products & Chemicals, Ball Aerospace, and Dupont. H Power has manufacturing facilities in Monroe, North Carolina and Montreal, Canada. For additional information, please visit our website at www.hpower.com
Energy Co-Opportunity (ECO) is an energy services cooperative established in 1998 to be the preferred provider of distributed energy solutions to the U.S. electric cooperative industry. ECO provides electric cooperatives with access to distributed generation technologies, including fuel cells, gas turbines and photovoltaics; access to alternative fuels such as propane and natural gas, and consulting, education and training in all aspects of energy diversification. ECO is headquartered in Herndon, Virginia. For more information, go to www.e-coop.org