U.S. Geothermal Announces Nevada PUC Approval of 19.9 Megawatt PPA for San Emidio

BOISE, IDAHO--(Marketwire - Jan. 3, 2012) - U.S. Geothermal Inc. (TSX:GTH)(NYSE Amex:HTM), a leading renewable energy company focused on the development, production and sale of electricity from geothermal energy, today announced that the Nevada Public Utility Commission has approved a 19.9 megawatt amended and restated power purchase agreement ("PPA") with its wholly owned subsidiary, USG Nevada LLC, for the San Emidio Project located in Washoe County, Nevada.

The amended PPA expands the existing 3.6 megawatt agreement to provide for the purchase of electric power by the Sierra Pacific Power Company ("SPCC") for up to 19.9 MW from two power generation units at San Emidio. The PPA has a term of 25 years with the starting price for power of $89.75 per megawatt-hour subject to an annual escalation rate of 1%. The new Phase I power plant, which is an 8.6 megawatt (net) water cooled facility, achieved mechanical completion in December and is currently undergoing commissioning.

"Approval of this PPA is a requirement of the project finance arrangements we are currently negotiating for Phase I and II of the San Emidio project," said Daniel Kunz, U.S. Geothermal Inc. Chief Executive Officer. "We expect to be closing the project loan agreements in the coming weeks, after the new Phase I plant achieves commercial production," Kunz added.

Development of the Phase II plant has started with the initiation of production and injection well drilling at the site. It is expected that Phase II will utilize two to three existing injection wells and other infrastructure at the site that will be shared with Phase I. To allow for full power generation under the amended PPA, an additional 3.9 megawatts of transmission capacity has been requested from the SPCC Transmission group, which would expand output currently available under the existing 16 megawatt Small Generator Interconnection Agreement.

Recent drilling for Phase II has identified a potential deeper, higher temperature production zone south of the current Phase I production wells, which is expected to expand the known reservoir boundary. Phase II is a planned 8.6 megawatt (net) air cooled power plant and is scheduled to be on line during the 3^rd quarter of 2013.

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About U.S. Geothermal Inc.:

U.S. Geothermal Inc. is a leading renewable energy development company that is operating geothermal power projects at Raft River, Idaho and San Emidio, Nevada. The Neal Hot Springs project, which is currently under construction, will be the company's third operating power project. The company holds geothermal energy rights to 69,500 acres comprising six advanced stage geothermal development projects. The San Emidio project is currently in the process of commissioning a new 8.6 net MW binary cycle power plant.

The information provided in this news release may contain forward-looking statements within the definition of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are based on U.S. Geothermal Inc.'s current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described, including but not limited to, the results from the exploration, production and injection well drilling and project finance negotiations underway at San Emidio. Readers are cautioned to review the risk factors identified by the Company in its filings with Canadian and US securities agencies. Forward-looking statements are based on management's expectations, beliefs and opinions on the date the statements are made. U.S. Geothermal Inc. assumes no obligation to update forward-looking statements if management's expectations, beliefs, or opinions, or other factors, should change.