June 2005, Issue No. 17

Federal Update

In Memory of Richard "Dick" Burdette

DOE issues Enhanced Geothermal Systems solicitation

WGA Geothermal Task Force seeks cogent, cost-effective recommendations

Geothermal Calendar of Events

Current Solicitations

National News

State Roundup

Federal Update

Energy Bill

The U.S. Senate passed H.R. 6, the Energy Policy Act of 2005 by a vote of 85-12 on 28 June 2005. For more information on the vote and a link to the bill .

The Senate Energy Policy Act of 2005 contains the following provisions regarding geothermal energy:

• Extends the Section 45 production tax credit (PTC) placed in service period through 31 December 2008 for all facilities (Energy Policy Tax Incentives Act of 2005).
  
• Authorizes $1 billion of tax credit bonds to finance Section 45-type facilities for governmental units, electric cooperatives, and tribes which are generally not taxed. 
  
• Gives all eligible technologies the full 10-year credit term under the PTC, rather than the five currently provided in the law.
  
• Mandates that 10% of the nation’s electricity sources derive from renewable sources by 2020 (Bingaman Amendment No. 791).
  
• Updates the Geothermal Steam Act by amending the leasing provisions to provide for a competitive leasing system.
  
• Directs other actions that will facilitate new development of geothermal resources.
  
• Provides loan guarantees to companies that build new "clean energy" projects (Title XIV - Incentives for Innovative Technologies).
  
• Includes a non-binding resolution that puts the Senate on record for the first time as saying it agrees that greenhouse gas emissions are contributing to global warming.

The bill now goes to a House-Senate Conference Committee to work out the differences. The House bill has no PTC provisions in its tax section and no national renewable portfolio standard. A bill is likely to be done in September.

For an Unofficial Comparison of the Geothermal Provisions of HR 6 as passed by the House and Senate, prepared by the Geothermal Energy Association.

Other Bills

• H.R. 2794 - The Clean Energy Bonds Act of 2005. The bill grants electric cooperatives a bond financing tool to fund renewable projects which is comparable to the production tax credit that investor-owned utilities (IOUs) and private developers have been able to use for years. The bill will provide electric cooperatives with the equivalent of an interest-free loan for building renewable facilities. Introduced on 8 June 2005 by Representatives Ron Lewis (R-KY) and Earl Pomeroy (D-ND).
  
  
• S. 962 - Companion bill to H.R. 2794. Introduced by Senator Chuck Grassley (R-IA) on 28 April 2005.
  
  
• S. 1151 - Climate Stewardship and Innovation Act of 2005. To provide for a program to accelerate the reduction of greenhouse gas emissions in the United States by establishing a market-driven system of greenhouse gas tradeable allowances, to limit greenhouse gas emissions in the United States and reduce dependence upon foreign oil, to support the deployment of new climate change-related technologies, and ensure benefits to consumers. Senators John McCain (R-AZ) and Joseph Lieberman (D-CT) introduced the bill on 26 May 2005.
  
  
• S. 1156 - To extend the Internal Revenue Code of 1986 tax credit period to cover electricity produced from renewable energy facilities placed in service before 1 January 2011. The bill also provides all renewable sources a 10-year credit period to ensure investors are not unfairly biased toward one source over another. Senator Orrin G. Hatch (R-UT) introduced the bill on 26 May 2005.

To search for specific bills.

Hearings

• On 24 May 2005, the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means held a hearing on a Federal PTC for electricity production from renewable sources. The Subcommittee assessed the economic efficiency of current tax policy for renewable energy production and its efficacy in promoting economically viable new energy technology. Vince Signorotti, Vice President, CalEnergy Operating Corporation, provided oral testimony. He stated that the 215-MW Salton Sea 6 geothermal plant "will remain untapped in this reservoir if the geothermal production tax credit is not extended in a viable manner."
  
  Howard Gruenspecht of the Department of Energy's (DOE) Energy Information Administration (EIA) based his oral testimony largely on EIA’s 2005 Energy Outlook according to which, geothermal is projected to have the second lowest levelized costs for new plants in 2010 (after pulverized coal) of all technologies listed. While Gruenspecht did not make any specific policy endorsements, he appeared generally supportive of the PTC. The Geothermal Energy Association submitted a written statement. For more information.

Appropriations

• The House passed H.R. 2419, the 2006 Energy and Water Development Appropriations Act on 24 May 2005, providing $23,299,000 for geothermal technology development, the same as the budget request. The Senate Energy and Water Subcommittee approved the bill on 14 June 2005.
  
