Ormat's Geothermal Exploration in Alaska Spurred by Legislature
RENO, Nev., June 2 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. (NYSE:ORA) announced today that it will accelerate geothermal exploration work this summer on Mount Spurr following Alaska Governor Sean Parnell's signing of Senate Bill 243. Originally, the annual royalty rate paid from geothermal production on state lands was a minimum of 10 percent of gross revenues. This bill significantly reduces that rate to the same level paid on Federal land.
While it is believed that Alaska has substantial geothermal potential, it has yet to develop a commercial geothermal power plant. "Reducing this rate is an important first step towards developing the state's renewable geothermal resources into utility scale power plants," said Yoram Bronicki, president and COO of Ormat. "At the end of the day, SB 243 provides Ormat with the confidence that the state supports the development of the geothermal industry in a manner that is financially viable."
"Alaskans want to live and work where they have access to reliable and affordable energy," said the bill's sponsor Senator Lesil McGuire. "By reducing the royalty rate on geothermal power, we acknowledge the unusually high costs of geothermal development in Alaska but still protect the State's interests. This bill will ultimately lower the cost of clean, reliable power to the ratepayers."
"SB 243 provides the initial regulatory framework that is critical to attracting private sector investment capital necessary to develop Alaska's vast and very promising geothermal resources," said Rep. Mike Hawker. "The geothermal resource in southcentral Alaska has the potential to replace nearly one-third of our region's electrical generation that is currently dependent upon a nearly depleted supply of natural gas from Cook Inlet. Geothermal resource development is one of the routes to our future energy security and SB 243 is the first step down that road."
In October 2008, Ormat leased approximately 36,000 acres of state land through a competitive bid process, and has since conducted early exploration work at the site. Ormat plans to begin drilling core holes this year as part of exploration and early field development, which is expected to take three years. Construction is forecasted to last another three years. Ormat hopes to be the first Independent Power Provider selling geothermal power to utilities in Alaska.
"We all know that developing a geothermal project in Alaska is difficult due to our remote location, climate and terrain found at many sites," said Brad Evans, CEO of Chugach Electric. "With the passage of SB 243, we are removing some of the burden layered on top of what is already a high cost development environment. We appreciate Ormat's commitment that it will pass along the benefit of SB 243 to customers by lowering the price of power. Chugach Electric supported this bill and is eager to work with Ormat and others as they strive to develop world class geothermal power plants in Alaska."
Geothermal energy is a well-proven form of reliable, affordable, base-load renewable energy. "Geothermal energy equals green energy," said Rep. Charisse Millett. "Geothermal electrical production has been used for decades all over the world and, with the passage of Senate Bill 243, Alaska is taking a big step to utilize this proven and secure energy resource."
About Ormat Technologies
Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by 75 U.S. patents. Ormat has engineered and built power plants, that it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1300 MW of gross capacity. Ormat's current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States - Brady, Brawley, Heber, Mammoth, Ormesa, Puna, Steamboat, OREG 1, OREG 2 and Peetz; in Guatemala - Zunil and Amatitlan; in Kenya - Olkaria III; and, in Nicaragua - Momotombo.
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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 8, 2010.
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.
Ormat Technologies Contact: Investor Relations Contact:
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CEO KCSA Strategic Communications
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