Headaches with California plant push Ormat into red for quarter
Struggles with a geothermal plant in California’s Imperial Valley brought a first-quarter loss to Reno’s Ormat Technologies.
The company said last week it lost nearly $9 million during the quarter, which compares with a profit of $1.8 million a year earlier.
Revenue of $97.8 million in the first quarter was up 18 percent over the same period a year ago.
Ormat operates in two major segments sales of products used in geothermal plants and sales of electricity from geothermal plants that it’s developed itself.
The electricity-sales segment felt the effects of operational problems at Ormat’s North Brawley plant in California.
The plant came online in early 2010 with expectations that it could produce 50 megawatts of power. But Ormat has struggled to drill wells to bring enough hot water to run the plant at its full capacity.
The effect on the company’s finances has been two-fold: Sales of electricity to Southern California Edison are lower than projected, and Ormat continues to spend more than it expected on operational costs.
Except for the troubles with the California plant, Ormat had a good quarter, said Dita Bronicki, its chief executive officer.
Its sales of geothermal equipment totaled $19.5 million during the quarter, up by $3 million from a year earlier.
The company has an $84 million backlog of orders for equipment, and it expects the order book to fill further as new geothermal plants are developed, Bronicki said.
Sales of electricity, meanwhile, totaled $78.3 million compared with $66 million a year earlier as Ormat boosted its generation from geothermal and recovered-energy projects by 14 percent from a year earlier.
Projects that the company has under way, Bronicki said, are expected to add about 220 megawatts of generating capacity by the end of 2013. It currently has about 1,300 megawatts in its portfolio of power plants, which include several plants at the southern edge of Reno.
The company is focusing some of its exploration efforts on large blocks of privately owned lands in the Pacific Northwest. That, Bronicki said, allows Ormat to move more quickly because private lands don’t have the same regulatory hurdles as public lands in states such as Nevada.
Publicly held Ormat will pay a dividend of 4 cents a share on May 25 to shareholders of record on May 18. The company’s board said it expects to continue the 4-cent payout during the next two quarters.
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