ICF Consulting Study Predicts "California Style" NO_x Allowance Prices for Houston Market

Creates Optimism for a Stronger ERCOT Power Market

FAIRFAX, VA, December 3, 2001 - ICF Consulting's Texas Air Regulatory and Power Market Outlook predicts that NO_x allowance prices in the Houston-Galveston market will increase to high levels over the next five years, resulting in higher power prices as well. New NO_x regulations, scheduled to start phasing in on January 1, 2002, will also cause dramatic impacts on power flows.

"NO_x allowance prices in the Houston area will approach the sky-high levels that contributed to the California energy crisis," reveals John Blaney, managing director of ICF Consulting's energy environment practice. He emphasizes, "Houston can avoid the disaster that occurred in California thanks to the growing electric generation capacity glut in the ERCOT power market." In spite of this, the strict NO_x emission regulations for the Houston area will inevitably lead to curtailment, and in some cases mothballing or retirement of generation capacity. As a result, electric power flows into the Houston market will radically increase, taxing the transmission system in Southeast and Central Texas. NO_x allowance prices in other regions will vary considerably—some being close to zero. This significant range of allowance prices is sure to alter the existing configuration of power flows and affect the value of new generation capacity.

Industrial sources in the Houston-Galveston area will face a difficult challenge achieving compliance because they are small and expensive to control. Blaney added, "Some of these industrial sources will be at a significant disadvantage because they are competing in an international marketplace against companies with minimal emission control requirements."

ICF International (Nasdaq: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 1,800 employees serve these clients worldwide. ICF’s Web site is http://www.icfi.com.

For Immediate Release Contact: Douglas Beck 1.703.934.3820