FuelCell Energy, Inc. (Nasdaq: FCEL), a manufacturer of ultra-clean and efficient electric power plants for commercial and industrial customers, today announced the sale of a 750 kilowatt (kW) generating plant to a premier hospitality and entertainment resort, making it FuelCell Energy's third hotel and lodging site in California. The unit was sold through FuelCell Energy's distribution partner, Alliance Power, Inc.

The facility will use the Direct FuelCell (DFC) power plant to provide base load power around the clock for hotel operations, and will transform the plant's heat byproduct into hot water for the guests, adding to the system's overall operating efficiency.

Three DFC300M power plants form the ultra-clean distributed generation system - where the fuel cells provide firm 24/7 base load power.

Alliance Power, a FuelCell Energy distributor, will provide technical guidance during the installation phase that will be performed directly by the facility and operations group of the resort. This DFC power plant installation will be the second installation performed directly by an end user - a trend that the FuelCell Energy expects will increase as more companies realize they can drive down capital costs by installing the power plants themselves. The expected operations date for the DFC power plant is April, 2007 and FuelCell Energy will provide on-going maintenance services under a multi-year service contract. Financial terms of the sale were not disclosed.

Pacific Gas and Electric, administrator for The California Public Utilities Commission's (CPUC) Self-Generation Incentive Program for their service territory, has issued a reservation letter that will provide incentive funding of approximately $1.9 million for this fuel cell installation. In addition, late last week Governor Schwarzenegger signed into law Assembly Bill 2778 which extends the sunset of the SGIP from 2008 to 2012.

"The recent extension of the SGIP program is great for California and continues to support our market opportunity for installing ultra-clean fuel cells in the state," said Bruce Ludemann, Senior Vice President of Sales and Marketing for FuelCell Energy.

The market for combined heat and power applications across the hotel and hospitality industry in California is estimated to be more than 500 megawatts. This equipment sale increases FuelCell Energy's orders to date in California to 9.0 megawatts (MW). Other California customer transactions by FuelCell Energy and Alliance Power include Sheraton San Diego Hotel & Marina, 1.5 MW; Sierra Nevada Brewing Co., 1 MW; California State University Northridge, 1 MW; The Westin San Francisco Airport Hotel, 500 kW; TST, Inc., 500 kW; and the City of Santa Barbara, 500 kW.

"California continues to be a strong market for ultra-clean distributed generation," said James Michael, President of Alliance Power. "This facility becomes our seventh customer in two years to choose DFC power plants for their cost-effective and reliable base load power requirements."

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