MERRILL LYNCH COMMODITY PARTNERS INVESTS IN VULCAN POWER, A RENEWABLE GEOTHERMAL POWER DEVELOPMENT COMPANY

Bend, OR – May 1, 2007 - Merrill Lynch Commodity Partners (“MLCP”), the principal energy investment business of Merrill Lynch, closed on a $35 million principal investment in Vulcan Power Company (“Vulcan” or the “Company”) last week.
 
Vulcan is a private entity holding one of the largest geothermal property portfolios in the United States including properties in California, Nevada, Oregon, and Arizona. The MLCP investment is the first stage of a $150 million private round of financing by Vulcan to develop prime geothermal property with potential to generate 900 megawatts (MW) to 2,000 MW of natural steam fuel – enough clean green power for up to two million people, according to third-party resource reports on Vulcan properties.

Geothermal energy involves drilling for heated water reservoirs, which produce steam that can be used as an alternative to fossil fuels burned to generate electricity. This process avoids the production of emissions including carbon dioxide, a major greenhouse gas. The life of the geothermal reservoir is extended by re-injecting condensed water back into the reservoir.

David Owens, Managing Director and Principal of MLCP, led the negotiations and structuring of the transaction. “Vulcan is an emerging leader in the expanding industry of renewable energy,” Owens said.  “The Vulcan portfolio of long term, fixed-price power contracts and geothermal leases puts them in a strong competitive position.”

“We believe that an investment in Vulcan is critical to accelerate development of geothermal resources to benefit the environment,” added Rob Jones, Head of the Global Energy and Power Group and Principal of MLCP.

Vulcan was founded in 1991 by Steve Munson, the company’s chairman and CEO. Mr. Munson is a recognized expert on ‘green’ power development, having participated in federal and state power policy, regulatory and legislative process. He is widely credited in the energy industry for his leading role in new Renewable Portfolio Standard laws in the Western United States.

Vulcan acquired many geothermal leases when some of the major energy companies were exiting geothermal after investing tens of millions of dollars into steam exploration – work that Vulcan is now reaping the benefits of.

“Many of our properties in advanced stages of development have been the subject of more than $50 million in development expenditures before Vulcan acquired them,” said Munson, “Vulcan has also invested an additional $21 million of development expenditures to date.”

Vulcan holds a property portfolio of geothermal leases and applications covering more than 136,000 acres.  The company is focused on delivering geothermal power to California, the largest green power market in the world, and Nevada from properties in northern California, Nevada and a joint venture in Oregon.

Vulcan has signed 20-year term Power Purchase Agreements (PPAs) with Nevada Power Company, Pacific Gas & Electric Company and Southern California Edison Company. It is also negotiating additional PPAs with other utilities.  For additional information on Vulcan and geothermal power, go to www.vulcanpower.com.