Edgar Filing: METRETEK TECHNOLOGIES INC

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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

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[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-12

METRETEK TECHNOLOGIES, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

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to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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paid previously. Identify the previous filing by registration statement
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METRETEK TECHNOLOGIES, INC.
303 EAST 17TH AVENUE
SUITE 660
DENVER, COLORADO 80203

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2004

To the Stockholders of
Metretek Technologies, Inc.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Metretek Technologies, Inc., a Delaware corporation (the
"Company"), will be held at The Warwick Hotel, 1776 Grant Street, Denver,
Colorado, on Monday, June 14, 2004 at 9:00 a.m., local time, for the following
purposes:

1. To elect two directors, each to serve for a term of three years and
until his successor is duly elected and qualified;

2. To approve an amendment to the Company's 1998 Stock Incentive Plan
to increase the number of shares of Common Stock authorized for
issuance thereunder by 1,000,000 shares to an aggregate of 2,750,000
shares;

3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 2004;
and

4. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only holders of record of the Company's Common Stock as of the close of
business on May 4, 2004 are entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof.

By Order of the Board of Directors,

Gary J. Zuiderveen
Secretary

Denver, Colorado
May 11, 2004

YOUR VOTE IS IMPORTANT

YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. HOWEVER,
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE REQUESTED TO SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, SELF-ADDRESSED
STAMPED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING AND SO DESIRE, YOU MAY REVOKE YOUR PROXY AND VOTE
YOUR SHARES IN PERSON.

METRETEK TECHNOLOGIES, INC.
303 EAST 17TH AVENUE
SUITE 660
DENVER, COLORADO 80203

PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2004

GENERAL SOLICITATION AND VOTING INFORMATION

PROXY SOLICITATION

This Proxy Statement is furnished to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of Metretek Technologies, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders of the Company to be held at The Warwick Hotel, 1776 Grant
Street, Denver, Colorado, on Monday, June 14, 2004 at 9:00 a.m., local time, and
at any adjournments or postponements thereof (the "Annual Meeting"), for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.
This Proxy Statement, the accompanying proxy card and the Notice of Annual
Meeting of Stockholders are being first mailed to stockholders on or about May
11, 2004.

The solicitation of proxies will initially be made by mail and may
thereafter be made in person or by mail, telephone, facsimile, electronic
communication or other means of communication by the directors, officers and
regular employees of the Company for no additional or special compensation. In
addition, brokerage houses, banks, nominees, trustees, custodians and other
fiduciaries will be requested by the Company to forward proxy solicitation
materials for shares of Common Stock held of record by them to the beneficial
owners of such shares, and such fiduciaries will, upon request, be reimbursed by
the Company for their reasonable out-of-pocket expenses incurred in connection
therewith. The cost of the solicitation of proxies for use at the Annual Meeting
will be borne by the Company.

VOTING RIGHTS AND PROCEDURES

Only holders of record of the Company's Common Stock as of the close of
business on May 4, 2004 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting. As of the close of business on the Record Date,
10,943,201 shares of Common Stock of the Company were issued and outstanding.
Each share of Common Stock outstanding on the Record Date entitles the holder
thereof to one vote on each matter to be voted upon at the Annual Meeting. The
presence, in person or by proxy, at the Annual Meeting of the holders of a
majority of the shares of Common Stock outstanding as of the Record Date is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting.

The directors will be elected by a plurality of the votes cast by the
holders of shares of Common Stock present, in person or by proxy, and entitled
to vote at the Annual Meeting. The affirmative vote of the holders of a majority
of the shares of Common Stock present, in person or by proxy, and entitled to
vote at the Annual Meeting is required to approve an amendment to the Company's
1998 Stock Incentive Plan (the "1998 Stock Plan") to increase the number of
shares of Common Stock authorized for issuance thereunder by 1,000,000 shares to
an aggregate of 2,750,000 shares (the "Stock Plan Proposal"). The affirmative
vote of the holders of a majority of the shares of Common Stock present, in
person or by proxy, and entitled to vote at the Annual Meeting is required to
ratify the appointment of Deloitte & Touche LLP as the Company's independent
auditors for the fiscal year ending December 31, 2004 (the "Auditors Proposal").

Abstentions and "broker non-votes" (shares held of record by brokers or
nominees for a beneficial owner which are not voted on a particular matter
because the broker or nominee has not received voting instructions from the
beneficial owner of such shares and does not have discretionary voting power
with respect to that matter) will be treated as present for purposes of
determining the presence of a quorum for the transaction of business at the
Annual Meeting. Abstentions on a matter will be treated as present on such
matter and, accordingly, (i) will have no effect on the outcome of the election
of directors, and (ii) will have the same effect as votes "AGAINST" the Stock
Plan Proposal and the Auditors Proposal. Broker non-votes on a matter will not
be treated as present on such matter and, accordingly, will have no effect on
the outcome of the election of directors, the Stock Plan Proposal or the
Auditors Proposal.

If a proxy card is properly signed and returned to the Company at or prior
to the Annual Meeting, unless subsequently properly revoked, the shares
represented by that proxy card will be voted at the Annual Meeting in accordance
with the instructions specified thereon. If a proxy card is properly signed and
returned to the Company at or prior to the Annual Meeting without voting
instructions, it will be voted, (i) "FOR" the election as directors of the
persons named herein as the nominees, (ii) "FOR" the Stock Plan Proposal, and
(iii) "FOR" the Auditors Proposal. If any other matters are properly presented
at the Annual Meeting or any adjournments or postponements thereof, the persons
appointed as proxies in the proxy card will have the discretionary authority to
vote or act thereon in accordance with their best judgment.

A stockholder may revoke a proxy at any time before it is exercised, by
delivering to the Secretary of the Company a written notice of revocation, by
delivering a properly signed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not
in and of itself constitute the revocation of a proxy.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of May 4, 2004 (except as
otherwise noted) by (i) each person known to the Company to be the beneficial
owner of more than 5% of the outstanding shares of Common Stock; (ii) each
director and nominee for director of the Company; (iii) each of the Named
Executive Officers (as defined in "Executive Compensation" below); and (iv) all
directors and executive officers of the Company as a group.

SHARES OF COMMON STOCK (1)
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NAME OF BENEFICIAL OWNER NUMBER PERCENT (2)
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DDJ Capital Management, LLC (3)....................... 3,045,065 24.1
141 Linden Street, Suite S-4
Wellesley, Massachusetts 02482
Special Situations Funds (4).......................... 1,618,406 13.4
153 East 53rd Street
New York, New York 10022
Gruber & McBain Capital Management (5)................ 967,740 8.7
50 Osgood Place, Penthouse
San Francisco, CA 94133
Smithfield Fiduciary LLC (6).......................... 600,000 5.4
c/o Highbridge Capital Management, LLC
9 West 57th Street, 27th Floor
New York, NY 10019
W. Phillip Marcum (7)................................. 416,634 3.7
A. Bradley Gabbard (8)................................ 361,452 3.2
Sidney Hinton (9)..................................... 235,000 2.1
Anthony D. Pell (10).................................. 137,264 1.2
Basil M. Briggs (11).................................. 121,138 1.1
Kevin P. Collins (12)................................. 115,665 1.0
Thomas R. Kellogg (13)................................ 100,000 0.9
Gary J. Zuiderveen (14)............................... 38,798 0.3
All directors and executive officers
as a group (8 persons)(15)....................... 1,525,951 13.8

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(1) For purposes of this table, the "Number" and the "Percent" of shares
of Common Stock beneficially owned is determined in accordance with
Rule 13d-3 promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and such information is not necessarily indicative
of beneficial ownership for any other purpose. Under Rule 13d-3,
beneficial ownership includes any shares as to which the beneficial
owner has sole or shared voting power or investment power and any
shares that the beneficial owner has the right to acquire within 60
days of May 4, 2004 through the exercise of any stock option,
warrant or other right to acquire shares of Common Stock. In
addition, such shares are deemed to be outstanding in calculating
the percent of class beneficially owned by such beneficial owner,
but are

not deemed to be outstanding in determining the percent of class
beneficially owned by any other beneficial owner. Unless otherwise
indicated in the notes below, each beneficial owner has sole voting
and investment power (or shares such power with his spouse) with
respect to the shares shown as beneficially owned, subject to
community property laws where applicable.

(2) The percent of class is based upon 10,943,201 shares of Common Stock
outstanding as of May 4, 2004.

(3) Information based, in part, on Schedule 13G filed with the SEC on
February 14, 2002 by State Street Bank and Trust Company, as trustee
for General Motors Employees Global Group Pension Trust (which has
been succeeded in interest by GMAM Investment Funds Trust II-Promark
Alternative High Yield Bond Fund ("GMAM") and General Motors
Investment Management Corporation ("GMIMCO"), indicating beneficial
ownership as of December 31, 2001. Information also based, in part,
on Amendment No. 4 to Schedule 13D filed with the SEC on December
27, 2000, by DDJ Capital Management, LLC ("DDJ"), B III-A Capital
Partners, L.P. ("B III-A Capital Partners") and GP III-A, LLC ("GP
III-A"), indicating beneficial ownership as of December 9, 2000.
Includes 221,497 shares of Common Stock held by B III-A Capital
Partners, 664,484 shares of Common Stock held by DDJ Canadian High
Yield Fund, and 442,998 shares of Common Stock held by GMAM. GP
III-A is the general partner of, and DDJ is the investment manager
for, B III-A Capital Partners. DDJ is the investment advisor to the
DDJ Canadian High Yield Fund. DDJ is an investment manager for GMAM.
Also includes 1,028,969 shares of Common Stock that may be acquired
upon the exercise of currently exercisable warrants, of which
warrants to purchase 171,497 shares are owned by B III-A Capital
Partners, warrants to purchase 514,484 shares are owned by DDJ
Canadian High Yield Fund, and warrants to purchase 342,988 shares
are owned by GMAM. Also includes 687,117 shares of Common Stock that
may be acquired upon the conversion of 1,500 shares of Series B
Preferred Stock, of which 250 shares of Series B Preferred Stock
convertible into 114,519 shares of Common Stock are owned by B
III-A, 750 shares of Series B Preferred Stock convertible into
343,559 shares of Common Stock are owned by DDJ Canadian High Yield
Fund, and 500 shares of Series B Preferred Stock convertible into
229,039 shares of Common Stock are owned by GMAM.

(4) Information based, in part, upon Amendment No. 2 to Schedule 13G
filed with the SEC on February 13, 2004 by Austin W. Marxe and David
M. Greenhouse, indicating beneficial ownership as of December 31,
2004. Austin W. Marxe and David M. Greenhouse are the controlling
principals of AWM Investment Company, Inc. ("AWM"). AWM is the
general partner of MGP Advisors Limited Partnership ("MGP Partners")
and the general partner of and the investment advisor to Special
Situations Cayman Fund, L.P. MGP Advisors is the general partner of
and investment adviser to Special Situations Fund III, L.P. Messrs.
Marxe and Greenhouse are also members of MG Advisers, L.L.C. ("MG
Advisers"), the general partner of and the investment advisor to the
Special Situations Private Equity Fund, L.P. and members of SST
Advisers, L.L.C., the general partner of and investment advisor to
the Special Situations Technology Fund, L.P. and Special Situations
Technology Fund II, L.P. Includes 198,303 shares of Common Stock
held are held by Special Situations Fund III, 120,522 shares of
Common Stock held by Special Situations Private Equity Fund, 14,655
shares of Common Stock held by Special Situations Technology Fund,
76,482 shares of Common Stock held by Special Situations Technology
Fund II and 65,782 shares of Common Stock held by Special Situations
Cayman Fund. Also includes 680,164 shares of Common Stock that may
be acquired upon the exercise of currently exercisable warrants, of
which warrants to purchase 280,808 shares are owned by Special
Situations Fund III, warrants to purchase 170,522 shares are owned
by Special Situations Private Equity Fund, warrants to purchase
21,201 shares are owned by Special Situations Technology Fund,
warrants to purchase 109,936 shares are owned by Special Situations
Technology Fund II and warrants to purchase 93,282 shares are owned
by Special Situations Cayman Fund. Also includes 458,078 shares of
Common Stock that may be acquired upon the conversion of 1,000
shares of Series B Preferred Stock, of which 412 shares of Series B
Preferred Stock convertible into 188,728 shares of Common Stock are
owned by Special Situations Fund III, 249 shares of Series B
Preferred Stock convertible into 114,061 shares of Common Stock are
owned by Special Situations Private Equity Fund, 33 shares of Series
B Preferred Stock convertible into 15,117 shares of Common Stock are
owned by Special Situations Technology Fund, 168 shares of Series B
Preferred Stock convertible into 76,957 shares of Common Stock are
owned by Special Situations Technology Fund II, and 138 shares of
Series B Preferred Stock convertible into 63,215 shares of Common
Stock are owned by Special Situations Cayman Fund.

