Geothermal Co. Boosts Capacity

Geothermal power company Ormat is boosting its geothermal stake though the purchase of 35 MW geothermal capacity in Nevada. The company has completely acquired the Steamboat Geothermal Complex in Steamboat Hills, 10 miles south of Reno, Nevada, including the Steamboat 2 and 3 power plants as well as adjacent private land which has the potential to support additional geothermal developments.

Sparks, Nevada – July 18, 2003 [] This transaction is expected to close by July 31, 2003 by which date Ormat will pay a one-time payment of US$32.5 million. This pending transaction follows the recent closing of the acquisition by Ormat Nevada of the Steamboat 1 and 1A plants which share the same geothermal resource with the Steamboat 2 and 3 plants. All the projects have Power Purchase Agreements (PPAs) with Sierra Pacific Power for additional 18-20 years for energy and capacity. Currently the existing projects generate some US$15 million in annual revenues, which increase gradually in accordance with the escalation clause in the PPAs. The Complex is located at the Steamboat Known Geothermal Resource Area (KGRA), on the foothills of Mount Rose in the northern Sierras, some 10 miles from Ormat headquarters in Sparks, Nevada. This KGRA is considered one of the prime geothermal resources in the Western USA, said the company. Ormat built the original facility of Steamboat 1 in 1985, followed shortly thereafter by its extension Steamboat 1A. “We are proud to be back at Steamboat, one of the projects we developed 18 years ago which is still working at full throttle,” Lucien Y. Bronicki, Chairman of the Ormat Group of Companies. Steamboat plants 2 and 3 were constructed in early 1990 and have performed in a manner that exceeded the initial projections, said the company. Currently, the Complex produces some 35,000 kW, which is enough power to satisfy the electricity needs of about 35,000 homes. Nevada is one of the states leading the implementation of Renewable Portfolio Standards (RPS), which requires the local power utilities to buy more green power such as geothermal. Ormat has already benefited from this initiative by entering into two PPAs for its Desert Peak projects: DP 2 and DP 3. The addition of the Steamboat plants will increase Ormat Group’s current portfolio of owned and operated plants to 225 MW. “This acquisition fits Ormat’s long term strategy which calls for taking ownership positions in various geothermal projects, upgrading them and financing them for the long term,” said Hezy Ram, Ormat’s VP of Business Development. “The previous two acquisitions of the Brady and the Ormesa complexes have been shored up and are operating today at a much higher capacity. We intend to review the future potential of Steamboat in the framework of the supporting environment in Nevada.”
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