Oct. 6, 2009 (Business Wire) -- Raser Technologies, Inc. (NYSE: RZ), an energy technology company, today released an update on its geothermal activities and its PHEV project, updating stockholders, the media and the public on its progress and strategy.
Lightning Dock, New Mexico Project
Raser recently received final approval of a key permit from the New Mexico Oil Conservation Division (OCD) for injection of geothermal fluids for the Lightning Dock No. 1 project. Raser’s in-house geology and reservoir management team is conducting its final review of the Lightning Dock resource in anticipation of commencing drilling on site, pending the completion of funding for the project.
Raser is also in the process of negotiating a revision to its power purchase agreement (PPA) with the Salt River Project Agricultural Improvement and Power District. The revision is expected to include an increase in the expected output from the Lightning Dock project as well as an increase in the price of energy under the PPA.
Thermo Update
Raser is now in the final stages of testing the fifth production well needed for the completion of Thermo No. 1 as part of its plan to bring the plant to full capacity by the end of the year. Raser is also preparing to re-work existing wells and is taking other steps to optimize the operations of the plant, including working with Pratt & Whitney Power Systems to make certain modifications to the PureCycle units on site.
As recently announced, Raser is in the process of amending its agreements with Merrill Lynch, the tax-equity partner in the Thermo No. 1 plant, and Prudential, the debt holder. These amendments will allow the Thermo No. 1 project to take full advantage of the 30 percent federal grant for renewable energy projects under the American Recovery and Reinvestment Act of 2009.
Raser is also actively planning future phases of development utilizing the Thermo resource which is estimated to contain over 200 MW of potential power. These efforts include moving forward with permitting, environmental compliance, engineering, transmission and interconnection, and negotiation of a pre-paid power purchase agreement with the Southern California Public Power Authority (SCPPA).
SCPPA Update
Raser continues to progress in negotiations with SCPPA on the previously announced pre-paid power purchase agreement. The expected structure of the agreement anticipates Raser building out 110MW over a three- to four-year period at its Thermo, Utah site in a multi-phase development via multiple power purchase agreements. When finalized, this transaction is expected to provide the financial support necessary for the funding of Raser’s roll out plan of 40MW per year over the next three years.
Funding
As traditional financing markets were struggling late in 2008 and early this year, Raser was actively exploring alternative funding sources to mitigate the impact from the global economic crisis on its business. Raser has pursued a variety of alternative funding sources, including pre-paid power purchase agreements, project joint ventures, green energy funds, lines of credit and other sources to assist Raser’s projects going forward.