(5) Includes 564,516 shares of Common Stock held by Lagunitas Partners
LP ("Lagunitas"), 145,161 shares held by Gruber & McBain
International, 48,387 shares held by Jon D. Gruber, and 48,387
shares held by J. Patterson McBain. Also includes 161,289 shares of
Common Stock that may be acquired upon the exercise of currently
exercisable warrants, of which warrants to purchase 112,903 shares
of Common Stock are held by Lagunitas,

warrants to purchase 29,032 shares of Common Stock held by Gruber &
McBain International, warrants to purchase 9,671 shares of Common
Stock are held by Jon D. Gruber, and warrants to purchase 9,671
shares of Common Stock are held by J. Patterson McBain. Gruber &
McBain Capital Management is the manager of Gruber & McBaine
International and the general partner of Lagunitas. Jon D. Gruber
and J. Patterson McBain are managers of Gruber & McBain Capital
Management and have voting control and investment discretion over
the securities held by Lagunitas and Gruber & McBain International.
Lagunitas, Gruber & McBain International, Jon D. Gruber and J.
Patterson McBain disclaim beneficial ownership of shares held by
each other.

(6) Highbridge Capital Management, LLC ("Highbridge") is the trading
manager of Smithfield Fiduciary LLC ("Smithfield") and consequently
has voting control and investment discretion over the securities
held by Smithfield.

(7) Includes 250,000 shares that may be acquired by Mr. Marcum upon the
exercise of currently exercisable stock options.

(8) Includes 2,187 shares owned by Mr. Gabbard's minor son and 237,500
shares that may be acquired by Mr. Gabbard upon the exercise of
currently exercisable stock options.

(9) Includes 145,000 shares that may be acquired by Mr. Hinton upon the
exercise of currently exercisable stock options.

(10) Includes 2,937 shares held by Mr. Pell's wife. Also includes 110,915
shares that may be acquired by Mr. Pell upon the exercise of
currently exercisable stock options.

(11) Includes 9,500 shares owned by Mr. Briggs' wife. Also includes 5,686
shares that may be acquired by Mr. Briggs upon the exercise of
currently exercisable stock options.

(12) Includes 113,415 shares that may be acquired by Mr. Collins upon the
exercise of currently exercisable stock options.

(13) Includes 100,000 shares that may be acquired by Mr. Kellogg upon the
exercise of currently exercisable stock options.

(14) Includes 31,000 shares that may be acquired by Mr. Gary Zuiderveen
upon the exercise of currently exercisable stock options.

(15) Includes 993,516 shares that may be acquired upon the exercise of
currently exercisable stock options. See note notes (7) through
(14).

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The Board of Directors of the Company currently consists of five members
divided into three classes, designated Class I, Class II and Class III, with
members of each class serving staggered three year terms. Of the five members of
the Board of Directors, four members are elected by the holders of the Company's
Common Stock and one member is designated or elected by the holders of the
Company's Series B Preferred Stock, par value $.01 per share (the "Series B
Preferred Stock"). The holders of Series B Preferred Stock, voting separately as
a class, are entitled to designate and elect one director of the Company to
serve so long as at least 2,000 shares of Series B Preferred Stock remain
outstanding. In April 2003, the holders of the Series B Preferred Stock
re-elected Kevin P. Collins as their designee to serve on the Board of
Directors.

The term of the Class I directors expires at the Annual Meeting. Two Class
I directors are to be elected at the Annual Meeting, each to serve for a term of
three years and until his successor is duly elected and qualified. On the
recommendation of the Nominating and Corporate Governance Committee, the Board
of Directors has nominated W. Phillip Marcum and Basil M. Briggs to be
re-elected as Class I directors. All other directors will continue in office
until the expiration of their respective terms, as indicated below, and until
their respective successors are duly elected and qualified.

The Class I directors will be elected by a plurality of the votes cast by
the holders of shares of Common Stock present, in person or by proxy, and
entitled to vote at the Annual Meeting. If properly signed and returned to the
Company at or prior to the Annual Meeting, the accompanying proxy card will be
voted for the election of the nominees listed below, unless contrary
instructions are specified. Although the Board of Directors has no reason to
believe that any of the nominees listed below will decline or be unable to serve
as a director, should that occur, the persons appointed as proxies in the
accompanying proxy card intend to vote, unless the number of nominees or
directors is reduced by the Board of Directors, for such other nominee as the
Board of Directors may designate, on the recommendation of the Nominating and
Corporate Governance Committee.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
AS DIRECTORS OF THE PERSONS LISTED BELOW AS "NOMINEES". PROXY CARDS SIGNED AND
TIMELY RETURNED TO THE COMPANY WILL BE SO VOTED, UNLESS CONTRARY INSTRUCTIONS
ARE SPECIFIED THEREON.

NOMINEES

CLASS I - TERM EXPIRES IN 2007

W. PHILLIP MARCUM, 60, a founder of the Company, has served as the
Chairman of the Board, President, Chief Executive Officer and a director of the
Company since its incorporation in April 1991. He also serves as the Chairman of
each of the Company's subsidiaries. Mr. Marcum currently serves on the board of
directors of Key Energy Services, Inc. ("Key"), New Hope, Pennsylvania, an
oilfield service provider.

BASIL M. BRIGGS, 68, has served as a director of the Company since June
1991. He has been an attorney in the Detroit, Michigan area since 1961,
practicing law with Cox, Hodgman & Giarmarco, P.C., Troy, Michigan, since
January 1997. Mr. Briggs was of counsel with Miro, Weiner & Kramer, P.C.,
Bloomfield Hills, Michigan, from 1987 through 1996. He was the President of
Briggs & Williams, P.C., Attorneys at Law, from its formation in 1977 through
1986. Mr. Briggs was the Secretary of Patrick Petroleum Company ("Patrick
Petroleum"), Jackson, Michigan, an oil and gas company, from 1984, and a
director of Patrick Petroleum from 1970, until Patrick Petroleum was acquired by
Goodrich Petroleum Company ("Goodrich Petroleum"), Houston, Texas, an oil and
gas company, in August 1995. From August 1995 until June 2000, he served as a
director of Goodrich Petroleum.

CONTINUING DIRECTORS

CLASS II - TERM EXPIRES IN 2005

A. BRADLEY GABBARD, 49, a founder of the Company, has served as an
executive officer and director of the Company since its incorporation in April
1991. He has served as the Executive Vice President of the Company since July
1993 and has also served as the Chief Financial Officer and Treasurer of the
Company since August 1996 and from April 1991 until July 1993. He also serves as
the Chief Financial Officer of each of the Company's subsidiaries. Mr. Gabbard
also served as the Secretary of the Company from May 2000 until April 2001, and
as the Vice President and the Secretary of the Company from April 1991 through
July 1993.

CLASS III - TERM EXPIRES IN 2006

ANTHONY D. PELL, 65, has served as a director of the Company since June
1994. Mr. Pell is the President, Chief Executive Officer and a co-owner of
Pelican Investment Management, an investor advisory firm with offices in Boston,
Massachusetts and New York, New York, which he co-founded in November 2001. Mr.
Pell is a director of Rochdale Investment Management, Inc., New York, New York.
He was the President and a co-owner of Pell, Rudman & Co., Boston,
Massachusetts, an investment advisory firm, from 1981 until 1993, when it was
acquired by United Asset Management Company, and he continued to serve as an
employee until June 1995. Mr. Pell was a director of Metretek Florida from 1985
until Metretek Florida was acquired by the Company in March 1994. Mr. Pell was
associated with the law firm of Coudert Brothers from 1966 to 1968 and with the
law firm of Cadwalder, Wickersham and Taft from 1968 to 1972, specializing in
estate and tax planning. In 1972, Mr. Pell joined Boston Company Financial
Strategies, Inc. as a Vice President and was appointed a Senior Vice President
in 1975.

SERIES B PREFERRED STOCK DIRECTOR

KEVIN P. COLLINS, 53, has served as a director of the Company since March
2000. Mr. Collins has been a Managing Member of The Old Hill Company LLC,
Westport, Connecticut, which provides corporate financial and advisory services,
since 1997. From 1992 to 1997, he served as a principal of JHP Enterprises,
Ltd., and from 1985 to 1992, he served as Senior Vice President of DG Investment
Bank, Ltd., both of which were engaged in providing corporate finance and
advisory services. Mr. Collins has served as a director of Key since March 1996;
a director of The Penn Traffic Company, Syracuse, New York, a food retailer,
since June 1999; and a director of London Fog Industries, Inc., Seattle,
Washington, an outerwear designer and distributor, since 1999. Mr. Collins is a
Chartered Financial Analyst.

EXECUTIVE OFFICERS AND KEY EMPLOYEES

The executive officers and certain other key employees of the Company and
its subsidiaries are as follows:

W. PHILLIP MARCUM, 60, a founder of the Company, has served as the
Chairman of the Board, President, Chief Executive Officer and a director of the
Company since April 1991. He also serves as the Chairman of each of the
Company's subsidiaries.

GARY J. ZUIDERVEEN, 45, has served as the Controller, Principal Accounting
Officer and Secretary of the Company since April 2001. He previously served as
the Controller of the Company from May 1994 until May 2000 and as the Secretary
and Principal Accounting Officer of the Company from August 1996 until May 2000.
Since March 2000, he has also served as the Secretary, Controller, and Principal
Accounting Officer of PowerSpring, Inc., a subsidiary of the Company. He also
serves in one or more of the capacities of Controller, Principal Accounting
Officer or Secretary of the other subsidiaries of the Company. From June 1992
until May 1994, Mr. Zuiderveen was the General Accounting Manager at the
University Corporation for Atmospheric Research in Boulder, Colorado. From 1983
until June 1992, Mr. Zuiderveen was employed in the Denver, Colorado office of
Deloitte & Touche LLP, providing accounting and auditing services to clients
primarily in the manufacturing and financial services industries and serving in
the firm's national office accounting research department.

WOOD A. BREAZEALE, JR., 74, has served as the President, Chief Executive
Officer and a director of Southern Flow Companies, Inc., a wholly-owned
subsidiary of the Company, since May 1993. Mr. Breazeale was formerly the
President and Chief Operating Officer of the Southern Flow Companies, a division
of Homco International, Inc., and a Vice President of Homco International, Inc.
from 1979 until the Company purchased the assets of the Southern Flow Companies
division in April 1993. Mr. Breazeale founded Southern Flow Companies in 1953.

SIDNEY HINTON, 41, has served as the President and Chief Executive Officer
and a director of PowerSecure, Inc. ("PowerSecure"), a wholly-owned subsidiary
of the Company, since its incorporation in September 2000. He also served as the
President and Chief Executive Officer of PowerSpring, Inc., a wholly-owned
subsidiary of the Company, from May 2000

until January 2001. From February 2000 until May 2000, Mr. Hinton was an
Executive-in-Residence with Carousel Capital, Charlotte, North Carolina, a
private equity firm. From February 1999 until December 1999, he was the Vice
President of Market Planning and Research for Carolina Power & Light (now known
as Progress Energy), Raleigh, North Carolina. From August 1997 until December
1998, Mr. Hinton was the President and Chief Executive Officer of IllumElex
Lighting Company, Raleigh, North Carolina, a national lighting company. From
1982 until 1997, Mr. Hinton was employed in several positions with Southern
Company and Georgia Power Company, Atlanta, Georgia.

THOMAS R. KELLOGG, 43, has served as the President and Chief Executive
Officer and a director of Metretek, Incorporated ("Metretek Florida"), a
wholly-owned subsidiary of the Company, since June 24, 2002. Mr. Kellogg has
more than 20 years experience in the energy and telecommunications industries.
From May 2000 to May 2002, Mr. Kellogg was the Executive Vice President and
General Manager of the Networks & Facilities Group of RCC Communications, in
Woodbridge, New Jersey. RCC Communications is a telecommunications consulting,
engineering, design, construction and operations company with offices in the
U.S. and abroad. From February 1999 to May 2000, he served as the Vice President
and General Manager of MOBEX Managed Services Company, currently headquartered
in Washington, D.C., a subsidiary of MOBEX Communications, Inc., a provider of
specialized mobile radio services and systems integration for wireless and wire
line telecommunications service providers. From October 1997 until November
1998, Mr. Kellogg was the Chief Financial Officer and Corporate Secretary of
IllumElex Corporation, based in Raleigh, North Carolina, a national lighting and
energy services company. From April 1995 until October 1997, he served as the
Vice President and General Manager of Southern Development and Investment Group,
located in Atlanta, Georgia, a wholly-owned subsidiary of the Southern Company
focused on the identification, development, funding, and deployment of various
energy, telecommunications and technology related businesses. Prior thereto, he
served in various capacities for divisions of the Southern Company, including
Georgia Power Company, Mississippi Power Company, Southern Company Services and
SouthernLinc.

CORPORATE GOVERNANCE

The Company is committed to strong corporate governance. During 2003, the
Board of Directors adopted a formal set of Corporate Governance Guidelines,
which are intended to formalize the corporate governance practices to which the
Company adheres through its Board of Directors and Board committees. The Board
continually reviews its corporate governance practices in light of changes and
developments in Delaware law, SEC rules and regulations and stock market
requirements as well as best practices recommended by recognized authorities.
The Company's Corporate Governance Guidelines are available to the public at the
Company's website at www.metretek.com under "Investor Info -- Corporate
Governance".

