Ormat Reduces Exposure to Natural Gas Prices With New 10-Year Power Purchase
Agreement for Heber 1
New Pricing is Expected to Add Approximately $7 Million to 2016 EBITDA
RENO, Nev., Sept. 6, 2013 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc.
(NYSE:ORA) announced today that it entered into a 10-year Power Purchase
Agreement (PPA) with Southern California Public Power Authority (SCPPA) to
deliver electricity from its Heber 1 geothermal power plant at the Heber
complex in Imperial Valley, California beginning December 16, 2015. The
current PPA with Southern California Edison will expire December 15, 2015.
"This new contract with SCPPA aligns with our overall strategy to replace the
more volatile Standard Offer Contract No. 4 (SO#4), which is tied to natural
gas prices, with fixed-price contracts," said Dita Bronicki, chief executive
officer of Ormat. "Signing this 46 MW contract will reduce our portfolio's
exposure to California SO#4 PPAs to 100 MW."
With an expected net generating capacity of 46 MW, Ormat will sell the power
to SCPPA at an average price of approximately $85.62 per megawatt hour over
the lifetime of the contract. The new pricing will increase Heber 1 revenues
in 2016 by more than $7 million. SCPPA members that will receive power from
Heber 1 are the Los Angeles Department of Water and Power (LADWP) and the
Imperial Irrigation District (IID).
"In our effort to replace all coal generation by 2025, LADWP sees the value in
geothermal as an ideal coal replacer as a renewable, baseload solution with no
integration costs," explained Aram Benyamin, senior assistant general manager
– power at LADWP."As we continue to incorporate more renewable assets into
our portfolio, we will benefit from contracts like the Heber 1 PPA because
it's a risk-free project with a credible owner-operator at an attractive
For IID, "The district is able to continue integrating renewable energy into
its portfolio while at the same time supporting sustainability in the Imperial
Valley by integrating our indigenous resources and the valuable jobs that are
sustained by them into the mix," said Carl Stills, energy department
manager."We are thrilled to have contracted our first long-term geothermal
project enabling the supply of electricity from a local resource."
In addition to the new PPA, Ormat is in the midst of enhancing the Heber 1
geothermal power plant. In 2014, the company plans to refurbish the main steam
turbine and replace the existing main generator.
"This new PPA marks our second contract with LADWP as well as IID. We are
delighted to strengthen our relationship with these two large publicly owned
utilities and to help them meet their RPS goals with clean, reliable and
cost-effective geothermal resources," Bronicki concluded.
About Ormat Technologies, Inc.
With over four decades of experience, Ormat Technologies, Inc. is a leading
geothermal company and the only vertically integrated company solely engaged
in geothermal and recovered energy generation (REG). 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 over
82 U.S. patents, Ormat's power solutions have been refined and perfected under
the most grueling environmental conditions. Ormat has over 500 employees in
the United States and about 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 supplied to utilities and
developers worldwide, totaling approximately 1600 MW of gross capacity.
Ormat's current generating portfolio of 595 MW (net) is spread globally in the
U.S., 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 toOrmat's plans, objectives and expectations for future operations and
are based upon its management's current estimates and projections of future
results or trends. 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 inOrmat
Technologies, Inc.'s Annual Report on Form 10-K filed with theSecurities and
Exchange CommissiononMarch 11, 2013.
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.
CONTACT: Ormat Technologies Contact:
Investor Relations Contact:
Todd Fromer/Rob Fink
KCSA Strategic Communications
212-896-1215 (Fromer)/212-896-1206 (Fink)
firstname.lastname@example.org / email@example.com
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