Vulcan Power gets funding for geothermal

Bend, Ore.-based Vulcan Power, which holds geothermal properties in the western U.S., announced today that Boston's Denham Capital will invest $145 million in the company. Vulcan said the funding will allow it to continue to develop geothermal property with potential to generate 900 to 2,000 megawatts of power.

"This investment by Denham allows the company to move forward aggressively with our business plan of developing steam resources and power projects, and supporting existing long term power purchase agreements," said Steve Munson, president and CEO of Vulcan.

Vulcan holds a property portfolio of geothermal leases and applications covering more than 160,000 acres in California, Nevada, Oregon, and Arizona.

The company has signed 20-year power purchase agreements with Nevada Power, Pacific Gas & Electric and Southern California Edison, and said it is negotiating additional deals with other utilities.

Pacific Gas & Electric is a unit of San Francisco's (NYSE: PCG) and Southern California Edison is a subsidiary of Rosemead, Calif.-based Edison International (NYSE: EIX).

"Vulcan will be a strong addition to our power generation portfolio, providing a low cost, baseload source of significant renewable electricity for Western markets at a time of extreme volatility," said Scott Mackin, partner at Denham. "Together with Merrill Lynch, we intend to help Vulcan grow quickly into a best in class and significant renewable independent power producer."

In addition to the Denham investment, Vulcan said today that Merrill Lynch Commodity Partners, a principal investment fund of Merrill Lynch, will convert its outstanding notes into Vulcan preferred equity.