Reno, Nev., November 29, 2016 -- Ormat Technologies, Inc. (NYSE: ORA) today announced that its subsidiary entered into a 25-year Power Purchase Agreement (PPA) with Southern California Public Power Authority (SCPPA) to deliver electricity from its Ormesa geothermal complex in Imperial Valley, California beginning November 30, 2017.
The SCPPA PPA will supersede Ormesa’s current 30-year Standard Offer Contract No. 4 (SO#4) with Southern California Edison that has a variable energy rate tied primarily to volatile natural gas prices and that will expire on November 29, 2017. Under the terms of the PPA, energy from the Ormesa complex will be sold to SCPPA at a rate of $77.25 per megawatt hour with no annual escalation. Contract capacity is 35 MW, with a maximum generation equivalent to a net capacity of about 43 MW. SCPPA will resell about 86% of this power complex’s output to the Los Angeles Department of Water and Power (LADWP) and the remaining 14% to the Imperial Irrigation District (IID).
Isaac Angel, CEO of Ormat Technologies said, “Geothermal power is a superior resource, offering customers firm and flexible power with no integration costs. We are delighted to be chosen again by SCPPA, LADWP and IID, who continue to recognize the value of cost-effective and reliable geothermal energy to meet their renewable energy goals. As for Ormat’s portfolio, this new PPA will eliminate our exposure to natural gas from the Ormesa complex and reduce our entire exposure to natural gas to approximately 50MW, which are less than 10% of our portfolio. As a result of the new PPA, we expect to see an improvement in Ormesa’s operating profit and EBITDA of approximately $8.5 million in 2018 compared to Ormesa’s expected operating profit and EBITDA in 2016.”
“Geothermal power will greatly assist LADWP in reaching our goal of 33% renewable energy by 2020 while transitioning away from coal power,” said Michael Webster, LADWP Executive Director of Power System Engineering and Technical Services. “The Ormesa geothermal complex’s energy will generate clean energy for homes in Los Angeles while we work to create a more sustainable energy future for all Angelenos.”
“As California moves aggressively towards a clean energy future, renewable resources from the Imperial Valley should continue to play a key role in meeting these goals,” said Norma Galindo, president, IID board of directors. “This facility is just one example of the prominent geothermal resources unique to this region that can be further developed and their energy exported to neighboring communities.”
About Ormat Technologies
With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter - a power generation unit that converts low-, medium- and high-temperature heat into electricity. With 72 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 450 employees in the United States and over 600 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 2,000 MW of gross capacity. Ormat’s current 710 MW generating portfolio is spread globally in the U.S., Guadeloupe, Guatemala and Kenya.
Ormat’s Safe Harbor Statement
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, specifically, the statements related to 2018 estimated EBITDA. 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 February 26, 2016.
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.