American Superconductor and GE Energy Receive Order from City of Detroit

May 11, 2006 by Jeff Shepard

American Superconductor Corp. (Nasdaq: AMSC) and GE Energy, a business of the General Electric Company, received an order for two D-VAR(R) systems from the City of Detroit Public Lighting Department (PLD), a Municipal Electrical Utility with public and private customers based in Detroit, Michigan. D-VAR voltage regulation systems are designed to dynamically regulate voltage levels on power grids. PLD will utilize the D-VAR systems to provide the voltage support that was previously provided by local electrical generators but at a much higher cost, a challenge frequently faced by utilities. American Superconductor expects to ship the D- VAR systems in June 2006 for installation at the Detroit PLD Mistersky 24 kilovolt (kV) substation in Detroit, Michigan. Commissioning is planned to take place in late summer of 2006.

"We expect our annual energy costs to be reduced by at least $10 million with the D-VAR solution in place – a great benefit for the citizens of Detroit," said Kwame Kilpatrick, Mayor of Detroit. "We have always run extra electrical generators in our system to support grid voltage to ensure reliable service for the citizens of Detroit. With D-VAR technology, we can significantly scale back use of the generators, which have become more and more expensive to run because of increasing fuel costs."

Detroit PLD's Mistersky Power Station managers found that they were frequently running multiple local generators to provide voltage stability on their 24kV network. This results in a premium cost of power versus the import price available on the wholesale market. By replacing the generators with the two D-VAR systems, Detroit PLD expects significant enough savings in their energy costs to completely offset the D-VAR costs in approximately 6 months.

"Utilities today are facing new pressures brought on by increasing energy costs and a combination of load growth, competition, and customer demands for improved power quality and reliability," noted Chuck Stankiewicz, senior vice president of AMSC Power Systems. "We are delighted to be working with Detroit PLD to bring the benefits of D-VAR systems to their network and to help them reduce their energy costs dramatically. We see multiple opportunities for utilizing D-VAR to replace 'reliability-must-run' generators in municipalities across the U.S."

Classified as a STATCOM, Flexible AC Transmission System (FACTS) device, D-VAR dynamic voltage regulation systems detect and instantaneously compensate for voltage disturbances by injecting leading or lagging reactive power, measured in VARs, precisely where it is needed on the grid. Powered by AMSC's PowerModule™ advanced power electronic converters, the D-VAR systems can be customized to meet specific customer needs through variations in operating software and in the number of PowerModule electronic converters required for the proper level of VAR support.