A geothermal developer\u2019s funding difficulties led the Sacramento Municipal Utility District to scale back a power purchase agreement. SMUD\u2019s board May 3 voted unanimously to revise the contract with Gradient for its Patua geothermal project, which originally was to provide up to 120 MW to SMUD, beginning with a 60 MW first phase. Under the agreement changes, the project\u2019s first phase is being reduced from 60 MW to 30 MW, with a downscaling of the project\u2019s total size from 120 MW to 90 MW. This allows Gradient to proceed with construction prior to finding the geothermal fluid supply required for a 60 MW project, according to the developer. SMUD entered into the power deal in April 2010. Reno, Nevada-based Gradient conducted a ceremonial groundbreaking for the Patua Project in August 2011. Gradient says that although it\u2019s proceeded with some development activities--including securing building and operation permits, securing interconnection and transmission agreements, and beginning preliminary construction activities--all have been funded with Gradient corporate equity. In order to proceed with construction, according to the company, it needs to obtain bank financing. However, certain provisions in the 20-year power contract, including SMUD\u2019s right to terminate the contract in the event of various performance failures, have made it difficult to secure financing. Under the revised agreement, SMUD gives up certain termination rights in exchange for financial reimbursement from the developer in the event of any delays in achieving commercial operation milestones. The revised agreement also states that if either phase of the project fails to achieve at least 90 percent capacity, then the developer has to reimburse SMUD for the costs of any unused portion of the transmission reservation. The Patua Project, estimated to cost $300 million, is located in Churchill County, Nevada, near the city of Fernley. Phase 1 of the project is expected to be operational by Jan. 1, 2013. Also May 3, SMUD announced that it completed the third phase of its Solano wind farm project. It provides an additional 55 wind turbines to the muni\u2019s 5,400-acre wind farm in Rio Vista. Solano\u2019s latest phase, which was developed by Portland, Oregon-based Vestas Americas, cost over $200 million. \u201cIt adds 128 MW of capacity,\u201d SMUD general manager John DiStasio said of the project. \u201cWe now have 230 MW of capacity on the Solano property, or enough to power 79,000 homes from wind energy.\u201d Last year SMUD sold the project to a division of banking corporation Citigroup, and is receiving power from it under a purchase agreement that DiStasio said saves SMUD $60 million to $70 million over the next six years. \u201cWe do plan to exercise the option to buy back the turbines,\u201d he said. \u201cIn the meantime, we have a power purchase agreement to buy back 100 percent of the output.