The amended PPA expands the existing 3.6 megawatt agreement to provide for the purchase of electric power by the Sierra Pacific Power Company ("SPCC") for up to 19.9 MW from two power generation units at San Emidio. The PPA has a term of 25 years with the starting price for power of $89.75 per megawatt-hour subject to an annual escalation rate of 1%. The new Phase I power plant, which is an 8.6 megawatt (net) water cooled facility, achieved mechanical completion in December and is currently undergoing commissioning.
"Approval of this PPA is a requirement of the project finance arrangements we are currently negotiating for Phase I and II of the San Emidio project," said Daniel Kunz, U.S. Geothermal Inc. Chief Executive Officer. "We expect to be closing the project loan agreements in the coming weeks, after the new Phase I plant achieves commercial production," Kunz added.Development of the Phase II plant has started with the initiation of production and injection well drilling at the site. It is expected that Phase II will utilize two to three existing injection wells and other infrastructure at the site that will be shared with Phase I. To allow for full power generation under the amended PPA, an additional 3.9 megawatts of transmission capacity has been requested from the SPCC Transmission group, which would expand output currently available under the existing 16 megawatt Small Generator Interconnection Agreement.
