Central California Power Agency Number 1 (CCPA) Coldwater Creek Geothermal Power Plant

Docket No. 84-AFC-2

Certification Granted on June 27, 1985; Closure approved on July 15, 1998.

Project Manager: Loni Perry

Staff Counsel: David Mundstock

Hearing Officer: Carol Chesborough

Presiding Member: Commissioner Geoffrey Commons

Associate Member: Vice Chair Barbara Crowley

AFC Filing, Data Adequacy, and the Second Unit Amendment

The Central California Power Agency (CCPA) consisted of the Sacramento Municipal Utility District (SMUD) - 50% share; the Modesto Irrigation District - 40% share; and the City of Santa Clara - 10% share. CCPA filed its AFC for a 65 MW Coldwater Creek Unit 1 Geothermal Power Plant on April 16, 1984. The Energy Commission accepted the AFC as complete, effective May 3, 1984. On August 29, 1984, CCPA amended the AFC to incorporate a second 65 MW unit at the same site, for a total project of 130 MW.

Geysers Overview and Project Description

CCPA was the last facility reviewed by the Energy Commission in the Geysers Known Geothermal Resource Area (KGRA) of Lake and Sonoma Counties. Geothermal had been the CEC’s most successful preferred technology during the late 1970s and early 1980s, with twelve powerplants certified in the geysers, making it the world’s largest geothermal field.

But the geothermal development boom was coming to an end. Instead of the predicted vast potential for additional geothermal plants, PG&E, QFs, and even the municipal utilities, would soon all cut back on their commitment to the geysers, as the steam supply unexpectedly declined, and other, cheaper or more reliable options, became available.

The municipal utilities, such as CCPA, still had ambitious but outdated plans for the geysers in 1984, featuring the Geothermal Public Power Line (GPPL), a massive new transmission project. GPPL was designed to service all the present and future municipal power plants in the geysers. Thus, GPPL would provide transmission from the proposed Coldwater Creek site in northern Sonoma County, at the Lake County border, south of Clear Lake. Coldwater Creek’s steam supply was from a large leasehold intended to accommodate this first 130 MW project and a second facility of equal size. This second facility was cancelled after the original project began to fail.

Steam Sufficiency Hearings

Under Public Resources Code section 25540.2(a), a 12-month geothermal AFC, without an NOI, can be reviewed by the Energy Commission only if, at the outset of the proceeding, the applicant can reasonably demonstrate that the site is capable of providing geothermal resources in commercial quantities.

The original 65 MW filing and the subsequent 65 MW amendment each resulted in a separate steam sufficiency hearing under Public Resources Code section 25540.2(a). The Division of Oil and Gas presented expert testimony at both hearings, which were uncontested. The first hearing was on August 7, 1984, with a Committee determination on August 16, 1984 that sufficient quantities of steam were likely to be available for the 65 MW project’s anticipated thirty-year life. The second hearing was on November 14, 1984, with the Committee reaching a comparable decision for the additional 65 MW on December 18, 1984.

The Division of Oil and Gas witness indicated that more wells would be necessary for Coldwater Creek to obtain sufficient quantities of steam to generate the 130 MW CCPA had anticipated, casting doubt on the feasibility of the steamfield ever supporting the projected second powerplant. This was an accurate warning.

However, the purpose of these hearings was to determine if sufficient quantities of steam were available, and the potential of a fuel supply that included corrosive steam was never raised at either hearing. Once the project was built, it was corrosive steam that damaged the powerplant and prevented Coldwater Creek from ever attaining full capacity or meeting its reliability objectives. At the time, it may have been impossible or premature for the technical witnesses to warn about dangers from corrosive steam. Thus, testimony at the two hearings held under Public Resources Code section 25540.2(a) did not reveal the fatal flaw in CCPA’s steam supply, i.e. sufficient quantities were available, but it was corrosive.

Major Issues

CCPA (SMUD project management) and the CEC staff conducted a cooperative process for settling engineering and environmental issues in the Coldwater Creek case. CCPA entered into agreements with Lake and Sonoma County school districts to mitigate its impacts upon overcrowded schools. (Socioeconomics Condition #1, page 73 of the CEC Decision.) The primary concern raised by Sonoma County’s intervention, impacts to the roads which CCPA would use, was to be resolved through direct mitigation negotiations between CCPA and the county, with the CEC stepping in only if an impasse occurred (Socioeconomics Condition #4, pages 73-74 of the CEC Decision.) There were no disagreements over air quality or biology.

The major issues in this case involved disputes which placed the Committee, Commissioner Geoffrey Commons, Presiding, against both applicant and CEC staff. Ultimately, the other Commissioners chose to overrule Commissioner Commons.

Demand Conformance

CCPA, submitting no testimony of its own, stipulated to the CEC staff testimony, filed under the methodology of Biennial Report 4 (BR 4) and the 1983 Electricity Report, showing that Coldwater Creek was needed. Under the same methodology in a concurrent and virtually identical proceeding, PG&E Geysers 21 was also found to be needed by staff, applicant, and the Committee, Vice Chair Crowley, Presiding, Docket No. 84-AFC-1. The Energy Commission had just adopted this decision, certifying PG&E Geysers 21 on June 12, 1985.

Commissioner Commons, however, had his own ideas about the proper manner in which to conduct a demand conformance analysis for Coldwater Creek. Unilaterally substituting different estimates of resources likely to be available from those contained in the CEC staff testimony, Commissioner Commons issued a Proposed Decision, also on June 12, 1985, which found that Coldwater Creek failed to meet demand conformance under BR 4 guidelines. (Pages 16-27 of the Proposed Decision.) However, the Proposed Decision held that Coldwater Creek was needed under the Committee’s economic benefits analysis in accordance with BR 4. (Pages 28-34 of the Proposed Decision.)

