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Ormat announces a non-cash pre-tax charge for impairment to its North Brawley Geothermal power plant

Reno, USA - Ormat Technologies, Inc. announced that it will record a non-cash pre-tax charge of up to 230 million US-Dollar during the fourth quarter of 2012 for impairment to the company

The North Brawley power plant was placed in service under its power purchase agreement with Southern California Edison (SCE) in 2010. However, the North Brawley 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 MW. Instead, it has been operating at capacities between 20 MW and 33 MW. This generation level has been achieved following significant additional capital expenditures and higher than anticipated operating costs.

In order to improve the economics of the North Brawley power plant, the company approached SCE to discuss various contractual alternatives to the power purchase agreement and, in early 2012, reached a written understanding to engage in discussions with third parties about purchasing the power at better rates. However, in a letter dated January 14, 2013, SCE informed the company that it is no longer interested in pursuing alternatives to the current power purchase agreement, thus retracting its permission to the company to explore a replacement power purchase agreement with higher electricity prices.

As a result of SCE



Source: IWR Online, 23 Jan 2013

 


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