DIRECTOR INDEPENDENCE

The Board of Directors is committed to having a majority of its members
being "independent", based upon the meaning of that term under applicable SEC
rules and regulations and stock market requirements. Because the Company's
Common Stock is currently traded on the OTC Bulletin Board and not on any
national securities exchange or stock market, the Board of Directors currently
utilizes the definition of independence set forth in the listing standards of
the Nasdaq Stock Market in evaluating the independence of its members. In
addition, the Board of Directors has adopted a general standard that no director
will be considered independent who has any other material relationship with the
Company that could interfere with the director's ability to exercise independent
judgment. Based upon these standards, the Board of Directors has determined that
each of its non-management directors (Basil M. Briggs, Anthony D. Pell and Kevin
P. Collins), which directors constitute a majority of the members of the Board
and all of the members of the Audit, Compensation and Nominating and Corporate
Governance Committees, are independent.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company held a total of six meetings during
2003. During 2003, no director attended fewer than 75% of the aggregate of the
total number of meetings of the Board of Directors and the total number of
meetings of committees of the Board of Directors on which he served.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established a standing Audit Committee,
Compensation Committee and Nominating and Corporate Governance Committee. The
membership of each committee and its functions, duties and responsibilities are

discussed below. Each of the committees operates under a written charter adopted
by the Board. All of the committee charters are available to the public on the
Company's website at www.metretek.com under "Investor Info -- Corporate
Governance".

AUDIT COMMITTEE. The Board of Directors has established a standing Audit
Committee in accordance with Section 3(a)(58)(A) of the Exchange Act. The
members of the Audit Committee are Anthony D. Pell, Chairman, Basil M. Briggs
and Kevin P. Collins. The Board of Directors has determined that each member of
the Audit Committee is "independent", as that term is used in Item 7(d)(3)(iv)
of Schedule 14A under the Exchange Act and Rule 10A-3 under the Exchange Act,
and would be deemed to be an "independent director" under the current listing
standard of the Nasdaq Stock Market. The Board of Directors has also determined
that each member of the Audit Committee is financially literate and is an "audit
committee financial expert", as that term is defined in Item 401(h) of
Regulation S-K under the Exchange Act. The Audit Committee formally met five
times during 2003, and also met informally several other times.

The function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight and monitoring responsibilities relating to the quality
and integrity of the Company's financial statements and the Company's
accounting, auditing and financial reporting functions. The Audit Committee's
duties and responsibilities include the following:

- reviewing and discussing with management and the Company's
independent auditors the annual audited and quarterly unaudited
consolidated financial statements of the Company;

- determining whether to recommend to the Board of Directors that the
Company's annual consolidated financial statements be included in
the Company's Annual Report on Form 10-K;

- appointing the independent auditors;

- reviewing and pre-approving the nature, scope and fee arrangements
of the annual audit and non-audit services of the Company's
independent auditors;

- reviewing the independence of the independent auditors;

- reviewing the scope and the results of the annual audit of the
Company's consolidated financial statements by the independent
auditors;

- reviewing and discussing with management, the Company's internal
accountants and the independent auditors the Company's accounting
and financial reporting plans and policies and the adequacy of the
Company's system of internal controls;

- reviewing any transaction that involves a potential conflict of
interest;

- adopting procedures for the receipt, retention and treatment of
employee concerns and complaints regarding accounting, internal
controls or auditing matters; and

- providing other assistance to the Board of Directors, as requested,
with respect to the financial, accounting and reporting practices of
the Company.

The Audit Committee performs its functions and responsibilities under a
formal written charter adopted by the Board of Directors. A copy of the Audit
Committee Charter, as amended and restated by the Board of Directors on March
21, 2003, was attached to the proxy statement for last year's annual meeting of
stockholders and is available to the public on the Company's website at
www.metretek.com under "Investor Info -- Corporate Governance". The Report of
the Audit Committee is set forth on page 27 of this Proxy Statement.

COMPENSATION COMMITTEE. The Board of Directors has established a standing
Compensation Committee. The members of the Compensation Committee are Basil M.
Briggs, Chairman, Anthony D. Pell and Kevin P. Collins. The Board of Directors
has determined that each member of the Compensation Committee is "independent",
as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act
and Rule 10A-3 under the Exchange Act, and would be deemed to be an "independent
director" under the current listing requirements of the Nasdaq Stock Market. The
Compensation Committee formally met three times during 2003, and also met
informally additional times.

The function of the Compensation Committee is to review and approve the
compensation of the Company's executive officers and to oversee the Company's
compensation plans and policies generally. The Compensation Committee's duties
and responsibilities include:

- reviewing and approving the compensation of executive officers,
including the Company's chief executive officer;

- approving employment agreements for executive officers;

- reviewing and approving the compensation of directors;

- assisting the Board of Directors in administering and recommending
changes to the Company's stock and incentive compensation plans and
programs; and

- producing an annual report on executive compensation for inclusion
in the Company's annual proxy statement.

The Compensation Committee performs its functions and responsibilities
under a formal written charter adopted by the Board of Directors. A copy of the
Compensation Committee Charter, as adopted by the Board of Directors on June 9,
2003, is available on the Company's website at www.metretek.com under "Investor
Info -- Corporate Governance". The Report of the Compensation Committee is set
forth on page 17 of this Proxy Statement.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Board of Directors has
established a standing Nominating and Corporate Governance Committee. The
members of the Nominating and Corporate Governance Committee are Kevin P.
Collins, Chairman, Basil M. Briggs and Anthony D. Pell. The Board of Directors
has determined that each member of the Nominating and Corporate Governance
Committee is "independent", as that term is used in Item 7(d)(3)(iv) of Schedule
14A under the Exchange Act and Rule 10A-3 under the Exchange Act, and would be
deemed to be an "independent director" under the current listing requirements of
the Nasdaq Stock Market. The Nominating and Corporate Governance Committee met
one time during 2003.

The Nominating and Corporate Governance Committee (i) identifies
individuals qualified to become members of the Board of Directors; (ii)
recommends qualified individuals for nomination to the Board of Directors; (iii)
advises the Board of Directors with respect to its composition, procedures and
committees; and (iv) reviews and evaluates the Company's corporate governance
guidelines and principles and recommends to the Board of Directors any changes
to such procedures that it deems necessary. Other specific duties and
responsibilities of the Nominating and Corporate Governance Committee include:

- assessing the size and composition of the Board;

- developing membership qualifications for Board committees;

- monitoring compliance with Board and Board committee membership
criteria;

- recommending Board committee assignments;

- reviewing and recommending proposed changes to the Company's
Corporate Governance Guidelines; and

- reviewing governance-related stockholder proposals and recommending
Board responses.

The Nominating and Corporate Governance Committee recommended each of the
directors currently standing for re-election at the Annual Meeting, which
recommendation was unanimously approved by the Board of Directors.

The Nominating and Corporate Governance Committee performs its functions
and responsibilities under a formal written charter adopted by the Board of
Directors. A copy of the Nominating and Corporate Governance Committee Charter,
as adopted by the Board of Directors on June 9, 2003, is available on the
Company's website at www.metretek.com under "Investor Info -- Corporate
Governance".

EXECUTIVE SESSIONS

Executive sessions of non-management directors, without any management
directors or other members of management being present, are held at least twice
a year, and more often if such directors deem appropriate. The sessions are
scheduled and chaired by the Chairman of the Nominating and Corporate Governance
Committee. Any non-management director can request that additional executive
sessions be scheduled.

DIRECTOR ATTENDANCE AT ANNUAL MEETINGS OF STOCKHOLDERS

The Board of Directors expects all directors to attend each annual meeting
of stockholders, except where the failure to attend is due to unavoidable or
unforeseeable circumstances. All members of the Board of Directors, except one
due to unavoidable circumstances, attended last year's annual meeting of
stockholders.

CONSIDERATION OF DIRECTOR NOMINEES

IDENTIFYING AND EVALUATING NOMINEES. The Nominating and Corporate
Governance Committee utilizes a variety of methods for identifying and
evaluating nominees for director. In selecting candidates for nomination at an
annual meeting of the Company's stockholders, the Nominating and Corporate
Governance Committee begins by determining whether the incumbent directors whose
terms expire at that meeting desire and are qualified to continue their service
on the Board. The Nominating and Corporate Governance Committee believes that
the continuing service of qualified incumbents promotes stability and continuity
in the Board room, giving the Company the benefit of the familiarity and insight
into the Company's affairs that its directors have accumulated during their
tenure, while contributing to the Board`s ability to work as a collective body.
Accordingly, it is the policy of the Nominating and Corporate Governance
Committee, absent special circumstances, to nominate qualified incumbent
directors who continue to satisfy the criteria for membership on the Board, and
who the Nominating and Corporate Governance Committee believes will continue to
make important contributions to the Board and who consent to stand for
reelection, to continue their service on the Board. If there are Board positions
for which the Committee will not be re-nominating a qualified incumbent, the
Nominating and Corporate Governance Committee will consider recommendations for
director nominees from a wide variety of sources, including Board members,
management, business contacts, professional search firms, stockholders and other
appropriate sources. In evaluating such recommendations, the Nominating and
Corporate Governance Committee seeks to achieve a balance of knowledge,
experience and capability on the Board and to address the criteria for
membership set forth below under " -- Qualifications of Nominees". Candidates
recommended by the Nominating and Corporate Governance Committee are subject to
approval by the Board. Each nominee for election to the Board this year
previously served as a director of the Company.

QUALIFICATIONS OF NOMINEES. The Nominating and Corporate Governance
Committee is responsible for reviewing with the Board the requisite skills and
characteristics of new Board candidates in the context of the current
composition of the Board, the operating requirements of the Company and the
long-term interests of stockholders. The Nominating and Corporate Governance
Committee has not established any specific minimum requirements for
qualifications or skills that candidates for membership on the Board must
possess, although from time to time the Nominating and Corporate Governance
Committee may identify certain skills or attributes as being particularly
desirable to help meet specific Board needs that have arisen. In evaluating
potential candidates for directorship, the Nominating and Corporate Governance
Committee considers all factors that it deems relevant, including but not
limited to independence, business and professional skills, background,
experience, personal integrity, judgment, skill, financial and accounting
background and literacy, actual and potential conflicts of interest, diversity,
existing commitments to other businesses, past performance (for incumbent
directors) and such other factors as it deems relevant, given the needs of the
Board and the Company at that time, to maintain an appropriate balance of
knowledge, experience and capability.

STOCKHOLDER NOMINEES. The policy of the Nominating and Corporate
Governance Committee is to consider properly submitted written nominations from
stockholders for nominees for director. In general, persons properly recommended
by stockholders as nominees for director are evaluated on the same basis as
candidates recommended by other sources. Any such nominations made by
stockholders must be submitted in compliance with the requirements for
stockholder nominations set forth in the Bylaws of the Company and described
under the caption "Stockholder Proposals" below, and should include the
following: (a) the name and address of the stockholder making the nomination and
the number of shares of the Company's Common Stock which are owned beneficially
and of record by such stockholder; (b) the nominee's name, age, address, number
of shares of Common Stock owned beneficially and of record, background,
experience, education and qualifications for Board memberships and (c) all other
information relating to such nominee that is required to be disclosed pursuant
to Regulation 14A under the Exchange Act (including such person's written
consent to

be named in the proxy statement as a nominee and to serving as a director if
elected). Nominations by stockholders must be addressed to:

Metretek Technologies, Inc.
303 East Seventeenth Street
Suite 660
Denver, Colorado 80203
Attn: Corporate Secretary

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Any stockholder who wishes to communicate directly with the Board of
Directors, any committee of the Board or any specific director may do so by
directing a written request addressed to such director or directors in care of
the Company's Corporate Secretary at the Company's principle executive offices.
Communications directed to members of the Board will be forwarded to the
intended Board members, unless such communication is deemed unduly hostile,
threatening, illegal or otherwise unnecessary or inappropriate to forward, in
which case the Corporate Secretary has the authority to discard the
communication or to take appropriate action regarding such communication.

CODES OF ETHICS

The Company has adopted two codes of ethics, each designed to promote its
directors, officers and employees to act with the highest integrity. Each of
these codes is publicly available on the Company's website at www.metretek.com
under "Investor Info -- Corporate Governance." In addition, the Company will
provide a copy of these codes without charge upon written request addressed to
Corporate Secretary, at Metretek Technologies, Inc., 303 East Seventeenth
Avenue, Suite 660, Denver, Colorado, 80203.

The Company has adopted the Metretek Technologies, Inc. Code of Ethics for
Principal Executive Officer and Senior Financial Officers, which is a code of
ethics that applies to its Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and other senior finance organization employees.
The purpose of this Code of Ethics is to deter wrongdoing and to promote, among
other things, honest and ethical conduct and to ensure to the greatest possible
extent that the business of the Company is conducted in a consistently legal and
ethical manner. If the Company makes any substantive amendment to the Code of
Ethics or grants any waiver, including any implicit waiver, from a provision of
the Code of Ethics to its Chief Executive Officer, Chief Financial Officer or
Principal Accounting Officer, it will promptly disclose the nature of such
amendment or waiver on its website or in a current report on Form 8-K.

