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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Free Writing Prospectus </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT
FACE="Times New Roman" SIZE="2">Pursuant to Rule 433 under the Securities Act of 1933 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">Registration Statement on Form S-3: No.&nbsp;333-152807
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">A transcript of Environmental Power Corporation&#146;s third quarter 2008 earnings call was independently prepared and published on November&nbsp;25, 2008
by Seeking Alpha on its website without payment or consideration from Environmental Power Corporation. This transcript may constitute a &#147;free writing prospectus&#148; within the meaning of Rules 405 and 433 under the Securities Act of 1933, as
amended, and relates to the registration statement on Form S-3 filed by Environmental Power Corporation (Registration No.&nbsp;333-152807). Attached is a complete transcript of the call in question prepared by Environmental Power Corporation.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Environmental Power Corporation has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication
relates. Before you invest, you should read the prospectus in that registration statement and other documents Environmental Power has filed with the SEC for more complete information about Environmental Power and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, Environmental Power and the underwriter will arrange to send you the prospectus if you request it by calling&nbsp;(888)&nbsp;884-8339. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Environmental Power Corporation - Q3 2008 Earnings Call Transcript (November 10, 2008 10:00 am ET) </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Operator]</B> Welcome to the Environmental Power&#146;s business update conference call in which management will describe third quarter financial results and provide
a business update. I would now like to introduce Micky Thomas, Senior Vice President and CFO. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Michael E. Thomas]</B> Good morning everyone. We
appreciate you joining us for Environmental Power Corporation third quarter 2008 results and business update conference call. As a reminder, this call is being recorded today, November&nbsp;10, 2008. A replay will be available immediately after this
call. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I would also like to note that remarks, comments, or statements made about future expectations, plans, prospects for the company constitute
forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various
important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, quarterly report on Form 10-Q and other filings we make with the SEC. Copies of these documents may be obtained from the SEC or
by visiting the investor relations section of our website. These forward-looking statements speak as of today and you should not rely on them as representing our views in the future. We undertake no obligation to update these forward-looking
statements to reflect events or circumstances that occur after this call. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">With me on the call today, of course, is Rich Kessel, our President and CEO of
Environmental Power Corporation. Besides Rich, we have Michael Hvisdos, Executive Vice President of Microgy and Head of our Growth Activities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We also
have on the call Craig Ward, Central Region Manager of the Harris Group. Craig and his group were instrumental in working with Microgy&#146;s staff in analyzing and specifying the modification to the gas conditioning equipment at the Huckabay Ridge
facility, and Rich has asked him to provide direct commentary on those modifications so as to assure ourselves that we have reliable operations going forward. The bond analysts also spoke to Craig independently, to achieve comfort in their recent
purchase of the California bonds. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">This morning&#146;s news release and the company&#146;s 10-Q, which will be filed with the SEC later today, include a
detailed presentation of our third quarter results. Rather than review the detailed results, which are reported in the 10-Q, let me highlight a few key items in the third quarter. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">The company&#146;s revenues increased to $456,000 in the third quarter of 2008 from $344,000 in the third quarter of 2007. The increase is attributable to revenues from the Huckabay Ridge facility for the month of
July 2008. We are presently returning the Huckabay Ridge facility to service. Rich will provide details in a few minutes. We also receive revenues from the three Wisconsin digesters which we manage, operate, and maintain under contract. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">For the quarter, operations and maintenance expenses were $1.8 million for the quarter, which also reflects the
commercial operations at Huckabay. The results reflect certain non-recurring and start-up expenses, and we expect these expenses at Huckabay to decrease as operations at the facility become more reliable. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">General and administrative expenses were lower for the three months ended September&nbsp;30, 2008, at $2.8 million compared to $3.8 million for the three months ended
September&nbsp;30, 2007. These expenses include non-cash compensation for stock options and stock appreciation rights, which decreased in the third quarter of 2008 to $0.3 million from $0.7 million in the prior year. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In part, the lower G&amp;A costs reflect the company&#146;s recent G&amp;A cost reduction program. The company is significantly reducing its cash expenditures associated
with its G&amp;A expenses. We are reducing our costs through cut-backs in each controllable area for a planned 25% G&amp;A savings. The resulting annualized G&amp;A burn rate, on a cash basis, would drop from $11.0 million to $8.25 million. These
remaining costs will include significant costs of being a public company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The loss of $0.33 per share associated with continued operations is attributable
to the company&#146;s limited sources of revenue as we build out more anaerobic digester facilities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We are pleased also to report that we have resolved
