January 13, 2010 08:00 ET

Sierra Geothermal Power Concerned Shareholder Urges Board and Management to Refrain From Misleading Fellow Shareholders

Mails Letter To Shareholders Highlighting Board Gaps In Financing, Experience and Words vs. Deeds

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 13, 2010) - Sierra Geothermal Power Corp. ("Sierra" or the "Company" or "SGP"). Concerned Shareholder today mailed a letter to shareholders that warns fellow shareholders of the Board and Management's apparent strategy to distract shareholders from the real issues facing Sierra.

The Concerned Shareholder is soliciting proxies for use at the Special Meeting, in support of resolutions to increase the number of Directors from six to 13 and to elect the Concerned Shareholder Nominees. Sierra's shareholders are urged to vote their YELLOW proxies today, to ensure they are received in advance of the 5:00 p.m. (Vancouver Time), Thursday, January 21, 2010 deadline.

"It is regrettable that this Board and Management team seem inclined to continue their campaign of misinformation," said Concerned Shareholder Rick Rule. "Despite these seemingly desperate actions on the part of the Sierra Board and Management, it appears that our fellow shareholders are not being distracted from the real issues facing Sierra and understand that they need to protect their investment and vote their YELLOW proxy to strengthen Sierra's Board."

The text of the letter (dated January 13, 2010) is as follows:

Wednesday, January 13, 2010

Dear Fellow Shareholders:

    THE BOARD AND MANAGEMENT OF SIERRA GEOTHERMAL POWER CORP. ARE TRYING 
                     TO DISTRACT YOU FROM THE REAL ISSUES

Your investment in Sierra Geothermal Power Corp. ("Sierra" or the "Company") is at risk, and you need to act decisively to protect your investment and to protect your Company. In the Concerned Shareholder (the "Concerned Shareholder") Circular, we outlined a number of compelling reasons why Sierra's Board needs to be strengthened.

Since the mailing of the Concerned Shareholder Circular, the Board and Management of Sierra have continued their campaign of misinformation. It appears that the current Board has decided that, rather than discuss Sierra's future in any concrete terms, their best chance to maintain the status quo is to confuse shareholders by overwhelming them with misleading and false information.

In this letter, the Concerned Shareholder sets the record straight, separates fact from fiction, and explains how an enhanced and more experienced Board is better equipped to create shareholder value.

YOUR CURRENT BOARD IS NOT UP TO THE TASK.

The geothermal industry is consolidating and significant capital will be required to move Sierra to production. Current US government subsidies are game changing for US geothermal assets, but there is a time constraint. Sierra may miss this incredible opportunity because they lack the scale to develop their assets on a timely basis without extraordinary share dilution.

Sierra's own investment advisors, Jacob Securities Inc. ("Jacob Securities"), have noted that "Sierra has by far the lowest valuation of the group" (of small cap geothermal companies). (Source: November 10, 2009 Jacob Securities Inc. Equity Research report,) Jacob goes on to point out that this discount in relative valuations is severe, whereas Sierra trades at C$80k EV/MW, the rest range from C$586k to C$3,111k/MW. This discount persists despite a share price recovery of 50% from the time of the Concerned Shareholder requisition.

The Concerned Shareholder believes that the trading discount reflects the investment community's conclusion that Sierra's Board and Management lack the requisite skills to develop Sierra's assets on a timely basis. Specifically lacking, are skills directly relating to US based geothermal plant financing, construction, and operations.

One of the leading industry publications highlights the challenge facing Sierra and is clear on what shareholders need to do:

"Based on our knowledge of the situation and of the players, we favor 
siding with the yellow dissident proxy and with Rick Rule... bringing a 
project from a license to a producing geothermal power plant takes tens 
of millions of dollars, something that Sierra cannot do on its own without
a lot of dilution. With a name like Rick Rule behind the story and the
financing, and with the possibility of bringing Sierra into the Ram Power 
or Magma Energy fold, we believe that Sierra's projects will get far 
more valuation and development. Eventually this will increase the value of
the shares."


Casey's Energy Confidential, CEC Vol 6 Issue 2 - "Sierra Geothermal - The 
Gloves Are Off!" January 8, 2010

The Concerned Shareholder proposes to enhance the Board with directors who bring deep expertise, each with an average of over 20 years of experience in corporate development, capital acquisitions, exploration and development of geothermal properties. The stronger, more experienced Board would be better equipped to represent the interests of all shareholders, and to evaluate all alternatives available to enhance shareholder value.

While claiming to be open to value-creating alternatives, the current Board - when presented with an alternative (namely the Ram Power Corp. ("Ram") proposal) - chose not to disclose this opportunity to shareholders, nor did they begin an auction process.

Instead of considering this proposal, the current Board and Management pushed through very dilutive equity issuances at net prices below the purported bid they rejected as too cheap. Sierra's own financial advisor commented on their yet another dilutive share placement, noting:

"...the size of the issue represents 19% dilution which we (Jacob 
Securities) believe was kept to under 20% of the post-issue shares to 
avoid shareholder approval."


August 19, 2009 Jacob Securities Inc., Equity Research Article "Sierra
Geothermal Power Corp. - "In Play"

This effort to avoid shareholder approval was yet another clear and deliberate attempt to disenfranchise the true owners of the Company, namely you - its shareholders.