The Company has also adopted the Metretek Technologies, Inc. Code of
Business Conduct and Ethics, a code of conduct that applies to all of its
directors, officers and employees. Under the Code of Business Conduct and
Ethics, each officer, director and employee is required to maintain a commitment
to high standards of business conduct and ethics. The Code of Business Conduct
and Ethics covers many areas of professional conduct, including conflicts of
interests, protection of confidential information, and strict adherence to laws
and regulations applicable to the conduct of the Company's business. Directors,
officers and employees are required to report any conduct that they believe in
good faith to be an actual or apparent violation of the Code of Business Conduct
and Ethics. If the Company makes any substantive amendment to the Code of
Business Conduct and Ethics or grants any waiver, including any implicit waiver,
from a provision thereof to its Chief Executive Officer, Chief Financial Officer
or Principal Accounting Officer, it will promptly disclose the nature of such
amendment or waiver on its website or in a current report on Form 8-K.

The Company also has adopted procedures to receive, retain and treat
complaints regarding accounting, internal accounting controls or auditing
matters and to allow for the confidential and anonymous submission by employees
of concerns regarding questionable accounting or auditing matters.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION

The following table sets forth the total compensation that the Company
paid or accrued for services rendered to the Company and its Subsidiary in all
capacities during the last three fiscal years by its Chief Executive Officer and
by its other executive officers (the "Named Executive Officers") whose total
salary and bonus exceeded $100,000 in the fiscal year ended December 31, 2003
("fiscal 2003"):

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
SECURITIES
ANNUAL COMPENSATION(1) UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(3)
------------------------------------ ---- -------- ------- ------------ ---------------

W. Phillip Marcum................... 2003 $295,000 $ 0 0 $ 7,138
President and Chief 2002 295,000 0 0 6,471
Executive Officer 2001 295,000 0 200,000 6,188

A. Bradley Gabbard.................. 2003 175,000 75,000 0 7,117
Executive Vice 2002 175,000 0 0 6,314
President and Chief 2001 175,000 0 200,000 6,060
Financial Officer
Sidney Hinton (4)................... 2003 250,000 117,341 0 7,138
President,
PowerSecure, Inc.
Thomas R. Kellogg (4)............... 2003 175,000 21,354 0 5,990
President,
Metretek Florida
Gary J. Zuiderveen (5).............. 2003 92,692 15,000 0 3,925
Controller and Principal
Accounting Officer

---------------------
(1) Excludes perquisites and other personal benefits, if any, which were less
than the lesser of $50,000 or 10% of the total annual salary and bonus
reported for each Named Executive Officer.

(2) All options were fully vested as of December 31, 2003.

(3) Includes amounts paid or accrued on behalf of the Named Executive Officers
in fiscal 2003 for:

- matching contributions under the Company's 401(k) plan of $6,000 for
Mr. Marcum, $6,000 for Mr. Gabbard, $6,000 for Mr. Hinton, $5,250
for Mr. Kellogg and $3,231 for Mr. Zuiderveen;

- premiums for group term life insurance of $882 for Mr. Marcum, $861
for Mr. Gabbard, $882 for Mr. Hinton, $360 for Mr. Kellogg and $438
for Mr. Zuiderveen; and

- premiums for long-term disability insurance of $256 for Mr. Marcum,
$256 for Mr. Gabbard, $256 for Mr. Hinton, $380 for Mr. Kellogg and
$256 for Mr. Zuiderveen.

(4) Named as an executive officer by the Board of Directors during 2003.

(5) Fiscal 2003 was the first year his total salary and bonus exceeded
$100,000.

EMPLOYMENT AGREEMENTS, CHANGE IN CONTROL ARRANGEMENTS AND OTHER COMPENSATION
ARRANGEMENTS

W. Phillip Marcum and A. Bradley Gabbard. In December 1991, the Company
entered into employment agreements, which have been amended several times, with
W. Phillip Marcum, its Chairman of the Board, President and Chief Executive
Officer, and A. Bradley Gabbard, the Company's Executive Vice President and
Chief Financial Officer. Under the most recent amendments to these employment
agreements, the employment terms of Messrs. Marcum and Gabbard were extended and
renewed until December 31, 2003, with automatic additional one-year renewal
periods when the terms expire, unless either the Company or the officer gives
six months prior written notice of termination.

The base salaries under these employment agreements, which are subject to
annual upward adjustments at the discretion of the Board of Directors, are
currently set at $295,000 for Mr. Marcum and $175,000 for Mr. Gabbard. In
addition to the base annual compensation, the employment agreements provide,
among other things, for standard benefits commensurate with the management
levels involved. The employment agreements also provide for the Company to
establish an incentive compensation fund, to be administered by the Company's
Compensation Committee, to provide for incentive compensation to be paid to each
officer or employee (including Messrs. Marcum and Gabbard) deemed by the
Compensation Committee to have made a substantial contribution to the Company in
the event of a change of control of Metretek or of the sale of substantially all
of the Company's assets or similar transactions. The total amount of incentive
compensation from the fund available for distribution will be determined by a
formula based on the amount by which the fair market value per share of the
Common Stock exceeds $10.08, multiplied by a factor ranging from 10-20%
depending upon the ratio of the fair market value to $10.08. In the case of the
sale of a significant subsidiary or substantially all of the assets of a
significant subsidiary, a similar pro rata distribution is required. As amended,
the employment agreements with Messrs. Marcum and Gabbard provide that if the
employment period expires without being renewed, then the executive is entitled
to receive a lump-sum severance payment equal to 12 months, for Mr. Marcum, and
six months, for Mr. Gabbard, of his then base salary, and continued
participation in all the Company's insurance plans for such additional period.
The employment agreements also contain certain restrictions on each executive's
ability to compete, use of confidential information and use of inventions and
other intellectual property.

As amended, the employment agreements with Messrs. Marcum and Gabbard also
include "change in control" provisions designed to provide for continuity of
management in the event the Company undergoes a change in control. The
agreements provide that if within three years after a change in control, the
officer is terminated by the Company for any reason other than for "cause", or
if the officer terminates his employment for "good reason", as such terms are
defined in the employment agreements, then the officer is entitled to receive a
lump-sum severance payment equal to two times, for Mr. Marcum, and one times,
for Mr. Gabbard, the amount of his then base salary, together with certain other
payments and benefits, including continued participation in all the Company's
insurance plans for a period of two years for Mr. Marcum and one year for Mr.
Gabbard. Under these employment agreements, a "change in control" will be deemed
to have occurred only if:

- any person or group becomes the beneficial owner of 50% or more of
the Company's Common Stock;

- a majority of the Company's present directors are replaced, unless
the election of any new director is approved by a two-thirds vote of
the current (or properly approved successor) directors;

- the Company approves a merger, consolidation, reorganization or
combination, other than one in which the Company's voting securities
outstanding immediately prior thereto continue to represent more
than 50% of the Company's total voting power or of the surviving
corporation following such a transaction and the Company's directors
continue to represent a majority of its directors or of the
surviving corporation following such transaction; or

- the Company approves a sale of all or substantially all of its
assets.

Thomas R. Kellogg. In June 2002, Metretek Florida entered into an
employment and non-competition agreement with Thomas R. Kellogg, the President
and Chief Executive Officer of Metretek Florida. Mr. Kellogg's employment
agreement was for an initial term of one year, expire June 24, 2003 and
currently in a one year renewal period, is renewable for additional one-year
renewal periods, unless either Metretek Florida or Mr. Kellogg gives 30 days
prior written notice of termination. Mr. Kellogg's employment agreement is
currently in a one year renewal term that expires in June 2004.

The base salary under Mr. Kellogg's employment agreement is set at
$175,000. In addition to the base salary, Mr. Kellogg's employment agreement
provides, among other things, for standard benefits commensurate with the
management

level involved, including a bonus of 7% of Metretek Florida's cash flow from
operations, options to purchase 100,000 shares of the Company's Common Stock at
$1.50 per share, and 8% of the common shares of Metretek Contract Manufacturing
Company, Inc., ("MCM"), a subsidiary of Metretek Florida. Mr. Kellogg's
employment agreement also provides for incentive compensation in the event of a
sale of the core business of Metretek Florida, consisting generally of all
Metretek Florida business other than the contract manufacturing business, based
upon an increasing proportion of the net proceeds of such a sale. Such incentive
compensation commences at 15.25% of the first $500,000 of the net proceeds over
$2 million from a sale of Metretek Florida's core business, and that percentage
increases incrementally as net proceeds increase, up to 31% of the net proceeds
of such a sale over $5.5 million. Any incentive compensation payable for net
proceeds exceeding $6 million are to be set in the discretion of the Company's
Board of Directors. If the Company rejects a bona fide offer for the sale of the
core business of Metretek Florida before Mr. Kellogg's employment is terminated
for any reason, and if he rejects any severance to which he would otherwise be
entitled, then Mr. Kellogg will be entitled to receive shares of Metretek
Florida, under the terms and conditions of a Shareholders Agreement, in
proportion to what his incentive compensation would have been if the sale had
been approved. In addition, if Mr. Kellogg's employment is terminated without
cause, or upon the expiration of the employment term or any renewal period, or
as the result of a sale of Metretek Florida where Mr. Kellogg waives his
incentive compensation, then Mr. Kellogg will be entitled to receive a severance
payment in the amount of one year's base salary, payable over the subsequent
year. Mr. Kellogg's employment agreement also contains a one-year non-compete
covenant and certain restrictions on Mr. Kellogg's use of confidential
information and use of inventions and other intellectual property.

MCM has issued shares totaling 13% of its outstanding common stock to two
of its employees, including to Mr. Kellogg as described above, as equity
incentive compensation. As of December 31, 2003, Metretek Florida owned 87% of
the outstanding MCM shares. The MCM shares are subject to a Shareholders
Agreement, dated June 27, 2002, signed by all the employees receiving MCM
shares. Under the Shareholders Agreement:

- MCM holds a right of first refusal on the sale of any MCM shares by
any employee-shareholders;

- MCM employee-shareholders have the right to participate in a sale of
a majority of the outstanding MCM shares by Metretek Florida;

- If Metretek Florida desires to sell its MCM shares that constitute a
majority of all then outstanding MCM shares, then Metretek Florida
has the right to force the employee-shareholders to also sell their
MCM shares;

- MCM employee-shareholders have the preemptive right to maintain
their pro rata equity percentage in MCM in the event of future
issuances of MCM shares by participating in such issuances on the
same terms as other buyers; and

- Upon the termination of employment of any MCM employee-shareholder,
MCM has the right to purchase such MCM shares at an appraised value.

Sidney Hinton. Effective January 1, 2003, PowerSecure entered into an
employment and non-competition agreement with Sidney Hinton, the President and
Chief Executive Officer of PowerSecure. Mr. Hinton's employment agreement is for
a term of three years, and is renewable for additional one-year renewal periods
when the term expires, unless either PowerSecure or Mr. Hinton gives 30 days
prior written notice of termination.

The base salary under Mr. Hinton's employment agreement is set at
$250,000, subject to annual upward adjustments at the discretion of the Board of
Directors of PowerSecure. In addition to the base salary, Mr. Hinton's
employment agreement provides, among other things, for standard benefits
commensurate with the management level involved, including an annual bonus of 7%
of PowerSecure's cash flow from operations and 7% of the common shares of
PowerSecure. If Mr. Hinton's employment is terminated without cause, or due to
the expiration of the employment term or any renewal period, then Mr. Hinton
will be entitled to receive a severance payment in the amount of one year's base
salary, payable over the subsequent year. Mr. Hinton's employment agreement also
contains a one-year non-competition covenant, which becomes two years if Mr.
Hinton voluntarily resigns or is terminated by PowerSecure for cause, and
certain restrictions on Mr. Hinton's use of confidential information and use of
inventions and other intellectual property. Mr. Hinton's employment agreement
also includes a "change in control" provision designed to provide for continuity
of management in the event the Company or PowerSecure undergo a change in
control. The employment agreement provides that if within three years after a
"change in control", Mr. Hinton is terminated by the Company for any reason
other than for "cause", or if Mr. Hinton terminates his employment for "good
reason", as such terms are defined in the employment agreement, then Mr. Hinton
is entitled to receive a lump-sum severance payment equal to one year's then
base salary,

together with certain other payments and benefits, including continued
participation in all the Company's insurance plans for a period of one year.

