SAN FRANCISCO -- JPMorgan Chase & Co. paid about $35.7 million for an interest in eight Ormat Technologies Inc. geothermal power plants in California and Nevada.
JPMorgan plans to pay Ormat an additional $8.7 million for 25 percent of the value of production tax credits generated by the plants through the end of 2016, the Reno, Nevada-based developer said today in a statement.
The so-called tax equity investment gives JPMorgan production tax credits and accelerated depreciation benefits that Ormat isn’t able to use, because “we generate more deductions for tax purposes than we are currently able to utilize,” Ormat Chief Executive Officer Dita Bronicki said in the statement. The production tax credit for geothermal is 2.2 cents a kilowatt-hour and applies to the first 10 years of a plant’s operation.
The eight plants are part of Ormat’s Ormesa, Heber and Mammoth complexes in California and its Steamboat and Brady complexes in Nevada, Bronicki said today in an e-mail.
JPMorgan invested $24.9 million in four of Ormat’s Nevada facilities in a similar transaction in February 2011.
Copyright 2013 Bloomberg
Lead image: Geothermal plant via Shutterstock