The nation’s leading maker of microturbines, Chatsworth, CA-based Capstone Turbine Corp., and the on-site generator part of Columbus, IN-based Cummins Inc. inked a three-year deal that could be worth $10-15 million during its first two years. Cummins will market Capstone’s commercially available 30 kW and 60 kW microturbines as part of its stationary power systems. The deal seeks to marry Capstone’s technological advantages with Cummins’ worldwide market presence.

A new Cummins Power Generation line of products for backup generation will carry the insignia “Powered by Capstone Micro Turbine.” Cummins will sell these new products worldwide, except for Japan and Mexico.

The deal calls for 3 MW worth of Capstone microturbines (any mix of 30 kW and 60 kW units) the first year; 10 MW during the second year; and a yet-to-be-determined volume for the third year.

Cummins bills itself as the “North American market leader” in auxiliary generator sets for recreational vehicles and marine applications, with 2000 sales of $1.4 billion and 500 distributorships and branches worldwide, something Capstone is trying to build up for its multi-gaseous and liquid fuel-powered turbines.

“These low-maintenance Capstone systems have demonstrated real-world reliability with more than a half-million hours of aggregated operation,” said Jack Edwards, president of Cummins Power Generation and executive vice president with Cummins, Inc.

Capstone CEO Ake Almgren said the deal is “very important” and helps substantiate that Capstone’s low-emission engine technology is “viable.” He views the alliance with “one of the world’s leading engine manufacturers” as a significant step in Capstone’s efforts to greatly bolster its market networks to take advantage of its newfound mass manufacturing capabilities in consolidated facilities it moved into last summer in suburban Los Angeles.

At a conference call with financial analysts last month following the company’s release of first quarter results, Capstone was criticized by some analysts for not moving more quickly to capture the newly pent-up demand for distributed and backup generation in the midst of California’s energy crisis and the spillover to other states this summer.

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