During March 2003, PowerSecure authorized the issuance of PowerSecure
shares totaling up to 15% of its outstanding common stock to its employees,
including to Mr. Hinton as described above, as equity incentive compensation,.
As of December 31, 2003, the Company owned 86.1% of the outstanding PowerSecure
shares. The PowerSecure shares were issued subject to a Shareholders Agreement
to be signed by all employees receiving PowerSecure shares. Under the
Shareholders Agreement:

- PowerSecure holds a right of first refusal on the sale of any
PowerSecure shares by any employee-shareholders;

- PowerSecure employee-shareholders have the right to participate in a
sale of a majority of the outstanding PowerSecure shares by the
Company;

- If the Company desires to sell its PowerSecure shares that
constitute a majority of all then outstanding PowerSecure shares,
then it has the right to force the employee-shareholders to also
sell their PowerSecure shares;

- If PowerSecure issues additional PowerSecure shares in the future to
third persons, then PowerSecure will grant an option for its
employee-shareholders to purchase additional PowerSecure shares in
order to maintain their pro rata equity percentage in PowerSecure,
at the price as paid by such third persons; and

- Upon the termination of employment of any PowerSecure
employee-shareholder, PowerSecure has the right to purchase such
PowerSecure shares at an appraised value.

STOCK OPTION GRANTS

The Company did not grant any stock options or stock appreciation rights,
alone or in tandem with stock options, in fiscal 2003 to the Named Executive
Officers.

STOCK OPTION EXERCISES AND VALUES

The following table sets forth information with respect to stock options
held by the Named Executive Officers on December 31, 2003. The Named Executive
Officers did not exercise any stock options during fiscal 2003.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FISCAL YEAR-END FISCAL YEAR-END (1)
------------------------------ --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------- ----------- ------------- ----------- -------------

W. Phillip Marcum........ 250,000 0 $0 $0
A. Bradley Gabbard....... 237,500 0 0 0
Sidney Hinton............ 145,000 0 0 0
Thomas R. Kellogg........ 100,000 0 0 0
Gary J. Zuiderveen....... 31,000 0 0 0

-------------------
(1) For purposes of this table and in accordance with SEC rules, the
"Value of Unexercised In-the-Money Options" is calculated based upon
the difference between $1.44, the closing sale price of the Common
Stock on December 31, 2003 as reported on the OTC Bulletin Board,
and the option exercise price. An option is "in-the-money" if the
fair market value of the underlying shares of Common Stock exceeds
the exercise price of the option. Because the exercise price of all
options in this table exceeded $1.44, none of the options were
"in-the-money" on December 31, 2003.

DIRECTOR COMPENSATION

Directors who are also officers or employees of the Company do not receive
any additional compensation for serving on the Board of Directors or its
committees. All directors are reimbursed for their out-of-pocket costs of
attending meetings of the Board of Directors and its committees. Commencing in
September 2003, directors who are not also officers or employees of the Company
("Non-Employee Directors") receive a monthly retainer of $2,000 per month for
their service as directors. Prior thereto, Non-Employee Directors received an
annual retainer of $5,000 plus a fee of $1,000 for each meeting of the Board of
Directors attended in person and $500 for each meeting attended telephonically.
Non-Employee Directors also receive stock options under an annual formula
("Annual Director Options") under the Company's 1998 Stock Incentive Plan (the
"1998 Stock Plan"). Under the formula for these Annual Director Options, each
person who is first elected or appointed to serve as a Non-Employee Director is
automatically granted an option to purchase 5,000 shares of Common Stock. On the
date of the annual meeting of stockholders each year, each Non-Employee Director
is automatically granted an Annual Director Option to purchase 2,500 shares of
Common Stock, unless he was first elected within six months of that date. All
Annual Director Options vest and become exercisable immediately upon grant.
Additional non-formula options can be granted to Non-Employee Directors under
the 1998 Plan in the discretion of the Board of Directors.

All Annual Director Options granted to Non-Employee Directors are
non-qualified stock options exercisable at a price equal to the fair market
value of the Common Stock on the date of grant and have ten year terms, subject
to earlier termination in the event of the termination of the optionee's status
as a director or the optionee's death. Annual Director Options typically remain
exercisable for one year after a Non-Employee Director dies and for that number
of years after a Non-Employee Director leaves the Board of Directors (for any
reason other than death or removal for cause) equal to the number of full or
partial years that the Non-Employee Director served as a director, but not
beyond the ten year term of the option. Any other option granted to a director
may contain different terms at the discretion of the Board.

As of May 4, 2004, options to purchase 230,016 shares of Common Stock were
outstanding to current Non-Employee Directors, at exercise prices ranging from
$0.46 to $17.38 per share.

EQUITY COMPENSATION PLAN INFORMATION

The Company has three compensation plans that have been approved by its
stockholders under which its equity securities have been authorized for issuance
to directors, officers, employees, advisors and consultants in exchange for
goods or services:

- the Company's 1991 Stock Option Plan;

- the Company's Directors' Stock Option Plan; and

- the Company's 1998 Stock Incentive Plan.

In addition, the Company has issued warrants to purchase its equity
securities to certain advisors, consultants and lenders with the approval of the
Board of Directors, but without the approval of its stockholders which was not
required.

The following table sets forth information about the Common Stock that may
be issued upon the exercise of outstanding options, warrants and other rights
under all of the Company's existing equity compensation plans as of December 31,
2003:

NUMBER OF SECURITIES
NUMBER OF SECURITIES REMAINING AVAILABLE FOR
TO BE ISSUED UPON WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER
EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (a))
PLAN CATEGORY (a) (b) (c)
------------------------------ -------------------- -------------------- -------------------------

Equity compensation plans
approved by security
holders (1)................... 1,812,425 $1.96 43,031

Equity compensation plans not
approved by security
holders (2)................... 45,000 10.83 0
--------- ----- ------
Total......................... 1,857,425 $2.17 43,031
========= ===== ======

---------------------------
(1) Represents options to purchase shares of Common Stock granted under the
Company's 1991 Stock Option Plan, Directors' Stock Option Plan and 1998
Stock Incentive Plan. The Company will not grant any future options under
the 1991 Stock Option Plan or its Directors' Stock Option Plan.

(2) Represents warrants to purchase shares of Common Stock granted in 1999 to
two advisors as compensation for services rendered, at exercise prices
ranging from $2.47 to $14.50, expiring at various dates through July 2004.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors has constituted and appointed a Compensation
Committee, which during fiscal 2003 consisted of Messrs. Pell, Briggs and
Collins. No member of the Compensation Committee is or has been an officer or
employee of the Company. None of the executive officers of the Company serves as
a member of the board of directors or on the compensation committee of any other
entity that has one or more executive officers serving as a member of the Board
of Directors of the Company or on the Compensation Committee. In addition, no
member of the Compensation Committee has an interlocking relationship with the
board of directors or compensation committee of any other entity.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors which consists
entirely of independent directors, establishes compensation policies with
respect to the Company's executive officers. The Compensation Committee approves
all compensation paid to the Company's executive officers, and also oversees the
administration by the Board of Directors of the Company's stock plans under
which stock option grants and direct stock issuances may be made to executive
officers. The Compensation Committee operates under a written charter adopted by
the Board of Directors on June 9, 2003, which is available on the Company's
website at www.metretek.com under "Investor Info-Corporate Governance."

EXECUTIVE COMPENSATION PHILOSOPHY. The Company's executive compensation
philosophy is based on the belief that competitive compensation is essential to
attract, retain, motivate and reward highly qualified and industrious
executives. The Company's executive compensation program is intended to (i)
attract and retain highly talented and productive executives, (ii) provide
incentives and rewards for superior performance by the Company's executives, and
(iii) align the interests of executive officers with the interests of the
Company's stockholders. To achieve these objectives, the Compensation Committee
has designed an executive compensation program that consists of three basic
components: (i) base salary, (ii) short-term incentive compensation in the form
of a cash bonus, and (iii) long-term incentive compensation

in the form of stock options. These compensation elements are in addition to the
general benefit programs that are offered to all of the Company's employees.

FACTORS. The Committee reviews the Company's executive compensation
program through the application of the subjective business judgment of each of
its members and through an informal survey of executive compensation programs of
peer companies. The Compensation Committee does not use a quantitative method or
a mathematical formula to set any element of compensation for a particular
executive officer. The Compensation Committee uses discretion and considers all
elements of an executive's compensation package when setting each portion of
compensation which is based upon corporate performance and individual
initiatives and performance. The principal factors which the Compensation
Committee considered with respect to each executive officer's compensation
package for fiscal 2003 are summarized below. The Compensation Committee may,
however, in its discretion apply entirely different factors with respect to
executive compensation for future years.

Base Salary. The base salary for each of the Company's executive officers
is subjectively determined primarily on the basis of the following factors:
experience, personal performance, contribution to Company performance, level of
responsibility, breadth of knowledge, salary levels in effect for comparable
positions within and without the Company's industry and internal base salary
comparability considerations. The base salaries are reviewed annually and may be
adjusted in the discretion of the Compensation Committee, based upon factors
such as individual performance, the functions performed by the executive
officer, the scope of the executive officer's ongoing duties, general changes in
the compensation peer group in which the Company competes for executive talent,
and the Company's financial performance generally. The relative weight given to
each of these factors differs from individual to individual, as the Compensation
Committee deems appropriate.

Annual Bonuses. In fiscal 2003, the Company granted bonuses to certain
executive officers payable based upon the achievement of objective pre-defined
performance goals. In addition, all executive officers of the Company are
eligible for discretionary annual bonuses, as determined by the Compensation
Committee. Factors considered in determining discretionary annual bonuses are
personal performance, level of responsibility and the Company's achievement of
performance goals, which is intended to correlate to stockholder value. The
Compensation Committee reviews the individual executive performance and Company
targets and approves the amount of actual bonuses awarded. No discretionary
annual bonuses were awarded in fiscal 2003.

Long-Term Incentive Compensation. Long-term incentives are provided
through grants of stock options. The grants are designed to align the interests
of executive officers with those of stockholders and to provide each executive
with a significant incentive to manage the Company from the perspective of an
owner with an equity stake in the Company. Each grant allows the executive
officer to acquire shares of Common Stock at a fixed price per share (typically,
the market price on the date of grant) for a fixed period (up to ten years).
Each option generally becomes exercisable in installments over a period of
years, contingent upon the executive officer's continued employment with the
Company. Accordingly, the option grant will provide a return to the executive
officer only if the executive officer remains employed by the Company during the
vesting period, and then only if the market price of the underlying shares
appreciates.

The number of shares subject to each option grant is subjectively
determined by the Compensation Committee primarily related to the executive
officer's anticipated contributions to the Company's future success, a level
intended to create a meaningful opportunity for stock ownership based on the
executive officer's current position with the Company, the size of comparable
awards made to individuals in similar positions within the industry, the
individual's potential for increased responsibility and promotion over the
option term and the individual's personal performance in recent periods. The
Compensation Committee also considers the number of unvested options held by the
executive officer in order to maintain an appropriate level of equity incentive
for that individual. However, the Compensation Committee does not adhere to any
specific guidelines as to the relative option holdings of the Company's
executive officers. No stock options were granted to executive officers during
fiscal 2003.

CEO COMPENSATION. The compensation of W. Phillip Marcum, the Company's
President and Chief Executive Officer is reviewed annually in accordance with
the factors discussed above, taking into account his Employment Agreement with
the Company. Mr. Marcum's base salary of $295,000 in fiscal 2003 has been
unchanged since 2000. The Company did not award Mr. Marcum an annual bonus or
grant him any stock options for fiscal 2003.

COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m). Section 162(m) of
the Internal Revenue Code of 1986, as amended, generally disallows a tax
deduction to public companies for certain compensation in excess of $1 million
paid to a company's chief executive officer and the four other most highly
compensated executive officers. However,

qualified performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Company intends to structure
long-term incentive compensation granted to its executive officers through
option issuances under the Company's stock plans in a manner that is intended to
avoid disallowance of deductions under Section 162(m). The Compensation
Committee has not awarded in the past, and does not expect to award during
fiscal 2004, compensation to any of the Company's executive officers in excess
of the $1 million limit per officer. In the event that the Compensation
Committee considers approving compensation in the future which would exceed the
$1 million deductibility threshold, the Compensation Committee will consider
what actions, if any, should be taken to make such compensation deductible.

CONCLUSION. Through these programs, a significant portion of the
Company's executive compensation is linked directly to individual and Company
performance in pursuance of strategic goals as well as stock price appreciation.
The Compensation Committee believes that these executive compensation policies
and programs promote the best interests of the Company and enhance stockholder
value.

Compensation Committee

Basil M. Briggs, Chairman
Anthony D. Pell
Kevin P. Collins

PROPOSAL NO. 2

APPROVAL OF AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN

The Company's 1998 Stock Incentive Plan (the "1998 Stock Plan") was
adopted by the Board of Directors of the Company in March 1998 and approved by
the stockholders of the Company in June 1998. The 1998 Stock plan was amended by
the stockholders in February 2000 and June 2001. The 1998 Stock Plan replaced
the Company's 1991 Stock Option Plan and Directors' Stock Option Plan. The 1998
Stock Plan authorizes the Board of Directors to grant non-qualified stock
options ("NQSOs"), incentive stock options ("ISO"s), stock appreciation rights
("SAR"s), restricted stock, performance awards, and other stock-based awards to
officers, directors, employees, consultants and advisors of the Company and its
subsidiaries. The purpose of the 1998 Stock Plan is to promote the success of
the Company by enabling it to attract, retain, reward, and motivate officers,
directors, employees, advisors and consultants of the Company and its
subsidiaries by providing them with an equity interest in the Company in order
to align their interest with those of the Company's stockholders and to provide
such persons with incentives to pursue the long-term growth, profitability, and
financial success of the Company and its subsidiaries and increase stockholder
value. The 1998 Stock Plan is a critical part of the Company's overall
compensation program.

