Ram Power Announces Tariff Increase for San Jacinto-Tizate Project
The tariff increase request was thoroughly reviewed by the Nicaraguan Ministry of Energy and Mines ("MEM"), the Nicaraguan Energy Institute ("INE"), Disnorte-Dissur, a subsidiary of Gas Natural Fenosa (the power purchaser under the power purchase agreement for the Project), and the Nicaragua Energy Cabinet whose recommendation was subsequently acknowledged by Nicaraguan President Daniel Ortega. The formal documentation implementing the increased tariff is now expected to be registered expeditiously by INE.
Ram Power's Executive Chairman, Antony Mitchell, stated, "We are grateful for the continued confidence and support of our project, and our company, at the highest levels of the Nicaraguan Government. President Ortega expressed a need to continue the development of the renewable energy sector in Nicaragua, and we look forward to continuing the relationship in the form of future projects and development."
The approved increase will allow the Company to recover unanticipated Project costs associated with both the development of the resource and plant construction. The power sales tariff increase of approximately 17% is effective October 1, 2012, with annual escalation of 3% through and including 2022 and 1.5% thereafter through 2028. The new tariff is comparable with current tariff rates of other renewable energy producers in Nicaragua.
The Company's extensive negotiations and discussions with the Nicaraguan Government represent a mutual understanding and focus to work together on achieving the country's objective to expand the development of clean, base load renewable energy in the region. The new tariff provides a long term foundation for the operation of the Project and represents another step in the development of Nicaragua's renewable energy sector resulting in lower energy costs and continued stable employment for the people of Nicaragua. Notwithstanding the increase to the existing tariff, the Project will still be selling power at 37% below the average wholesale electricity price in Nicaragua, and will generate approximately 17% of Nicaragua's total electricity needs.
Emilio Rappaccioli, the Minister of MEM, stated, "Development of the San Jacinto project has become an example of natural resource development currently going on in Nicaragua. The development of these types of renewable energy projects is an essential component for Nicaragua's future, further promoting the wellbeing and progress of the people of Nicaragua."
"The continued development of the San Jacinto project translates directly into clean, renewable base load energy for the people of Nicaragua at a discount to the current fossil fuel generation," said Jose Antonio Rodriguez, Vice President Operations and COO of the Company's Latin America subsidiary. "We would like to thank both Disnorte-Dissur and Gas Natural Fenosa for their continued support of our project as well as their desire to decrease overall energy costs in Nicaragua."
Shuman Moore, CEO of Ram Power, said, "I am very pleased with the efforts of our Nicaraguan team in achieving this historic milestone for our San Jacinto project. The increase to the power sales tariff has a direct benefit to the long term financial stability of the Company, is in the best interests of Nicaragua, and continues our focus and dedication towards increasing the shareholder value of the Company."
About Ram Power, Corp.
Ram Power is a renewable energy company based in Reno, Nevada, engaged in the business of acquiring, exploring, developing, and operating geothermal properties, and has interests in geothermal projects in the United States, Canada, and Latin America.
This news release contains certain "forward-looking information" which may include, but is not limited to, statements with respect to future events or future performance, management's expectations regarding the Company's growth, results of operations, estimated future revenues, requirements for additional capital, revenue and production costs, future demand for and prices of electricity, business prospects and opportunities. In addition, statements relating to estimates of recoverable geothermal energy "reserves" or "resources" or energy generation are forward-looking information, as they involve implied assessment, based on certain estimates and assumptions, that the geothermal resources and reserves described can be profitably produced in the future. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. A number of known and unknown risks, uncertainties and other factors may cause the actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current geothermal energy production, development and/or exploration activities and the accuracy of probability simulations prepared to predict prospective geothermal resources; changes in project parameters as plans continue to be refined; possible variations of production rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the geothermal industry; political instability or insurrection or war; labor force availability and turnover; delays in obtaining governmental approvals or in the completion of development or construction activities or in the commencement of operations; as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form. These factors should be considered carefully and readers of this news release should not place undue reliance on forward-looking information.
Although the forward-looking information contained in this news release is based upon what management believes to be reasonable assumptions, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Such forward-looking information is made as of the date of this news release. Other than as required by applicable securities laws, Ram Power assumes no obligation to update or revise the information contained in this news release to reflect new events or circumstances.