Press Room

Press Release

August 2006

Mountain Island Energy Holdings, LLC Receives Project Endorsements from Idaho Congressional Delegation

Salt Lake City, Utah - Terra Systems, Inc. (Pink Sheets: TSYI - News) - Mountain Island Energy Holdings, LLC (MIEH) is pleased to announce that it has received the support of the entire Idaho Congressional Delegation: Senator Larry Craig, Senator Mike Crapo, Congressman Mike Simpson and Congressman Butch Otter; for MIEH's proposed advanced clean coal fired power generating facility in Soda Springs, Idaho.

In letters of support to Samuel Bodman, Secretary of Energy, US Department of Energy (DOE) and Henry Paulsen, Secretary of the Treasury, US Department of the Treasury; the Idaho Congressional Delegation stated, "The Soda Springs [Idaho] Project addresses the Energy Department's stated policy goals, including: Diversity of Policy Approaches and Methods, Geographic Distribution of Potential Markets, Presentation of Unique Environmental, Economic and Performance Benefits". They added, "We are convinced that the Soda Springs [Idaho] Project exceeds the goals of the Energy Policy Act while addressing several significant and far-reaching national and regional economic, social and economic goals".

As previously announced on June 28, 2006 -- Mountain Island Energy, LLC (MIE) of Soda Springs, Idaho, a subsidiary of Terra Systems Inc. and United Fund Advisors, LLC (UFA) of Portland, Oregon formed Mountain Island Energy Holdings, LLC (MIEH), a Delaware limited liability company. MIEH was formed to make application to the US Treasury and US Department of Energy for federal tax credits for Advanced Coal Projects under Section 48A of the Internal Revenue Code. The holding company unites the strengths of both companies in the pursuit of an Idaho-based advanced clean coal powered generating facility. The formation of MIEH combines the financial and project development resources of UFA and the physical assets, project site and project management strengths of MIE.

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About Terra Systems, Inc.
Terra Systems, Inc. is a clean energy technology company incorporated in 1996 focused on advanced clean coal power generation, enhancement and utilization of waste coal and upgrading of specialty carbon products.

Contact
George Ford
Terra Systems, Inc.
gford3648@msn.com

Note: Certain statements contained herein may be forward-looking statements within the meaning of federal securities laws and Terra Systems, Inc. intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Terra Systems, Inc. expectations as to the managing and marketing of its businesses within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as "expects," "anticipates," "targets," "goals," "projects," believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. Although Terra Systems, Inc. believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this statement.

Company Profile

Terra Systems, Inc. is a development stage company focused on advanced, clean and renewable energy technology applications and projects. TSYI is engaged in the development and commercialization of it's patented pneumatic accelerator system technology and the upgrading of specialty and waste carbon products. Terra Systems was founded in 1996 and is headquartered in Salt Lake City, Utah with a satellite office in Price, Utah.