the weaknesses in our internal controls that were reported in prior filings with the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002. None of the disclosed items required changes or restatements of our financial
statements, and the necessary controls have now been identified and implemented by our accounting team. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I would now like to discuss our financing
initiatives. First, let me recap our subsidiary-level project financing activity during the quarter. In July, we closed on $7.0 million of 7% interest rate tax exempt bonds to finance our Swift project in Grand Island, Nebraska. Despite generally
deteriorating financial market conditions globally, in September we successfully closed on another $62.4 million of tax exempt bond financing to support the construction of the Hanford and Riverdale anaerobic digester projects in California.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Those bonds carry an interest rate of 9% and before proceeds can be used for construction, we are required to achieve certain operational and gross profit
targets at Huckabay. As these targets are lower than our internal estimates, we expect to satisfy them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Additionally, we are required to raise an
additional $39.0 million to $45.0 million of other funding with the amount depending on whether we close on the tax exempt financing for the Bar 20 project in California. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We do intend to seek additional tax exempt financing in California for the Bar 20 Project in the first quarter of 2009,
consistent with special procedures that California has put in place allowing all tax exempt issuers expanded timing flexibility to issue bonds. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">With over
$100.0 million of restricted cash on our September&nbsp;30, 2008, balance sheet, we have undertaken to raise the remaining funding, which together with the existing bond proceeds, will fund the construction of our remaining Texas projects, the Swift
project, as well as the two California projects. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">At the parent company level, we have filed the preliminary prospectus under our shelf registration
statement for up to $50 million in debt securities, indicating our intent to draw down $10 million to $25 million through the issuance of convertible notes having a proposed 13% interest rate and a proposed conversion price of $5.40. This financing
is expected to close in various tranches over the next 90 days. Any proceeds from the offering of the notes would be dedicated solely to the construction and operation of our subsidiary&#146;s projects and would not be available for general
corporate purposes. We believe that in general the notes have been structured in a manner that will meet our stated objective of minimizing the dilutive effects to our common stockholders of raising additional capital. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">With that, let me turn the call over to Rich Kessel. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E.
Kessel]</B> I would now like to add some comments regarding the Ziegler debt offering. We have had three sessions with Ziegler sales teams to date and have received a very positive response. Why the interest? Simply stated, this is the last money
in. Unlike many other companies seeking financing with a convertible offering, their dilemma is that the funds are being used to cover G&amp;A, the paying down of debt, and the promise of things to come. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">Unlike those companies, we have the debt in place. The RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP>
</FONT> offtake agreement is in place with fixed prices, reflecting the premium value of our RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> products are there to assure steady-state revenue streams, and therefore certainty of
future streams and the permits to start construction, thereby transforming this company from a development focus to a sustainable operating company with a strong pipeline of projects to continue our growth. It provides these investors, who focus on
the yield of the bonds, a liquid security with a unique opportunity to invest in a renewable energy company with a major player in the evolving carbon offset market. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Our goal, as Micky said, is to raise $25.0 million under this vehicle, which will be closed in various tranches, and then we will seek the remainder of the monies needed to release the California bonds from a variety
of potential sources. We are talking to strategic partners, we are considering forward selling of carbon credits, or even another round of convertible debt in the second quarter of 2009 as interest rates come down, if required. We will pursue all
means that result in recognizing shareholder value and will entertain any and all possibilities. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I would now like to provide an overview of our operations. Previously the company announced that it was implementing
changes at the Huckabay Ridge facility to improve the gas conditioning and related equipment. The improvements to the gas conditioning system have been substantially completed, and final testing of that equipment is underway. From this point
forward, the plant is expected to ramp up its production levels through this month and into early December. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">As Micky had said earlier, I have asked Craig
Ward of the Harris Group to provide an overview of their activities and findings, to address the background of their group, overview of amine glycol as a conditioning system, and also the scope of what they accomplished. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Craig, I would like to turn it over to you. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Craig Ward]</B> Good
morning, this is Craig Ward of the Harris Group. The Harris Group is an engineering and design company. The Dallas office, which is where I am operating out of, which is the Central Region, we have worked with amine treating in the gas processing
and the refining industry for over 25 years. A lot of the employees I have at the Dallas office, I have worked together with these gentlemen for over 25 years. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">We specialize in amine treating facilities, like I said, in the refining and also the gas processing conditions. We bring to the table our expertise in this in designing safe, operational, and reliable facilities. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We were contracted by Microgy to take a look at the Huckabay facility because they were having some operational problems in the amine treating area. We sent a crew to
