Excerpts of Ormat [Olkaria III] Q2 2020 Earnings Call Transcript touching on KPLC:
Quoting Doron Blachar -- Chief Executive Officer
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1. The fourth majeure letter we received from KPLC in April has an immaterial impact on our revenue as agreed by KPLC....So as you said, we have a long-term contract with KPLC, end of last quarter we received the force majeure letter and we analyzed it as immaterial. This quarter, we have discussed with KPLC, and they actually agreed to our position that is totally immaterial and it's already in the numbers. We don't have any discussions with the KPLC on our PPA, on the pricing. There's some other PPAs that are much higher than ours. And the only discussion we had was on the force majeure that was totally immaterial.
2. KPLC has been slowing its payments for the last, I think, two years, but they keep on paying.
3. Power generation in our power plants declined by 4.7% to 1.44 million megawatt hours in the second quarter of 2020. This decline is attributable to several factors; including the curtailment of our generation in Olkaria power plant in Kenya
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Below from ORMART's Q1 earnings call for the period ending March 31, 2020:
"On April 17 we received from KPLC, our customer in Kenya, a notice declaring a force majeure event due to the impact of COVID-19. In their letter, they are claiming to reduce the Olkaria complex contracted capacity from 150 megawatts to 133.9 [Phonetic] megawatts. We believe that the notice will not have a material impact on our expected revenue."
"First of all in Kenya, we have both capacity payments and energy payments. And the capacity payments is the vast majority of the income coming from the power plant. The capacity payment remains as it is on those curtailments, and the thing that it's not paid is the energy. On the 150 megawatts to 133.9 megawatts drop, we are still negotiating and discussing with the utility if they have the ability to have to make this drop, because according to the contract they don't have it. So our expectation is it eventually it will be a non-significant drop on revenue coming from the power plant."