Sierra Geothermal Warns of Risk of Fire Sale If Dissident Nominees Are Elected, Says It Benefits From US Incentives

Sierra Geothermal Power Corp. (TSX VENTURE:SRA) today warned shareholders of a
risk of a fire sale takeover by Ram Power, Corp. if seven nominees put forward
by a dissident shareholder are elected to the board, and told shareholders that
it is in a strong position to benefit from US incentives as Sierra develops its
geothermal projects.


Sierra urged shareholders to protect their investment against a fire sale
takeover by voting the GREEN Proxy in support of Sierra's board and management.
To count, Computershare Investor Services must receive the GREEN Proxy prior to
10:00 am (Vancouver Time) tomorrow (January 22, 2010). 


Sierra's management and board are exploring the full range of strategic
alternatives to unlock value for Sierra's shareholders. Further to our January
11, 2010 news release, Sierra continues to receive inquiries from a number of
different parties. Sierra is currently engaged in discussions with several
parties, including two geothermal power companies, two large-scale utilities and
a major oil and gas producer, about the possibility of a joint venture, or a
merger or out-right sale that could maximize shareholder value.


"The dissident's only strategy is to put Sierra up for sale," said Gary
Thompson, Sierra's President and Chief Executive Officer. "Because the dissident
has no operating plan, even as a fallback, it is clear that the dissident's
nominees will take whatever price is offered. This means that there is virtually
no prospect of a fair price. There is however a big risk of a fire sale,
especially if the preferred buyer is Ram Power, given the dissident's strong
connections to Ram Power." 


"While the incumbent board will consider any and all reasonable buyout offers,
and has formed a special committee to encourage such offers from interested
parties, we see no reason for a fire sale. If there is no fair price available,
we believe our exploration and development strategy is the way to unlock value
in geothermal projects, especially when combined with the US government
incentives. Sierra believes this strategy will deliver value to shareholders in
the long term."


How Sierra's strategy is benefiting from US government policy

Sierra's development strategy continues to benefit from major US government
incentives that favour geothermal projects. Sierra disputes the dissident's
position that Sierra will miss out on these benefits. 


The US government is offering billions of dollars in grants, tax incentives and
loan guarantees for renewable energy projects, including geothermal projects.
Sierra believes it is in a strong position to obtain in the range of US$50
million to US$60 million in possible US grants if, as targeted, management
brings projects to bankable feasibility by the end of this year. 


This would be in addition to the US$10 million of matching government grants
that Sierra was awarded in October 2009. Sierra's award in October was the
second largest amount received by any of the 19 awardees and twice the amount
received by Ram Power. 


Sierra's management anticipated this success and has raised more than $12
million in equity financings since 2009. As a result, Sierra now has the funds
to utilize the matching grants immediately for additional exploratory drilling.
Sierra, which yesterday commenced drilling at its Silver Peak property in Nevada
utilizing its US government matching grants, does not intend to miss out on
additional available incentives. 


The positive impact of US government incentives, which also include low-cost
loan guarantees for up to 80% of the capital expenditures for a geothermal
project, can be especially significant to fund development. The Board and
management have moved fast to take advantage of available incentives and have
earned the right to continued shareholder support.


Dissident's defense of the July 2009 discount takeover proposal

The dissident's principal, Arthur Richards Rule, called the July 2009 discount
price takeover proposal at $0.186 per share a "value creating" alternative in a
recent letter to shareholders. Mr. Rule has continued to defend the $0.186
proposal even though Sierra shareholders would not have benefited from it. 


"Our shareholders have benefited because our board questioned the discount
takeover proposal in July 2009," said Mr. Thompson. "Our shares have risen by
28.3% since then, and our shareholders would have forgone virtually all of this
gain if the board had accepted the discount price."


By questioning the discount price, Sierra's board believed at the time that it
was acting in the best interests of Sierra and its shareholders. Based on
Sierra's outperformance of Ram Power in the stock market since then,
shareholders now have incontrovertible evidence that Sierra's board made the
right call. 


Because Sierra's board questioned the discount price valuation, all of Sierra's
shareholders have benefited by 27.8% from Sierra's outperformance of Ram Power.
The table below shows the calculation using the closing prices of Sierra and Ram
Power yesterday (January 20, 2010).




--------------------------------------------------------------------------
                                        July 2009   Jan. 20, 2010    Gain 
--------------------------------------------------------------------------
Sierra's real market gain                  $0.226           $0.29    28.3%
--------------------------------------------------------------------------
Ram Power's gain                         $3.00 (1)          $3.66    22.0%
--------------------------------------------------------------------------
Equivalent increase from discount       
 proposal                               $0.186 (2)         $0.227    22.0%
--------------------------------------------------------------------------
What Sierra holders would have actually 
 gained with Ram Power (3)                 $0.226          $0.227    0.41%
--------------------------------------------------------------------------
Extra value because Sierra questioned   
 the Ram Power proposal                 $0.227 (4)          $0.29    27.8%
--------------------------------------------------------------------------

(1) Ram Power's deemed value for the July proposal was $3.00 
(2) Ram Power's proposal for Sierra was an 18% discount to July market value
(3) Comparing Sierra's market price in July 2009 to the deemed value of
    Sierra yesterday, had it participated in the Ram Power proposal 
(4) Except for $0.227, which is the Jan. 20, 2010 deemed value of Sierra if
    it had participated in the Ram Power proposal. 



