U.S. Geothermal buying Nevada plant for $16.62M

Boise, Idaho-based U.S. Geothermal (OTC: UGTH) announced an agreement to buy a geothermal plant in Nevada from Empire Geothermal Power, along with geothermal energy leases and certain ground water rights, for $16.62 million.

The company said it plans to spend $75 million to $85 million to expand capacity at the site, which is north of Reno, Nev.

U.S. Geothermal said the existing 3.6 megawatt plant is comprised of four binary cycle units, a wet cooling tower and nine geothermal wells.

"This acquisition will provide us with our second operating power plant and another proven geothermal reservoir," said Daniel Kunz, president and CEO of U.S. Geothermal.

"Based on our experience at Raft River, we believe that a new plant would utilize the existing well production more efficiently and could produce up to 10 megawatts."

U.S. Geothermal's Raft River plant is in Idaho (see US Geothermal, Idaho Power in 13 MW power deal).

The company said the Nevada deal includes 28,358 acres, or 44.3 square miles, of geothermal energy leases and certain ground water rights.

"These 44.3 square miles of geothermal leases are located along thermal geologic structures and are close to the California electricity market," said Kunz.

The company plans to construct two binary cycle plants, saying the current well field could provide 75 percent of the geothermal fluid for one replacement plant, and that an expanded production and injection well field could be drilled for the second plant.

U.S. Geothermal plans to make a total 27 MW development, with drilling scheduled to begin this year.

Commercial operations from the twin plants is expected in late 2010 or early 2011, but the company said a $10 million transmission upgrade may be required to allow the full electrical output of the project to be delivered to customers.