  According to the Senate report language, "The Committee recommends $23,299,000 for geothermal technology development, the same as the request, including continued funding (at current year levels) for GeoPowering the West. The Committee recommendation also includes $1,300,000 for the Geothermal and Renewable Energy Laboratory of Nevada; $500,000 to continue funding of operations at the Geo-Heat Center at Oregon Institute of Technology; and $500,000 for the Pyramid Lake Paiute Tribe Energy Project." The bill is currently in the full Appropriations Committee for markup. For more information.
  
  
• The House approved H.R. 2361, the 2006 Interior and Related Agencies Appropriations bill on 19 May 2005. The bill funds the Department of the Interior , the Bureau of Land Management, and programs related to geothermal energy. Of particular note was the decision to increase funding of the U.S. Geological Survey for energy and mineral resource assessment by $30 million.No specific information was available on funds budgeted or appropriated for BLM's geothermal program. The Senate Committee on Appropriations approved the bill on 9 June 2005. It is now in the full Senate. For more information
  
  
• The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies fully restored funding for Section 9006, the Renewable Energy and Energy Efficiency Program, to $23 million for FY06 on 16 May 2005. The Administration’s FY06 request for the program was $10 million. The Senate Appropriations Committee also funded Section 9006 at $23 million when they approved unanimously H.R. 2744, the FY06 Department of Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations bill on 23 June 2005. For more information.

For more information on these and other legislative issues related to geothermal development: GEA Update.

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In Memory of  Richard "Dick" Burdette

Richard "Dick" Burdette, Jr., Energy Advisor to Nevada Governor Kenny Guinn and a key proponent for geothermal energy, passed away on Wednesday, 27 April 2005. He was 61. Dick was born 25 October 1943 in Philadelphia. He grew up in Piqua, Ohio till 1958 when the family moved to Scottsdale, Arizona. He attended Scottsdale High School where he was student body president and valedictorian. After graduation in 1961, he was accepted by the United States Naval Academy in Annapolis, Maryland. While at the Naval Academy, Dick sang in the choir and played football for Navy.
Dick Burdette (1943-2005)	Upon completion of his degree from Annapolis in 1965, Dick was stationed on the nuclear attack submarine the USS Guardfish. He later became both an administrator and teacher at the Naval Nuclear Power School. He then earned an M.A. in Quantitative Economics from the University of Delaware. Dick worked in the field of energy and transportation for many years. He was a legislative assistant in the U.S. Senate, deputy assistant secretary in the U.S. Department of Transportation, and most recently, energy advisor to Governor Guinn.
Dick was always interested in the mysteries and opportunities of the world around him. He brought smiles and laughter to those who knew and loved him and enjoyed life to the fullest. Music was one of his loves and he sang in choirs wherever he went, most recently in Carson City's Chamber Singers. He will be greatly missed by us all. Donations may be made in Dick's name to the American Red Cross, 1190 Corporate Boulevard, Reno, NV 89502-2330. The Reno Gazette-Journal

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DOE issues Enhanced Geothermal Systems solicitation

The Department of Energy (DOE) is seeking proposals for studies in the general area of fracture characterization and analysis in high-temperature (>150°C) environments typical of the Basin and Range tectonic province. Specific task areas of interest include:

1. Remote determination of fractures - Locate fractures which have no detectable surface manifestation.
   
   
2. Fracture mapping - Determine the size and orientation of single fractures or fracture systems at depth.
   
   
3. Fracture formation and growth - Study geological/geochemical/tectonic factors, such as lithology, rock fabric, and in situ stress that govern the fracturing process. Provide the means to measure the growth of fractures.
   
   
4. Fracture evolution - Analyze the transient behavior (life cycle) of fractures and fracture systems in a variety of tectonic environments and saturation conditions.
   
   
5. Fracture permeability - Formulate an understanding of how fluids flow through rock. Develop novel means to reliably measure and monitor the flow of fluids in fracture systems and determine variations in flow capacity over time.
   
   
6. Fracture stimulation - Perform fundamental studies of processes and procedures designed to enhance fracture permeability and maximize flow through a volume of fractured rock, considering the effects of the in situ stress field, the induced stress field, pre-existing fractures and fluid chemistry. Develop techniques to enhance natural fracture permeability between a production and injection well while minimizing the risk of short circuiting.

Since subject areas overlap, proposals will be accepted that incorporate more than one area of interest. A preference will be given to applications in task areas with higher importance.

Applicants are encouraged to develop multidisciplinary project teams that include a combination of universities, industry, and other profit/non-profit entities.

The maximum amount for an individual project supported by this announcement is $160,000. Cost share of at least 20% is required from awardees. Approximately $3 million is expected to be available for new grant awards under this announcement.

