US Geothermal raises $23.8m for Oregon power project

September 8, 2010

Neal Hot Springs is set to become US Geothermal's third operating geothermal power project in 2012

Canadian oil distribution company Enbridge, Inc., has invested $23.8 million in a geothermal project in eastern Oregon.

The company based in Calgary, Alberta, will provide the remaining funding needed to cover construction costs for US Geothermal’s 35-megawatt Neal Hot Springs project.

The balance of construction costs are being funded through a project loan from the US Department of Energy.

Daniel Kunz, President and Chief Executive Officer of U.S. Geothermal, Inc., said: “Our strategic partnership with Enbridge assures full financing for the successful construction and operation of the Neal Hot Springs geothermal project.”

The deal with Enbridge will see the firm taking a 20% ownership in the project, benefiting from a 24% investment tax credit from the US government.

US Geothermal, which has its head office in Boise, Idaho, has already invested $13 million in the project, being operated through subsidiary USG Oregon LLC.

The $124.3 million project now includes $36.8 million in equity funding and $102.2 million in project debt financing.

Enbridge

Enbridge, which operates crude and liquid transportation network across North America, is expanding its interests into low-carbon energy technologies including wind, solar energy, fuel cells and heat recovery projects.

“Enbridge is already heavily involved in renewable and alternative energy projects through our interests in 810 megawatts of wind, solar, waste heat recovery and fuel cell projects,” said Patrick D. Daniel, Enbridge’s President and CEO.

“This investment is our initial entry into geothermal energy, which we think has an important role to play in North America’s shift toward a greener energy production mix. We look forward to our relationship with U.S Geothermal and the potential that we may find further opportunities to partner together.”

Neal Hot Springs

Neal Hot Springs is set to be US Geothermal’s third operating geothermal power plant when it starts up in the fourth quarter of 2012.

Houston-based TAS Energy Inc., is providing a new modular, air-cooled binary cycle power plant for the project (see this BrighterEnergy.org story), which the company said would average a net output of 23MW through the course of a year.

Power from the project is being sold to the Idaho Power Company, IdaCorp’s Idaho utility, through a 25MW power purchase agreement that runs through 2032.

US Geothermal already operates geothermal power projects at Raft River, Idaho and at San Emidio, Nevada, where construction is underway on a new 8.6MW binary cycle power plant.