(BIVN) – Global geothermal company Ormat Technologies has filed a lawsuit against insurers, as it continues to work towards resuming operations in Puna.
Puna Geothermal Venture, knocked off-line by the 2018 eruption of Kīlauea Volcano on the lower East Rift Zone, is “working rapidly to resume operation”, parent-company Ormat told investors in its November 7 third quarter earnings call.
Ormat explained how PGV has successfully reached the production area, and one production well is available for the operation of the power plant. PGV also recovered several injection wells.
“Continued recovery work includes re-drilling of existing wells, cleanouts and drilling of new wells,” the presentation states. Cost to repair wells and drill new wells is between $30 and $50 million, Ormat says, with “proceeds from Control of Wells insurance” expected to recover part of the investment.
All insurers accepted Ormat’s property loss claim and started to pay the costs to rebuild the damaged items. However, certain insurers rejected Ormat’ claim for business interruption coverage, the company said. Ormat has filed a lawsuit against these insurers.
The total claim, as of September 30, is $56.7 million. The company has so far received $21.2 million.
The lawsuits will not impact plans to re-start the Puna facility, Ormat said.
The refurbishment activities will be completed by the end of 2019, “enabling us to deliver energy from the plant,” the company says. Ormat plans to regain full operation by the end of the second quarter of 2020.
There is still the matter of building the electrical substation, which is expected to finish construction by the end of 2019. Permits are delayed, however.
The Hawaiʻi Public Utilities Commission suspended the docket for the Hawaiʻi Electric Light Company request to construct 69 kV overhead transmission lines to reconnect PGV. The Hawaiʻi PUC is waiting to receive additional information regarding a renegotiated power purchase agreement between HELCO and PGV.
Ormat hopes to settle that by the end of the first quarter of 2020. Once completed, PGV will be able to sell the electricity produced in Puna.
“Our estimate for completion and operation, is subject to receiving all required permitting and successful resource and plant equipment,” Ormat wrote.