U.S. Geothermal Inc. (GTH.TO; AMEX: HTM), a renewable energy company focused on geothermal energy, has been selected by the U.S. Department of Energy (DOE) to enter into due diligence review on an $85 million project loan for its Neal Hot Springs project in eastern Oregon.
The DOE loan is expected to provide 80% of the $106 million estimated total capital cost. Construction of a binary cycle power plant is expected to begin in mid 2010. The new plant, designed to deliver 22 megawatts (MW) of power to the grid, is scheduled to begin commercial operations in late 2011. The DOE loan is anticipated to be a combined construction and long term loan and provide the project with a low cost annual interest rate.
On February 26, 2009 U.S. Geothermal submitted an application for the Neal Hot Springs project to the DOE’s Energy Efficiency, Renewable Energy and Advanced Transmission and Distribution Solicitation loan guarantee program under the Energy Policy Act of 2005. The company was notified that its project application is complete, the power plant technology choice qualifies as new or improved under the program, and the project has been selected to proceed in the project loan process.
The renewable energy is expected to be sold under a long term power purchase agreement that is currently under advanced negotiations, U.S. Geothermal said.
U.S. Geothermal currently operates geothermal power plants at Raft River, Idaho and at the San Emidio Desert in Nevada. The company holds, through ownership or lease, geothermal rights of lands that comprise the Raft River project in Idaho, San Emidio, Granite Ranch, and Gerlach in Nevada, and the Neal Hot Springs project in Oregon.
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