Ram Power in 49.9MW geothermal deal with California utility

April 9, 2010

Ram Power is already drilling in the Imperial Valley area under a deal with Southern California Edison

Geothermal energy developer Ram Power, Inc., has signed a deal to provide one or more 49.9-megawatt facilities for the Imperial Irrigation District (IID) of California.

The company based in Reno, Nevada, said this week it had signed a term sheet to locate the geothermal projects on District-owned lands in California’s Imperial Valley.

The deal will see the projects owned and developed by a Ram Power subsidiary to be formed specifically for the task, which will then enter into a power purchase agreement with the community-owned utility to sell 49.9MW of power.

The agreement includes an option for the District to pay in advance for a portion of the project’s output once it has begun commercial operations, and allows for other members of the Southern California Public Power Authority to buy electricity from the facility.

The District will also have the option to buy a stake in the project after 7-10 years from its commercial start, Ram Power said.

“Significant benefits”

Dan Schochet, Ram Power’s Executive Vice President, said, “This project, which is structured to benefit from various federal incentives, represents the first step for Ram Power to join in a true public-private joint venture to utilize the strengths of IID as a publically owned utility along with the experience of Ram Power to develop the vast amount of base load, cost effective geothermal energy resources in the Imperial Valley.”

Mr Schochet added: “This Project, as well as others planned to follow, will provide significant benefits to the residents of the Imperial Valley by creating high paying jobs and contributing to the overall economic development of the region.”

Formed in 2008, Ram Power has geothermal power interests in California, Nevada, Nicaragua, Canada and elsewhere.

Among its projects, the company is currently working with the Southern California Edison Company to supply up to 300MW of geothermal power through the Orita project, also in California’s Imperial Valley. The project will involve three 50-100MW plants, with drilling getting underway last month.