RENO, Nev., Sept. 6, 2013 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) announced today that it entered into a 10-year Power Purchase Agreement (PPA) with Southern California Public Power Authority (SCPPA) to deliver electricity from its Heber 1 geothermal power plant at the Heber complex in Imperial Valley, California beginning December 16, 2015. The current PPA with Southern California Edison will expire December 15, 2015.
"This new contract with SCPPA aligns with our overall strategy to replace the more volatile Standard Offer Contract No. 4 (SO#4), which is tied to natural gas prices, with fixed-price contracts," said Dita Bronicki, chief executive officer of Ormat. "Signing this 46 MW contract will reduce our portfolio's exposure to California SO#4 PPAs to 100 MW."
With an expected net generating capacity of 46 MW, Ormat will sell the power to SCPPA at an average price of approximately $85.62 per megawatt hour over the lifetime of the contract. The new pricing will increase Heber 1 revenues in 2016 by more than $7 million. SCPPA members that will receive power from Heber 1 are the Los Angeles Department of Water and Power (LADWP) and the Imperial Irrigation District (IID).
"In our effort to replace all coal generation by 2025, LADWP sees the value in geothermal as an ideal coal replacer as a renewable, baseload solution with no integration costs," explained Aram Benyamin, senior assistant general manager – power at LADWP. "As we continue to incorporate more renewable assets into our portfolio, we will benefit from contracts like the Heber 1 PPA because it's a risk-free project with a credible owner-operator at an attractive price."
For IID, "The district is able to continue integrating renewable energy into its portfolio while at the same time supporting sustainability in the Imperial Valley by integrating our indigenous resources and the valuable jobs that are sustained by them into the mix," said Carl Stills, energy department manager. "We are thrilled to have contracted our first long-term geothermal project enabling the supply of electricity from a local resource."
In addition to the new PPA, Ormat is in the midst of enhancing the Heber 1 geothermal power plant. In 2014, the company plans to refurbish the main steam turbine and replace the existing main generator.
"This new PPA marks our second contract with LADWP as well as IID. We are delighted to strengthen our relationship with these two large publicly owned utilities and to help them meet their RPS goals with clean, reliable and cost-effective geothermal resources," Bronicki concluded.
About Ormat Technologies, Inc.
With over four decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company solely engaged in geothermal and recovered energy generation (REG). The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter—a power generation unit that converts low-, medium- and high-temperature heat into electricity. With over 82 U.S. patents, Ormat's power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has over 500 employees in the United States and about 600 overseas. Ormat's flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1600 MW of gross capacity. Ormat's current generating portfolio of 595 MW (net) is spread globally in the U.S., Guatemala and Kenya.
Ormat's Safe Harbor Statement
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2013.
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Ormat Technologies Contact:
Dita Bronicki
CEO
775-356-9029
dbronicki@ormat.com
Investor Relations Contact:
Todd Fromer/Rob Fink
KCSA Strategic Communications
212-896-1215 (Fromer)/212-896-1206 (Fink)
tfromer@kcsa.com / rfink@kcsa.com
