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Keith Johnson, Deseret Morning News
Raser Technologies CEO Brent Cook. Raser Technologies deals with geothermal and hybrid-vehicle technology.

PROVO — Many companies revel in making The Big Splash or cranking out The Next Big Thing. Brent Cook turns to baseball for analogies when discussing the prospects for Raser Technologies Inc. and says he would be content if his company hits "singles and doubles."

The company's two business segments both have potential for success.

Home runs could come from its transportation and industrial segment, if hybrid electric vehicles in the future putter around town with Raser's energy-efficiency technology, giving them longer driving range.

The company's geothermal power-plant development is seen by market analysts as a surer bet. The company is on the verge of constructing facilities throughout the West.

Raser is doing it all with — jokes aside — cutting-edge technology, and the possibility exists that someday a person might drive a hybrid electric car containing Raser technology and charge it using electricity produced at one of its geothermal plants.

The hybrid and electric car business, however, is more difficult to predict, since auto companies can't tell you how many hybrid cars they're going to sell. To diversify, Cook, Raser's chief executive officer, has steered the company toward geothermal energy development.

"This strategy is our singles and doubles," he says. "We have a 'green' power strategy that we call 'wells to wheels.' We believe you can generate the power from a renewable, nonpolluting source, all the way to the wheels, which is using it in a hybrid application."

"The theory is you could have a zero-carbon imprint if you elect to buy 'green' power through a geothermal source and elect to have a hybrid electric car."

Heating up

Geothermal development is on the company's front burner.

Raser's niche in the industry comes from developing a system that, technicalities aside, can capture power generation at sites with temperatures lower than at traditional geothermal plants. The company has snatched up rights to hundreds of thousands of acres in a six-state Western area for possible development. That includes about 78,000 acres in Oregon and Washington that Raser picked after reviewing 229,000 acres of International Paper property.

Cook expects western Utah, Nevada and eastern California to yield the most plants. The only Utah project that has been announced is near Milford in Beaver County, but more are likely. Cook predicts that perhaps one-fourth of the company's total will be in the Beehive State.

The company said Friday it had leased 71,000 more acres in two southern Utah counties for possible geothermal development, bringing its Utah total to more than 100,000 acres.

"Nevada is known as the geothermal state, but Utah has just as much as Nevada in that respect — the potential," Cook said.

Unlike monster-sized coal or natural-gas generation plants, Raser's facilities will be modest. Most will generate 10 megawatts, enough to power about 10,000 typical homes.

Raser is building five plants — three in Nevada and one each in Utah and New Mexico — and expects to have some operating this year. Cook has announced that Raser will develop 100 megawatts, or about 10 plants per year, for the next three years and thereafter 150 megawatts annually.

If that sounds aggressive, it's because Raser is relying on a relatively simple design. Its plants will use a modular approach, with United Technologies equipment — similar to rooftop air conditioners — that can slide into place.

"Unlike most power plants, these are really like plugging in a bunch of refrigerators in the desert and generating power. So it's a pretty creative application," Cook said.

Cook says that Raser's focus on lower-temperature resources aims to tap areas in the 200-to-350 degree range in the West that other companies have drilled out and passed over because they lacked the technology to tap the geothermal energy there.

"We're going out and catching resources that people passed by years ago, looking for 400 degrees and above," he says. "The technology has now caught up."

What's more, the company's closed-loop system means zero pollution emissions, zero fuel costs, virtually zero labor costs and less maintenance than a traditional plant.

Developing projects

Raser's rapid-deployment plans call for construction of plants over 12 to 18 months rather than the four to five years common for a traditional geothermal facility. That fast pace has posed challenges when it comes to getting permitting agencies "to move as quickly as we move," Cook says.

But the company is plunging forward, and Cook expects Raser to be a power exporter, with early arrangements sending the juice to California and Arizona utility markets, because Utah has no requirement that power utilities buy a certain amount of its generation from renewable sources.

"Our society is starting to value 'green' power and sees that the cost of 'brown' power is actually higher than what they have had for years," he says. "So 'green' power is starting to become a premium."

The popularity of developing geothermal power plants is evident in a Jan. 14 report by the Geothermal Energy Association. Based on a survey of development companies, the report indicates that 86 proposed projects would provide up to 3,368 megawatts of electricity. That would more than double the current geothermal capacity of 2,936 megawatts and supply enough power for 6 million households.

