RENO, Nev. - Ormat Technologies, Inc. (NYSE: NYSE:ORA), a key player in the renewable energy sector, has received approval from the Hawai'i Public Utilities Commission for amendments to the Power Purchase Agreement (PPA) with its subsidiary, Puna Geothermal Venture (PGV), and Hawaiian Electric. This recent decision allows PGV to increase its renewable energy contribution to Hawai'i Island by up to 8 megawatts (MW), raising the contract's maximum capacity to 46 MW.
The amended PPA stems from a comprehensive Environmental Impact Statement (EIS) conducted by PGV, which was a prerequisite for the PPA's approval. The EIS aimed to address the environmental aspects of PGV's operations in Puna, Hawai'i. The revised agreement, which consolidates two prior contracts into a single extended term through 2052, provides a fixed energy rate for PGV, independent of fluctuating oil prices. This arrangement is anticipated to stabilize revenue for PGV and offer consistent energy costs for ratepayers over the contract's duration.
As part of the updated PPA, PGV will decommission older generation units and introduce three new, efficient generating units from Ormat. These units are expected to be operational within three years following the HPUC's approval.
Doron Blachar, CEO of Ormat Technologies, expressed satisfaction with the extended partnership with Hawaiian Electric and emphasized the company's commitment to supporting Hawaii's renewable energy objectives. Jim Alberts, senior vice president and chief operations officer of Hawaiian Electric, highlighted the contract's role in providing customers with lower and more stable rates and reducing reliance on fossil fuels.
Ormat's portfolio includes approximately 3,200 MW of gross capacity across geothermal, solar, and energy storage facilities worldwide. The company's current total generating portfolio is 1,385 MW, with a significant presence in the U.S. and international markets.
The information in this article is based on a press release statement from Ormat Technologies, Inc.
InvestingPro Insights
In light of Ormat Technologies' recent approval for amendments to their Power Purchase Agreement, the company's financial outlook remains a point of interest for investors. According to InvestingPro data, Ormat Technologies currently has a market capitalization of approximately $3.93 billion USD. The company's price-to-earnings (P/E) ratio stands at 35.61, which adjusts to a slightly lower 29.95 when considering the last twelve months as of Q3 2023. This indicates a premium placed on the company's earnings relative to the market.
Moreover, Ormat's PEG ratio, which measures the P/E ratio relative to the earnings growth rate, is at 0.68 for the same period, suggesting that the company's earnings growth could be seen as undervalued based on its P/E ratio. Additionally, the company has demonstrated a steady revenue growth of 10.27% over the last twelve months as of Q3 2023, underlining its potential for continued financial performance improvement.
From an InvestingPro Tips perspective, it is noteworthy that Ormat Technologies has been able to maintain dividend payments for 19 consecutive years, which could be appealing for income-focused investors. Another tip reveals that analysts predict the company will be profitable this year, which aligns with the company's positive revenue growth trend and operational expansions, such as the recent PPA amendment with Hawaiian Electric.
Investors interested in a deeper dive into Ormat Technologies' financials can find additional InvestingPro Tips by visiting https://www.investing.com/pro/ORA. For those looking to subscribe to InvestingPro for more in-depth analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. As of now, there are 6 additional InvestingPro Tips available for Ormat Technologies, offering further insights into the company's financial health and investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.