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Iberdrola Renewables Sells Entire Output of Region's Largest Biomass Energy Project

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October 27, 2008

PORTLAND, Ore. — Iberdrola Renewables today announced that the Sacramento Municipal Utility District (SMUD) has purchased the entire output of a 55 megawatt (MW) biomass cogeneration plant under construction at a Tacoma, Wash., pulp and paper mill. Iberdrola Renewables announced in April it had acquired the output to expand its growing portfolio of clean and renewable resources for its utility customers.

The biomass plant will be owned by Simpson Tacoma Kraft Company. Simpson will generate power from a combined heat and power (cogeneration) process that consumes waste wood products to generate steam needed for power production as well as its manufacturing process. The power will leave the plant from a Tacoma Power interconnection where Iberdrola Renewables will then manage delivery into California. The first power from the plant is expected to be available in July 2009.

"This clean, renewable biomass energy will help SMUD reach its goal of meeting 23 percent of our customers' energy needs with renewable sources by 2011," said Steve Sorey, SMUD's Manager of Energy Trading & Contracts. SMUD will receive enough renewable energy from the agreement to power about 38,000 homes.

"Simpson is building the cogeneration plant to maximize energy production from our existing operations that already involve burning sawmill and paper mill by-products, wood-building demolition waste and debris from logging," said Dave McEntee, Simpson's Energy and Environmental Manager. The company may also "mine" old lumber mill landfill sites to recycle wood waste buried there years ago. According to the USA Biomass Power Producers Alliance, the facility will be the largest single cogeneration renewable energy project built in the U.S. in the last 10 years.

"This transaction allows everyone to do what they do best. Simpson is using its extensive experience in wood products to provide biomass fuel and operate the plant. Tacoma Power's quality infrastructure will connect the plant to the grid. Iberdrola Renewables will provide transmission and manage logistics, and SMUD will distribute renewable power to Sacramento-area homes and businesses," said Peter van Alderwerelt, senior vice president of Iberdrola Renewables. "It's our unique rights to otherwise scarce transmission resources that makes it possible for Iberdrola Renewables to deliver new sources of renewable energy to high-demand West Coast markets."

Iberdrola Renewables is currently the world's leading provider of wind power with 8,500 MW of wind power in operation globally now, plus over 600 MW of clean gas-fired generation and over 50 BCF of gas storage in the US and Canada.
www.iberdrolarenewables.us.

As the nation's sixth largest customer-owned utility, the Sacramento Municipal Utility District has been providing low-cost, reliable electricity for over 60 years to Sacramento County (and a small portion of Placer County). SMUD is recognized as a leader and award winner for its innovative energy efficiency programs, renewable power technologies and sustainable solutions for a healthier environment.

Simpson has been in the forest products business since 1890. It operates five wood product manufacturing plants, one pulp and paper facility, and two door manufacturing plants in Washington State, along with two wood product manufacturing plants in South Carolina and one in Georgia. For more information, visit www.simpson.com.

Contact: Art Sasse, Director, Communications & Brand, Iberdrola Renewables, 503-796-7740
Paul Copleman, Media Relations, Iberdrola Renewables, 207-641-2805

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