Vulcan Power sells power to California utility
The Sacramento Municipal Utility District signed a 21-year contract with Patua Project LLC, a Vulcan subsidiary developing a geothermal energy site near Fernley, Nev., about 38 miles east of Reno.
Geothermal energy is produced when extreme underground temperatures heat water to produce steam, much like a conventional boiler. It becomes renewable when production facilities, which run the steam through a turbine, re-inject the water back into the ground so it can reheat.
The Nevada project, the companyÂ’s first, will be developed in three phases. Drilling for the first phase began in February and construction of a 60-megawatt power plant is expected to begin next January.
The plant is expected to begin producing electricity as soon as the first quarter of 2012, continuing through 2033, Vulcan said in a news release.
It will initially provide 500 gigawatt hours per year before eventually growing to 1,000 gigawatt hours per year.
In February, Vulcan announced that it had raised $108 million from an affiliate of Boston-based private equity firm Denham Capital.
The deal brought VulcanÂ’s total outside investment to more than $200 million in three years, including a previous $58 million from Denham and $35 million from Bank of America Merrill Lynch.
Earlier this month, the company said Craig Mataczynski had been appointed CEO. He spent the past five years as CEO of Broomfield, Colo.-based Renewable Energy Systems Americas, one of North AmericaÂ’s largest developers of wind energy projects.
“A critical factor for our business is ensuring that we have the customers for the power we expect to produce,” said Bob Warburton, acting CEO of Vulcan Power, in a news release. “This power purchase agreement with SMUD is our third with a major utility. We are pleased to support the Sacramento area and the state of California in its commitment to renewable energy sources.”
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