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                                                                   EXHIBIT 99.08

May 30, 2002



Dear Shareholders,

Environmental Power Corporation ("POWR") reported that for the three months
ended March 31, 2002 ("2002"), power generation revenues were $14,113,256 and
net income was $1,766,650 or 9 cents per share. For the corresponding three
months ended March 31, 2001 ("2001"), power generation revenues were $13,482,891
and net income was $987,937 or 9 cents per share. The average outstanding shares
used to determine earnings per share were 11,407,990 shares in 2001 versus
20,273,141 shares in 2002.

The first quarter 2002 was a good one for the Company with net earnings nearly
double the same quarter last year. Scrubgrass achieved the highest levels of
output and the greatest capacity factor (98%) of its eight years of operation.
This production, sold at fixed power sales rates, supported record earnings from
the sale of power produced in any quarter in our history. Further, the sale of
certified NOx emission allowances for the years 2003 - 2007 was finalized in
January and contributed $2.5 million in extraordinary income during the quarter.
We are especially proud to sell pollution credits as they represent income from
our facility's ability to surpass government environmental standards. Such
transactions are testimony to our mission of "doing well by doing good".

The 1/st/ Quarter was also marked by significant progress toward realizing the
potential of our anaerobic digestion technology. As investors know from our many
previous communications, it was our excitement for this technology that
motivated us to acquire Microgy Cogeneration Systems, Inc., the holder of the
technology license. We have created a strategic planning group which consists of
members from management, POWR's Board, and selected consultants. This group has
analyzed this opportunity and shaped our goals and action plans.

During the 1/st/ quarter and into the 2/nd/ quarter, we began to gather the
fruits of those efforts. We have completed the drafting of our business plan and
taken initial steps toward our first transaction. We executed a 15-year contract
with Wisconsin Public Service to sell up to 15 MW of output generated from the
biogas from digested animal wastes. Additionally, five Wisconsin farms signed
Letters of Intent to use our technology, and other farms have expressed
considerable interest. Our team has been busy. We started negotiations for
another power sales contract in the upper Midwest and have been working with
farmers and state agencies in Maryland to market our facilities and services in
those areas as well. Overall, we are excited by our prospects.

We are also energized by the addition of Ed Chapman, Jeff Macartney and Wally
Long to our team. Ed, former head of tax exempt project finance at Goldman
Sachs, agreed to join POWR as Senior Vice President of Finance. Ed will be
focused on developing and implementing our financial strategies and innovative
project financing structures. Jeff, who replaced Bill Linehan as our Chief
Financial Officer, has held high-level financial and operations positions for
Pitney

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Bowes, Bank Austria and Allied Signal. We are also excited about the addition of
Wally Long as Vice President of Energy Marketing. Wally brings more than twenty
years of development, marketing and engineering experience in the energy field,
mostly with R. W. Beck. Wally will spearhead our energy marketing efforts which
are so important to implementing our ongoing strategy to penetrate and become
the dominant player in the field of anaerobic digestion. Together with existing
management and staff, these men are a significant part of the exceptional team
needed to meet our aggressive growth objectives.

One more important note, management has reinvigorated its commitment to keeping
our investors fully informed. We know that investors want timely information,
whether favorable or not, and can only fairly evaluate us if they can mark our
progress. The appropriate valuation of our shares and true liquidity of the
market can not improve without an informed investor base. As part of our
commitment, we have updated our website and our annual report to reflect the
changes at POWR. Further, with the help of a respected investor and public
relations consultancy, management intends to disseminate company information
promptly and more broadly. Through these efforts, management hopes to encourage
greater interest in our stock among the investment community.

Sincerely,

/s/ Donald A. Livingston                    /s/ Joseph E. Cresci

Donald A. Livingston, President             Joseph E. Cresci, Chairman and CEO

