June 5, 2002 — Carson City, NV-based Hess Microgen announced recently that it has officially started-up an ultra-efficient onsite cogeneration system for one of California’s premier brick and tile manufacturers, Pacific Clay Products in Lake Elsinore, Calif.

The advanced one-megawatt cogeneration system — believed to be the first of its kind for a brick and tile manufacturer — will produce about 65% of Pacific Clay’s electricity needs and provide a substantial amount of cogeneration heat to offset existing gas-driven product dryers, used to cure products after molding. The manufacturing facility is located 70 miles southeast of Los Angeles, in high-growth Riverside County, part of the Southern California Edison utility district.

The turnkey cogeneration system consists of five 200 kW natural-gas fired cogeneration packages, operating in parallel with the grid. The packaged system comes fully equipped, including ultra-efficient heat recovery equipment to convert heat from fuel combustion into usable heat for product drying. An innovative approach was developed by Hess Microgen to apply the cogen heat toward offsetting the use of natural gas consumed in the drying process.

According to Bob Miller, senior vice president of Hess Microgen, “This advanced cogeneration system is expected to reduce Pacific Clay’s annual energy bill by $400,000 or more and achieve an economic payback on investment of less than two years.” The system is expected to produce electricity at approximately six cents per kilowatt-hour, compared to Pacific Clay’s current rate of 13 cents per kilowatt-hour. By recovering the heat produced during engine combustion and electricity generation, the system will also reduce Pacific Clay’s gas bill significantly.

Hess Microgen’s cogeneration system is considered ultra environmentally friendly and meets the most stringent air quality standards in the United States, as set by the South Coast Air Quality Management District. The system’s overall efficiency, when taking into consideration both useful electric and thermal production, is well over 80%. The system’s efficiency qualified the project for a $230,000 rebate from California’s Self-Generation Incentive Program and exempts the system from any standby charges.

“The challenge in a market like brick and tile is to constantly manage costs while providing a diversity of high-quality products. Hess Microgen is instrumental in helping us manage costs,” said Al Cunningham, vice president of production for Pacific Clay. “Hess Microgen’s innovative design and attention to quality installation has allowed us to begin generating savings well before the summer energy crunch. Because the system runs in parallel with the grid or as a standalone system, we’ve also improved our ability to manage energy in the event of rolling blackouts.”

David Wilkie, president of Hess Microgen, stated, “Pacific Clay’s ability to manage their energy costs ensures that they can avoid raising product prices to maintain margins, thereby allowing them to remain competitive with competitors from other states and countries. We’re fortunate to work with customers like Pacific Clay who realize the economic, reliability, and environmental benefits of onsite cogeneration.”

About Pacific Clay Products
Pacific Clay Products, located in Lake Elsinore, Calif., is a manufacturer of brick and tile products. For over a century, Pacific Clay Products has been known for manufacturing hard, durable, low absorption bricks that are virtually maintenance free. Pacific Clay offers a variety of colors and shapes nearly unmatched in the brick industry.

About Hess Microgen
Hess Microgen is a provider in the packaged cogeneration industry. Utilizing industrial reciprocating gas engines and flexible financing programs, Hess Microgen’s systems allow customers to lower their energy costs with little or no capital. Hess Microgen is proud to be part of the Amerada Hess Corporation.