At the Annual Meeting, the stockholders are being asked to approve the
proposed amendment to the 1998 Stock Plan to increase the number of shares of
Common Stock reserved for issuance thereunder. A total of 1,750,000 shares of
Common Stock are presently reserved for issuance under the 1998 Stock Plan, of
which as of May 4, 2004, only 17,364 shares were available for issuance in
future awards. On March 25, 2004, upon recommendation of the Compensation
Committee, the Board of Directors authorized an amendment to the 1998 Stock Plan
subject to stockholder approval, to increase the number of shares available for
issuance thereunder by 1,000,000 shares to a total of 2,750,000 shares.

The purpose of the proposed amendment is to ensure that a sufficient
number shares of the Company's Common Stock are available under the 1998 Share
Plan for awards to attract, retain, reward and motivate officers, directors,
employees, advisors and consultants as set forth above.

As of May 4, 2004, an aggregate of 1,525,851 shares of Common Stock were
subject to outstanding awards under the 1998 Stock Plan to 44 employees and
directors. To date, all awards under the 1998 Stock Plan have been stock
options. In addition, as of May 4, 2004, an aggregate of 127,190 shares were
subject to outstanding options granted under the Company's prior stock plans,
the Company's 1991 Stock Option Plan and the Company's Directors' Stock Option
Plan. On May 4, 2004, the last reported sale price of the Common Stock as
reported on the OTC Bulletin Board was $3.10 per share.

SUMMARY OF THE 1998 STOCK INCENTIVE PLAN

The major provisions of the 1998 Stock Plan are summarized below. The
following summary does not purport to be complete and is qualified in its
entirety by reference to the 1998 Stock Plan. A copy of the 1998 Stock Plan will
be furnished upon oral or written request of stockholders of the Company
directed to the Corporate Secretary, Metretek Technologies, Inc., 303 East
Seventeenth Avenue, Suite 660, Denver, Colorado 80203, telephone: (303)
785-8080.

GENERAL. The 1998 Stock Plan provides for the grant of incentive stock
options, non-qualified stock options, restricted stock, performance awards and
other stock-based awards to officers, directors, employees, consultants and
advisors of the Company and its subsidiaries. A total of 1,750,000 shares of
Common Stock are currently authorized to issue under the 1998 Stock Plan, which
would be increased by the proposed amendment to 2,750,000 shares. The shares of
Common Stock issuable under the 1998 Stock Plan may be authorized or unissued
shares or treasury shares, including shares repurchased by the Company for
purposes of the 1998 Stock Plan. If any shares subject to any award are
forfeited or payment is made in the form of cash, cash equivalents or property
other than shares, or an award otherwise terminates without payment being made
to the participant in the form of shares, the shares subject to such awards will
again be available under the 1998 Stock Plan.

ADMINISTRATION. The 1998 Stock Plan is administered by the Board of
Directors of the Company. The Board of Directors has the right to delegate the
administration of the 1998 Stock Plan to a committee comprised of two or more
directors who are not officers or employees of the Company or any its
subsidiaries, and who meet certain other requirements under applicable federal
securities law and federal tax law provisions. The members of the Board of
Directors, or of any committee appointed by the Board of Directors, are eligible
for awards under the 1998 Stock Plan. The Board of Directors is authorized to
designate participants, determine the type and number of awards to be granted,
set the terms, conditions and provisions of awards, cancel or suspend awards,
prescribe forms of award agreements, interpret the 1998 Stock Plan, establish,
amend and rescind rules and regulations related to the 1998 Stock Plan, and make
all other determinations which may be necessary or advisable to the
administration of the 1998 Stock Plan.

ELIGIBILITY. Officers, directors, employees, consultants and advisers of
the Company and its existing or future subsidiaries who, in the determination of
the Board of Directors, are responsible for or contribute to the management,
growth, profitability and successful performance of the Company and its
subsidiaries are eligible to receive awards under the 1998 Stock Plan. All of
the approximately 255 employees of the Company and its subsidiaries, all five
directors of the Company, and all advisors and consultants of the Company are
eligible to receive awards under the 1998 Stock Plan.

STOCK OPTIONS. Under the 1998 Stock Plan, the Board of Directors is
authorized to grant incentive stock options and non-qualified stock options. The
exercise price of stock options is determined by the Board of Directors but may
not be less than the fair market value of the Common Stock on the date of grant
(or 110% of the fair market value in the case of an ISO granted to an employee
beneficially owning more than 10% of the outstanding Common Stock). The Board of
Directors may grant NQSOs to any eligible participant, but may grant ISOs only
to employees. Stock options become exercisable at such time or times in whole or
in part as determined by the Board of Directors, except that ISOs may not be
exercised after the expiration of 10 years after the date of grant (5 years
after grant in the case of ISO, granted to an employee beneficially owning more
than 10% of the outstanding Common Stock). Options may be exercised by payment
of the exercise price in cash, shares of Common Stock, exchange of outstanding
awards or other property, or in any combination thereof having a fair market
value equal to the exercise price, as the Board of Directors determines.

The 1998 Stock Plan provides for a formula grant of NQSO, to directors who
are not employees of the Company or any of its subsidiaries ("Non-Employee
Directors"). Under the 1998 Stock Plan, each person who is first elected or
appointed to serve as a Non-Employee Director automatically receives an option
to purchase 5,000 shares of Common Stock. On the date of the annual meeting of
stockholders each year, each Non-Employee Director (other than a person who
became a Non-Employee Director within the previous six months) automatically
receives an option to purchase 2,500 shares of Common Stock. All such options
granted to Non-Employee Directors under the formula provisions of the 1998 Stock
Plan vest immediately upon grant, have an exercise price equal to the fair
market value of the Common Stock on the date of grant, and expire 10 years after
the date of grant. Under the 1998 Stock Plan, additional (non-formula) options
may be granted to the Non-Employee Directors in the discretion of the Board of
Directors.

STOCK APPRECIATION RIGHTS. The Board of Directors is authorized to grant
SARs either alone or in tandem with underlying stock options. SARs entitle the
participant upon exercise to receive cash or shares of Common Stock (as
determined by the Board of Directors) equal in value to the excess of the fair
market value of the shares of Common Stock covered by the SAR on the date of
exercise over the grant price of the SAR. The grant price for SARs is fixed by
the Board

of Directors but will not be less than the fair market value of the Common Stock
on the date of grant. SARs are exercisable at such time or times in whole or in
part as determined by the Board of Directors, except that they may not be
exercised after the expiration of 10 years from the date of grant.

RESTRICTED STOCK. The 1998 Stock Plan also authorizes the award of
restricted stock. An award of restricted stock is an award of shares of Common
Stock that is subject to such restrictions as the Board of Directors determines.
The restricted stock vests and may be disposed of by the participant only after
such restrictions lapse in whole or in installments as the Board of Directors
determines. Restricted stock awards may be subject to forfeiture if, for
example, the participant's employment terminates before the award vests. A
participant receiving restricted stock has all the rights of a stockholder of
the Company, including the right to vote the shares and the right to receive any
dividends, unless the Board of Directors otherwise determines. The Board of
Directors, in its sole discretion, may waive or accelerate the lapsing of
restrictions in whole or in part.

DEFERRED STOCK. The 1998 Stock Plan also authorizes the Board of Directors
to make deferred stock awards, generally consisting of a right to receive shares
of Common Stock at the end of specified deferral periods. Awards of deferred
stock are subject to such limitations as the Board of Directors may impose,
which limitations may lapse at the end of the deferral period in installments or
otherwise. Deferred stock awards carry no voting or dividend rights or other
rights associated with stock ownership. Upon termination of employment during
the restriction or deferral period, restricted stock or deferred stock will be
forfeited subject to such exceptions, if any, as are authorized by the Board of
Directors.

BONUS SHARES AND AWARDS IN LIEU OF OBLIGATIONS. The Board of Directors is
authorized under the 1998 Stock Plan to grant shares of Common Stock to eligible
persons as a bonus or in lieu of obligations (such as salary requirements) to
pay cash or deliver other property, subject to such terms as determined by the
Board of Directors.

PERFORMANCE AWARDS. Under the 1998 Stock Plan, the Board of Directors may
make a performance award, which is an award of a number of units that represents
the right to receive a specified number of shares of Common Stock or cash, or
both, upon satisfaction of certain specified performance criteria, subject to
such terms and conditions as the Board of Directors determines. Performance
awards will be earned to the extent such performance goals established by the
Board of Directors are achieved over a period of time specified by the Board of
Directors. The performance objectives may vary from participant to participant,
group to group and period to period. The performance objectives for awards
intended to constitute "qualified performance-based compensation" (see
discussion below under the heading "Certain Federal Income Tax Consequences")
will be based upon one or more of the following: earnings per share; revenues;
cash flow; return on investment; return on net assets, assets, capital or
equities; economic value added; operating margins; net income; pre-tax earnings;
pre-tax earnings before interest, depreciation and amortization; pre-tax
operating earnings after interest expense and before extraordinary or special
items; operating earnings; total stockholder returns; price of the shares (and
changes thereof); and any of the above goals as compared to the performance of a
published or special index deemed applicable by the Board of Directors
including, but not limited to, the Standard & Poor's 500 Stock Index or a group
of comparable companies. The Board of Directors has the discretion to determine
the value of each performance award, to adjust the performance goal as it deems
equitable to reflect events affecting the Company or changes in law or
accounting principles or other factors, and to determine the extent to which
performance awards that are earned may be paid in the form of cash, deferred
cash, shares of Common Stock or other awards or property, or combination
thereof, as determined by the Board of Directors.

DIVIDEND EQUIVALENTS. The Board of Directors is authorized to grant
dividend equivalents conferring on a participant the right to receive, quarterly
or on a deferred basis, interest or dividends, or interest or dividend
equivalents. Dividend equivalents may be paid directly to a participant or may
be reinvested under the 1998 Stock Plan.

OTHER STOCK-BASED AWARDS. In order to enable the Company to respond to
material developments in the area of taxes and other legislation and regulations
and interpretations thereof, and to trends in executive compensation practices,
the 1998 Stock Plan authorizes the Board of Directors to grant awards that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to securities of the Company. The Board of
Directors shall determine the terms and conditions of such awards, including the
consideration paid for awards as purchase rights, which consideration generally
may not be less than the fair market value of the Common Stock on the date that
the purchase right is granted. These awards may include, without limitation,
performance shares and restricted stock units that entitle the participant to
receive, upon satisfaction of performance goals or other conditions, a specified
number of shares of Common Stock or the cash equivalent thereof.

TRANSFERABILITY OF OPTIONS. Under the 1998 Stock Plan, awards are
generally not assignable or transferable by a participant, except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order, except to the Company under the terms of the 1998 Stock Plan, and except
that, upon approval by the Board of Directors, NQSOs and SARs may be transferred
by participants to immediate family members, to trusts for the benefit of
immediate family members and to partnerships or similar entities in which such
participant and his or her immediate family members are the sole parties or
members.

ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. The 1998 Stock Plan
provides that in the event of a "change in control" of the Company (as defined
in the 1998 Stock Plan), all outstanding awards under the 1998 Stock Plan,
regardless of any limitations or restrictions, will immediately vest and become
fully exercisable, and all restrictions applicable to outstanding restricted
stock, performance awards and other stock-based awards will lapse, unless
otherwise provided by the Board of Directors at the time of grant of the award
or unless waived or deferred by the participants. In the event of a change in
control of the Company, with certain exceptions, participants may elect to
surrender any outstanding award and receive in satisfaction thereof a cash,
stock or other payment equal to the value of their outstanding awards based on
the "change in control price" (as defined in the 1998 Stock Plan), which is
generally the highest price paid or offered for the Common Stock during the
preceding 60-day period, of the shares of Common Stock subject to the award or
of the fair market value of any property other than shares of the Company
relating to such award, except that with respect to an ISO or an SAR granted in
tandem with an ISO, the cash payment will be based on the fair market value of
the shares subject to the ISO or SAR on the date on which the change in control
occurred.

AMENDMENT AND TERMINATION OF THE 1998 STOCK PLAN. The Board of Directors
has the right to amend, alter, suspend, discontinue or terminate the 1998 Stock
Plan at any time without the consent of the stockholders or participants, except
that (i) stockholder approval of such action will be required if such approval
is required by any federal or state law or regulation or stock exchange or stock
market rule, regulation or policy, or if the Board of Directors in its
discretion determines that obtaining such stockholder approval is advisable, and
(ii) subject to the terms of the 1998 Stock Plan, no amendment or termination of
the 1998 Stock Plan may materially and adversely affect the rights of a
participant under any award granted under the 1998 Stock Plan without the
consent of the affected participant. Unless earlier terminated by the Board of
Directors, no award may be granted under the 1998 Stock Plan after June 12,
2008.

