Certification Granted on February 1, 1982

Staff Counsel: Arlene Ichien

Presiding Member: Chairman Rusty Schweickart

AFC Filing and Data Adequacy

Occidental Geothermal, Inc. filed an AFC for its 80 MW OXY No. 1 Geothermal Powerplant on January 29, 1981. It was accepted by the Commission as data adequate at the February 21, 1981 Business Meeting, effective on the filing date, providing the applicant submitted additional fiscal and air quality data by May 15, 1981. That additional data was provided by the deadline.

Geysers Overview and Project Description

Geothermal power was the CEC’s most successful preferred technology during the late 1970s and early 1980s, with a total of twelve powerplants certified in the Geysers Known Geothermal Resource Area (KGRA) of Lake and Sonoma Counties, making it the world’s largest geothermal field. Geothermal, followed later by cogeneration, was the Energy Commission’s chosen alternative to the large coal and nuclear plants long favored by utilities.

PG&E had pioneered in the geysers many years earlier, prior to the Energy Commission’s creation, and now produced more geothermal power than any other utility in the geysers (if not the planet).

Projections had indicated that a vast potential existed for additional geothermal plants, with virtually no end in sight. Municipal utilities had started to get their share of the geothermal bonanza. Now Occidental became the first non-utility qualifying facility (QF) to file a geysers AFC. Occidental was negotiating a contract to sell its electricity to PG&E. Optimistically, the plant was called OXY No. 1, suggesting that other OXY units would follow.

But by the mid 1980s, the geysers boom would come to an end. The PG&E service area developed a surplus of electricity. Meanwhile, the geysers steam supply unexpectedly started to drop, reducing the output of many existing powerplants, while dooming future projects. OXY No. 1 would be the only QF plant to be certified and constructed in the geysers.

The OXY No. 1 site was located in moderately steep terrain, on the ridgeline border between Lake and Sonoma Counties, primarily in Lake County. The site was at the headwaters of Anderson and Gunning Creeks, which provided the water supply to the small Lake County community of Anderson Springs.

Most geysers powerplants had an oil company as their steam supplier, such as UNOCAL for PG&E. However, since Occidental Geothermal was related to Occidental Petroleum, an oil company itself, this applicant was in the unique position of being its own steam supplier.

Steam Sufficiency Hearing

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 Committee conducted an uncontested steam sufficiency hearing for OXY on March 2, 1981, followed by a ruling that the leasehold had adequate steam resources for the life of the project, in accordance with Public Resources Code section 25540.2(a).

Issues

CEC Staff and Occidental reached agreement on nearly all mitigation measures, which were expressed as Findings and Conclusions, later to become Conditions of Certification in the Compliance Plan.

Demand Conformance was uncontested, based upon the Commission’s preference for geothermal power and PG&E’s forecasted need for electricity. CEC staff suggested that OXY’s steam efficiency could be improved, and the applicant agreed to make turbine design changes that increased the plant’s efficiency by approximately 20 percent, a projected saving of 2.4 billion pounds of geothermal steam per year. Air Quality was uncontested.

Powerplant chemical spills into the region’s creeks had been an ongoing problem. In addition to a series of preventative measures, Occidental agreed to provide bottled water to the residents of Anderson Springs, should OXY contaminate their Gunning Creek/Anderson Creek water supply.

Anderson Springs residents advocated construction of a permanent domestic water system for their community that would not be subject to industrial pollution from geothermal plants. Lake County was attempting to have geothermal developers in the Gunning/Anderson Creek watershed fund such a system. The decision required Occidental to make a contribution, which Lake County and the applicant agreed would be a 65,000 gallon water storage tank and $78,000.

In Biology, Occidental rejected staff’s proposal for a two-year study of the ringtail cat, a fully protected species whose range included the geysers area. Applicant offered to implement all ringtail-related mitigation measures specified by staff, without the expense of the study. Staff biologists believed the results of the ringtail study at the OXY site were a prerequisite to proper implementation of the mitigation measures. This issue was adjudicated. The Committee concluded that CEC staff’s proposed study was unnecessary, since feasible mitigation measures were available to avoid any significant effect on ringtails which may be present at the site.

Applicant and the Lake County Schools reached a School Impact Mitigation Agreement under which an annual survey would be conducted to determine the number of new students attributable to the OXY project. For each such student, Occidental agreed to pay $4,575 to mitigate impacts to these overcrowded schools.

Also in Socioeconomics, Sonoma County claimed that it was entitled to mitigation for various cumulative impacts from geothermal projects, in areas such as housing and other community services. The Sonoma County Schools proposed their own mitigation requirements, similar to the Lake County agreement. Both CEC staff and the applicant opposed mitigation, citing a lack of evidence for Socioeconomic impacts to Sonoma County or its schools from OXY. The Committee concluded that the claimed Sonoma County impacts were too speculative, referring all parties to the Commission’s new study of geysers cumulative impacts, Docket No. 81-GCI-1.

Adoption

The Energy Commission certified the OXY Geothermal Plant at its February 1, 1982 Business Meeting, the first qualifying facility ever licensed by the CEC. OXY was constructed and began operation in May 1984. The plant was later sold, and its name first changed to the Santa Fe Geothermal Project. It is now called Calistoga.