the field to do a site visit and we reviewed the facility. This was a walk-through of the unit itself. We looked at the operations of how it was operating at that time and we collected all of the equipment data. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We came back to our office in Dallas, and we did a complete simulation of the amine treating portion of the Huckabay plant. The facility was having some problems in
operations so we looked at what was the original design capacity of the facility, what is the present gas composition that we would have to be treating, and we looked at the local environmental conditions at the site. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">This we started with a slate, with all of this new design we did not do any of the existing simulations. We did not look at those, we treated this as if it were a brand
new facility. With our design and simulation, we came across some improvements that we recommended to Microgy. These were recommendations to improve the operations and also the facility operational reliability to reduce operation costs. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">What we saw, that there was equipment that was under-sized and then there was also some of the piping needed to be changed to a larger diameter. We worked with
Microgy in finding equipment to purchase for the revamp of the unit. This equipment, due to schedule constraints, we were able to find new equipment and also refurbished equipment so that we could meet the end date that Microgy had to get the unit
back on line. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We supplied support of the construction activities. During construction, this is the setting of the new equipment,
routing of the new pipe, and doing a field check out of the facility to make sure that it was designed and installed like we said. They are presently in a start-up mode for the facility, circulation is being done through the equipment, and the gas
is being ready for processing in the facility. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Based on our experience and expertise in designing these types of units, we are fully confident that the
unit, as designed and modified under our recommendation, will meet all of the design capacity that was set for the original design of the unit. It will meet the gas composition necessary to have a good product going down to the sales line and it
will give a high reliability operational unit which should reduce some of the operational cost which was due to amine losses and so forth. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Our scope of
work was mainly the amine treating facility. Microgy had done some revamping of the compressor unit that was out there and that was outside of our scope but that was done to meet operational condition of the pressure going down to the line.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">That&#146;s what I have right now. I am available for questions at the end of the comments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> Craig, thank you. In hindsight, the mistake I made, obviously, was not being able to find the Harris Group earlier in the process. We did have other consultants. We relied on them, we had
some staff who had found these people. That has all been changed out. We brought on new internal staff with greater expertise who were able to find the Harris Group, and really enabled us to have confidence that this system now is truly the system
that will take us where we need to be to meet our targets. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">So, Craig, I am very grateful to your group. I know that the bond analysts were a very
skeptical group, to say the least, and understandably so. Enjoyed the conversations and got comfort from you and your group, and I just want to let you know we appreciate all of that support in getting us to where to we are. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Let me continue with my presentation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In addition, the plant was taken out
of service beginning in August to correct lingering problems related to the original design of the biogas collection system and over-pressure protections systems. We experienced a blockage in the biogas collection system, causing an
over-pressurization of two tanks. The blockage originated as large quantities of biogas, at times even greater than what we had contemplated in the facility design, carried over fibrous material that accumulated on intrusive devices, such as
instrumentation and valves and plugged the collection system. The tanks&#146; protections systems worked as designed but it became apparent for reliable operations the best remedy was to modify the biogas collections system to make it consistent
with the system incorporated in the next generation of our standard design. Therefore, we put the </FONT>
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<FONT FACE="Times New Roman" SIZE="2">digesters into a neutral state, and immediately instituted repair of the two tanks, upgraded pressure release systems, and made the necessary improvements to
the biogas collections systems, including new valving and instrumentation and pressure monitors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We are presently, as Craig said, bringing seven of the
eight digesters up to the expected biogas production levels with the eighth tank being repaired in the next few weeks, at which time it will be reseeded and brought up to targeted levels of biogas production. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">As we bring up the Huckabay Ridge facility to the 100% biogas level previously achieved, I am confident that we
have addressed the previous limitations in our process. These limitations negatively affected both our RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> sales, and as Craig noted, our operating costs. We have a high degree of
confidence that we will reach our goal, which is to achieve the same continuous and reliable output level that we have experienced at the Wisconsin facilities where we continue to operate at, or above, output targets. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I would now like to address new project construction and commodity prices. Construction of our projects is on track for achieving our $40.0 million targeted annualized
