March 25 (Bloomberg) -- U.S. Geothermal Inc., a renewable-energy developer with projects in three Western states and Guatemala, was approved for a U.S. Treasury Department grant for a power plant it operates in Oregon.
U.S. Geothermal’s $36 million grant for the Neal Hot Springs geothermal plant will be reduced 8.7 percent to about $33 million due to automatic cuts to the federal budget that took effect March 1, the Boise, Idaho-based company said today in a statement.
About $13.3 million will pay an outstanding project loan and $8.5 million will be held in cash reserves. The balance will be distributed among equity partners. Enbridge Inc. owns 30 percent to 40 percent of the U.S. Geothermal unit that operates Neal Hot Springs.
Idaho Power Co. purchases electricity from Neal Hot Springs under a 25-year contract. The plant is expected to produce about 183,000 megawatt-hours a year.
The grant was awarded under the Treasury Department’s 1603 program that provides cash when projects go into operation instead of tax credits the plants would receive in the future. U.S. Geothermal received March 6 the balance of an $11.8 million federal grant under the same program for a project in Nevada.
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