Projects are being developed in 10 Western states, plus Alaska and Hawaii, the report said. The 86 projects were 35 more than were planned when the association conducted a survey a year earlier. The most recent survey indicated that Utah has four projects that would provide between 191.6 and 224 megawatts.

Motoring innovation

Raser also is hoping people put a premium on the importance of hybrid electric vehicles. The company's licensed Symetron family of technologies enables electric motors, alternators and generators to run more efficiently. Mathematical algorithms imbedded on a Symetron chip can help the motor work more efficiently by giving it some smarts, extending the motor's driving range and providing more power for the amount of electricity used.

That could someday be helpful in hybrid electric cars, where the Raser technologies would be part of the vehicle's motor and drive system. In a vehicle that uses the electric power before the combustion side kicks in, Raser's contribution would allow the vehicle to travel further with electricity, perhaps without ever needing the combustion portion on certain trips.

"We're giving an electric motor an electronic brain and telling it to operate more efficiently and allowing it to react to the circumstances," Cook said.

But timing remains a question mark.

"There are so many factors that I don't have control over as an executive," Cook says. "We'll hit home runs in the (transportation and industrial) area, there's no question. But I can't predict to you when we're going to hit home runs. With the singles and doubles area, I can tell you exactly when."

The Symetron technology is perfect for high-performance, high-torque, high-efficiency motors, Cook says, meaning someday Raser could help out in air conditioners, elevators, refrigerators and industrial applications.

Powerful possibilities

Raser formed in 2001 and became a public company in 2003, trading on the NYSE Arca exchange. So far, Raser has yet to earn any significant revenue. But Cook expects that to change soon. He pegs the construction cost of a 10-megawatt geothermal plant at $32 million to $35 million, but recovering that cost "is a very rapid recovery," he says.

So far, the company has lined up nearly 60 institutional investors, and forging partnerships is a key element of the business model. "We would expect that we'll always be working with companies much larger than ourselves," Cook says.

Raser and Merrill Lynch forged an agreement announced Jan. 17 for the structuring and financing of up to 155 megawatts, including up to $44 million for the first 10.5 megawatts. A deal signed Jan. 9 with Hyundai Heavy Industries Co. Ltd. of South Korea calls for Hyundai to manufacture motors, generators and drives with Symetron technology, with Raser helping to introduce the products to certain markets and applications.

Will it pay off? An industry blogger recently described Raser as "a stock for all environments. It's got huge growth ahead, will be profitable in 2008 and has a massive short interest." The stock has been hovering at about $11, with the price ranging between $4.82 and $18.44 during the past year.

Gerald A. Rothstein, senior analyst for investment research firm Dutton Associates, has been cautionary. In December, he wrote that Raser still lacked a power purchase agreement for its geothermal business, "so the modeling of its prospective revenue stream is quite hypothetical." As for Symetron, he noted that "neither its mass production cost-effectiveness or its reliability in use have been proven yet."

In a mid-January research note, he commended Raser for getting well-established companies in its target market areas to put their industry expertise and customer relations behind Raser's technology.

"There is still a good deal of work to be done to prove that Symetron technology is cost-efficient, reliable and durable in the field," Rothstein wrote. "At the same time, the commitment of major industrial companies to the further development of the technology is very positive."

Moving ahead

Karl Gawell, executive director of the Geothermal Energy Association, says Raser's advantages appear to be its ability to use low-temperature resources and its speed in getting plants online.

"Most geothermal power plants today are custom-made, where you make each one for the resource," Gawell says. "If you've got a power unit that's mass-produced and you can come in and plug it in, you can cut development time significantly, and that's one of the advantages they're looking at."

Some geothermal-energy companies are looking at 10 years to get their projects up and running, he says.

"One of the problems is your financing costs start eating you alive when it takes that long to build a project," he says.

Raser's fast-track strategy is an asset, Gawell says. "If they're able to meet their goals as they've outlined them, I think they'd very quickly become a player in the industry."

Cook has no doubts.

"This will be a very significant company in terms of its technology being implemented in many, many applications," he says. "The way of the world is more energy efficiency and generation of that energy from renewable resources. That is clearly the wave of the future."

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