Notice of Intention Decision on June 18, 1980

Certification Granted on November 18, 1981

AFC Staff Counsel: David Mundstock

Hearing Officer: Ernesto Perez

Presiding Member: Commissioner Arturo Gandara

AFC Filing and Data Adequacy

The California Department of Water Resources (DWR) filed its AFC for the 55 MW South Geysers Geothermal Project on March 23, 1981. The AFC was designed to clearly show that it met all the conditions specified in the Commission’s South Geysers NOI Decision.

Under the regulations then in effect, the Executive Director accepted the AFC on April 10, 1981, which started the clock on the original filing date. A geothermal AFC, following an NOI, was a nine month proceeding, so that a decision was required no later than December 23, 1981. The proceeding actually took only eight months from the filing date to the Commission decision.

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.

The California Department of Water Resources (DWR) operated the State Water Project, pumping large quantities of water up and down the state. The pumping required a significant amount of electricity, which led DWR to the geysers in search of a clean energy source. However, PG&E and the municipal utilities had already acquired the best geothermal sites, leaving DWR with the least desirable sites from which to choose. DWR’s two geothermal plants, South Geysers and Bottlerock (Docket No. 79-AFC-4), would both fail due to lack of adequate steam supplies.

The South Geysers site was located on the Rorabaugh leasehold in Sonoma County, a steep, natural area that would require disposal of 600,000 cubic yards of earth in order to create a level pad for the powerplant. The site was not close to any of the small residential communities in either Sonoma or Lake County. Geothermal Kinetics, Inc. was DWR’s steam supplier.

Issues

CEC staff and DWR worked closely together as part of a cooperative process intended to resolve all potential problems. The case was uncontested, there being no disputed issues in CEC staff testimony or in the last separate Environmental Impact Report (EIR) prepared for an AFC. Subsequent AFCs would be exempt from the EIR requirement under functional equivalency, Public Resources Code section 21080.5, and section 15251(k) of the CEQA regulations.

In Biology, DWR agreed to purchase a parcel of land as off-site mitigation for the general habitat loss caused by building a powerplant in a natural area. If implemented, this off-site mitigation would substitute for essentially cosmetic attempts to lessen impacts at the project site itself. (Pages 45-46 of the CEC Decision, and Section 5, Requirement 5-2 in the Appendix B Compliance Plan.) CEC staff considered off-site mitigation to be an innovative approach, used by other agencies, but not yet well established at the CEC.

In Socioeconomics, DWR became the first geysers applicant who agreed to mitigate its project’s impacts upon the overcrowded Lake and Sonoma County Schools. In prior cases, the school districts had failed to obtain any mitigation. However, in South Geysers, the Lake County Schools intervened and convinced both DWR and CEC staff that compensation was warranted for new students brought into the schools by DWR’s workers. DWR agreed to pay $4,250 per year for each new Lake County student identified as their responsibility. (Pages 55-56 of the CEC Decision and Appendix D.)

DWR’s mitigation agreement with Sonoma County included compensation for school impacts and a payment of $900,000 to assist the county in repairing the Healdsburg-Geysers Road, which was suffering continued damage from heavy geothermal construction vehicles. (Pages 57-58 of the CEC Decision and Appendix D.) The narrow Geysers roads were unsuited to the industrial traffic that was part of geothermal development.

The Non-Issue: Steam Supply

All Energy Commission lawyers involved in the South Geysers case concurred that adequacy of the steam supply was not a subject over which the CEC had jurisdiction. Under Public Resources Code section 25120, the powerplant was defined to exclude the steam field, over which local jurisdiction prevailed. (As the last powerplant with an NOI preceding the AFC, South Geysers was not affected by Public Resources Code section 25540.2(a), requiring a steam sufficiency hearing for a 12-month geothermal AFC, without an NOI.) Thus, the CEC had no express legal authority to investigate whether the South Geysers steam field could provide adequate fuel for the powerplant.

When an adjoining landowner’s representative attempted to intervene in the case for the purpose of questioning the adequacy of South Geysers steam resource, Commissioner Arturo Gandara, Presiding Member, denied any intervention based upon the steam supply issue. He declared the steam resource subject totally beyond the scope of the AFC and outside CEC jurisdiction. In his opinion, the matter fell within the jurisdiction of the Department of Oil and Gas. (September 16, 1981 Reporter’s Transcript, pages 896-898.)

CEC staff was aware that the South Geysers steam supply amounted to an unproven resource, over which some skepticism had been expressed. Absent legal authority to raise the steam issue, and in deference to a Committee ruling categorically excluding steam supply from the proceeding, CEC staff made no further effort to discussing the adequacy of DWR’s steam resource.

Adoption

The DWR South Geysers Geothermal Project unanimously received Commission certification at the November 18, 1981 Business Meeting.

Regarding steam supply, Commissioner Gandara’s final decision explained his reasons for previously denying an intervenor’s right to address that subject. The Decision clearly stated on page 10 that the Committee "did not intend to examine the adequacy of geothermal steam reserves during the South Geysers proceeding." At the adoption hearing, there were no challenges to the Presiding Member’s handling of the steam supply topic.

Collapse

DWR began constructing the South Geysers powerplant without conducting further tests to determine the adequacy of its steam supply. Only after many millions of dollars had been expended on building the project did DWR learn the truth: the South Geysers steam resource was totally inadequate to support the powerplant. With the powerplant approximately 50 percent on its way to being completed, but without equipment being installed, construction was abruptly halted, never to resume.

In the investigations that followed, blame was primarily assigned to DWR and its steam supplier. However, it also became clear that the Energy Commission should always review the adequacy of a geothermal plant’s steam resource. To accomplish this, the Legislature amended the Warren Alquist Act to add Public Resources Code section 25524(b):

(As part of electric industry restructuring (de-regulation), Public Resources Code section 25524 was repealed; however a steam sufficiency finding is still required for AFCs under Public Resources Code section 25540.2 in order to obtain an NOI exemption.)

Closure

In 1993, DWR permanently plugged and abandoned the four steam wells and cleaned up the sumps and well pads in the associated steamfield. In 1997, DWR initiated the CEC closure process for the powerplant and steamfield. On December 2, 1998, the Energy Commission formally terminated certification of South Geysers. DWR now wishes to sell the property.