Ormat Technologies warns on 4Q, full-year losses

Ormat Technologies warns will report 4th-quarter, full-year losses due to plant-related charge

Associated Press

RENO, Nev. (AP) -- Ormat Technologies cautioned Wednesday that it will report losses in its fourth quarter and full year due to a plant-related charge of up to $230 million.

The geothermal company said the charge will be taken in the fourth quarter for its North Brawley power plant in California.

The Reno, Nev. company's stock fell 20 cents, or 1 percent, to $19.87 in late morning trading, recovering most of the 6.4 percent drop it saw when trading opened for the session.

Ormat said the plant has been unable to reach its design capacity of 50 megawatts, instead running at somewhere between 20 megawatts and 33 megawatts. The company said it reached out to Southern California Edison to talk about contract options to its power purchase agreement, and in early 2012 came to a written understanding to hold talks with third parties about buying the power at better rates.

Last week, Southern California Edison sent a letter to Ormat stating that it was no longer interested in pursuing alternatives to the power purchase agreement — meaning Ormat could no longer seek a replacement power purchase agreement with higher electricity prices.

Ormat has decided not to continue investing in the capital required to increase capacity at the plant, and said the plant will run at its current capacity of about 27 megawatts.

In addition, parent company Ormat Industries Ltd., based in Israel, plans to record a charge between $30 million and $40 million in the fourth quarter for impairment to its Jersey Valley power plant in northern Nevada. That charge reflects international accounting standards, but does not apply to U.S. accounting standards and will not be recorded by Ormat Technologies, the company said.

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