U.S. Geothermal Inc. (NYSE: HTM) announced it has received approval on an amended power purchase agreement for energy provided by its San Emidio Project to the Sierra Pacific Power Company (SPPC).
The Nevada Public Utility Commission is allowing U.S. Geothermal to increase its existing agreement of 3.6 MW of geothermal energy to 19.9 MW from its two power-generation units at San Emidio, located in Washoe County, Nevada.
The power purchase agreement [pdf] has a term of 25 years, with a starting price of $89.75 per megawatt hour. An annual increase of 1% has also been agreed to. Approval of the amended agreement was necessary for proper financial arrangements being negotiated for both Phase I and Phase II.
“We expect to be closing the project loan agreements in the coming weeks, after the new Phase I plant achieves commercial production," said Daniel Kunz, U.S. Geothermal Inc. Chief Executive Officer.
Drilling for Phase II is now underway and the recent discovery of a potentially deeper, higher temperature production zone is likely to expand the existing reservoir boundary. All this bodes well for U.S. Geothermal, as it has requested additional output permission to meet its latest agreement requirements.
Approval of this request is pending from the SPCC Transmission group, who will likely grant it in the near future.
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