FOR IMMEDIATE RELEASE: September 22, 2004

CONTACT: Ron Hull (760) 482-9601

(EL CENTRO, Calif.) – Imperial Irrigation District Board of Directors approved an Amended and Restated Power Sales Agreement Tuesday with CalEnergy, moving the project that will build the largest single geothermal energy power plant in the United States, forward. The Board also approved amendments to the Interconnection Agreement and Water Supply Agreement between IID and CalEnergy Obsidian Energy LLP (CEOE).

“This is a major step toward the realization of the construction of a new geothermal power plant in Imperial Valley,” said Bruce Kuhn, IID Board President.

“For IID and our customers it means a clean reliable supply of electric energy with a local energy resource and local energy company that will provide not only local jobs but local economic development opportunities and local tax revenues.” Said Bernard Raemy, project manager for CEOE: “These agreements are the result of many months of negotiations and result in a foundation for a long and mutually beneficial relationship.”

The agreements extend the energy supply arrangement from 20 years to 30 years, create a new price structure with a lower initial payment, further define the transmission access for CEOE and further define the roles of the parties with respect to environmental attributes.

The agreements are associated with the electrical output from CEOE’s proposed Salton Sea Unit 6, which would be the largest single geothermal plant built in the United States. Construction of the power plant would bring the total to 11 geothermal plants that CalEnergy operates in the Imperial Valley. The 10 plants currently have a net output of 340 megawatts. The new plant will supply IID with 170 megawatts beginning in 2007 and up to 195 megawatts in 2011.

“Although additional development work is still required to make the project viable, these agreements are significant milestones and pave the way for future development of even more indigenous, environmentally responsible energy from the abundant geothermal resources around the Salton Sea,” said Vince Signorotti, vice president for CEOE. “In this regard, it is essential that we obtain a federal production tax credit, similar to the wind tax credit, which is contained in legislation now pending before Congress. The future purchase of electricity from the Salton Sea Unit 6 is a clear example of IID’s commitment to the environment and its voluntary goal of producing 20 percent of the energy from renewable resources.”

Added IID Director Bruce Kuhn: “The plant is a major part of IID’s goal to diversify our power portfolio which will help us keep our rates affordable for our customers.”

The new power plant is expected to be operational by June 2007.