May 2008

1. Corporate Presentation May 2008 OTCBB: TMEN

2. Forward Looking Statements This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. It is presented to licensed broker-dealers and registered investment advisors for analysis purposes only. Certain statements contained in this slide presentation are forward looking statements that involve a variety of risks and uncertainties including, but not limited to, our product development efforts, future product demand and market acceptance, the effects of economic conditions, the impact of competitive products and pricing and other risks disclosed in our Securities and Exchange Commission filings.

3. Company Overview ThermoEnergy Corporation is a diversified clean technologies company engaged in the worldwide commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. • Water - The wastewater treatment technologies are consolidated in our subsidiary, CASTion Corporation (CASTion), a developer and manufacturer of innovative wastewater treatment and recovery systems to industrial and municipal clients. • Clean Power Generation - The power generation technologies are consolidated in our subsidiary, ThermoEnergy Power Systems, LLC (TIPS). The economic and environmental matrix of the Company's technologies represents a paradigm shift in these key infrastructure industries.

4. Corporate Summary * Close of Market 5/09/08

5. Investment Highlights • Wastewater Treatment and Zero Air Emission Fossil Fuel Power Generation Company Utilizing Patented & Disruptive Technologies • Wastewater Treatment Subsidiary – CASTion – Operates In 2 Markets: • Municipal and Industrial • 65 Large-Scale Industrial Systems Currently In Operation In: • United States ▪ Mexico ▪ Japan ▪ Canada • First Municipal System - $12.4M ARP Facility for New York City • Plant Start-Up Target Date: February 2009 • Advanced Power Plant Design Under Development • Converts Fossil Fuels & Biomass Into Energy with Zero Air Emissions + CO2 Capture • Development Team Includes: CANMET / MIT / RSE / UNR • Currently Finalizing 3rd US Gov Grant Designed To Fast-Track Development • MOU w/ Babcock Power To Commercialize Technology • Expect To Have Large-Scale Prototype Plant in Operation by 2010

6. CASTion Water Group • Municipal Division: • Carbon Reduction / Nutrient Removal / Renewable Energy Systems for POTW’s • Key technology: Ammonia Recovery Process (“ARP”) • Industrial Division: • Water Conservation/Reuse / Chemical Recovery / Water Purification • Key technology: Zero Liquid Discharge (“ZLD”) • Municipal Market • 16,000 POTW in US • $8 Billion Overall Market • Ammonia $Billion+ Niche Play • 560 POTW’s Currently Affected • Direct Sls Potential: $600M • D/B/O/O Potential: $1B - $2B in 3 Yrs. • Industrial Market • 185,000+ Facilities US w/ NPDES Permits • $12.5 Billion Overall Mkt • $5.5 Billion Direct Equipment Sale • Water Conservation Rapidly Growing Seg • Fragmented Mkt Provides Excellent • Opportunity for Focused Market Strategy

7. Municipal: ARP Process Overview Process Inputs: Centrate ~ 1,000 ppm N Caustic, Brine, Flocculent, Power Pretreatment Solids Removal Softening Rough Capture Process Outputs: Spent Softening Brine Solids Return Ammonium Sulfate Concentrated Regeneration Solution 7,000ppm Pretreated Centrate Process Inputs: Caustic Acid Power Ammonia Capture: Adsorption Capture Regeneration pH Adjustment Process Outputs: Treated Centrate N <100 ppm • Compared to conventional biological reduction methods, ARP: • Costs 80% less to build • Costs 60% less to operate • Requires less than 1/3 the space • Reduces plant energy usage up to 10% • Substantially reduces carbon emissions • Provides for beneficial reuse of recovered ammonia 7

8. Municipal Market Potential for ARP • Nitrogen/Ammonia Latest Regulatory Problem for Wastewater Plants • Leading Cause of Dead Zones Worldwide (areas devoid of aquatic life) • Currently being regulated in NY / PA / DE / VA / DE / MD / District of Columbia • Similar reg’s pending in states of Illinois, Oregon, Washington, California and Florida • Revenue Model based on four options • Design / Build / Own / Operate (D/B/O/O) – ‘privatization’ • Design / Build / Operate – 26th Ward project • Direct Equipment Sales • Direct License – specific application or territory (royalty) • Potential Revenue based on tipping fees from D/B/O/O model • Based on current revenue projections using $4 lb. ammonia removed tipping fee • Top 20 markets potential: $ 680 M annually • Top 50 markets potential: $ 1.9 B annually • Projected global water/wastewater market 10 times US market 8

9. ARP Near Term Market Potential • New York City project – 26th Ward WPCP Brooklyn • First commercial project • $12.5m project (includes 1 yr of operation) – total project being financed by City • 500,000 gpd centrate / recovering 1.2m lbs. of ammonia annually • Expect to convert project into long-term operating contract • Based on $4 per lb of ammonia removed • NYC generates total of 4.2 mgd from all eight dewatering plants • Revenue potential for treating all 4.2m gpd of NYC centrate = $400 M / 20 yr. Contract • 40% EBITDA margin to TMEN • Additional opportunities being negotiated • Washington Area Sewage Authority’s Blue Plains POTW (3 mgd centrate) • Metropolitan Water Reclamation District of Greater Chicago (5 mgd centrate) • Strategic partnership with larger companies well placed in Company’s target markets 9