ACCOUNTING TREATMENT

Depending on the type and terms of the award, the grant of an award under
the 1998 Stock Plan to a participant may constitute an expense to the Company
for accounting and financial reporting purposes, and any such expense would
reduce the Company's income (or increase the Company's loss) for the relevant
accounting period by a like amount. The accounting consequences of grants,
exercises and disposition will in some, but not all, cases be the same as the
tax consequences to the Company described below under "Certain Federal Income
Tax Consequences."

In general, stock options grants made to employees under the 1998 Stock
plan will not constitute an expense to the Company for accounting and financial
reporting purposes. However, the fair value of the award is required to be
disclosed in the notes to the Company's consolidated financial statements, and
the Company must also disclose in the notes to its consolidated financial
statements the pro forma impact the award would have had upon the Company's
reported income (or loss) if the fair value of the award at the time of grant
was treated as a corporate expense over the life of the award.

The Financial Accounting Standards Board has initiated a project relating
to the expensing of grants of employee stock options. There is no assurance if,
when or in what form the project will be finally approved. Accordingly, the
foregoing summary of the accounting transactions for stock options may change
substantially.

SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES

The following is a brief summary of the principle federal income tax
consequences of certain kinds of awards that may be granted under the 1998 Stock
Plan. This summary is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), the applicable treasury regulations promulgated thereunder,
judicial authority and administrative ruling and practice, all as in effect on
the date hereof. Legislative, judicial or administrative rules and
interpretations are subject to change, potentially on a retroactive basis, at
any time, and such changes could alter or modify the statements and conclusions
set forth below. This summary does not purport to be complete and does not
address all aspects of federal income taxation that may be relevant to a
particular participant in light of such participant's personal investment
circumstances or participants subject to special treatment under the federal
income tax laws. The summary also does not address the effects of foreign, state
or local tax consequences. The 1998 Stock Plan is not a tax-qualified deferred

compensation plan under Section 401(a) of the Code, and is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
Participants of grants of awards under the 1998 Stock Plan should consult with
their personal tax advisors with respect to such grants and transactions in
awards and shares acquired pursuant to the 1998 Stock Plan.

NQSOs. A participant will not recognize any taxable income, and the
Company will not have any tax consequences, upon the grant of a NQSO. In
general, upon the exercise of a NQSO, a participant will recognize ordinary
income in an amount equal to the excess, if any, of the fair market value of the
Common Stock on the date of exercise over the option exercise price, and the
Company will be entitled to a tax deduction in the same amount in the year the
participant exercises the NQSO. Upon subsequent disposition of shares of Common
Stock acquired upon the exercise of a NQSO, a participant will have a capital
gain or loss equal to the difference between the amount realized on the
disposition and the participant's tax basis in the shares, which is generally
the amount paid for the shares plus the amount treated as ordinary income at the
time the NQSO was exercised. Such capital gain or loss will be long-term if the
participant's holding period is longer than one year, and short-term otherwise.
The participant's taxable disposition of the shares of Common Stock acquired
upon the exercise of a NQSO will not result in any additional tax consequences
to the Company.

ISOs. A participant will generally not recognize any taxable income upon
the grant or exercise of an ISO so long as he or she has been an employee of the
Company or any of its subsidiaries from the date the ISO was granted until three
months before the date of exercise (one year if the employee is disabled), but
the amount by which the fair market value of the Common Stock on the date of
exercise exceeds the option exercise price is a required adjustment for purposes
of the alternative minimum tax applicable to the participant. If the participant
holds the shares of Common Stock received upon the exercise of the ISO for at
least one year after the date of exercise and two years after the date of grant
of the ISO (the "holding period"), then any difference between the amount
realized upon the disposition of the shares and the exercise price will be
treated as long-term capital gain or loss to the participant. The Company will
not have any tax consequences from the grant or exercise of an ISO (except as
discussed below) if the participant satisfies the holding period requirements.

If a participant exercises an ISO but does not satisfy the holding period
requirements set forth above, the participant generally will recognize ordinary
income in the year of disposition of the shares of Common Stock acquired upon
the exercise of an ISO equal to the excess, if any, of the fair market value of
the Common Stock on the date of exercise over the option exercise price, and any
excess of the amount realized on such disposition over the fair market value of
the Common Stock on the date of exercise will be taxed as long-term or
short-term capital gain, as applicable. If the participant disposes of the
shares of Common Stock prior to the satisfaction of the holding period
requirements but for proceeds in an amount less than the fair market value of
the Common Stock on the date of exercise, the participant will recognize
ordinary income equal only on the difference between the amount realized on the
disposition of the shares and the option exercise price. In either event, the
Company will be entitled to a tax deduction in an amount equal to the amount
constituting ordinary income to the participant.

If a participant exercises an ISO by tendering shares of Common Stock
(other than the shares acquired upon the exercise of an ISO and not held for the
requisite holding period set forth above) in payment of all or part of the
option exercise price, the participant will not be required to recognize any
taxable income from the exchange and option exercise, and the participant's tax
basis and holding period (for capital gain purposes) for the tendered shares of
Common Stock will be treated as a substituted basis for the shares received upon
the exercise of the ISO. If the participant uses shares received pursuant to the
exercise of an ISO as to which the participant had not satisfied the applicable
holding period requirements, the exchange will be treated as a taxable
disqualifying disposition of the exchanged shares, with the result of the excess
of the fair market value of the shares tendered over the participant's basis in
such shares would be taxable.

SARs. The grant of a SAR will create no federal income tax consequences
for the participant or the Company. When a participant exercises a SAR, any cash
received and the fair market value of the Common Stock on the date of exercise
will constitute ordinary income to the participant, and the Company will be
entitled to a tax deduction in the same amount in the year of exercise.

RESTRICTED STOCK. The federal income tax consequences of restricted stock
awards depend upon the restrictions imposed on the stock. In the absence of a
Section 83(b) election by a participant, the grant of restricted stock will not
result in taxable income to the participant or entitle the Company to a tax
deduction in the year of grant if the restricted stock received is subject to a
substantial risk of forfeiture and is either non-transferable or after transfer
remains subject to such substantial risk of forfeiture. In such case, a
participant must recognize ordinary income equal to the fair market value of the
restricted stock received as of the first date the restricted stock becomes
either transferable or not subject to a substantial risk of forfeiture,
whichever occurs earlier. However, a participant may, in his or her discretion,
make a Section 83(b)

election to recognize as ordinary income the value of the restricted stock as of
the date of receipt rather than upon lapse of restrictions on transferability or
the substantial risk of forfeiture. The Company generally will be entitled to a
tax deduction in the amount of the fair market value of the restricted stock
transferred to the participant in the year the participant recognizes ordinary
income. Prior to the lapse of restrictions, dividends paid on restricted stock
will be taxable to the participant as ordinary income in the year such
restricted stock is received free of restrictions, and the Company will be
entitled to a tax deduction in the same amount.

PERFORMANCE AWARDS. A participant who receives a performance award of
shares of Common Stock will generally recognize ordinary income in the year the
award is received equal to the fair market value of the Common Stock on the date
of award. The Company will be entitled to a tax deduction equal to the amount of
ordinary income recognized by the participant in the year such income is
recognized.

OTHER STOCK-BASED AWARDS. A participant will recognize ordinary income
equal to the amount of any cash payments or the fair market value of any Common
Stock or other property a participant receives in connection with other
stock-based awards (less any amounts paid by the participant) in the year the
stock based award is received or made available to the participant without
substantial restrictions or risk of forfeiture in a manner consistent with the
treatment of restricted stock. The Company generally will be entitled to a tax
deduction in the same amount and at the same time the participant recognizes
such ordinary income.

SECTION 162(m). Section 162(m) of the Code generally limits the deductible
amount of annual compensation paid (including, unless an exception applies,
compensation otherwise deductible in connection with awards granted under the
1998 Stock Plan) by a public company to the chief executive officer and four
other most highly compensated executive officers of the Company to no more than
$1,000,000. This limit, however, does not apply to "qualified performance-based
compensation." The Company generally intends to structure any stock options and
other awards granted under the 1998 Stock Plan that might be affected by Section
162(m) of the Code to comply with the performance-based compensation exemption
to the deductibility limit.

SPECIAL RULES. Special rules will apply to a participant who is subject to
Section 16 of the Exchange Act.

NEW PLAN BENEFITS

The grant of awards under the 1998 Stock Plan to eligible directors,
officers, employees, consultants and advisors, including the Named Executive
Officers, is subject to the discretion of the Board of Directors, other than the
annual formula stock option grants to Non-Employee Directors. As of the date of
this Proxy Statement, no determination has been made as to which or how many of
the persons eligible to receive awards under the 1998 Stock Plan will receive
future awards under the 1998 Stock Plan, other than formula stock option grants
to Non-Employee Directors. Accordingly, the benefits or awards that will be
received by or allocated to persons under the 1998 Plan in the future are not
presently determinable.

The following table sets forth, as of May 4, 2004, the aggregate number of
shares of the Company's Common Stock subject to outstanding awards granted under
the 1998 Stock Plan to (i) each Named Executive Officer; (ii) all current
executive officers as a group; (iii) all current directors who are not executive
officers, as a group; and (iv) all employees, including all current officers who
are not executive officers, as a group.

1998 STOCK INCENTIVE PLAN

NUMBER OF SHARES
NAME (OR GROUP) AND POSITION SUBJECT TO OPTIONS GRANTED
----------------------------------------------------------------------- --------------------------

W. Phillip Marcum...................................................... 200,000
Chairman of the Board, President and Chief
Executive Officer
A. Bradley Gabbard..................................................... 212,500
Executive Vice President and Chief Financial Officer
Gary J. Zuiderveen .................................................... 24,000
Principal Accounting Officer, Controller and Secretary
Sidney Hinton.......................................................... 145,000
President and Chief Executive Officer
PowerSecure, Inc.
Thomas R. Kellogg ..................................................... 100,000
President and Chief Executive Officer
Metretek, Incorporated
All current executive officers as a group (5 persons).................. 681,500
All current directors who are not executive
officers, as a group (3 persons)................................... 230,016
All employees, including all current officers
who are not executive officers,
as a group (36 persons) ........................................... 529,340

VOTE REQUIRED

The approval of the amendment to the 1998 Stock Plan requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present, in person or by proxy, and entitled to vote at the Annual
Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE ADOPTION AND APPROVAL OF THE PROPOSED AMENDMENT TO THE 1998 STOCK PLAN.
PROXY CARDS SIGNED AND TIMELY RETURNED TO THE COMPANY WILL BE SO VOTED, UNLESS
CONTRARY INSTRUCTIONS ARE SPECIFIED THEREON.

PROPOSAL NO. 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

AUDITORS PROPOSAL

The Audit Committee of the Board of Directors of the Company has appointed
Deloitte & Touche LLP to serve as the Company's independent auditors for the
fiscal year ending December 31, 2004. Deloitte & Touche LLP has served as the
Company's independent auditors since 1991, the Company's first fiscal year.
Services provided to the Company by Deloitte & Touche LLP during fiscal 2003
included the audit of the Company's annual financial statements and the review
of the Company's unaudited quarterly financial statements. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting, will have
the opportunity to make a statement if he desires to do so, and is expected to
be available to respond to appropriate questions.

Stockholder ratification of the appointment of Deloitte & Touche LLP as
the Company's independent auditors is not required by the Company's By-Laws or
any other applicable legal requirement. However, the Audit Committee is
submitting the appointment of Deloitte & Touche LLP to the stockholders for
ratification as a matter of good corporate practice. If the

stockholders fail to ratify the appointment, then the Audit Committee will
reconsider the appointment. Even if the appointment is ratified by the
stockholders, the Audit Committee may, in its discretion, appoint different
independent auditors for the fiscal year ending December 31, 2004 at any time
during the year if it determines that such a change would be in the best
interests of the Company and its stockholders.

FEES BILLED TO THE COMPANY BY DELOITTE & TOUCHE LLP

The aggregate fees for professional services rendered to the Company by
Deloitte & Touche LLP, the Company's independent auditors, for fiscal 2002 and
2003 were as follows:

2003 2002
-------- --------

Audit Fees (1)...................................... $139,000 $111,000
Audit - Related Fees (2)............................ 0 9,500
Tax Fees ........................................... 0 0
All Other Fees...................................... 0 0
-------- --------
Total ...................................... $139,000 $120,500
======== ========

(1) "Audit Fees" represents fees billed for professional services
rendered for the audits of the Company's consolidated annual
financial statements and for the reviews of the Company's unaudited
financial statements included in the Company's Quarterly Reports on
Form 10-Q and Form 10-QSB.

(2) "Audit-Related Fees" for fiscal 2002 represents fees for
professional services rendered in connection with issuing a
preferability letter related to a change in accounting principles.

The Audit Committee has determined that the provision of non-audit
services by Deloitte & Touche LLP in fiscal 2002 was compatible with maintaining
its independence. Deloitte & Touche LLP did not provide any non-audit services
during fiscal 2003.

