The company also commented on recent regulatory developments:
Recent developments in the market are encouraging to the growth of renewable energy, and more specifically to geothermal energy in our opinion. In California, the signing into law of AB-2363 earlier this month by the California Governor, will require the California Public Utilities Commission to establish the appropriate adders (integration cost) for each technology that must be used when evaluating bids for long term wholesale power contracts. We believe this change will add appropriate costs to wind and solar power generation due to their intermittent deliveries of power, which then should allow base load renewables like Geothermal and Biomass to compete for PPAs based on a more accurate comparison of the full cost for power. That has not been the case in the past.
Similarly, in the State of Nevada, in 2013 the legislature mandated that the utilities in the state must purchase 300 megawatts of renewable energy from independent power producers to replace coal generation that is going to be retired. In response, NV Energy has issued their first of 3 Requests for Proposal for 100 MW of renewable energy. This creates a solid market of 100 MW per year for the next three years, which provides our company with a potential path for selling power from both our existing and new projects.
In addition, there are a number of pending bills, both at the federal and state level that could have a favorable impact on future geothermal development. At the federal level, Senate Bill S-2260 would extend the current tax credits available to new geothermal plants for an additional 2 years. Under the proposed bill, plants that begin construction by December 31, 2015 would be eligible for a 30% Investment Tax Credit (“ITC”), or alternatively a 10 year Production Tax Credit (“PTC”). S-2260 has been approved by the Senate, and is now at a conference committee to be merged with a companion House tax extenders bill.
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