Ormat Technologies announced Monday that it has exercised some previously announced options completing four 25-year purchased power agreements with Bismarck, ND-based Basin Electric Power Cooperative for small amounts of electricity that will be generated with some of Ormat's recovered energy generation equipment on natural gas transmission pipeline compressors. Collectively, the deals amount to 22 MW and will be phased in over the next two years.
The announcement came only a few business days after Ormat reported a $5.8 million loss for its first quarter earnings results, compared with $7.9 million in net profits for the same period in 2006. Ormat CEO Dita Bronicki assured analysts that the company expects to be profitable in each of the three remaining quarters this year.
In terms of the latest deal with Basin Electric, the cooperative's marketing executive Ron Rebenitsch said, "Ormat made commitments to us and met those commitments, so we are very pleased with the existing projects and look forward to doing more projects." Rebenitsch called the cooperative's relationship with Ormat "solid," and emphasized that the pipeline compressor waste heat recovery was a "natural fit" for Basin.
Ormat's Bronicki said the newest long-term contracts provide "validation of the importance of recovered energy in general," noting that his firm's proprietary technology "responds to two objectives high on the energy policy agenda -- energy efficiency and emission reduction."
Earlier this year, Ormat and Basin announced that they had entered into a "power purchase option agreement" regarding five new Ormat Recovered Energy Generation (REG) Power Plants, along the North and South Dakota portion of an interstate pipeline connecting Alberta, Canada with the greater Chicago area. It noted that these REG installations would be in addition to four completed facilities along the pipeline last fall.
In October, Reno, NV-based Ormat completed a series of four REG plants along Northern Border Pipeline in North and South Dakota that are producing approximately 22 MW for the cooperative under separate 25-year power purchase agreements with Ormat. At the time, Ormat said the Dakotas project constituted "the largest application of Ormat's REG technology to date and the first in which it maintains direct ownership and operation of the power-producing facilities."
As will be the case with the facilities slated to go into service two at a time in 2008 and 2009, the four REG plants now operating were engineered and built with Ormat equipment, using the company's proprietary technology to produce electricity from recovered waste heat.
The process does not produce any greenhouse gas emissions, Ormat said. Hot exhaust gases from the existing natural gas turbines at compressor stations along the pipeline provide the fuel for generating power.
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