Permitting delay causes Ormat to loose PPA with NV Energy

Permitting delay causes Ormat to loose PPA with NV Energy Carson Lake project drilling rig (source: flickr/ greatbasintours)
Alexander Richter 27 Dec 2011

Ormat Technologies and utility NV Energy terminate Power Purchase Agreement for the Carson Lake project in Nevada. Permitting delays are named as the main cause of this development.

Reported just before the holidays, “Ormat Technologies Inc.  its contract to sell power to NV Energy Inc. (NVE) from a Nevada geothermal power plant was terminated after the project ran into permitting delays.

Ormat, said permitting delays kept it from making progress on the power project and affected the development plan and economics of the project.” The project is the Carson Lake geothermal power project in Nevada.

Ormat has for a long time warned that the current permitting situation in the United States is not business friendly and has described it as one of the predominant issues the industry faces in pushing development further.

“A spokesman at NV Energy confirmed that the companies agreed to terminate their agreement, but declined to comment further.

Ormat obtained a $350 million government loan guarantee earlier this year to help finance three geothermal power plants in Nevada. The company said it planned to sell the electricity from those plants to NV Energy through long-term power contracts.

The terminated contract was tied to a different project that was not among those backed by the loan guarantee.

NV Energy had agreed to jointly develop the 31.5 megawatt project and buy the electricity it generated, under a contract signed in 2006.

Ormat said it paid NV Energy a termination fee of $1.7 million and that it would continue working on the project.”

Source: Wall Street Journal