Boise, Idaho, June 10, 2010 — U.S. Geothermal was offered a conditional commitment for a $102.2-million loan guarantee from the Department of Energy to construct the planned 22-MW power plant at Neal Hot Springs in Eastern Oregon.
The conditional commitment was offered through the DOE‘s Loan Programs Office.
The Neal Hot Springs development project is the first geothermal project to be offered a conditional commitment for a loan guarantee under DOE’s Title XVII loan guarantee program, which was created by the Energy Policy Act of 2005 to support the deployment of innovative clean energy technologies.
Issuance of the loan guarantee is subject to the satisfaction of certain conditions precedent. Once issued, the loan guarantee will guarantee the loan to the Neal Hot Springs project from the U.S. Treasury’s Federal Financing Bank.
“There is tremendous potential for renewable geothermal energy and the jobs for Oregon that come with it,” said Senator Ron Wyden. “The announcement today helps make commercial development of geothermal energy at the Neal Hot Springs a reality. This is good news for Oregon and the environment.”
Idaho’s largest utility, Idaho Power Co., signed a 25-year power purchase agreement with U.S. Geothermal’s wholly owned subsidiary, USG Oregon LLC, for up to 25 MW of power per year. Beginning in 2012, the flat energy price is $96 per MW hour.
The price escalates annually by 6 percent in the initial years and by 1.33 percent during the latter years of the agreement. The approximate 25-year levelized price is $117.65 per MW hour.
U.S. Geothermal Inc. is a renewable energy development company that is operating geothermal power projects at Raft River, Idaho, and San Emidio, Nevada. U.S. Geothermal Inc. recently announced IPUC approval of a power purchase agreement and is continuing to work on the conditions precedent to be able to draw upon a $102.2 million project loan as part of its development activities at Neal Hot Springs in eastern Oregon.