RENO, Nev., Feb. 4 /PRNewswire-FirstCall/ -- Ormat Technologies, Inc. (NYSE: ORA) today issued an update on its 30 MW Puna ("Puna") power plant in Hawaii. Puna is currently operating at approximately 17 MW as a result of a decline of the steam supply to the power plant. This decline is resulting in a monthly revenue decrease of less than $1 million based on current energy rates. Energy rates for the Puna power plant are based on the short run avoided cost of the local utility and are calculated monthly.
The plant generated 25 MW following the completion of repair work on production wells in the fourth quarter of 2009 and was expected to recover to approximately 30 MW. However, the actual steam supply gradually declined and in January 2010 the plant reached a generation level of 17 MW.
Our analysis of the current situation determined that the decline is not related to the reservoir parameters. We believe the issue is a wellbore restriction that reduces the flow from the existing wells to the power plant. We are in the process of implementing a quick repair through a chemical cleaning of the wells. If this is not successful we will have to perform a mechanical cleaning, which will be more expensive and take more time. An update will be provided once we have further information.
In addition, we plan to start drilling a new production well in the next few days. The drilling work of the new well and its connection to the power plant is expected to be completed by the end of the second quarter of 2010. This plan is intended to increase the available geothermal fluid and enable the power plant to generate at full capacity. The estimated cost to execute this plan is approximately $11 million.
About Ormat Technologies
Ormat Technologies, Inc. is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The Company 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. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by 75 U.S. patents. Ormat has built over approximately 1,200 MW of plants half for its own account and half as supplies to utilities and developers. Ormat's current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States - Brady, Heber, Mammoth, Ormesa, Puna, Steamboat, OREG 1 and OREG 2; in Guatemala - Zunil and Amatitlan; in Kenya - Olkaria; and in Nicaragua – Momotombo.
Safe Harbor Statement
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat Technologies, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2009
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Ormat Technologies, Inc.