ADA-ES Provides Update on Progress with Refined Coal Activities; First Three M45 Facilities Successfully Placed in Service
ADA-ES, Inc. (NASDAQ: ADES) today provided an update on the progress of Clean Coal Solutions, LLC, its joint venture with an affiliate of NexGen Resources Corporation and an affiliate of The Goldman Sachs Group, Inc. Clean Coal is marketing two different technologies, CyClean and M45, both of which reduce emissions of NOx and mercury, and qualify for IRS Section 45 tax credits of over $6.33 per ton of coal.
To date, Clean Coal has installed and operated 15 Refined Coal facilities, consisting of both CyClean and M45 technologies, at various utility sites, with three more RC facilities scheduled to be qualified by the end of next week. ADA expects that each of these 18 facilities will satisfy the “placed-in-service” requirements from initial operations, which would make these facilities available for full-time operation in 2012 and qualify for the IRS Section 45 tax credits for a ten-year period. Clean Coal's goal is to install and operate up to eight additional RC facilities by year-end, for a total of 26 facilities installed in 2011.
After initial operation, it takes an average of approximately six months to obtain permits for full-time operation, secure necessary approvals from Public Utility Commissions and complete all necessary contracts. If all planned RC facilities become fully operational, which we expect to occur throughout 2012, they should produce a total of more than 40 million tons of RC per year. At this level of production, ADA expects to generate pre-tax income of approximately $50 million per year after payments to minority partners for the 10-year life of the tax credits. Based on continued progress with permitting and contract negotiations between the lessees of the facilities and the utilities where the facilities are sited, ADA hopes to have several of these additional facilities processing more than 15 million tons of coal per year in routine operations within the next two months.
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