Ormat Technologies makes $230m write off on US power plant

Parent company Ormat Industries will also make write offs on the North Brawley geothermal power plant in California and the Jersey Valley power plant in Nevada.

Ormat Technologies Inc. (NYSE: ORA), will write off up to $230 million in its financial report for the fourth quarter of 2012 on its North Brawley geothermal power plant in California. Its parent company, Ormat Industries Ltd. (TASE: ORMT), will write off $140-150 million: $110 million for the North Brawley and $30-40 million on its Jersey Valley power plant in Nevada.

Although the North Brawley power plant came on line with a power purchase agreement with Southern California Edison (SCE) in 2010, the geothermal field has been much more difficult to operate than other fields and the power plant has been unable to reach its design capacity of 50 megawatts, producing only 20-33 megawatts. Furthermore, achieving this level required significant additional capital expenditures and higher than anticipated operating costs. Last week, SCE rejected Ormat Technologies' request to revise the power purchase agreement at higher rates.

Ormat therefore concluded that it is not worthwhile investing further to increase the generating capacity of the North Brawley plant, and will operate it at the current capacity level.

Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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