Sharyland Utilities Files 'Panhandle Loop' Proposal; Seeks to Build 800-Mile 345kV Electric Transmission Loop; Potential Wind Could Power Over 1 Million Homes Annually in Texas

AUSTIN, Texas, Feb. 15 /PRNewswire/ -- Sharyland Utilities, L.P. announced today that it has filed a proposal with the Public Utility Commission of Texas (PUCT) to build an 800-mile 345kV electric transmission loop throughout the Texas Panhandle. Known as the "Panhandle Loop", this project is intended to connect up to 8,000 megawatts (MW) of wind, natural gas, and coal-fired generation into the Electric Reliability Council of Texas (ERCOT) electric market.

The Panhandle Loop is supported by a group of five unique and diverse companies in the energy and chemical industries: Airtricity, Inc.; Babcock & Brown Renewable Holdings Inc; Celanese, Ltd.; Occidental Energy Ventures Corp.; and Sharyland Utilities, L.P.

"Quite simply, this proposal will bring the ERCOT grid to the Panhandle. That way, the entire state can enjoy the benefits of the tremendous wind resources located there, as well as the substantial gas and coal resources," said Hunter Hunt, President of Sharyland Utilities, L.P. "Once this project is approved by the PUCT, Sharyland Utilities is committed to moving forward expeditiously with a goal of project completion as early as late 2010."

Preliminary planning has assumed approximately 4,200 MW of wind power, 2,000 MW of gas-fired power, and 1,800 MW of coal-fired power in the region. By interconnecting such a diverse mixture of fuel sources, the Panhandle Loop brings the environmental benefits of wind power to the ERCOT market, coupled with the constant power availability provided by coal and natural gas generation. This combination of wind, coal, and gas generation ensures that a greater amount of electric power is constantly flowing along the power lines, thus resulting in a more efficient and cost-effective transmission system.

The Panhandle Loop will be open access, meaning any generator -- whether it is wind, coal, natural gas, or any other source -- is welcome to use the Panhandle Loop to access the ERCOT power market, provided it is approved under ERCOT's interconnection procedures. This will enable the potential development of more than $10 billion in new generation projects in the Panhandle, which will spur economic development through capital investments, increased tax bases, and permanent jobs once facilities are built.

As the name implies, the Panhandle Loop will be a "looped" transmission system, with three interconnected transmission lines extending from three separate points in the existing ERCOT grid. The benefits of using a looped system, rather than a single radial line that simply connects two points, is that a looped system is inherently more reliable. If one line should go down, the remaining two lines will ensure that power still flows throughout the region.

"Texas needs more power, and the sooner, the better," said Pat Wood, Chairman of Airtricity's North American Advisory Board and former chairman of both the PUCT and the Federal Energy Regulatory Commission. "The potential wind tapped by this project could power over 1 million homes annually in Texas. By bringing together natural gas and coal-fired plants with abundant Panhandle wind power as early as 2010, Sharyland's cost-effective and reliable Panhandle Loop will benefit the entire state."

Sharyland Utilities filed this proposal in PUCT Docket No. 33672, a proceeding to designate Competitive Renewable Energy Zones (CREZ). In its CREZ proceeding, the PUCT is expected to designate power regions for transmission development by July 5, 2007. If the Panhandle Loop proposal is approved, Sharyland Utilities will immediately begin the steps necessary to construct the transmission facilities as expeditiously as possible with the goal of project completion by late 2010. The cost of the project is expected to be approximately $1.5 billion, based on preliminary cost estimates.

                          Background Information

  About Sharyland Utilities, L.P.

Sharyland Utilities, L.P. is a privately-owned, Texas-based transmission and distribution electric utility committed to providing quality customer service, safe and reliable electric delivery, and increased investment in the electric grid of Texas. It is a pure "wires only" company that has been operating in South Texas in the cities of Mission and McAllen for the past seven years and has no interests or affiliations with Retail Electric Providers (REPs) or electric generation in Texas. Sharyland Utilities has a proven record of bringing innovative solutions to the ratepayers of Texas, including its underground and looped distribution system, automated metering, and time-of-use tariffs. Sharyland Utilities is also currently constructing a 150 MW High Voltage Direct Current Interconnection (DC tie) between the ERCOT grid of Texas and the Comision Federal de Electricidad grid of Mexico, which will allow for the first commercial bidirectional electricity trade between the U.S. and Mexico. The Panhandle Loop will allow Sharyland Utilities to expand its transmission activities beyond South Texas. Sharyland Utilities is owned by Hunter L. Hunt and other members of his family and managed by Hunter L. Hunt.

