Ormat Updates Impact of California Global Settlement on its Revenues; Expects Reduction of $9.5M in 2012, $6.5M in 2013
Ormat Technologies, Inc. (NYSE: ORA) announced today that it is revising its previously issued expectations pertaining to the impact of recently finalized mandatory short-run-avoided-cost pricing applicable to power purchase agreements for the Heber 1 and 2 power plants, the Ormesa complex and the Mammoth complex in California may have on its revenues in 2012 and 2013.
When originally announced, the impact of this settlement was expected to reduce revenues by $9.5 million in 2012 and $6.5 million in 2013. However, as a result of the significant decrease in natural gas price forecasts for 2012 and 2013 and the delay of California's greenhouse gas cap-and-trade program that is now scheduled to begin in 2013, each of which is uncertain and subject to change, it is now expected that the new SRAC price formulas will reduce revenues in 2012 and 2013 by an estimated $24.8 million and $24.9 million, respectively. Such reduction represents approximately 5.9% of the company's forecasted 2011 total revenues.
