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Raser says it’s victim of $100 million ‘joke’
Energy » Utah firm sues over its failed geothermal plant.

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Christman went on to state that "no one had any business building a plant like this" and added that using the PureCycle system was a "joke," the complaint said.

For its part, Pratt & Whitney counters that the lawsuit is "without merit."

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"UTC Power and Pratt & Whitney Power Systems have fulfilled our contractual obligations to Raser and Thermo 1, and the equipment we provided has performed at or above promised levels," Pratt & Whitney said in an emailed statement provided by spokesman Matthew Bates.

The statement also asserted that both companies stand behind the PureCycle system as a viable and valuable option for power generation from lower-temperature geothermal resources.

Yet Raser’s lawsuit paints a far different picture.

The company said in terms of the electricity produced, the cost of the Thermo 1 plant far exceeded UTCP’s projections. "Indeed, Raser believes that on an installed-cost-per-kilowatt basis, Thermo is the most expensive geothermal plant ever built in the United States — and perhaps the world."

One independent observer, who has followed Raser’s story and repeatedly warned investors to stay away from the company’s shares, in part because their "balance sheet is a mess," said he doubts the lawsuit will be successful.

Raser’s management long claimed in the company’s regulatory filings that they possessed the technological prowess and acumen to build geothermal plants, said David Phillips, editor of the 10Q Detective website, which offers information to investors gathered from the documents that publicly held companies file with the U.S. Securities and Exchange Commission.

He points to an April 2009 statement from Raser in which its CEO praised Pratt & Whitney — the company Raser now accuses of fraud.

"We are grateful for our strong partnership with [Pratt & Whitney Power Systems] and appreciate their commitment to help us develop these geothermal power plants," said Cook, who resigned as CEO four months later. "They continue to be very supportive and stand behind their modular units, which continue to perform at higher levels than expected."

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Raser’s management, including the company’s current CEO, Nick Goodman, didn’t return repeated telephone calls seeking comment about its lawsuit or its future.

The company’s website, however, suggests that now that it has shed its debt, it intends to proceed with the development of its geothermal resources.

And despite the allegations in company’s lawsuit, the Thermo 1 plant is continuing to operate, according to U.S. Bankruptcy Court documents and the plant’s largest customer, the city of Anaheim, Calif.

"We’re still getting six or seven megawatts of power from Raser," said Steve Sciortino, Anaheim’s integrated resource manager. "I understand they have had problems at the plant but hear they are working them out."

Still, it is unclear how much of a role the Thermo 1 plant, with its PureCycle technology, will play in the future of the Raser, whose Chapter 11 plan gave ownership of the business to an investment group that includes Linden Advisors LP and Tenor Capital Management, both of New York City.

"Raser spent over $100 million attempting to make the PureCycle units at the Thermo 1 plant into a commercially viable utility-scale power facility," its lawsuit said. "This money was spent in vain. The PureCycle units did not function as UTCP had represented they would in order to induce Raser to buy that system, and the units are now in the process of being scrapped."

steve@sltrib.com Twitter: @OberbeckBiz

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