Ormat Technologies cautioned Wednesday that it will report losses in its fourth quarter and full year due to a plant-related charge of up to $230 million.
The geothermal company said the charge will be taken in the fourth quarter for its North Brawley power plant in California.
Ormat said the plant has been unable to reach its design capacity of 50 MWe, instead running at somewhere between 20 MWe and 33 MWe. The company said it reached out to Southern California Edison to talk about contract options to its Power Purchase Agreement (PPA), and in early 2012 came to a written understanding to hold talks with third parties about buying the power at better rates.
Last week, Southern California Edison sent a letter to Ormat stating that it was no longer interested in pursuing alternatives to the PPA — meaning Ormat could no longer seek a replacement PPA with higher electricity prices.
Ormat has decided not to continue investing in the capital required to increase capacity at the plant, and said the plant will run at its current capacity of about 27 MWe.
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