Recent developments in the market are encouraging for the growth of renewable energy, and more specifically to geothermal energy in our opinion.
In Washington, D.C., legislation was passed by the house and senate that extended the tax credits available to new geothermal plants. Under the approved legislation, projects that began construction by December 31, 2014 would be eligible for a 30% Investment Tax Credit ("ITC"), or alternatively a 10 year Production Tax Credit ("PTC").
In California, the signing into law of AB-2363 earlier this year by the California Governor, will require the California Public Utilities Commission to establish the appropriate adders (integration cost) for each technology that must be used when evaluating bids for long term wholesale power contracts. We believe this change will add appropriate costs to wind and solar power generation due to their intermittent deliveries of power, which then should allow base load renewables like Geothermal and Biomass to compete for PPAs with Investor Owned Utilities based on a more accurate comparison of the full cost for power. That has not been the case in the past.
In the State of Nevada, in 2013 the legislature mandated that the utilities in the state must purchase 300 megawatts of renewable energy from independent power producers to replace retiring coal generation. NV Energy has issued their first of 3 Requests for Proposal for 100 MW of renewable energy. This creates a solid market of 100 MW per year for each of the next three years, which provides our company with a local option for selling power from both our existing and new projects.
"We are very pleased with our accomplishments to date, and are optimistic with the growth opportunities that lie ahead for our company and its shareholders," said Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc. "We are currently well capitalized, and with the addition of our positive cash flows from operations, are well positioned to fund internal development, and growth through strategic M&A activities, as was demonstrated this year with our Geysers and Earth Power acquisitions which we acquired without going to the market for capital."
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