FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * Kessner Steven   2. Issuer Name and Ticker or Trading Symbol ENVIRONMENTAL POWER CORP [( EPG )] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 16 PADDINGTON ROAD 3. Date of Earliest Transaction (Month/Day/Year) 08/24/2006 (Street) SCARSDALE, NY 10583 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 08/24/2006   P   2,500 A $ 5.07 31,785 I See Footnote (1) Common Stock 08/24/2006   P   3,000 A $ 5.08 34,785 I See Footnote (1) Common Stock 08/24/2006   P   1,800 A $ 5.09 36,585 I See Footnote (1) Common Stock 08/24/2006   P   3,800 A $ 5.1 40,385 I See Footnote (1) Common Stock 08/24/2006   P   500 A $ 5.11 40,885 I See Footnote (1) Common Stock 08/24/2006   P   500 A $ 5.12 41,385 I See Footnote (1) Common Stock 08/24/2006   P   300 A $ 5.14 41,685 I See Footnote (1) Common Stock 08/24/2006   P   200 A $ 5.2 41,885 I See Footnote (1) Common Stock 08/25/2006   P   1,000 A $ 5.09 42,885 I See Footnote (1) Common Stock 08/25/2006   P   3,000 A $ 5.1 45,885 I See Footnote (1) Common Stock 08/25/2006   P   1,000 A $ 5.12 46,885 I See Footnote (1) Common Stock 08/25/2006   P   1,000 A $ 5.15 47,885 I See Footnote (1) Common Stock 08/25/2006   P   2,100 A $ 5.18 49,985 I See Footnote (1) Common Stock 08/25/2006   P   900 A $ 5.19 50,885 I See Footnote (1) Common Stock 08/25/2006   P   500 A $ 5.2 51,385 I See Footnote (1) Common Stock 08/25/2006   P   2,000 A $ 5.23 53,385 I See Footnote (1) Common Stock 08/25/2006   P   1,000 A $ 5.24 54,385 I See Footnote (1) Common Stock 08/25/2006   P   4,000 A $ 5.25 58,385 I See Footnote (1) Common Stock 08/25/2006   P   2,700 A $ 5.27 61,085 I See Footnote (1) Common Stock 08/25/2006   P   17,200 A $ 5.28 78,285 I See Footnote (1) Common Stock 08/25/2006   P   1,000 A $ 5.29 79,285 I See Footnote (1) Common Stock 08/25/2006   P   500 A $ 5.3 79,785 I See Footnote (1) Common Stock               198,289 I See Footnote (2)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
Kessner Steven 16 PADDINGTON ROAD SCARSDALE, NY 10583	X

Signatures

/s/ Scott E. Pueschel, Attorney-in-fact		08/28/2006
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	80% of the shares purchased and reported as beneficially owned following the transaction were purchased and are held in equal proporations by The Robert Kessner Trust, The Richard Kessner Trust, The Michael Kessner Trust and The Adam Kessner Trust. Each of these trusts is for the benefit of the reporting person's child named in the trust title. The reporting person is the sole trustee of each of these trusts and exercises sole voting and investment control over the shares held by each of these trusts. 20% of the shares shares purchased and reported as beneficially owned following the transaction were purchased and are held by the reporting person as custodian for Jonathan Kessner, one of the reporting person's children. The reporting person exercises sole voting and investment control over these shares.
(2)	Held by RE Funding, LLC, of which the reporting person is the sole officer and director and over which he has sole voting and investment control.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

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