Wind Power
The Company’s wind energy subsidiary, Arcadian Renewable Power Inc., owns a large wind farm in the Altamont Pass, east of San Francisco. The wind farm has an appraised value of $14,834,400 including more than twenty years of property specific wind data, property easements and transmission access ways all vital for the financing needed to repower this site. This Wind Farm was initially home to some 1350 turbines, which were built in the 1980s and retrofitted in the 1990’s. The project includes leasehold interest on approx. 4,000 acres through 2036 with extension options. The Company plans to eliminate any sign of the turbines of the past while repowering this facility with 21st Century Technology Turbines with up to 250 megawatts. At present, the wind farm is not operating while California’s Public Utilities Commission (PUC) sets energy prices and policies in the aftermath of California’s energy crisis of 2000, which led to Pacific Gas and Electric filing for temporary bankruptcy, resulting in power purchase contracts becoming uncollectible. PG&E is no longer in bankruptcy and the California legislature currently is developing a plan to ensure the commercial viability of alternative energy. The Company anticipates that the wind farm at Altamont Pass will become operational again, with new state of the art turbines, insuring higher profit margins.

All projects in the Altamont Pass area were put on hold after 2000 due to the uncertainty of the California Energy Crisis and debacle which led to Pacific Gas and Electric filing for bankruptcy protection which resulted in all power purchase contracts to be uncollectible and forced the state to enact a workable energy policy which is still in development. A plan is currently in the legislature for the state and the two counties that comprise the Altamonte Pass area for a definitive re-power assessment plan which will address tower height, migratory birds, power allotments, transmission, tax credits, power purchase agreements, etc. Certainly the Stimulus Bill recently passed will help bring into focus a number of these issues and there funding.

Our wind project is currently zoned for 114 megawatts and has leasehold interests on approximately 4,000 acres which run through the year 2036 with extension options thereafter. The wind farm is the second largest project at the Altamonte area and abuts the largest farm which is owned by FPL Group, the Florida utility. FPL Group is the largest owner of wind turbines in the United States. Due to the cost of maintenance to keep the old turbines producing and the fact of the low kilowatt output per turbine, we've chosen to re-power the farm with new 1MW to 2MW state of the art turbines as did FPL Group and Babcock Brown. Today’s financial markets certainly make the financing of projects of this size more difficult than years past. But, with this project being in the world of wind and alternative energy development, enhances the probability of funding from financiers from all over possible partners or syndicate participants which could also include government involvement. Previously, we’d secured financing commitments of $120,000,000 plus to re-power the farm in two phases. The initial re-power at 60 MW for $68million, equipment and construction will be coordinated with the cooperation of FPL's re-power project in an effort keep costs low and stream line risk during redevelopment. Those plans have been evolving as has the entire world financial landscape when it concerns the financial facilities used to fund projects like large wind farms. But, in a world that is in need of immense job creation and increased energy solutions produced from within this country’s own resources, these projects are no longer a some day solution, they are today’s foundation to a energy solution our country can build on and can’t live without. Any participation with development partners from within the State of California only compound the advantages that our repowering this project realizes, as jobs are created at the project site as well as at the manufacturing level. Obviously, Kore Holdings will make its decision as to re-powering or selling its wind related assets as the issues mentioned herein are resolved or evolve into clearer focus to what direction is best for our shareholders in the immediate future as well as long term. As we sit today, there is no option that we would consider that doesn’t include at a minimum of KORE shareholders controlling a considerable carry forward interest in the re-powering of this project.