LADWP approves purchase of $4 million of Capstone MicroTurbine generators

The City of Los Angeles Board of Water and Power Commissioners unanimously approved a $4 million purchase of 141 microturbine power systems from Capstone California, a newly formed subsidiary of Capstone Turbine Corp.

WOODLAND HILLS, Calif., March 21, 2001—In an unprecedented partnership between the South Coast Air Quality Management District and the Los Angeles Department of Water and Power, the City of Los Angeles Board of Water and Power Commissioners unanimously approved a $4 million purchase of 141 microturbine power systems from Capstone California, a newly formed subsidiary of Capstone Turbine Corp.

Once installed at a variety of Los Angeles area facilities, these distributed generation systems have the capacity to generate a total of more than four megawatts, enough electricity for about 4,000 homes.

"The combined support and endorsement of both the LADWP and the SCAQMD for our ultra-low-emission power systems is very high praise," said Mike Tingus, president of Capstone California. "The SCAQMD is world-renowned for their leadership in creating and maintaining clean air standards in Southern California, and the LADWP is one of the best-managed, most forward-thinking utilities in the nation.

"The LADWP in particular has been a consistent island of reliability throughout the California power crisis, and they have a strong commitment to green energy sources. This deployment of Capstone MicroTurbines to reduce power draw on the grid is yet another example of their leadership in power management and customer support."

The Capstone Model 330 creates 30 kilowatts of power from a variety of fuels, including natural gas, propane, diesel, kerosene and methane-based gases from sources such as landfills, oilfields and wastewater treatment plants. Capstone MicroTurbines can be installed onsite at businesses and public facilities to reduce demand on the electric power grid.

Tingus said the units will be delivered to the LADWP starting immediately and continuing through May.

About Capstone California (; Nasdaq: CPST)

Capstone California is a wholly owned subsidiary of Los Angeles area based Capstone Turbine. It delivers turnkey electricity solutions for businesses using Capstone microturbine miniature electrical power plants, winner of the Financial Times Energy 2000 Global Energy Award for Most Innovative Commercial Technology.

In 1998, the Capstone Turbine was the first to offer commercial power products utilizing microturbine technology, the result of more than 10 years of focused research. Worldwide, more than 1,000 commercial production Capstone MicroTurbine systems serve, among others, the following applications:

* Hybrid electric vehicles (HEVs): onboard generation

* Resource recovery: converting oilfield and biomass waste gases into electricity

* Micro-cogeneration: combined heat/power/chilling solutions

* The 9s market: power quality and reliability

With headquarters in the Los Angeles suburb of Woodland Hills, Capstone California has offices in Los Angeles, Sacramento, Irvine, and San Diego. Offices will soon open in the San Francisco Bay Area and San Jose.

This news release contains "forward-looking statements," as that term is used in the federal securities laws, about Capstone Turbine's business, including statements regarding product delivery and Capstone California's plans to open new offices in California. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. These risks and uncertainties include those risks, uncertainties, marketplace competitors and risk factors identified, among other places, under "Risk Factors" in Capstone's registration statement on Form S-1, SEC File No. 333-48524. Capstone cautions you not to place undue reliance on these statements, which speak only as of the date of this release. Capstone undertakes no obligation to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

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