June 28, 2002 — KFx Inc.’s majority owned subsidiary, Pegasus Technologies, Inc., a source of combustion optimization solutions for the power industry, and Pavilion Technologies Inc. on Friday jointly announced the successful commissioning of a Pegasus OS-2001 advanced combustion optimization software solution at a coal-fired generating plant in Northeast Texas.

The OS-2001 solution, utilizing Pavilion Technologies’ Power Perfecter™ software, has been in trial operation for several months, reducing air emissions on the plant, while enabling the facility to maintain its outstanding record of achieving production goals.

The unit is an 840 MW tangential-fired boiler, fueled by combinations of East Texas lignite and Powder River Basin coal. The boiler was recently retrofitted with new, high-efficiency, low-NOx burners, and when the Pegasus solution was commissioned on this enhanced configuration, the plant was able to further reduce NOx emissions by an additional 10%.

Pegasus Technologies, Inc. acquired exclusive license to Pavilion Technologies’ Power Perfecter software in August of last year. This project was a jointly executed effort of the two companies in support of the owner/operator’s environmental and operational goals.

The owner/operator of this generating plant is one of the largest generators of electricity in the United States, with more than 20,000 megawatts of coal, natural gas and nuclear generation capacity, over $40 billion in assets and more than $20 billion in annual revenues.

“This success is exactly the kind of synergy we expected to come from merging Pavilion’s utility boiler optimization business with our own,” said Gary Nicholson, Pegasus’ CEO. “We are extremely pleased to have been a partner with Pavilion in this success. With this new Pegasus system in place, our customer can produce electricity across a range of operating conditions, both efficiently and cleanly, objectives that are very difficult to achieve at the same time without such a system.”

“The profitable energy companies of the future will be not only be efficient, but also able to predict opportunities and act on them,” said Pavilion COO Doug Johnson. “This customer’s investment in optimization software today gives them the foundation to capitalize on the dynamic energy market of tomorrow.”

About KFx/Pegasus
KFx provides total fuel solutions for the power industry. Its patented K-Fuel® process converts low heating value coal into clean, high-energy fuel. The KFx web site address is https://kfx.com/ .

Pegasus Technologies, Inc., a majority-owned subsidiary of KFx, is a provider of neural network based optimization and control applications for the power generation market. The Pegasus OS-2001 suite of combustion optimization solutions enables customers to reduce emissions and increase the efficiency of their fossil-fueled electric generating units. Power Perfecter is a trademark of Pavilion Technologies, Inc. Pegasus is headquartered in Mentor, OH and also has an office in Austin, TX. The Pegasus web site address is https://pegasustec.com/ .

About Pavilion
Pavilion Technologies, Inc. is a Real-time Enterprise Optimization (REO™) software solutions company, helping businesses leverage the power of their information assets to make the best, real-time decisions.

Pavilion’s engineering and consulting expertise coupled with its patented decision software provides solutions that create millions of dollars in annual benefits for industrial and energy customers. Pavilion has successfully implemented over 1,700 solutions at more than 200 facilities worldwide.

Established in 1991 and headquartered in Austin, Texas, Pavilion is a privately held corporation with offices in the U.S., Belgium, Japan and New Zealand. The Pavilion web site address is https://pav.com/ .