THE BOARD'S INTERESTS ARE NOT ALIGNED WITH YOURS.

In his January 11th Letter to Shareholders, Gary Thompson, Sierra's CEO, promises to "continue to practice strong corporate governance to protect shareholders." Shareholders should ask themselves if this Board's actions have been consistent with that promise.

The letter goes on to say: "Sierra's Board believes that a sale of the company might be an attractive alternative to its current business plan, but only if we receive a reasonable offer."

Who exactly is "WE"? Shouldn't the shareholders, being Sierra's rightful owners, be made aware of any bona-fide arms length transaction? Shouldn't the current Board disclose such an offer?

In the same letter, Mr. Thompson continues to mislead shareholders by equating the Concerned Shareholder with Ram Power Corp. Here are the facts:

- The Concerned Shareholder actually has more money invested in Sierra than the entire incumbent Board does;

- The Concerned Shareholder has never made a bid for Sierra, nor does it intend to promote the sale of Sierra, a Company that it has a substantial investment in, at a discount.

As it pertains to Ram and Sierra, Mr. Thompson should be more concerned about Sierra's funding gap and the conclusion in the January 5, 2010 research report by Jacob Securities regarding the gap:

"A possible takeout of Sierra Geothermal is looming. Sierra has the most 
drill ready properties in the U.S., meaning a suitor not capital-
constrained could qualify for $154 million in ITC grants in 2013"


January 5, 2009 Jacob Securities Inc., Equity Research Article "Ram Power,
Corp. - Initiating Coverage: Well Advanced Projects That Are Fully 
Financed"

SEPARATING FACT FROM FICTION.

Recent increase in the value of Sierra Shares

In its January 11th Letter to Shareholders, the current Board and Management expend significant amounts of ink attempting to take credit for the recent increase in the value of Sierra shares.

As our fellow shareholders know, and as Jacob Securities alludes to in its August 19, 2009 article 'Sierra Geothermal Power Corp. - "In Play"', Mr. Thompson purposely omits to acknowledge that the uptick in share price coincides with the meeting requisition from the Concerned Shareholder. Since the Concerned Shareholder requisitioned the meeting, and thereby tried to make the Board of Sierra more accountable to its shareholders, Sierra's price has increased well over 50%. This appreciation has occurred despite Sierra's best efforts at accelerating dilution which has exceeded 125%, on a fully diluted basis, over the same period.

TALK IS CHEAP. ACTIONS SPEAK LOUDER.

There is a significant gap between what the current Board and Management says and what it does:

- Saying you will consider all offers - and then failing to disclose them to shareholders is disingenuous.

- Claiming you have the requisite experience to develop Sierra is contradicted by action - or more accurately, inaction.

- Discussing joint ventures is not the same as actually entering into them.

- Promising good corporate governance and then circumventing the shareholders by both (i) not disclosing a legitimate arms length offer and (ii) structuring private placements to avoid shareholder input, appears to be inconsistent.

Sierra shareholders have suffered enough. Now you have the opportunity to act decisively to protect your investment and to protect your Company.

Another leading industry publication summarizes the choice facing shareholders succinctly:

"My view is to support the alternative directors... If you go with the 
Gary Thompson slate, you'll be getting a continuation of what we've seen.
If you go with the Rick Rule slate, you'll get that Ram-level of management
and growth-oriented view of the future."


Byron W. King, Energy & Scarcity Investor, "Geothermal Update - Sierra 
Proxy Fight", January 8, 2010.

TIME IS SHORT. SHAREHOLDERS NEED TO ACT NOW BY VOTING THEIR YELLOW PROXY.

The Special Meeting is scheduled to be held on January 26, 2010 at 10:00 am (Vancouver time). It is important that fellow shareholders take the time to review the information in the Concerned Shareholder Circular and vote the YELLOW proxy. In order to be counted at the Special Meeting, Kingsdale Shareholder Services Inc. must receive your YELLOW proxy by 5:00 pm (Vancouver time) on Thursday, January 21, 2009. If you require assistance in voting your YELLOW proxy, please contact Kingsdale at 1-800-775-4067 or visit www.YourSierra.com.

Yours truly,

"Arthur Richards Rule"


President, Resource Capital Investments Corp.
General Partner
Exploration Capital Partners 2005 Limited Partnership

Proxy Voting Deadline

Shareholders are reminded to not delay and vote the YELLOW proxy form so that it can be received no later than 5:00 p.m. (Vancouver Time) on Thursday, January 21, 2010. Detailed voting instructions are included in the Concerned Shareholder Proxy Circular that is being distributed to Sierra's shareholders.

Further information about voting the YELLOW proxy is available from Kingsdale Shareholder Services at 1-800-775-4067 or by visiting www.YourSierra.com.

About the Concerned Shareholder

The Concerned Shareholder is Exploration Capital Partners 2005 Limited Partnership ("Exploration"). Exploration and Rick Rule, President of Resource Capital Investments Corp., General Partner to Exploration, are among the largest and most experienced investors in the small to mid-cap geothermal space. The Concerned Shareholder holds 6,927,019 shares or approximately 5.40% of Sierra's issued and outstanding shares as of the Record Date.