Coso Geothermal Power Holdings, LLC has announced that the company’s US$15.2 million letter of credit issued to support performance security obligations under the company’s PPAs (power purchase agreements) with Southern California Edison (SCE) has been replaced by a US$15.2 million letter of credit issued by Citibank, N.A.
The new letter of credit will expire on October 20, 2015.
On July 31, 2014, CoBank ACB disclosed that it would not renew or extend the outstanding Coso letters of credit. These letters of credit consist of a PPA letter of credit, which is being replaced by the Citibank, N.A. letter of credit described above, and a debt service reserve letter of credit, which is not being replaced.
Under the terms of that debt service reserve letter of credit, the remaining amount available (approximately US$27.6MM) can be drawn at any time during the 15-day period prior to its expiration on December 1, 2014. The company expects that the final drawing of the entire amount remaining available will be made in mid-November 2014 with the proceeds deposited in a debt service reserve account.
Coso Geothermal Power Holdings, LLC leases and operates three interlinked geothermal power plants located in China Lake, California, with installed nameplate capacity of 302 megawatts. The three plants has new PPAs between SCE and Coso Clean Power LLC. These PPAs will expired in 2030.
The plants involved in the deal are the following: