Ormat Operating New California Geothermal Plant at Reduced Capacity

Ormat Technologies, Inc. (NYSE:ORA) announced that its North Brawley power plant in California has been placed in service and is currently operating at a stable capacity of 17 megawatts (MW) despite difficulties with un-dissolved solids in the geothermal fluid.

Ormat believes the North Brawley reservoir is sufficient to support the 50MW of geothermal power output, but the re-injection of the geothermal fluid has been hampered by an exceptional amount of un-dissolved solids in the geothermal fluid.

The company has installed temporary measures while awaiting the arrival of permanent equipment for the solids handling. Ormat believes that the permanent equipment will provide both a higher efficiency and lower operating cost for the facility.

"However, it appears that even with the solids in check, the injection capacity of some of the wells is disappointing and the Company is evaluating how to increase the injection capacity and bring the plant to its rated design," Ormat said in a release.

Ormat plans to request an adjustment to its power purchase agreement to give until the end of the year to bring the power plant to its design capacity of 50MW.

Because the Company expects to incur additional capital expenditures to fully resolve the operational issues described above, it has temporarily deferred submitting an application for the ITC cash grant for the project. The cash grant is expected to be more than $100 million.

Ormat Technologies, Inc. designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services.