U.S. Geothermal Inc.

U.S. Geothermal Inc.

January 05, 2005 13:52 ET

U.S. Geothermal Signs Power Purchase Agreement


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: U.S. GEOTHERMAL INC.

TSX VENTURE SYMBOL: GTH

JANUARY 5, 2005 - 13:52 ET

U.S. Geothermal Signs Power Purchase Agreement

BOISE, IDAHO--(CCNMatthews - Jan. 5, 2005) - U.S. Geothermal Inc. (TSX
VENTURE:GTH)

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OF
AMERICA OR TO UNITED STATES OF AMERICA NEWS SERVICES.

U.S. Geothermal Inc. (TSX VENTURE:GTH), a renewable energy development
company focused on geothermal energy in the Pacific Northwest, today
announced that, on December 29, 2004, it entered into a Power Purchase
Agreement ("PPA") with Idaho Power Company for the electrical output
from Phase One of the Raft River geothermal power project. The 20-year
contract is regulated by the Idaho Public Utilities Commission under the
Public Utilities Regulatory Policies Act of 1978, and provides published
electric power prices for a monthly average output of 10 megawatts
("MW") of electric power. The contract has been submitted to the Idaho
Public Utilities Commission for final approval, which is expected to
take approximately 30 days.

"With the signing of this contract we are now ready to build an
efficient 10 MW geothermal power plant at Raft River utilizing the
existing production wells and known energy resource," said Daniel Kunz,
President & CEO of U.S. Geothermal Inc. "This transaction will
commercialize Phase One of the project and set the stage for growth on
both the project and corporate levels."

The Raft River Phase One power plant is scheduled to begin power
generation in mid 2006 and will receive payments under a price schedule
that starts with $51.50 per MW and increases 2.3% annually to a maximum
of $81.25 per MW over the 20-year term of the contract. The published
prices are established for electric power only. US Geothermal retains
ownership of any renewable energy credits ("Green Tags" and "Carbon
Credits"), and intends to market them separately, which can
significantly enhance the profitability of the project.

US Geothermal is a renewable energy development company focused on
geothermal energy in the Pacific Northwest. US Geothermal's first
project is the Raft River Geothermal Power Plant. Once Phase One is
completed, this plant is expected to be the first geothermal power plant
in Idaho and the Pacific Northwest. Raft River is scheduled to begin
production of electric power in 2006, bringing customers the benefit of
a clean, green, renewable energy source. The Company currently owns or
leases 5.8 square miles (15 square kilometers) of land and geothermal
rights, which contain a proven energy reservoir. The Company's
independent consultant, GeothermEx of Redmond California estimates the
Company's existing land position could yield 90 MW of electric power.
Engineering studies are currently underway to select locations for new
production wells to increase power generation at Raft River.

The information provided in this news release may contain
forward-looking statements within the definition of the Safe Harbor
provisions of the US Private Securities Litigation Reform Act of 1995.
These statements are based on US Geothermal Inc.'s current expectations
and beliefs and are subject to a number of risks and uncertainties that
can cause actual results to differ materially from those described in
forward looking statements.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    U.S. Geothermal Inc.
    Mike Dake
    Investor Relations
    (604) 484-3031
    (604) 688-9895 (FAX)
    Email: mdake@usgeothermal.com
    or
    U.S. Geothermal Inc.
    Saf Dhillon
    Investor Relations
    (604) 484-3031
    (604) 688-9895 (FAX)
    or
    U.S. Geothermal Inc.
    Doug Glaspey
    COO
    (208) 424-1027
    (208) 424-1030 (FAX)
    Email: dglaspey@usgeothermal.com
    Website: www.usgeothermal.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.