Since the dissident cannot deny Sierra's outperformance of Ram Power, the
dissident has instead chosen to take the credit for it. The dissident would have
shareholders believe that the hard work of the current board and management
through successful exploration and financing activities, including obtaining
US$10 million in government grants in October 2009, was insignificant. The
dissident's claim is simply not credible.


Mr. Rule's continuing criticism of Sierra fails to address the fundamental truth
that the discount price was unattractive at the time and is even more
unattractive with hindsight. Moreover, Sierra believes Mr. Rule's continuing
defense of the discount price provides a clear insight into his plans for Sierra
if the dissidents are elected.


A conflict of loyalties is the real issue

Sierra believes Mr. Rule's loyalties and those of the dissident nominees, all of
whom helped create Ram Power, are conflicted, and that this is the real issue of
the proxy contest. Companies associated with Mr. Rule are Ram Power's largest
shareholder and would have benefited from the "value creating" alternative while
Sierra shareholders would have lost out. Given this situation, Sierra believes
shareholders should not take at face value Mr. Rule's statement that the
dissident does not intend to sell Sierra at a discount. 


The independent proxy advisor RiskMetrics Group has carefully considered
management's plans and has endorsed management and the current board in this
proxy contest. RiskMetrics is objective and sophisticated and after conducting
its own diligence it said the incumbent board and management's actions appear
reasonable and "the intricate business relationships among the dissident
nominees appear to be worrisome."


Said Mr. Thompson, "Considering the dissident's ties to Ram Power, and
considering that the dissident nominees include two Ram Power directors, there
can be no question that Ram Power is aware of the dissident's strategy. In such
circumstances there is no incentive for Ram Power to offer a fair price for
Sierra. We believe shareholders should NOT hand Mr. Rule yet another opportunity
to sell Sierra at a discount."


How to cast your vote 

A special meeting of Sierra shareholders has been scheduled for January 26,
2010. The Management Circular and related proxy materials, including the GREEN
proxy, have been mailed to persons who were shareholders of record as of the
close of business on December 15, 2009. Investors and security holders may
obtain a free copy of these documents on our website at
www.sierrageopower.com/proxy, at the Canadian securities regulators web site
www.sedar.com, and by mail. 


You can request the materials by contacting Anthony Srdanovic, Sierra Geothermal
Power Corp., Suite 500 - 666 Burrard Street, Vancouver, B.C., Canada, V6C 3P6,
or by telephone: [phone], or by email [e-mail], or
follow the web link http://www.sierrageopower.com/index.php/proxy.


Sierra and its directors, executive officers and other members of its management
and employees may be deemed to be participants in the solicitation of proxies
from Sierra's shareholders in connection with the proposed acquisition.
Information concerning the interests of Sierra's management who are
participating in the solicitation is set forth in the Management Circular. 


If you have any questions or need assistance in completing your GREEN proxy,
please call Laurel Hill Advisory Group at toll free 1-888-534-1149 or email at
[e-mail] and they will be happy to help. 


About Sierra Geothermal Power Corp. 

Sierra Geothermal Power Corp. is a renewable energy company focused on the
exploration and development of clean, sustainable geothermal power. It is based
in Vancouver, British Columbia and listed on the TSX Venture Exchange under the
symbol SRA. Its portfolio of geothermal projects located in Nevada and
California exceeds 365 square kilometres (90,000 acres) and has a combined total
estimated capacity of greater than 500 MW. Sierra intends to finance development
by utilizing a combination of corporate equity, joint venture partnerships and
project debt, with the support of US government grants and loan guarantees. To
find out more about Sierra Geothermal Power Corp. (TSX VENTURE:SRA) visit our
website at www.sierrageopower.com. 


On behalf of the Board of Directors 

Gary Thompson, Chief Executive Officer, President and Director 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION 

This news release may contain forward-looking statements. All statements, other
than statements of historical fact, included or incorporated by reference in
this news release are forward-looking statements, including, without limitation,
statements regarding activities, events or developments that Sierra expects or
anticipates may occur in the future. Forward-looking statements can be
identified by the use of forward-looking words such as "may", "would", "could",
"expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or
similar words or the negative thereof. Forward-looking statements in this news
release include statements that the dissident's objective is to sell Sierra at a
fire sale price; that Ram Power would make such an offer; that, if elected, the
dissident's nominees would support such a transaction; that Sierra will be in a
strong position to benefit from US government incentives; that Sierra's strategy
will deliver shareholder value; that Sierra will bring projects to bankable
feasibility by the end of the year, and that discussions with interested parties
could lead to a joint venture or a transaction that maximizes shareholder value.



There can be no assurance that the plans, intentions or expectations upon which
these forward-looking statements are based will occur. Readers are cautioned not
to place undue reliance on these forward-looking statements, which are not a
guarantee of performance and are subject to a number of uncertainties and other
factors that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. These factors include
the election of the dissident nominees, the possibility that Sierra does not
qualify for additional US government incentives, or that Sierra cannot otherwise
finance its operations, as well as the risks and uncertainties detailed in
Sierra's filings with the applicable Canadian securities commissions, copies of
which are available at www.sedar.com. We urge you to carefully consider these
factors.


All of the forward-looking statements contained in this news release are
expressly qualified in their entirety by this cautionary statement. The
forward-looking statements included in this news release are made as of the date
of this news release and Sierra undertakes no obligation to publicly update such
forward-looking statements to reflect new information, subsequent events or
otherwise, except as required by law.