Raser’s Steady Progress

Raser Technologies Inc. (RZ) yesterday provided an update on its geothermal activities and its PHEV project. The company is gradually transiting from a developmental stage company towards a geothermal power producer.
 
Raser is progressing rapidly on the Lightning Dock No. 1 geothermal project. Recently it bagged final approval from the New Mexico Oil Conservation Division (OCD) for injection of geothermal fluids. The company is also in the process of negotiating a revision to its power purchase agreement (PPA) with the Salt River Project Agricultural Improvement and Power District. The revision is expected to include an increase in the expected output from the Lightning Dock project as well as an increase in the price of energy under the PPA.
 
Raser is now in the final stages of testing the fifth production well that is needed for the completion of its first geothermal plant Thermo No. 1 as part of its plan to bring the plant to full capacity by the end of fiscal 2009. As of now, only the Thermo No. 1 plant (Hatch plant in Utah) with an annualized capacity of 10MW has been generating revenues since April by selling electricity to the city of Anaheim. The company plans to add 40MW annually to its capacity over the three year period 2010–2012 to bring its total geothermal power generation annualized capacity to 130MW.
 
Raser, however, is facing financial constraints for its capital projects. The company’s hopes now rest on governmental funding in its quest to become a commercially viable geothermal power producer. Also, Raser has a power purchase agreement with the Southern California Public Power Authority (SCPPA) that would cover the company’s next 110MW capacity expansion. Raser is also in the process of amending its agreements with Merrill Lynch, the tax-equity partner in the Thermo No. 1 plant, and Prudential, the debt holder to avail the benefit of the 30% federal grant for renewable energy projects under the American Recovery and Reinvestment Act of 2009. The company is also making progress at its electric powertrain technology following successful demonstrations of its proprietary H3 Hummer E-REV.
 
Provo, Utah-based Raser, founded in 2002, functions as a geothermal power development and technology licensing company in the United States. The company operates in two segments – Power Systems, and Transportation and Industrial Technology. The Power Systems segment supplies and develops geothermal electric power generating plants and bottom-cycling operations. The Transportation and Industrial Technology segment focuses on commercializing its Symetron technology to improve the efficiency of electric motors and related components.
 
Raser currently has seven geothermal power projects under development three each in Nevada, two in Utah, one each in Oregon and New Mexico, respectively. We maintain our market Neutral recommendation on the shares.

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