News

EnergySource commences construction of Hudson Ranch Power, 49 MW geothermal project in California

One of the geothermal plants at the Salton Sea, not directly related to story but close to the Hudson Ranch site (source: aquafornia.com)
Alexander Richter 17 May 2010

EnergySource commences construction of 49 MW Hudson Ranch Power project in Imperial County, California with closing the debt financing of nearly US$400 million.

According to its release, “EnergySource LLC, an independent power producer that developes renewable energy resources, announced the commencement of construction of its Hudson  Ranch  I  project,  a  49  MW  high  temperature  geothermal  power  generation  project  in Imperial  County,  California.  The  project  has  been  under  development  since  2006  by  Catalyst Renewables and Hannon Armstrong, the majority owners of EnergySource (formerly CHAR).

“We are very encouraged by the response of the project finance market to a new generation of high  temperature  flash?technology  geothermal  power  projects  that  will  serve  utility  customers  with base load renewable energy” remarked Dave Watson, President of EnergySource. “The Hudsron Ranch Power I project will commence construction in one of the best geothermal resources in North America, as well as create much-needed employment opportunities in Imperial County.”

Debt  financing  for  the  nearly  $400  million  project  was  raised  by  an  eight  member  bank syndicate led by ING Capital, Societe General and WestLB, and included Union Bank, MetLife, CIBC, Siemens  Financial  and  Investec.    Additional  equity  was  raised  from  GeoGlobal  Energy  LLC  (GGE),  a  privately  held  geothermal  energy?focused  investment  firm  backed  by  Mighty  River  Power,  a  state?owned New Zealand untility. Hannon Armstrong represented EnergySource in raising both the debt and equity.

Eric  Spomer,  President  of  Catalyst  Renewables  and  an  EnergySource  director  said,  “We  have enjoyed  tremendous  local  support  in  the  Imperial  Valley  for  this  project  from  the  Imperial  Irrigation District,  the  Imperial  County  government  and  from  the  quality  local  contractors  who  will  make  this project  a  success.”      Spomer  also  cited  Salt  River  Project,  the  purchaser  of  the  plant’s  power  for “extraordinary cooperation and faith in the project’s ultimate success.”

Sarah Slusser, a GGE partner, which invested US$90 million in the project, expressed confidence in the investment by saying “Hudson Ranch is exactly the geothermal opportunity GGE is looking for and we are delighted to have the opportunity to bring our financial and technical resources to help make the project a success.”

The project will take 21 months to build and will create 200 full-time equivalent construction jobs. Once completed,  it  will  employ  35  full?time  plant  operations  employees.  John  Featherstone, Senior Vice President of Engineering and Operations at EnergySource remarked, “It has been 20 years since the last stand-alone flash geothermal plant was built in this excellent resource and we are excited to use all the lessons learned from the existing plants to make this a best-available-technology geothermal power plant. This plant design ensures very efficient water use, which is a critical attribute in the southwestern U.S.”.

The  project  will  benefit  from  Federal  tax  incentives  contained  in  the  American  Recovery  and Reinvestment  Act  (“ARRA”).  EnergySource  acknowledged  the  support  of  numerous  local  politicians and business leaders, joind by Congressman Filner and Governor Schwarzenegger, in supporting the Hudson Ranch project throughout the development process.

About  EnergySource:  EnergySource  is  an  independent  developer,  constructor,  operator  and  owner  of  utility  scale  geothermal  and  solar  power  generation  projects  in  the  Southwestern  U.S.,  selling  wholesale  power  and environmental  attributes  to  utilities  subject  to  state  requirements  to  purchase  energy  from  renewable resources. EnergySource employs a strong team of professionals with long experience in energy development and in particular, the unique field of geothermal power. The company has an advanced pipeline of geothermal and solar projects it is currently developing. EnergySource is headquartered in San Diego, with a full office in El Centro. www.energysource.com

About Catalyst Renewables: Catalyst is a Dallas, Texas based independent developer of biomass and goethermal projects through the U.S. www.catalystrenewables.com

About Hannon Armstrong: Hannon Armstrong is a 30 year old, Annapolis, MD financial services firm, financing infrastructure assets by providing capital to companies and governments that are solving the critical issues of today. www.hannonarmstrong.com

GeoGlobal Energy LLC: GGE, based in Washington, DC area, is a privately held, geothermal investment and development company focused on the worldwide development of geothermal resources, covering all aspects of geothermal exploration, development and operations. www.geoglobal-energy.com

Mighty  River  Power:  Mighty  River  Power  is  an  integrated  energy  generation,  trading,  retailing  and  metering business located in New Zealand. www.mightyriverpower.co.nz

Source: Company release via e-mail