Ormat Technologies has secured the final approval required to sign a power purchase agreement (PPA) between ONGP, a subsidiary of the Company, and Southern California Public Power Authority (SCPPA).
Under the PPA, SCPPA will purchase 150MW of power generated by a portfolio of the Company's new and existing geothermal power plants. SCPPA will resell the entire output to the Los Angeles Department of Water and Power (LADWP).
Energy deliveries under the portfolio PPA are expected to start in the fourth quarter of 2017 and the entire portfolio is expected to be on line by the end of 2022. The portfolio PPA contract capacity is 150MW, with a minimum capacity of 135MW and maximum potential capacity of 185MW. The portfolio PPA is for a term of approximately 26 years, expiring in December 31, 2043 and has a fixed price of $75.50 per MWh.
The portfolio PPA covers nine primary facilities, including Tungsten Mountain, and Dixie Meadows, new projects currently under construction or development by the Company, as well as Steamboat Hills, Brady and Steamboat 2&3, existing geothermal power plants that will commence deliveries to SCPPA once their current PPAs terminate.
The portfolio PPA also covers sixteen secondary facilities, including McGinness Hills Phase 3, that could be used to replace or supplement the primary facilities. The parties expect to execute the portfolio PPA in the coming weeks.
Isaac Angel, CEO of Ormat Technologies said, “We are very excited to receive the final approval for this first portfolio PPA, which has a unique structure supporting Ormat’s long-term plans to grow our geothermal business domestically. This PPA will enable both the development of multiple new projects as well as the sustainable operation of several of our existing geothermal power plants, thereby strengthening our ability to deliver long-term growth. We are delighted to be chosen for the sixth time by SCPPA and greatly appreciate their confidence in Ormat. SCPPA’s and LADWP’s commitment to a diversified portfolio of renewable energy with geothermal resources will guarantee long term reliable and cost-effective power for LADWP’s customers.”
“The Los Angeles Department of Water and Power is committed to supplying our customers with renewable energy, and this PPA adds baseload geothermal power to LA’s sustainable power portfolio,” Reiko Kerr, LADWP’s Senior Assistant General Manager of Power Systems said. “We are proud to partner with Ormat Technologies and SCPPA to further increase LADWP’s diverse renewable portfolio efforts.”