Ormat secures agreement for 150 MW of geothermal capacity
Reno-based Ormat Technologies, Inc. ( NYSE: ORA) announced June 1 that it is in receipt of the final approval required for the execution of a Power Purchase Agreement (PPA) between ONGP LLC, a subsidiary of the Ormat, and Southern California Public Power Authority (SCPPA).
Under the agreement, SCPPA will purchase 150MW of power generated by a portfolio of the Ormat’s new and existing geothermal power plants. SCPPA will resell the entire output to the Los Angeles Department of Water and Power.
Isaac Angel, CEO of Ormat Technologies said, “We are very excited to receive the final approval for this first portfolio PPA, which has a unique structure supporting Ormat’s long-term plans to grow our geothermal business domestically. This PPA will enable both the development of multiple new projects as well as the sustainable operation of several of our existing geothermal power plants, thereby strengthening our ability to deliver long-term growth. We are delighted to be chosen for the sixth time by SCPPA and greatly appreciate their confidence in Ormat.”
Energy deliveries under the portfolio agreement are expected to start in the fourth quarter of 2017 and the entire portfolio is expected to be on line by the end of 2022.
The portfolio PPA contract capacity is 150 MW, with a minimum capacity of 135 MW and maximum potential capacity of 185 MW. The portfolio PPA is for a term of approximately 26 years, expiring in December 31, 2043 and has a fixed price of $75.50 per MWh.
The portfolio PPA covers nine primary facilities, including Tungsten Mountain, and Dixie Meadows, new projects currently under construction or development by Ormat, as well as Steamboat Hills, Brady and Steamboat 2&3, existing geothermal power plants that will commence deliveries to SCPPA once their current PPAs terminate. The portfolio PPA also covers 16 secondary facilities, including McGinness Hills Phase 3, that could be used to replace or supplement the primary facilities. The parties expect to execute the portfolio PPA in the coming weeks.
Per the agreement, Caesars will continue to operate Harrah’s for the first half of 2020 before it’s redeveloped into a non-gaming hotel and mixed-use development.