revenue level by the second quarter of 2010. The Swift project is scheduled for completion during the first quarter of 2009. We are planning to complete the Rio Leche and Cnossen projects by the fourth quarter of next year, with the remaining
projects scheduled for commercial operations by the beginning of the second quarter of 2010. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Our backlog of 10.7&nbsp;million MMBtu will supply us with
additional projects that we expect to announce as we get closer to construction dates for such facilities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The company expects to benefit from the
significant decrease in commodity prices as commodities such as steel and copper are a significant component of our facilities. Steel components include the digester tanks, rebar, piping, and other equipment, while copper is incorporated, obviously,
into electric cables and transformers. In addition, due to the overall slowdown in construction, we are seeing a decrease in delivery times and availability of construction labor. We are presently analyzing the most appropriate contracting
philosophy and timing of orders as we prepare for our extensive construction program, which will include at least 32 digesters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">It should be noted that we
have already given back $3.0 million of volume cap from that originally requested for the California projects as we continue to improve our project estimates for capital costs. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">Relating to the demand for our by-products, we recently announced that we have established a strategic alliance
with Organics, with a production of a peat replacement. Their product is known as RePeat, which will utilize a solid by-product from selected Microgy anaerobic digestion facilities. This arrangement allows the company to produce another high-value
product from waste streams in additional to our premium-base renewable natural gas. A typical large scale Microgy RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> project can product 40,000 to 70,000 cubic yards of RePeat product per
year, with the associated revenues to the </FONT>
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<FONT FACE="Times New Roman" SIZE="2">company depending on specific project arrangements. This initiative will further strengthen the company&#146;s ability to generate favorable project
economics, again, by turning a waste product into a high-value product. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In addition, we continue dialogue with eco-friendly building product manufacturers
who have expressed interest in our solid by-products for their wall board and other products, including furniture. As this market evolves, we will evaluate our involvement and economic implications. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">I would now like to provide a market update. There are many things going on and one of the items I would really
like to stress is we continue to experience strong interest in our RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> product due to the increased focus on domestic renewable sources of energy, as well as the possibility of increased
mandates related to renewable portfolio standards by several states. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We are also witnessing the possibility of a federal mandate under the new
administration. In addition, the expectation of a mandatory cap and trade regime is also increasing, regardless of the present economic conditions, with the debate centering on how such a program could improve economic conditions. The company
believes that the increased desire to improve environmental stewardship by industry has also increased the demand and therefore, the potential value of the greenhouse gas offset credit that our facilities generate. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">During our last update call, we expressed belief that there would be numerous efforts with the new Congress to pass legislation to promote renewable energy, and we would
continue our efforts to obtain parity with other renewable and bio fuels. We are encouraged, therefore, by prospects for an improved climate for renewable natural gas at the federal level. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In the House for example, House Bill HR 9097, introduced by Representative Higgins of New York on September&nbsp;25, would provide the transferable production tax credit
of $4.27 per million Btu for renewable natural gas production from qualifying facilities. This bill would help to put renewable gas production on equal footing with other renewable processes already receiving federal support. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The bill was co-sponsored by Representative Nunas and Representative Emanuel, and you know Emanuel is becoming chief of staff under the Obama administration. The bill
has the backing of the American Gas Association, the Gas Technology Institute, and major U.S. utilities and is comparable to a Senate bill introduced by Senator Bill Nelson of Nebraska last year. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We are, of course, grateful for the Congressional support to date and look forward to working with the AGA, the GTI, and interested utilities, to support this important
legislation, along with other anticipated initiatives favorable to renewable energy from the incoming Obama administration, the Congress, and key states where we are actively pursuing projects. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We believe that demand for renewable energy and renewable natural gas remains strong. While other renewable energy
sources often are highly dependent on subsidies, our project economics do not depend on subsidies, but as we stated many times, we do seek to be on par with other renewables. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">The new political climate seems strongly oriented towards renewable energy, and we believe positions the company well to benefit from such legislation. We also believe that there continues to be broad concerns about
traditional petroleum-based, as well as food-crop based, renewable transportation fuels. The discussions related to a shift to natural gas continues as a fuel for vehicles and fits well with the nature of our biogas production. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Under the new administration we believe more emphasis will be focused on incentivizing natural gas as a transport fuel, which bodes well for our market position.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">While we have experienced volatility in the price of brown gas over the last several months,
