The tiny Provo-based company, which since its founding in 2003 has lost more than $25 million and has yet to see its first penny of profit, portrays itself as on the verge launching an era of geothermal energy in the West.

To hear Raser's management tell it, a year from now the company will not only be profitable but producing enough power from eight geothermal projects now under development in six Western states to supply the electrical needs of some 100,000 homes.

"We expect those plants that will come on line during the later half of this year and into early 2009 will push us to profitability," said Brent Cook, Raser's chief executive officer. "It will show up on our balance sheet for all our shareholders to see."

Raser hopes to capitalize on the growing demand for clean energy by producing power from sites where temperatures are lower than at traditional geothermal plants. And it has acquired the rights to hundreds of thousands of acres throughout the West for possible development.

In an event attended by Utah Sen. Orrin Hatch and other state dignitaries, Raser in early May staged a ground-breaking ceremony to mark the beginning of construction of its first geothermal plant - an 11 megawatt facility in Beaver County that was billed as the first geothermal power plant built in the state in 20 years.

"Today marks a turning point in our energy future," Hatch said. "I believe geothermal power will play an increasingly significant role in our nation's renewable energy plan. New geothermal technology, combined with Raser's innovative development strategy, can unlock this nation's vast reserves of geothermal power."

Political pontifications aside, some outside observers remain skeptical and wonder whether Raser can execute on its ambitious development plans.

Instead of pursing a traditional development strategy of building geothermal plants from the ground up, Raser contends it will be using a new approach that will allow it to significantly reduce the time it takes to bring a facility on line. Its plants will be constructed using modular generating units, produced by a United Technologies subsidiary, that can easily be brought onto site and be up and running in a matter of months, rather than years.

"They have all these plans, but it is still a far cry from actually producing energy and plugging into an electric grid," said David Phillips, a securities analyst and Internet blogger who operates under the 10Q Detective name. "About the only thing they've really been good at, so far, is raising money."

At the end of its most recently completed fiscal year that ended on Dec. 31, 2007, Raser's auditors expressed doubt about the company's ability to continue in business. However, during the first quarter of this year the company sold $50 million in notes, a development that led the Raser's accounting firm to back away from its earlier statement.

Despite securing that funding, Raser warns in its latest quarterly statement it still needs to raise additional funds or it might have to modify its geothermal development activities or extend the time frame for their development.

Moreover, the company warns that the technology it intends to use at the heart of its geothermal energy production activities has a limited operating history and has been deployed only in a limited number of projects. "We cannot be certain that . . . heat transfer technologies can be successfully implement in the geothermal power projects we intend to develop."

The technology was developed by UTC Power, and many of the parts are similar to those found in the heating, ventilation and air conditioning products sold by a sister subsidiary, Carrier Corp.

"It's a new product, and Raser is our major customer right now," said John Fox, a UTC Power vice president and general manager over its PureCycle geothermal product operations.

Fox said UTC Power is in production to manufacture 200 of its geothermal power generators for four of Raser's sites.

Each generator, which can generate 250 kilowatts of electricity, retails for $350,000. And that means the generators needed for each of Raser's proposed 10 megawatt sites, will retail for $17.5 million.

At the end of the first quarter of 2008, Raser reported current assets of $26.4 million.

Fox, however, explained that under the existing plans, Raser will be the developer of the geothermal sites. UTC Power will provide the power generating equipment and Merrill Lynch construction money, with the city of Anaheim in California agreeing to buy the power.

Raser said two weeks ago that it had signed a commitment letter with Merrill Lynch for the financing for its project in Beaver. The company earlier this year said it signed an agreement that provided Merrill Lynch the right to arrange financing for up to 155 megawatts of Raser's geothermal projects.

However, Raser warned that Merrill Lynch "is not obligated to provide us with a financing commitment for any other project unless it elects to do so."

Analyst Phillips, who has followed the company for the past two years, pointed out that Raser initially was organized to pursue the development of its "Symetron" technologies, which it maintains allows electric motors, alternators and generators to run more efficiently.

Raser initially talked about how its Symetron technology would revolutionize electric motors, offering improvements in power and efficiency, Phillips said.

"You'd think that if that technology was all they said it would be that by now someone, a big automobile company maybe, would have stepped in to buy the company," he said.

The big question now is whether Raser will be any more successful in pursing opportunities in geothermal energy, Phillips said.

Karl Gawell, executive director of the Geothermal Energy Association, said there is a groundswell of geothermal development taking place.

In a recently completed survey, the association indicated there were 86 new geothermal power projects under way in 12 states as of January.

When completed, the projects could provide up to 3,368 megawatts of electric power generation, more than doubling the U.S. geothermal power capacity from 2,936 megawatts to 6,304 megawatts.

"What you have is companies like Raser trying new things and putting different kinds of development packages together," Gawell said.

"Some of those companies are going to fail, but some of them will succeed. It is going to be interesting to see what happens."

steve@sltrib.com