10. Industrial Market Overview • CASTion provides custom designed, turn-key wastewater treatment, chemical recovery, water conservation & purification systems worldwide for broad range of industrial applications including: • Refining / pulp & paper / chemical processing / heavy manufacturing / micro electronics / • food processing / textile manufacturing / aircraft manufacturing / consumer products • Client base includes fortune 500 companies such as: • US industrial wastewater treatment market approaching $12.5 billion / year • Key market players are GE / Siemans / US Filter (together representing 40% of the market) • Remaining market is highly fragmented • CASTion Advantages • Extensive IP portfolio • Low cost technology provider • Strategic partnerships with key industry players 10

11. Energy Division • Developing advanced new power plant design known as ThermoEnergy Integrated Power System (“TIPS”) • 2 US patents & 6 foreign patents issued / 31 foreign patents pending • Evolutionary design that delivers revolutionary performance • Based on reliable and well understood oxy-fuel chemistry • Combusts fossil fuels & biomass with zero air emissions • Proprietary carbon capture technology • Phase 1: Finalizing 2-year crash developmentprogram • Funded by 3 US government grants totaling $2.3m • Phase 2: Design / build / operate large-scale prototype plant • MOU with Babcock Power Inc. • CANMET report shows installed cost slight premium to conventional coal plant 11

12. TIPS Market Drivers • Government Regualtions • Clean Air Act – mandated emission reduction • Kyoto Protocol – Nations must diminish CO2 emissions, especially where 50% plus of energy is fossil fuel generated • High Energy Prices • Coal is abundant and cheap • National Security • Promote energy independence • Reduce imported energy

13. TIPS Case Study • Alternative Energy Study for DOW Chemical Plant, Freeport, Texas • Primary energy source for Freeport Plant is natural gas • High natural gas costs ($6 mBtu in 10/04) effecting Plant’s profitability • “Non-Attainment” Status of Air Quality Prevented Use of Alternative Fuel Sources • Alternative Fuel Source Must Equal or Exceed Existing Emissions To Implement • DOW asked ThermoEnergy to Calculate Energy Savings Using TIPS • TIPS’ Zero Air Emission Capability Allowed Use of Alternative Fuels • The Study Matched the Plant’s Energy Matrix Requirements w/ Then Current Fuel Pricing • Resulting in the following: Texas Lignite Annual Energy Savings: $54,000,000 E. Texas High-Sulfur Pet Coke Annual Energy Savings: $80,000,000

14. Management Team • Dennis C. Cossey – Chairman & Chief Executive Officer • 38 Yrs. management experience in both public & private corporations, including IBM, Peter Kiewit & Sons • United Capital Management, American Fuel and Power • Member of NY Academy of Science, American Chemical Society, National Safety Council • Shawn Hughes – President & COO CASTion Corporation • 25 Yrs. experience in management & operations for manufacturing and service industries • including Compaq, NYNEX • Alex Fassbender, P.E. – EVP & Chief Technology Officer • Registered Professional Chemical Engineer with BS & MBA Degrees • Senior level scientist for Department of Energy National Laboratory System • NASA, 23 yrs. Pacific Northwest National Laboratory, 4 R&D 100 Awards, 12 Patents, 20 Scientific Articles • Andrew T. Melton - EVP & Chief Financial Officer • Certified Public Accountant, Certified Internal Auditor, MBA • Extensive financial reporting and acquisition experience • VP Merrill Lynch, SVP BancOklahoma, CFO Worthen Banking Group • David Delasanta - VP Sales & Marketing • 35 Yrs. experience in Environmental Engineering, Construction & Capital Equipment Industries • Marketing and operational experience including Shaw Group, IT, OHM, Metcalf & Eddy and ICF Kaiser • BS Physics, MA Engineering & MBA

15. Investment Conclusions • Highly visible markets with multiple addressable opportunities: • Revenue potential in the hundreds of millions • Recent agreements established to accelerate development of TIPS process: • Babcock Power MOU to develop and implement TIPS technology in future power markets • Highly visible contracts for CASTion deployment: • New York City contract to retrofit ARP technology in Jamaica Bay • Approval implementation notice expected June 2008 • Increasing pipeline for CASTion division for 2008 • High gross margin businesses: • Waste Water – 40% - 50%

16. Contact Us Thermoenergy Corp.Dennis Cossey, Chairman and CEO 124 West Capitol AvenueSuite 880Little Rock, AR 72201Phone: 501-376-6477 dennis.cossey@thermoenergy.comWeb Site: www.thermoenergy.com Investor Relations Contacts: Alliance Advisors, LLC Mark McPartland - 910-221-1827 markmcp@allianceadvisors.net or Bryan Kobel - 212-398-3487 bkobel@allianceadvisors.net