New Agreement Expected to Improve Overall Project Economics and Allows Raser to Apply For an Estimated $33 Million in Federal Grant Funds

Provo, UT, December 7, 2009 – Raser Technologies, Inc., an energy technology company, announced today that it has reached final agreements amending the Thermo No. 1 financing arrangements with the senior project debt holders and the project tax-equity partner.

Principal Executive Officer, Richard Clayton stated, “We are extremely pleased with the results of these amendments and note that this should improve the overall economics of our first power plant by allowing us to apply for the 30% U.S. Treasury grant applicable to renewable energy projects under the American Recovery and Reinvestment Act of 2009.  Through this amendment, Raser will become 100% owner of the Thermo No. 1 power plant.”

Raser expects to apply for the treasury grant within the next several days.  The grant application includes, among other things, a certificate of independent accountants relating to the capital costs of the project and a certificate of an independent engineer stating that the project was placed in service in 2009.  The Treasury Department is required to pay the grant proceeds within 60 days of the application being deemed complete.

As part of the amendments, the timing for final performance testing and completion of the Thermo No. 1 Project has been extended to February 15, 2010.  Raser will continue ramping up to full capacity and anticipates delivering approximately 10MW of geothermal power from its plant to the City of Anaheim before the performance testing date.

Under the new agreement, Raser will be the sole owner of the Thermo No. 1 project and future financing commitments between Raser and the tax equity partner have been canceled.  Raser estimates that the project will qualify to receive approximately $33 million from the U.S. Treasury grant.  Any amounts received from the grant will be used for payments to all members of the Thermo No. 1 financing partnership.  Raser would receive $3.8 million immediately upon Thermo No. 1 receiving payment from the Treasury.  The remainder of the grant funds will be placed in escrow until after the 10-day final performance testing is complete.  Upon final completion, the senior secured lenders may receive a payment for debt reduction, the amount of which will be determined based on the results of the 10-day final performance test, and project reserves will be funded. The tax equity partner will then receive a redemption payment. The remainder of the grant proceeds will be used to pay any final amounts owed to the project turbine supplier and then distributed to Raser according to distribution provisions.

“We expect this restructuring and receipt of grant funds to enhance the economics of the Thermo 1 power plant and the distributions that will flow to Raser out of the project,” stated Raser’s Chairman, Kraig Higginson.  “We note that the unvested warrants we issued to the tax equity partner under the original commitment letter will be forfeited and our balance sheet will improve by the amount of project debt and vendor payables retired with the proceeds from the U.S. Treasury grant.  With this now behind us, we can focus our efforts on completing the funding for our additional projects going forward.”

About Raser Technologies
Raser is an environmental energy technology company focused on geothermal power development and technology licensing. Raser’s Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology. Raser’s Transportation and Industrial segment focuses on extended-range plug-in-hybrid vehicle solutions and using Raser’s award-winning Symetron™ technology to improve the torque density and efficiency of the electric motors and drive systems used in electric and hybrid-electric vehicle powertrains and industrial applications. Further information on Raser may be found at: www.rasertech.com.

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding; our beliefs about the strength and enforceability of our agreements;  our beliefs about the acceptability of our grant application by the federal government, the amount of funds we our eligible to receive under the grant,and the ability of the government to promptly process our grant application and make timely payment of any grant funds; ;  our belief about the positive financial impact this grant money will have on Raser and its Thermo No.1 partners; our belief about our ability to develop future geothermal projects and the geothermal industry in general.  These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, the risk that our grant application could be delayed, the risk that the federal government may not timely process our application, the risk that the federal government may deny all or part of our grant application, or determine that we are not eligible to receive the full amount we estimate we are eligible to receive; the competitive environment and our ability to compete in the industry; our ability to attract, train and retain key personnel; and such other risks as identified in our quarterly report on Form 10-Q for the quarter ended September 30,  2009, as filed with the Securities and Exchange Commission, and all subsequent filings.

Raser Technologies, Inc.                

Issa Arnita

Investor Relations

(801) 765-1200

investorrelations@rasertech.com

Hayden IR

Cameron Donahue

(651) 653-1854

cameron@haydenir.com