Boise, Idaho, August 30, 2010 — U.S. Geothermal entered into agreements with Science Applications International Corp., for a project loan and an engineering, procurement and construction contract for a geothermal power plant for Phase 1 of the San Emidio project in northwest Nevada.

The work will be executed by SAIC's design-build unit, The Benham Companies, LLC. The San Emidio project is a planned two-stage development.

Phase 1 consists of relocation and replacement of the existing power plant. The new 11.5 MW plant will have a net electrical output of between 9.1 and 8.1 MW depending on seasonal and other variations.

Phase 2 is a planned 26 MW expansion. SAIC is providing design-build services for the Phase 1 geothermal power plant, teamed with technology provider TAS Energy who worked in close collaboration with U.S. Geothermal on the plant design.

The anticipated commercial operation date is 4th quarter of 2011 for Phase 1 and 4th quarter of 2013 for Phase 2.

TAS will manufacture and test the modular plant in their Houston, Texas factory. SAIC is also providing a project loan for the Phase 1 total construction costs currently estimated to be about $27 million.

To secure a long-term project loan to repay the construction loan, U.S. Geothermal is engaged in financing discussions in preparation for the project's application to the DOE geothermal loan guarantee program.

In support of the two-stage development plan, negotiations are continuing on a 35 MW power purchase agreement. The project is currently producing and selling up to 3 MW of electricity under a PPA with Sierra Pacific Power Co., a unit of NV Energy.

USG Nevada is constructing a new generation, water-cooled binary cycle power plant that produces renewable base load electricity. The TAS modular plant is expected to provide a rapid development schedule of 12 months and will use R-134a refrigerant, which is non-volatile and reduces permitting and insurance requirements for the project.

No drilling is required for Phase 1 since the new plant will use the production and injection wells which are currently in use by the existing San Emidio power plant. The existing plant will be decommissioned when the new plant achieves commercial operation.