PRE-APPROVAL POLICY AND PROCEDURES

The Audit Committee has adopted a policy that requires the Audit Committee
to pre-approve all audit and non-audit services to be provided by the
independent auditors. The Audit Committee may delegate this pre-approval
authority to one or more of its members. Such a member must report any decisions
to the Audit Committee at the next scheduled meeting. In accordance with this
pre-approval policy, all professional services provided by Deloitte & Touche LLP
for fiscal 2003 were pre-approved by the Audit Committee.

VOTE REQUIRED

The affirmative vote of the holders of a majority of the shares of Common
Stock present, in person or by proxy, and entitled to vote at the Annual Meeting
is required to ratify the appointment by the Audit Committee of the Board of
Directors of Deloitte & Touche LLP as the Company's independent auditors for the
fiscal year ending December 31, 2004.

THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER
31, 2004. PROXY CARDS SIGNED AND TIMELY RETURNED TO THE COMPANY WILL BE SO
VOTED, UNLESS CONTRARY INSTRUCTIONS ARE SPECIFIED THEREON.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company consists of
three members of the Board of Directors. Because the Company's Common Stock
currently trades on the OTC Bulletin Board, the Company is not subject to the
listing requirements of the Nasdaq Stock Market, including those governing audit
committees. Nonetheless, members of the Audit Committee meet the structure and
membership requirements, including the definition of independent directors, of
the current listing standards of the Nasdaq Stock Market. The Audit Committee
operates under a formal written charter, which was amended and restated by the
Board of Directors on March 21, 2003. The Audit Committee reviews and assesses
the adequacy of its charter on an annual basis.

The Company's management is responsible for the preparation, presentation
and integrity of the Company's financial statements and the integrity of the
Company's accounting and financial reporting processes, including its system of
internal controls, the audit process, and the process for monitoring compliance
with laws and regulations and ethical business standards. The Company's
independent auditors are responsible for performing an independent audit of the
Company's annual consolidated financial statements in accordance with generally
accepted auditing standards, and issuing a report thereon. The responsibility of
the Audit Committee is to assist the Board of Directors to fulfill its
responsibilities to monitor and oversee these processes. Additionally, among
other matters, the Audit Committee is responsible for the selection and
engagement terms of the independent auditors and the prior approval of the
nature and scope of and the fee arrangements for audit and permitted non-audit
services by the independent auditors.

In discharging its oversight responsibilities as to the audit process, the
Audit Committee has reviewed, and has met and held discussions with management
and with Deloitte & Touche, LLP, the Company's independent auditors, regarding,
the Company's audited consolidated financial statements for the fiscal year
ended December 31, 2003. The Audit Committee has also discussed with the
independent auditors the matters required to be discussed by Statement of
Auditing Standards No. 61 (Communication with Audit Committees), as modified or
supplemented. The Audit Committee has met with the independent auditors, with
and without management present, to discuss and review the results of their
examination of the Company's financial statements and their evaluation of the
Company's internal controls. The Audit Committee has also considered and
discussed with management and the independent auditors other areas of oversight
relating to the financial reporting and audit process that the Audit Committee
determined appropriate.

In addition, the Audit Committee has received from the independent
auditors the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
as modified or supplemented. The Audit Committee has discussed with the
independent auditors their independence from the Company and its management and
has considered that Deloitte & Touche LLP did not provide any non-audit services
to the Company in 2003.

Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements of the Company be included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2003 for filing with the
Securities and Exchange Commission.

The members of the Audit Committee are not professional accountants or
auditors, and as specified in its charter it is not the duty of the Audit
Committee to prepare financial statements, to plan or conduct audits or to
determine that the Company's consolidated financial statements are complete and
accurate and in accordance with generally accepted accounting principles. In
discharging its duties, the Audit Committee has relied on (i) management's
representation that the annual consolidated financial statements of the Company
were prepared with integrity and objectivity and in accordance with generally
accepted accounting principles, and (ii) the report of the Company's independent
auditors with respect to such financial statements.

Audit Committee

Anthony D. Pell, Chairman
Basil M. Briggs
Kevin P. Collins

PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return for
the five year period ended December 31, 2003 on the Company's Common Stock with
the Nasdaq Stock Market (U.S. Companies) Index (the "Nasdaq U.S. Index") and the
S&P 500 Oil & Gas Equipment and Service Index. The measurement dates are the
last trading day of each of the Company's fiscal years in the five year period.
The graph assumes that $100 was invested on December 31, 1998 in the Common
Stock of the Company, the Nasdaq U.S. Index and the S&P 500 Oil & Gas Equipment
and Services Index, and that all dividends, if any, were reinvested. The stock
price performance shown on the following graph is historical and not necessarily
indicative of future stock price performance.

[PERFORMANCE GRAPH]

12/31/98 12/31/99 12/29/00 12/31/01 12/31/02 12/31/03
-------- -------- -------- -------- -------- --------

METRETEK TECHNOLOGIES, INC. $ 100.00 $ 223.53 $ 47.06 $ 28.71 $ 12.24 $ 67.76
NASDAQ U.S. INDEX $ 100.00 $ 185.43 $ 111.83 $ 88.76 $ 61.37 $ 91.75
S&P 500 OIL & GAS EQUIPMENT AND SERVICES $ 100.00 $ 135.99 $ 182.24 $ 121.30 $ 107.37 $ 133.94
INDEX

INCORPORATION BY REFERENCE

To the extent that this Proxy Statement is incorporated by reference into
any other filing by the Company under the Securities Act 1933, as amended, or
the Exchange Act, the sections of this Proxy Statement entitled "Report of the
Compensation Committee on Executive Compensation," "Report of the Audit
Committee" (to the extent permitted by the rules of the SEC) and "Performance
Graph" will not be deemed incorporated unless specifically provided otherwise in
such filing. In addition, information contained on or connected to the Company's
website is not incorporated by reference into this Proxy Statement and should
not be considered part of this Proxy Statement or incorporated into any other
filing that the Company makes with the SEC.

ANNUAL REPORT

THE COMPANY'S 2003 ANNUAL REPORT TO STOCKHOLDERS, WHICH CONTAINS THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
AND INCLUDES THE COMPANY'S AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL
2003, ACCOMPANIES THIS PROXY STATEMENT BUT IS NOT A PART OF THIS PROXY STATEMENT
OR THE COMPANY'S PROXY SOLICITATION MATERIALS. THE COMPANY WILL PROVIDE, WITHOUT
CHARGE, ADDITIONAL COPIES (WITHOUT EXHIBITS) OF ITS 2003 ANNUAL REPORT TO ANY
STOCKHOLDER UPON RECEIPT OF A WRITTEN REQUEST, ADDRESSED TO METRETEK
TECHNOLOGIES, INC., 303 EAST 17TH AVENUE, SUITE 660, DENVER, COLORADO 80203,
ATTENTION: CORPORATE SECRETARY.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
directors and executive officers, and beneficial owners of more than 10% of the
outstanding Common Stock, to file with the SEC initial reports of ownership on
Form 3 and reports of changes in ownership on Form 4 or Form 5, and to furnish
the Company with copies of all such reports that they file. Based solely upon
its review of the copies of such forms received by the Company, the Company
believes that, during fiscal 2003, all reports required by Section 16(a) to be
filed by such persons were timely filed.

STOCKHOLDER PROPOSALS

Stockholders of the Company may submit proper proposals for consideration
at the Company's annual meetings of stockholders by submitting their proposals
in writing to the Company in a timely manner and otherwise in compliance with
federal and state laws and regulations and the Company's By-Laws. In order to be
considered for inclusion in the Company's proxy materials for the 2005 annual
meeting of stockholders, stockholder proposals must be received by the Secretary
of the Company on or before January 12, 2005, and must otherwise comply with the
requirements of Rule 14a-8 of the Exchange Act ("Rule 14a-8"). The timely
submission of a stockholder proposal does not guarantee that it will be included
in the Company's proxy materials for the 2005 annual meeting.

In addition, the Company's By-Laws establish an advance notice procedure
that stockholders must follow in order to nominate directors or to bring other
business before an annual meeting of stockholders without complying with Rule
14a-8. These advance notice procedures require that, among other things, notice
of a director nomination or other business must be submitted in writing to the
Secretary of the Company not less than 45 days nor more than 150 days prior to
the anniversary of the date on which the Company first mailed its proxy
materials for the prior annual meeting, unless the date of the annual meeting is
changed by more than 30 days from the anniversary of the date of the prior
annual meeting. For director nominations or other business to be properly
brought before the 2005 annual meeting, a stockholder must deliver written
notice to the Secretary of the Company no sooner than December 13, 2003 and no
later than March 27, 2005; provided, however, that if the date of the 2005
annual meeting is changed by more than 30 days from the date of the 2004 annual
meeting, notice must be received not later than the later of 75 days before the
date of the 2005 annual meeting or 10 days following the date on which public
announcement of the date of the 2005 annual meeting is first made. The notice
must contain the information specified in the By-Laws concerning the matters to
be brought before such annual meeting and concerning the stockholder proposing
such matters, including the name, address, number of shares beneficially owned
and any material interest of the stockholder making the proposal. Notice of a
director nomination must include information on various matters regarding the
nominee, including the nominee's name, age, business and residence addresses,
principal occupation and security holdings and any arrangements between the
stockholder and the nominee. Notice of other business must include a description
of the proposed business, the reasons therefor and other specified matters. A
copy of the relevant provisions of the Company's By-Laws may be obtained by a
stockholder, without charge, upon written request to the Secretary of the
Company.

All notices of proposals by stockholders, whether or not to be included in
the Company's proxy materials, must be sent to Metretek Technologies, Inc., 303
East 17th Avenue, Suite 660, Denver, Colorado 80203, attention: Secretary. Any
stockholder proposal must also comply with all other applicable provisions of
the Company's Second Restated Corporate Certificate of Incorporation and
By-Laws, the Exchange Act (including the rules and regulations thereunder), and
Delaware law. The Chairman of

the meeting may exclude any stockholder proposal that is not in compliance with
the foregoing requirements. If the Chairman does not exclude the proposal, then
the persons appointed as proxies in the proxy card solicited by the Board of
Directors of the Company for the 2005 annual meeting may exercise discretionary
voting authority to vote in accordance with their best judgment on any such
proposal submitted outside of Rule 14a-8.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors knows of no
other matters to be presented at the Annual Meeting. However, if any other
matters are properly presented at the Annual Meeting, the persons appointed as
proxies in the accompanying proxy card will have the discretionary authority to
vote the shares represented by the proxy card in accordance with their best
judgment.

By Order of the Board of Directors

Gary J. Zuiderveen
Secretary

May 11, 2004
Denver, Colorado

PROXY -- METRETEK TECHNOLOGIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 14, 2004

The undersigned stockholder of Metretek Technologies, Inc., a Delaware
corporation (the "Company"), hereby appoints W. Phillip Marcum and A. Bradley
Gabbard, or either of them, with full power and substitution (the "proxies"), as
proxy or proxies of the undersigned, to represent the undersigned, and to
exercise all the powers that the undersigned would have if personally present to
act and to vote all of the shares of the Company that the undersigned is
entitled to vote, at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting") called to be held on Monday, June 14, 2004, at 9:00 a.m. at
The Warwick Hotel, 1776 Grant Street, Denver, Colorado, and at any adjournments
or postponements thereof, as indicated on the reverse.

The shares represented by this proxy card when properly executed will be voted
as specified. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR ITEMS 1,
2 AND 3 AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF. All proxies previously given are hereby revoked. Receipt
of the accompanying Proxy Statement is hereby acknowledged.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
SELF-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.

A. ELECTION OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES:

1. To elect two (2) directors of the Company, each to serve for a term of
three years and until his successor is duly elected and qualified.

W. Phillip Marcum [ ] FOR [ ] WITHHOLD

Basil M. Briggs [ ] FOR [ ] WITHHOLD

B. ISSUES

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:

2. To approve a proposed amendment to the Company's
1998 Stock Incentive Plan to increase the number of
shares of Common Stock authorized for issuance
thereunder by 1,000,000 shares to an aggregate
of 2,750,000 shares

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. To ratify the appointment of Deloitte & Touche LLP
as the Company's independent auditors for the fiscal
year ending December 31, 2004.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. In their discretion, the proxies are authorized to take
action and to vote upon such other business as may
properly come before the Annual Meeting or any
adjournments or postponements thereof.

Please check this box if you are planning to attend
the annual Meeting of Stockholders. [ ]

C. AUTHORIZED SIGNATURES - SIGN HERE -THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.

INSTRUCTIONS: Please sign exactly as your name appears on the label above and
return this proxy card promptly in the accompanying envelope. When shares are
held by joint tenants, both should sign. When shares are held in the name of a
corporation, partnership, limited liability company or other entity, please sign
the full entity name by an authorized officer, partner, manager, member or other
authorized person. When signing as attorney, executor, administrator, trustee,
guardian or in any other representative capacity, please give your full title as
such.

Signature 1 -- Please keep signature within the box Signature 1 -- Please keep signature within the box Date(mm/dd/yy)

[ ] [ ] [ / / ]