including the normal softening of prices during the fall season, the price of gas has recovered to the same level that existed when we negotiated our long-term RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> agreement with PG&amp;E,
approximately $7.20 per million Btu. The projected 2010 strip today is $8.22 with a similar price for 2011. It must be remembered that we price our RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> product at a market price reflecting
the value of our green premium, which we believe will increase over time. It is for this reason that we seek longer-term agreements that provide greater certainty in future revenue streams than which exist in the monthly volatile gas markets. We
believe that pricing certainty will allow us to attract capital to support our growth. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">We also see
increased interest in our RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> as a renewable fuel to displace brown gas in the production of clean energy from users of fuel cells as well as from producers of solar and wind projects
seeking to firm up their renewable character of their projects. We believe that these sources of demand increase the market value for our product. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The
company believes that all these factors bode well as we seek to maintain our first-mover status in the biogas market, execute on our identified projects totaling 5.0&nbsp;million MMBtu per year of energy production, and continue to bring forward our
development pipeline of over 10.7&nbsp;million MMBtu of energy production per year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">During the last quarter the company undertook a number of initiatives
in its transformation from a development-based company to a sustainable operating company. These seven initiatives have been addressed in this call. Let me just summarize them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">We discussed the means to enhance our capital structure, both with the Zeigler offering and the Bar 20 financing. We have confidence in the Huckabay Ridge in achieving its operating performance and I appreciate,
Craig, you being on the line to describe that process. We have taken actions to reduce our G&amp;A costs and plan to maintain those reductions into 2009. We see improvements in our project costs with the decrease in the cost of commodities, which
will help reduce our project capital costs and therefore improve our project returns. We have achieved some value already for our by-products </FONT>
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<FONT FACE="Times New Roman" SIZE="2">with our alliance with Organics and will continue to seek other values for our by-products. And we will continue to seek parity working with the federal
agencies, with government, with state agencies, for parity with regards to other renewable and bio fuels and at the same time prepare our next group of projects to continue our growth. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">These initiatives form the framework of our decision making and focus the organization at its inflection point in its growth cycle. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">Prior to opening the call to questions, I would like to reiterate our targeted project economics, which are consistent to what we have previously stated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">Our target output on a typical project is 635,000 MMBtu per year. Our carbon credit allowances range from 75,000 to 250,000 and we use on average approximately 130,000 tons in our economics. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">The solid by-product revenue associated with Organics will vary by project and project arrangements. It could be
anywhere from $200,000 to $500,000 and we are typically using approximately $250,000 for our large RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT> projects. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Our capital costs, again we reiterate, is that $22 million. We believe that this reflects our present thinking and as we do a better job in standardizing the design as we take account the commodity price decreases we
have seen, we are hoping to see improvement there. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Our operating cost is still in the range of $2.5 million to $2.7 million. Our financing costs, you know
7% to 9% 30-year money with five-year grace on principal with the capability of leveraging 80/20. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman"
SIZE="2">Utilizing these parameters, and using a typical and average price of RNG<FONT FACE="Times New Roman" SIZE="1"><SUP>&reg;</SUP></FONT>, which we have experienced in the past of $9.00, helps reinforce our ability to get an EBITDA to revenue
ratio in that 45% to 55%, project returns in the 11% to 16% unlevered case, with returns then leveraged based on 80/20, 25% to 32%. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We have confidence in
this model. We believe it will prove out as we bring our projects on line. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I would now like to open the discussion to answer questions from the audience.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Operator]</B> Your first question comes from Daniel Mannes - Avondale Partners. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>[Daniel Mannes - Avondale Partners] </B>Just talk a little bit about some of the changes that have come through on the timing of projects. Obviously this is financing-driven. Can you give us a little comfortable on
how comfortable you are that you will be able to raise the capital on a timely manner in order to be able to complete the two Texas projects in late 2009 and the California projects in Q2 of 1010, because it&#146;s not a surprise that you are
pushing it back but it is basically a full-year push back from what you were looking at before. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> Well, in Texas we were looking at August of next year and we have pushed that back just
because of all the activities. And I want to be able to take advantage, you know, we have the tank orders, we&#146;re in the process of reviewing that and also right now we want to make certain that we&#146;re getting all the advantage there. So
