press release

U.S. Postal Service Brings Renewable Power, Energy Efficiency to San Francisco Mail Processing Facilities

JOINT NEWS RELEASE

Issued by Chevron Energy Solutions and the U.S. Postal Service (USPS)

SAN FRANCISCO, Calif., Dec. 1, 2004 -- In the next phase of its national program to optimize efficiency and conserve natural resources, the U.S. Postal Service (USPS) today announced that Chevron Energy Solutions will complete major energy efficiency upgrades and a hybrid renewable power plant – including a fuel cell and two solar electric technologies – at the USPS's largest processing and distribution facilities in San Francisco.

Together the two mail facilities – the San Francisco Processing & Distribution Center (P&DC) and Embarcadero Postal Center (EPC) – comprise 1.2 million square feet, employ about 3,000 people and process 7.5 million pieces of mail daily. Both facilities operate 24 hours a day, 365 days a year. The USPS is the largest employer in San Francisco's Bay View/Hunter's Point district, where the P&DC is located.

Chevron Energy Solutions, a ChevronTexaco (NYSE: CVX) subsidiary, will develop, engineer and construct the project over the next year. The work will involve numerous energy efficiency measures, including new energy management and compressed air systems, lighting retrofits and comprehensive heating, ventilation and air conditioning system upgrades. At the P&DC, a 680,000-square-foot facility, Chevron Energy Solutions will also install high-efficiency natural gas cooking equipment for the cafeteria, and a new hybrid solar/fuel cell power plant comprised of a 250-kilowattt fuel cell; 185 kilowatts of crystalline-silicon solar panels mounted on a parking canopy that will track with the sun; and 100 kilowatts of flexible, amorphous-silicon, roof-mounted solar panels.

The improvements at both facilities will lower total annual electricity purchases by $1.2 million or 10 million kilowatt-hours – a 46 percent reduction. In addition, the energy efficiency upgrades will reduce the P&DC's and EPC's heating needs by 69 percent and 28 percent, respectively. In total, these improvements translate to avoided local electric utility emissions of about 6,600 tons of carbon dioxide annually, the equivalent of planting about 1,860 acres of trees.

"These facility upgrades are an important step in the Postal Service's efforts to reduce its energy consumption nationwide and to use more renewable energy," said Ray Levinson, USPS's interim national environmental program manager. "Project by project, we're making a positive impact on our environment and our operating costs, while at the same time helping to secure America's energy resources."

"This project clearly demonstrates the commercial viability of renewable energy," said Jim Davis, president of Chevron Energy Solutions. "By combining fuel cells, solar power generation and energy efficiency improvements, it's possible to achieve both cost savings and environmental benefits."

The $15 million cost of the project will be wholly funded by energy savings, contributions from the USPS's CFC refrigerant replacement program, and more than $2.6 million in grants and incentives from the U.S. Department of Defense and the State of California.

The San Francisco project is part of a larger USPS contract with Chevron Energy Solutions to install energy efficiency improvements at mail facilities throughout Northern California. CES recently completed improvements at the USPS processing facility in West Sacramento, and is upgrading facilities in Colfax, Marysville, Oakland, San Jose, Stockton, Vacaville, Winters and other Northern California locations. Together these improvements will save the Postal Service more than $2 million per year in energy costs. In addition, the USPS has contracted with CES to install improvements at its Memphis, Tennessee mail processing facilities.

Since 1985 USPS has reduced its energy consumption nationally by more than 20 percent. A leader in using renewable energy, it has installed solar power systems at facilities in California, Colorado, Rhode Island, Texas and Puerto Rico, installed fuel cells in Alaska, and begun using geothermal technology to heat and cool facilities in Oklahoma and Maryland. Over the past year it also dedicated new "green" post offices in Ft. Worth, TX, and Corrales, NM.

About the United States Postal Service

For 228 years, the United States Postal Service has been the gateway to the household, binding friends, families and neighbors together. It is an independent federal agency that handles 42 percent of the world's mail volume, with annual revenues of $65 billion. The Postal Service is not funded with taxpayer dollars, but derives its revenues solely from the sale of postage and other products and services it provides. Through its unrivaled service network, the Postal Service delivers money, messages and merchandise daily to more than 137 million addresses, offering some of the most affordable postage rates in the world.

About Chevron Energy Solutions

San Francisco-based Chevron Energy Solutions partners with institutions and businesses to improve facilities, increase efficiency, reduce energy consumption and costs, and help ensure reliable, high quality power for critical operations. Its customers include federal government agencies; state, county and municipal government agencies; schools, colleges and universities; and many other public institutions and commercial and industrial businesses. With more than two dozen locations nationwide, the company maintains in-house engineering, monitoring and project management capabilities, provides financing options and delivers solutions designed to address each customer's particular needs without promoting specific vendors, products or commodities.

For more information about Chevron Energy Solutions, please visit our web site at www.chevronenergy.com

Updated: December 2004