Wednesday, September 2, 2009

Scratching their heads at Raser Technologies (RZ)

AlphaNinja - With the Feds "stimulating" the economy with $1million frisbee golf courses and $4.5million "eco-parks," you'd think a simple loan-guarantee for a do-gooder environmental tech firm would get approved.

Nope, and Raser Technologies (RZ) shares are off by 14% after being turned down by the Department of Energy for a project. It's one of many they have in the works, so better luck next time.

PROVO, Utah--(BUSINESS WIRE)--Raser Technologies, Inc. (NYSE:RZ - News), an energy technology company, announced today that it has received notice from the Department of Energy (“DOE”) that its loan guarantee application for its “East Thermo” project has been denied. In its notice, the DOE stated “we believe that the East Thermo project possesses fundamental strength, but would benefit from continued development….”

Project East Thermo is a future phase Thermo-area proposed development, approximately six miles to the east of Raser’s Thermo No. 1 plant. Raser submitted the loan guarantee application in an effort to extend its range of potential financing options, which also includes potential pre-paid power purchase agreements. Raser recently announced that it had entered into a term sheet with the Southern California Public Power Authority (“SCPPA”) for a pre-paid power purchase agreement that would cover Raser’s next 110 MW to be developed out of the Thermo resource.

“We understand the DOE’s decision and remain confident in our ability to fully develop our resources. We have other projects that are further along in the development process than East Thermo and are in better positions at this time for both this and other loan guarantee programs,” stated Raser’s principal executive officer Dick Clayton. “We are moving forward with SCPPA on the pre-paid power purchase agreement and believe that, if finalized, it will assist us in our development efforts at Thermo for the foreseeable future. We are also evaluating the recommendations made by the DOE and determining when the timing may be right to re-submit the East Thermo application.”

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