U.S. subsidized geothermal power companies U.S. Geothermal, Nevada Geothermal Power and bankrupt Raser Technologies having significant financial difficulties, haven't made profit in years or never, records indicate
October 7, 2011
– At least three geothermal power-generating companies in the U.S. that have received federal subsidies are having significant financial difficulties, according to an analysis of financial records, reported USA Today on Oct. 5.
Two of the companies, Nevada Geothermal Power Inc. (NGP) and Salt Lake City, Utah-based Raser Technologies Inc., have received US$195 million in partial federal loan guarantees and grants intended to encourage renewable energy development.
Both companies have agreements with utilities to purchase their energy output, but have still been unable to turn a profit.
Vancouver, British Columbia-based NGP has never made a profit and is at risk of failing, according to the company’s financial filings. Raser Technologies filed for Chapter 11 bankruptcy protection this year, USA Today reported.
U.S. Geothermal Inc. hasn’t made a profit in four years, according to filings with the U.S. Securities and Exchange Commission. The Boise, Idaho-based company received a $97 million loan from the U.S. Dept. of Energy (DOE) in February.
Raser’s power plant in Beaver County, Utah, has been unable to produce more than 5 megawatts (MW) of power, and the company claims in a lawsuit it filed last month that the problem lies with the generators, which were developed by a Pratt & Whitney subsidiary.
The claim was denied by Pratt & Whitney spokesman Matthew Bates, reported USA Today.
NGP’s Blue Mountain geothermal facility in Nevada has only reached 35 MW of its rated 45-MW capacity, not enough to cover overhead and loan payments. The company received a $98.5 million loan guarantee from the DOE and another $66 million in government grants.
Nevada Geothermal’s debt is not expected to hinder its ability to repay its federal loan, said DOE spokesperson Dan Leistikow, in a blog posting this week, USA Today reported.
Raser and U.S. Geothermal did not respond to requests for comment. Nevada Geothermal’s Paul Mitchell, who heads the company’s investor communications, said that the “lag periods” in the output and financial “targets” are to be expected while developing the resources.
The geothermal sector has had a tumultuous year, with publicly-traded geothermal stocks down 60% to 80%, including for Nevada-based Ormat Technologies Inc., which also won a DOE loan guarantee, said John McIlveen, a geothermal analyst at Jacob Securities Research, reported USA Today.
The primary source of this article is USA Today, McLean, Virginia, on Oct. 5, 2011.