  Press Contact for Sharyland Utilities: Jeanne Phillips 214-978-8535

  About Airtricity, Inc.

Airtricity, an international wind power company, has been developing wind projects in the Texas market since 2004 and is currently completing construction of projects totaling over 200 MW. By the end of 2007, Airtricity plans to more than double that total with well over 500 MW in operational wind farms in Texas. The company is also an active developer in Ireland, the United Kingdom, Canada and the Northeastern U.S., and is a leader in offshore wind technology in Europe. Airtricity sees the Texas Panhandle resources as some of the best in the U.S., due to their high quality and their location relative to customer markets. Airtricity is also a retail electricity provider in its home Irish market.

  Press Contact for Airtricity: Pat Wood 214-978-8535

  About Babcock & Brown Renewable Holdings Inc

Babcock & Brown is a global investment and advisory firm with longstanding capabilities in structured finance and the creation, syndication and management of asset and cash flow-based investments. Babcock & Brown was founded in 1977 and is listed on the Australian Stock Exchange. Babcock & Brown is traded on the Australian stock exchange, with a market capitalization in excess of $5 billion, and assets under management of $24 billion at June 30, 2006. Babcock & Brown focuses on infrastructure and asset intensive businesses such as wind energy, fossil generation and electric transmission, and views the Texas Panhandle as a prime wind energy development opportunity due to its world-class wind resource. Babcock & Brown commissioned its first wind turbines in Texas in 2003, and will have almost 600 MW on line in Texas by the end of this year.

  Press Contact for Babcock & Brown: Kathy Alderfer 415-267-1532

  About Celanese, Ltd.

As a global leader in the chemicals industry, Celanese Corporation makes products essential to everyday living. Our products, found in consumer and industrial applications, are manufactured in North America, Europe and Asia. Net sales totaled $6.7 billion in 2006, with over 60% generated outside of North America. Known for operational excellence and execution of its business strategies, Celanese delivers value to customers around the globe with innovations and best-in-class technologies. Based in Dallas, Texas, the company employs approximately 8,900 employees worldwide. Celanese is considering electricity generation as one of the strategic alternatives for its site in Pampa, Texas.

  Press Contact for Celanese:  Jeremy Neuhart 972-443-3750

  About Occidental Energy Ventures Corp.

Occidental Energy Ventures Corp. (OEVC) is a subsidiary of Occidental Petroleum Corporation. OEVC's power projects generate more than 2,000 MW of electricity. OEVC also coordinates energy supplies for all of Occidental's Texas oil and gas and chemical operations. Occidental Petroleum Corporation is one of the world's largest independent oil and natural gas exploration and production companies and a leading North American chemical manufacturer. Visit http://www.oxy.com/

  Press Contact for OEVC:  Jan Sieving 310-443-6504

                        Panhandle Loop Quick Facts

   *  Panhandle Loop is a proposed 800-mile looped 345kV electric
      transmission system located throughout Texas Panhandle.

   *  Panhandle Loop is intended to connect up to 8,000 megawatts (MW) of
      wind, natural gas, and coal-fired generation into the Electric
      Reliability Council of Texas (ERCOT) electric market.

      -- Approximately 4,200 MW of potential wind generation (enough to
         power over 1 million homes annually in Texas).

      -- Approximately 2,000 MW of potential gas-fired generation.

      -- Approximately 1,800 MW of potential coal-fired generation.

   *  Benefits of Panhandle Loop include:

      -- Loop's proposed fuel diversity brings environmental benefits of
         wind to ERCOT market, coupled with constant power availability
         provided by coal and gas, which results in a more efficient and
         cost-effective system.  This ensures a more efficient and cost-
         effective system.

      -- Loop will be open access, meaning any generator is welcome to
         access ERCOT power market, provided they are approved under ERCOT's
         interconnection procedures.  This will enable the potential
         development of more than $10 billion in new potential generation
         projects, which will spur economic development through capital
         investments, increased tax bases, and permanent jobs once
         facilities are built.

      -- As name implies, Loop will be a "looped" transmission system, with
         three interconnected transmission lines extending from three
         separate points in the existing ERCOT grid.  This is inherently
         more reliable because if one line should go down, the remaining two
         lines will ensure that power still flows throughout the region.

   *  Panhandle Loop supported by:
      -- Airtricity, Inc.
      -- Babcock & Brown Renewable Holdings Inc.
      -- Celanese, Ltd.
      -- Occidental Energy Ventures Corp.
      -- Sharyland Utilities, L.P.

   *  PUCT is expected to make CREZ designation by July 5, 2007.

   *  Goal of project completion by late 2010.

   *  Cost: Approximately $1.5 billion, according to preliminary cost
      estimates