CMP - RWS Energy Agreement Reached

RWS Contract to Sell Energy to CMP to Terminate at Year's End

PORTLAND, Maine á Central Maine Power Company (CMP) and Portland-based Regional Waste Systems, Inc. (RWS) have reached an agreement regarding termination of their power purchase contract. According to the terms of the settlement, the RWS power purchase contract with CMP will terminate on December 31, 2000, and RWS will then be able to sell its power in the deregulated electricity market.

RWS is a non-profit regional solid waste management corporation owned and operated by the 31 cities and towns it serves, including Portland. RWS, which generates approximately 90 million kilowatt hours of electricity per year from the trash its burns at its facility in Portland, has sold its power to CMP since its waste-to-energy plant opened in 1988.

A lawsuit was filed by RWS in April 1998, requesting the Cumberland County Superior
Court to resolve a contract dispute concerning the rates payable by CMP for RWS power from
2001 through 2008. However, as a result of the settlement, the energy contract will be
terminated upon payment of $3.8 million by CMP to RWS. CMP will continue to purchase
electricity from RWS at 13.50 cents per kilowatt hour through the end of the year when the
contract expires. Recently, the RWS board voted 17-0 to embrace the settlement.

State Senator Phil Harriman, who served on the Legislature's Utility Committee when
deregulation of the electric industry was approved, was instrumental in mediating the settlement.
Officials at CMP and RWS today called the settlement a fair and just result for all parties.

"It's a sound resolution to a very complex contractual issue," said Dale Olmstead,
Freeport Town Manager and Chairman of the RWS Board of Directors. "We are grateful to Sen.
Harriman and Portland City Manager Bob Ganley, [RWS Vice-Chairman], for their efforts in
mediating this agreement, and the RWS Board looks forward to making its power available on
the open market in the year 2001."

"Resolving this dispute eliminates risk for both parties," said Frederick Woodruff, Managing Director, Energy Marketing and Trading. "For CMP customers, the settlement removes the risk of millions of dollars of increased power costs had the court ruled against our reading of the contract. We're pleased that this issue has been resolved in a spirit of cooperation rather than litigation."

Regional Waste Systems, Inc. was established in 1974 after Portland, South Portland, Cape Elizabeth and Scarborough decided to form a cooperative to handle their waste disposal. Throughout the 1970s and 80s, more southern Maine towns joined the cooperative, and in the mid-80s member towns voted to build a "waste-to-energy" facility to burn trash from each member community and convert it to energy. In 1988, the European-designed "mass burn" incinerator went on-line at the new RWS facility located off outer Congress Street.

Today, 21 cities and towns own and control RWS, and 10 additional towns are associate members. The organization is governed by a 28-member board consisting of officials appointed from member towns. RWS accepts solid waste and recycled materials from each of these communities. A comprehensive recycling program also was initiated to reduce the amount of trash coming into the facility with more than 100 recycling bins in more than 60 communities. For additional information on RWS, visit the RWS web site at www.regionalwaste.com.


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