Vice Chair Crowley, who presided over the PG&E Geysers 21 case, was second member on the CCPA Committee. She objected to the inconsistency between Commissioner Common’s decision and her own, finding no reason for the Commission to adopt totally contradictory need findings for a pair of indistinguishable geothermal power plants. On June 26, 1985, Vice Chair Crowley thus proposed an Alternate Opinion Re Demand Conformity for Coldwater Creek, which found an affirmative showing of need for CCPA’s energy, eliminating the inconsistencies with Geysers 21 created by Commissioner Common’s Proposed Decision.

Both opinions found Coldwater Creek to be needed. The Commission would have to choose which methodology should prevail.

Transmission (An Alternative to GPPL)

CCPA had proposed no special transmission line for Coldwater Creek, relying instead on the proposed Geothermal Public Power Line (GPPL), then undergoing CEC review in a separate, lengthy Notice of Intention proceeding, Docket No. 84-NOI-1. The problem was that Coldwater Creek’s fast construction schedule rendered it virtually impossible for GPPL, which did not even have an AFC yet, to be in place by 1988, when Coldwater Creek would require a transmission line.

However, CCPA was totally committed to GPPL as the crown jewel of municipal utility self-sufficiency in the geysers. Each participant in CCPA was also a GPPL applicant. With GPPL, a 1,000 MW collector line, the municipal utilities would be able to transmit their own electricity from the geysers, without any reliance upon PG&E’s transmission system. While Coldwater Creek was under review, CCPA could not acknowledge any serious potential for GPPL to fail or be delayed. Thus, CCPA proposed no transmission line for Coldwater Creek, other than GPPL.

CCPA did outline four possible tap line options to the PG&E system, which it could utilize if necessary. Only preliminary details were provided. CCPA would not negotiate with PG&E at this time for Coldwater Creek transmission because that would be provided by GPPL.

CEC staff and CCPA developed a contingency condition under which CCPA could later propose a post-certification amendment to the Coldwater Creek AFC for a tap line to the PG&E system. This allowed CCPA to rely upon GPPL, without delaying Coldwater Creek, until such time as CCPA was ready to acknowledge that PG&E’s transmission services would be required. Only when the amendment was actually filed would CCPA have to provide AFC-level details for the tap line. This condition would ensure that Coldwater Creek obtained transmission. It was a face saving approach for CCPA, which applicant and CEC staff jointly proposed. (Page 119 of the Proposed Decision.)

Commissioner Commons again had his own ideas about solving the transmission problem, which appeared quite perilous to him. He wanted certainty, suggesting that CCPA delay Coldwater Creek until all transmission risks were eliminated, either by approval of GPPL or negotiation of a long-term transmission agreement with PG&E. CCPA refused on the grounds that delay was far too expensive. Commissioner Commons held special hearings to gage the financial risk CCPA was taking and to determine whether it was reasonable.

At pages 121-126 of his Proposed Decision, Commissioner Commons offered three separate alternatives to resolve the transmission issue:

Alternative 1 would bar CCPA from starting construction on Coldwater Creek until it could demonstrate to the CEC that firm transmission capacity was available for the lifetime of the powerplant.

Alternative 2 would establish limits upon CCPA’s expenditures for the construction of Coldwater Creek, set at different amounts depending upon whether the GPPL NOI is approved.

Alternative 3 was the CEC staff/CCPA stipulation, requiring a post-certification amendment for an alternative tapline, if GPPL failed to meet a set of specific milestone approval dates.

The Proposed Decision disapproved Alternative 3 as too risky for CCPA’s ratepayers. Commissioner Commons would let the Commission choose which alternative to impose, but if no selection were made, Alternative 2 would prevail. (Page 122 of the Proposed Decision.)

Adoption - The Presiding Member Loses

At the June 27, 1985 Business Meeting, applicant and CEC staff both supported Vice Chair Crowley’s Alternate Opinion on Demand Conformance and Transmission Alternative 3. Commissioner Commons had no allies among his fellow Commissioners on either issue. Chairman Imbrecht, Vice Chair Crowley, and Commissioner Noteware all voted to adopt Vice Chair Crowley’s need opinion and Alternative 3 as the transmission condition of certification. (Commission Order, first page of the CEC Decision.) The Presiding Member filed dissenting/concurring opinions on the two contested issues, which were included in the CEC Decision.

Post-Certification: The Tapline Amendment, Corrosive Steam, Closure

GPPL did not proceed on schedule. In accordance with Transmission Alternative 3, CCPA filed its tapline amendment on March 3, 1986, Docket No. 84-AFC-2A. The 1.3 mile tapline to the PG&E system was approved by the Energy Commission in a December 10, 1986 Decision. GPPL was ultimately withdrawn. Since it began operating in June 1988, all electricity generated by Coldwater Creek was transmitted by PG&E.

The unanticipated problem of corrosive steam, combined with other steam operator and steam supply difficulties, prevented Coldwater Creek from ever meeting its performance objectives. Corrosive steam damaged equipment and greatly hampered plant operations. In 1990, this 130 MW facility was producing 59 MW. After several years of failed attempts to correct the situation, CCPA formally proposed closing Coldwater Creek in late 1996.

The Energy Commission’s review and approval process for CCPA’s closure plan proceeded under a Memorandum of Agreement between Sonoma County, the CEC, and CCPA. The memorandum established the Energy Commission as CEQA lead agency for all issues, including steamfield closure environmental review. The Energy Commission approved closure of the Coldwater Creek Facility on July 15, 1998.