Ormat Technologies Reports on Damage Caused by Fire at Heber 1 Geothermal Power Plant

Rhea-AI Summary

Ormat Technologies (NYSE: ORA) reported an outage at its 40 MW Heber 1 geothermal power plant in California due to a fire on February 25, 2022. The incident primarily affected the steam turbine-generator area, leading to a 25 MW outage, expected to reduce monthly revenues by about $1.5 million. While approximately 15 MW is anticipated to resume operations shortly, Ormat aims to minimize the impact on its Adjusted EBITDA, backed by business interruption insurance. No injuries were reported, and a thorough assessment of damages and repair costs is ongoing.

Positive

• Approximately 15 MW may be back in operation soon.
• No injuries were reported due to the incident.
• Company has business interruption insurance to mitigate financial impact.

Negative

• 25 MW outage expected to reduce monthly revenues by approximately $1.5 million.
• Ongoing assessment required for remaining 25 MW repairs may imply additional costs.

RENO, Nev., Feb. 28, 2022 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE: ORA), a leading geothermal, energy storage, solar PV and recovered energy power company, today announced that its 40 MW Heber 1 geothermal power plant, located in California, reported an outage following a fire on Friday, February 25^th at approximately 11:45 pm PST that caused damage primarily to the steam turbine-generator area. The Heber 1 power plant is part of the 81 MW Heber complex and sells its electricity under a long-term contract with the Southern California Public Power Authority.

An initial assessment of the damage caused to the power plant indicates that approximately 15 MW generated by the binary units may be back in operation in a few days. The Company estimates that the 25 MW outage will reduce its monthly revenues by approximately $1.5 million and is still evaluating the work required to repair the remaining 25 MW.

Ormat holds business interruption insurance subject to a 45-day deductible period in addition to property damage insurance with customary deductibles. At this point, the Company expects that the impact on its Adjusted EBITDA for the year will not be significant, subject to receiving all insurance proceeds in a timely manner.

“Thanks to the dedicated staff on site who immediately took appropriate measures in accordance with our emergency response plan, there were no injuries reported. We would also like to thank the Imperial Valley County Fire department for their quick and efficient response to the incident.” said Doron Blachar, Ormat’s Chief Executive Officer.

ABOUT ORMAT TECHNOLOGIES

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1.1 GW with a 1,012 MW geothermal and Solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and an 83 MW energy storage portfolio that is located in the U.S.

ORMAT’S SAFE HARBOR STATEMENT
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties, and other risks described under "Risk Factors" in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 25, 2022, and in Ormat’s annual reports on Form 10-K and quarterly reports on Form 10-Q that are filed from time to time with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Ormat Technologies Contact: Smadar Lavi VP Head of IR and ESG Planning & Reporting 775-356-9029 (ext. 65726) slavi@ormat.com

Investor Relations Agency Contact: Sam Cohen or Joseph Caminiti Alpha IR Group 312-445-2870 ORA@alpha-ir.com

FAQ

What caused the outage at Ormat Technologies' Heber 1 power plant?

The outage was caused by a fire on February 25, 2022, primarily affecting the steam turbine-generator area.

How much revenue loss is Ormat Technologies expecting from the Heber 1 outage?

The company estimates a revenue loss of approximately $1.5 million per month due to the outage.

When is Ormat Technologies expecting to resume operations at Heber 1?

Ormat Technologies anticipates that approximately 15 MW generated by the binary units may resume operations in a few days.

Will the outage significantly impact Ormat Technologies' Adjusted EBITDA?

The company expects that the impact on its Adjusted EBITDA for the year will not be significant, subject to timely insurance proceeds.

Is there any insurance coverage for the damages at Heber 1?

Yes, Ormat holds business interruption insurance and property damage insurance with customary deductibles to cover the incident.