I&#146;m giving up somewhat on schedule but getting the ability to really impact capital costs. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In addition, what we&#146;re seeing is that some of the
long-lead items that before were causing us to have this time frame on schedule, could actually improve. I can&#146;t guarantee anything, that we&#146;re going to be able to pull them in, but I wanted to give what I felt was a fair estimate of the
things that we&#146;re trying to do to control the capital costs, take advantage of the commodity world and the changes there, and try and bundle, as I said, all the tanks under some kind of master agreement with points of which we can release the
orders and get the benefit of the pricing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">So with regards to the Texas, we are very comfortable in moving that ahead, with the moneys that we are raising
right now. Obviously in California it&#146;s a bigger nut to raise, but there is a lot of interest in us as a company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Biogas is becoming more of the
norm. Wind is sort of played out, solar is played out, biogas, you see what is going on in legislation, which was very positive for us and we certainly have come up high on the radar screen of a number of companies, including European-based
companies, with regards to working with us and possibly investing us at the project level or at the company level. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Daniel Mannes - Avondale
Partners]</B> So you are sort of implying that the $10 million to $25 million you can potentially raise for the convertibles would go towards primarily the Texas projects. Where does that leave you as of today in terms of what you are able to
invest? Are you able to draw down the existing Texas bond proceeds? And what is your current cash position, at least at the end of the quarter and how much flexibility do you have to be spending now ahead of the convertible closing? </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> What we have is in Texas both Rio Leche and Cnossen, we have the ability to draw down those funds. There [are] no limitations on that. The $10
million to $25 million that we are seeking to raise would go a long way to provide, obviously, the equity that is needed just for those two, get those into the ground, draw the funds, and go from there. So I think that&#146;s a given. With regards
to your second question, Micky will provide you that. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Michael E. Thomas]</B> As far as cash position, the unrestricted cash balance of the company as
reported as of September&nbsp;30 is $6.4 million and again, we believe that that cash balance is adequate to take us into early 2009 timeframe. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Daniel
Mannes - Avondale Partners]</B> And just walking through the California bond situation real quick, whatever you raise under these convertibles, even if they go into the Texas projects, would that count toward that $39 million to $45 million you need
to raise under the California? And number two, how are you looking to work out the balance of that in order to be able to be able to utilize those bond proceeds? </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> The answer to the first question is yes. Any and all money we raise, and that could be money,
and then the second part of your answer is, in dealing with the strategic entities, either investment in the project level, obviously that investment goes towards the moneys needed also. So the reason we took $10 million to $25 million is because we
wanted to have enough time during those discussions to see exactly how much money we ourselves need to raise versus bring in through these either partnerships, investments, etc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>[Daniel Mannes - Avondale Partners]</B> And would you say these investments, both the convertible as well as any strategic, is that contingent effectively on Huckabay meeting its performance test? </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> No. We&#146;ve had a lot of discussions and people understand that Huckabay, while it has been unfortunate, we have solved that problem. We
are confident in solving that problem. I believe we will start, and confident that we will have the news that we expect out of that project. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Daniel
Mannes - Avondale Partners]</B> And on the recent announcement to Organics, obviously we are happy to see an incremental revenue stream, but what I&#146;m wondering is have you seen, is there any precedent for people selling the solid leftover,
especially after a co-digestion operation? Does that change the quality at all? How much visibility do you have on the salability of this product? </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>[Richard E. Kessel]</B> We have had over three months of testing of our product, of our solids, with Organics and the end users that Organics deals with, and it&#146;s come out very positive. So we would never announce something unless
we had faith that the co-digestion aspects of our process would not impair the quality of the solids. So that already has been done. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Daniel Mannes -
Avondale Partners]</B> Does that restrict any of the substrates you can use? </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>[Richard E. Kessel]</B> No. I understand we had calls in from a couple of
the other analysts that needed to break off and they are going to call us back. With that I believe we are pretty much coming to a close. I would just like to make a couple of summary points. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">In summary, this management team is confident in our business model. We see market conditions improving for our R&amp;G product, which we see as expanding, whether it be
transport, whether it be other uses. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">We see the potential for the federal subsidies and giving us real parity with other renewable, and we will be successful
in transforming from a development company to a sustainable operating company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">I want to thank you for your interest and support and I look forward to any
questions which might not have been addressed for Micky or myself, we are always available. Again, thank you for your attention. </FONT></P>
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