US Geothermal Offered US $102.2M Conditional Loan Guarantee

U.S. Geothermal Inc. has been offered a conditional commitment for a US $102.2 million loan guarantee from the U.S. Department of Energy (DOE) to construct the planned 22-megawatt (MW) geothermal power plant at Neal Hot Springs in Eastern Oregon. The conditional commitment was offered through the DOE’s Loan Programs Office.

The Neal Hot Springs development project is the first geothermal project to be offere d a conditional commitment for a loan guarantee under DOE’s Title XVII loan guarantee program, which was created by the Energy Policy Act of 2005 to support the deployment of innovative clean energy technologies.

Issuance of the loan guarantee is subject to the satisfaction of certain conditions precedent. Once issued, the loan guarantee will guarantee the loan to the Neal Hot Springs project from the U.S. Treasury’s Federal Financing Bank.

Idaho Governor C.L. “Butch” Otter said the Department of Energy’s support of U.S. Geothermal’s largest project undertaking yet goes to the heart of the 60-year relationship between the agency and the State of Idaho, home to the Idaho National Laboratory since 1949.

“Advanced thinking and unsurpassed commitment have formed the bond between the Department of Energy and Idaho for more than six decades, and it has created this critical new opportunity to inject clean, renewable baseload energy into our region’s power grid,” Gov. Otter said. “We couldn’t be prouder of our partners at U.S. Geothermal. They’ve shown once again the quality of their global leadership in renewable energy.”

Idaho’s largest utility, Idaho Power Company, has signed a 25-year power purchase agreement with U.S. Geothermal’s wholly owned subsidiary, USG Oregon LLC, for up to 25 MW of power per year. Beginning in 2012, the flat energy price is $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.

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