AUSTIN, Texas, March 20, 2001 — Caterpillar Inc. and Active Power Inc., have formed an alliance to develop battery-free solutions for the power quality industry.

Cat UPS™ (uninterruptible power supply) power protection system will be demonstrated at CeBIT 2001 in Hanover, Germany.

The Cat UPS flywheel will be spinning for journalists to unveil the latest battery-free technology in power quality. Industry experts will be on hand to explain how the integrated motor-generator-flywheel stores kinetic energy in its quiet, constantly spinning steel disc and powers the critical load during utility disturbances or bridges until a standby Cat generator takes over.

“The Cat UPS is more reliable, economical and space efficient than traditional UPS systems for a wide range of applications such as advanced data centers, telecommunications, broadcasting facilities and critical manufacturing processes,” said Jim Parker, director of Caterpillar Electric Power. “Caterpillar provides power quality solutions distributed through the global network of Cat dealers, and the Cat UPS product line is an important element in the complete solution package.”

On March 6 in San Leandro, Calif., Active Power jointly demonstrated the Cat UPS system with Caterpillar dealer Peterson Power Systems to showcase the power quality capabilities of a Cat UPS while supporting an entire enterprise network during rolling blackouts, power outages and continuing power interruptions in California. Active Power President and CEO Joe Pinkerton, co-inventor of the patented flywheel technology that is integrated with Cat UPS, explained the benefits of the battery-free technology during the San Leandro demonstration.

“Unreliable electrical power cannot be tolerated in today’s digital world,” Pinkerton said. “From industrial plants where maximum productivity is crucial to the explosive build-out of advanced AP at data centers, power quality is essential. And this growing demand further validates our original design strategy. The small footprint, high efficiency and low maintenance of the battery-free Cat UPS system are ideal for the power quality market.”

Cat UPS features advanced power conditioning, high overload capacity and environmentally tolerant design to provide complete power protection from the smallest power disturbances to the longest of prolonged outages when integrated with a standby generator set. Cat UPS boasts an industry-leading 97 percent efficiency compared to 90 to 94 percent for conventional UPS systems and also has a gen-set start feature. Ideal for both new and existing facilities, Cat UPS offers redundant and field-expandable options to meet the rigorous demands of today’s mission-critical operations.

About Caterpillar

Caterpillar Inc., based in Peoria, Ill., is a global provider of diesel-powered reciprocating engines, natural gas engines and industrial turbine engines. The Caterpillar line of diesel- and gaseous-fueled engines range in size from 10 to 22,030 bhp (8 to 16,200 kW). Caterpillar also offers financial and technical services needed for completing virtually any type of power generation project worldwide.

About Active Power

Active Power ( designs, manufactures and markets battery-free power quality products that provide the consistent, reliable electric power required by today’s digital economy. Targeting a large segment of the $11 billion power quality market, Active Power’s battery-free power quality solutions eliminate power disturbances, which cost U.S. industry $30 billion annually in lost data and productivity (source: Electric Power Research Institute, 1999).