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Ground Breaks on First-of-Its-Kind Fuel Cell Project

10 October 2000

Southern Company, Alabama Municipal Electric Authority, FuelCell Energy And Mercedes-Benz Break Ground on First-of-Its-Kind Fuel Cell Project

     Project Objective: To Further the Advancement of an Environmentally
                           Responsible Power Source

    TUSCALOOSA, Ala., Oct 6 An international energy company, a
public power utility, a leading fuel cell company and a major automotive
company today broke ground on a fuel cell demonstration project that is the
first of its kind in the U.S.
    Southern Company , Alabama Municipal Electric Authority (AMEA),
FuelCell Energy and Mercedes-Benz U.S. International, Inc.
(MBUSI) have joined in a historic partnership to field test an environmentally
responsible power generation technology as part of the process to bring a
clean energy option to the marketplace.
    The Alabama Direct FuelCell Demonstration Project, announced by the
partners last February, is intended to drive a growing interest in fuel cell
technology as demand for cleaner, more efficient power generation increases in
the U.S. Because fuel cells use an electrochemical reaction rather than
combustion to generate electricity, electrical efficiencies are high and
emissions are minimal, making them an environmentally responsible method of
producing electricity.
    Alabama Power Company, a Southern Company subsidiary, enters into a
special customer partnership with Mercedes-Benz, as the fuel cell plant will
be located in its service territory.  "Southern Company and Alabama Power have
a history of environmental commitment and in exploring a full array of energy
opportunities," said Dr. Charles H. Goodman, Southern Company senior vice
president for research and environmental affairs.  "Today, with Alabama Power,
we join with our partners to launch a power generation project in testing
cleaner, more efficient ways to meet the energy needs of our customers."
    "Today's groundbreaking continues one of the most exciting undertakings
and advancements in the electric utility industry, and AMEA is delighted to be
among the leaders who make this fuel cell field trial possible.  The success
of, and information gathered from, this project will benefit our members and
provide them with the ability to deliver the cleanest, most efficient electric
power to their customers," said Bob Claussen, General Manager of AMEA.
    "We are delighted that these world-class organizations, including Southern
Company, AMEA, MTU Friedrichshafen and MBUSI, are joining us to further
demonstrate the unique electric power generating capabilities of the Direct
FuelCell(TM) power plant," said Jerry Leitman, CEO of FuelCell Energy.  "This
commercial field trial power plant represents a significant step toward
realizing the potential to deliver clean, fuel-efficient electric power to
Alabama and the world."
    "MBUSI is pleased to be part of this project which seeks to develop
alternative, environmentally friendly energy sources as we move forward in the
new century," said MBUSI CEO and President Bill Taylor.  "Our company has a
long-standing tradition of being a leader in environmental initiatives;
therefore, partnering with these world-class organizations to explore new
advancements seemed like a perfect fit."
    The power plant will utilize FuelCell Energy's Direct FuelCell(TM) stack
in a unique design developed by MTU Friedrichshafen, a subsidiary of
DaimlerChrysler and partner of FuelCell Energy.  MTU Friedrichshafen has
licensed FuelCell Energy's Direct FuelCell technology while FuelCell Energy
has licensed MTU's power plant design, called the "Hot Module."  The plant
will convert pipeline natural gas to electricity at an efficiency of about 50
percent, compared with 33 percent for conventional generation.  The plant will
feed the Mercedes-Benz production facility power distribution system.  In
addition, the entire power plant will be skid-mounted, making it easy to
transport to different locations for additional demonstrations.  MTU is
currently conducting a 250 kW commercial field trial at Bielefeld, Germany,
providing electricity to the grid, processing steam for the university and
heat for district heating.
    Southern Company, AMEA and FuelCell Energy will provide funding for the
fuel cell power plant, and Southern Company will serve as project manager.
MBUSI will provide the resources and venue for the demonstration site to
simulate actual field operating conditions during the project.  All partners
will share in the knowledge gained in the demonstration of the power plant
under actual field operations, and FuelCell Energy will apply the knowledge
gained toward the design of future commercial Direct FuelCell(TM) plants.
    The fuel cell plant is expected to be fully operational by spring 2001.
It will operate for at least one year, and the companies may agree to continue
to operate the project on the MBUSI site.  Southern Company and AMEA have
options to negotiate exclusive arrangements for the sale, distribution and
service of FuelCell Energy's commercial power plants elsewhere.