Seattle, Washington December 8, 2008 Dear friends: I wish to extend my apologies for surprising state and local officials and organizations in the states where we have proposed projects.  The FERC acted on our applications faster than I think it has ever acted for any applicant before, and, frankly, it caught it us off guard.  We have not had time to contact the political, energy and ocean leaders in our project areas. We have been developing a demonstration project for an offshore wind/wave renewable energy platform in Washington state since Oct. 2007.  We applied for a FERC preliminary permit to explore the feasibility of the site in Oct. 28, 2007.  FERC did not even open the permit application for public comment until five months later.  We were finally issued the preliminary permit on July 30, 2007, nine months after we applied. On October 16, 2008, the FERC announced it is asserting jurisdiction over wave and tidal energy development on all national waters, including offshore beyond the state 3-mile limit.  The Minerals Management Service contests this jurisdiction and we will see how that is resolved.  Meanwhile we have the right technology solution and team, we know what kind of sites are ideal, and we know how to apply for FERC preliminary permits that grant site development priority rights.   We had not been considering projects in other states.  But when the FERC opened the door to the national offshore opportunity on October 16 we were ready and we stepped right through. Then FERC surprised us greatly by its rapid response.  Our first application took FERC five months to open for comment.  This time they did it in five weeks!  We have been preparing to contact the officials in the states affected by our applications in January and February, after the holidays and the Presidential transition and the new Federal agency heads are in place.  I personally called FERC and asked them to open the public comment period in January or February, because opening it in December is rather unfair to the public - the holiday season is a big distraction and I don't think the public and agencies really get a "normal" 60-day comment period if it opens on November 28.  A proposal for offshore energy development of course greatly concerns state and local officials and the affected public and interest groups.  We have great experience in stakeholder consultation and the permitting processes and we like the FERC system, unlike almost every other developer, because it requires and directs an extensive consultation process with every stakeholder.  We will follow that process and contact state and local leadership in our site areas beginning in January 2008.  We have already contacted a few key people in each state.  We look forward to receiving "official" comments on our applications to FERC during the 60-day period, and of course we want any feedback at any time to help us understand local concerns and learn how we can advance this tremendous opportunity in open partnership and collaboration.  Commenting on the FERC applications is easy - when you have the Docket number of the application go to FERC Online and use the options available. Have a happy holiday season, let's hope Santa and Obama bring us lots of support for large-scale sustainable ocean renewable energy generation and green jobs in our communities. Sincerely, Burton Hamner President, Grays Harbor Ocean Energy Company LLC