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Dually-Listed Alternative Energy Company Looking to Pull-Up from Support Level
By: AllPennyStocks.com News
January 3, 2012
Each year, alternative energy investors are hoping that “this is the year” for green technologies to take-off and reap some serious rewards for those who have been patiently building positions. 2012 should continue to bring traction to the industry as green technologies continue to move to the forefront and gain general acceptance as high prices for the development of nascent technologies are leveled. Heavily-watched indices such as the Ardour Global Alternative Energy IndexesSM (AGAEI), indices designed to serve as a fair, impartial and transparent measure of the performance of the Alternative Energy Industry, have been on a strong slide for several years, but appear to be trying to find a bottom once again, giving hope to alternative energy plays. Since June of 2008 to the present, the AGAEI has fallen from 3,808 to less than 800.
Building its brand and revenue stream as green energy continues to emerge, U.S. Geothermal Inc. (TSX:GTH) (AMEX:HTM) is a Boise, Idaho-based renewable energy company focused on the development, production and sale of electricity from geothermal energy. In total, the company holds geothermal energy rights to 69,500 acres comprising six advanced stage geothermal development projects in the Western United States. With its Raft River geothermal project, U.S. Geothernal owns and/or leases approximately 8.2 square miles of land with a proven geothermal reservoir. Commercial power generation was achieved on January 3, 2008 with the power now being purchased by Idaho Power Company under the terms of a 25 year power purchase agreement (PPA).
The Neal Hot Springs project currently consists of 9.6 square miles of geothermal energy and surface rights leased by U.S. Geothermal Inc. Construction began in 2011 on a new 23 megawatt net binary cycle power plant. A 25-year contract has been inked with Idaho Power Company to purchase the full output from the power plant at a levelized price of $117.65 per megawatt-hour.
The company’s San Emidio geothermal project has an operating binary power plant with 3.6 MW net capacity in northern Washoe County, Nevada. The property is roughly 23,000 acres and has estimates of being able to increase production more than 10-fold. The power plant was constructed in 1986 with commercial power generation beginning in 1987.
More growth appears to be in the cards for the San Emidio project and U.S. Geothermal as the company today reported that the Nevada Public Utility Commission has approved a 19.9 megawatt amended and restated PPA with its wholly owned subsidiary, USG Nevada LLC, for the San Emidio Project located in Washoe County, Nevada.
The amended PPA expands the existing 3.6 megawatt agreement to provide for the purchase of electric power by the Sierra Pacific Power Company for up to 19.9 MW from two power generation units at San Emidio. The PPA has a term of 25 years with the starting price for power of $89.75 per megawatt-hour subject to an annual escalation rate of 1%. The new Phase I power plant, which is an 8.6 megawatt (net) water cooled facility, achieved mechanical completion in December and is currently undergoing commissioning.
Shares of U.S. Geothermal, much like all alternative energy stocks, have been on a turbulent ride for the last four years. The value of a share received a mild bounce today as the general markets pushed upward, but it is interesting to note that U.S. Geothermal is back to levels from the market crash at the end of 2008. With initiatives intact to create less reliance on fossil fuels, expansion plans for its projects and a price point at a historic support level, U.S. Geothermal may be worth a closer look as 2012 gets underway. Proper due diligence is, as always, encouraged.
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