The Phase II expansion calls for drilling new production and injection wells to generate an estimated 11MW (net) capacity, and modernize transmission to cope up with possible increase in production.

The Phase II power plant is likely to begin operations by 2015 and sell its output to NV Energy under the existing power purchase agreement.

In 1990, a mining exploration in the targeted area for Phase II discovered a shallow, hot outflow zone from 300 to 500ft deep with temperatures of 220 to 240°F.

During Phase I, which was completed in May 2012, the company has replaced the existing 3.6MW plant with a new 9MW power plant that uses the existing geothermal fluid flow from the proven area of the reservoir.

U.S. Geothermal president and COO Doug Glaspey said that the company has started drilling activities for this second project in the San Emidio resource area.

"Moving the project forward this year will qualify Phase II for the currently available 30% Investment Tax Credit, and will take full advantage of the remaining balance in the 19.9 megawatt PPA we have in place with NV Energy," added Glaspey.