Idaho, United States — U.S. Geothermal Inc. announced that the Idaho Public Utilities Commission has approved the Power Purchase Agreement (PPA) for the Neal Hot Springs project. U.S. Geothermal’s wholly owned subsidiary, USG Oregon LLC, signed the PPA with Idaho Power Company in December 2009.
The PPA has a term of 25 years and provides for the purchase of up to 25 megawatts (MW) of certified renewable power. Beginning in 2012, the flat energy price is US $96 per megawatt-hour (MWh). The price escalates annually by 6 percent in the initial years and by 1.33 percent during the latter years of the agreement.
The approximate 25-year levelized price is $117.65 per MWh. Neal Hot Springs is being developed as an improved technology binary cycle power plant with a planned annual average net output of 22 MW.
The project is negotiating with the U.S. Department of Energy for a low cost $102.2 million loan for 75% of the maximum total project costs. In addition, with construction continuing this year, the project will qualify for an approximate $34 million cash grant from the U.S. Department of The Treasury upon commercial operation of the plant.
USG Oregon LLC initiated construction by having drilled two production wells that have a combined output rating, subject to drilling necessary injection wells, of nearly 15 MW. Two smaller drill rigs are currently working on an extensive temperature gradient well drilling program at the project.
Ten small diameter wells have already been completed and an additional three wells are planned with variable depths down to 2,000 feet. The drilling has identified an enlarged high temperature geothermal anomaly and extended the length of the known production zone by approximately one mile to the southeast.
The results of this drill program are being incorporated into a reservoir model to help pinpoint the location of the remaining full size production and injection wells to be drilled.