Applications are due 14 July 2005 .

For more information .

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WGA Geothermal Task Force seeks cogent, cost-effective recommendations

In response to the Western Governors' Association's (WGA) resolution calling for the development of 30,000 MW of clean energy resources by 2015, the Geothermal Task Force will provide recommendations to the Governors through their Clean and Diversified Energy Advisory Committee (CDEAC). As it develops its recommendations, the Geothermnal Task Force is seeking cogent, cost-effective input from all stakeholders on how geothermal can contribute to this goal.

In part, the Task Force has been asked to examine: "What new policies are needed in the near-term, mid-term, long-term to accelerate development of the resource so that the resource can contribute to goal of 30,000 MW and 20% efficiency improvement?" Towards this end, the Geothermal Energy Association (GEA) has designed a survey to gather information about the barriers to geothermal development. Your response to this questionnaire will assist the Geothermal Task Force in forging effective policies and actions to promote new geothermal development in the West. To complete the survey .

The Geothermal Task Force's final report is expected in September 2005.

For more information.

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National News

• Douglas L. Faulkner has been named DOE Acting Assistant Secretary for Energy Efficiency and Renewable Energy (EERE) following the confirmation of David K. Garman as Under Secretary of Energy for Energy, Science and Environment. Mr. Faulkner has served as Principal Deputy Assistant Secretary in DOE’s EERE Office since 29 June 2001. In his over 25-year career in the federal government, Mr. Faulkner has served in a number of assignments at the Central Intelligence Agency and DOE, including as senior policy advisor to Secretaries Admiral Watkins and Abraham.
  
  
• DOE announced on 14 June 2005 that it is making nearly $2.5 million available to 18 Native American tribes to advance the use of renewable energy and energy efficient technologies on tribal lands. Three of the projects selected are for geothermal: (1) Citizen Potawatomi Nation - Fire Lake Hybrid Geothermal Heat Pump Demonstration - DOE funding: $240,000, Cost share: $210,410; (2) Confederated Tribes of Warm Springs - Feasibility Study for Geothermal Energy Power Development - DOE funding: $219,497, Cost share: $32,524; and (3) Fort Bidwell Tribe - Geothermal Direct Use Feasibility Study - DOE funding: $130,492 , Cost share: $9,014. For more information.
  
  
• DOE's EERE Office has opened a new portal to web-based state information. Called "EERE State Activities & Partnerships," the new website organizes links to hundreds of state-specific webpages published by EERE and its technology development programs, including such information as DOE grants to the states, resource maps, project databases, and contacts. The new portal also includes the latest state energy news, publications, and statistics.
  
  
• The Federal Energy Regulatory Commission (FERC) issued standard procedures on 12 May 2005 (18 CFR Part 35) for interconnecting small power generating equipment to power grids. The new procedures are meant to reduce the uncertainty, time, and costs associated with connecting systems to the grid that have generating capacities of 20 MW or less. Effective 12 July 2005, the final rule directs public utilities to offer non-discriminatory, standardized interconnection service for small generators and to provide them technical procedures for connecting to the grid. For more information.
  
  
• The Geothermal Valuation Subcommittee of the Minerals Management Service's (MMS) Royalty Policy Committee (RPC) has issued its report. According to the May 2005 Geothermal Valuation Subcommittee Report, "The Subcommittee recommends that for direct use and electrical generation operations, MMS should implement new valuation regulations to address the valuation of geothermal resources under non-arm's length and no sales situations." The MMS Royalty Advisory Committee has endorsed the recommendations of the Geothermal Subcommittee. The Geothermal Subcommittee was created by the Royalty Policy Committee of MMS in October 2004. For more information, email Pat Etchart, MMS, at patrick.etchart@mms.gov .
  
  
• The Small Business Administration (SBA) in partnership with the Thomson Corporation (Ed2Go) will offer new, online instructor-taught classes for small business owners. Small businesses and entrepreneurs can enroll in three of Ed2Go’s most popular online educational courses at no cost: Creating a Successful Business Plan, Customer Service Fundamental, and Creating Web Pages. Each online course will be six weeks in length, and will be facilitated by an instructor. The courses will begin 15 June, 20 July, 17 August, and 21 September. For more information.
  
  
• In a 26 May 2005 letter to the Senate Finance Committee, the WGA "strongly support a long-term extension of the Production Tax Credit for wind, solar, geothermal, and biomass technologies." The letter was signed by Governors Arnold Schwarzenegger (CA), Bill Richardson (NM), John Hoeven (ND), and Dave Freudenthal (WY).
  
  
• The Western Renewable Energy Generation Information System (WREGIS) is inviting stakeholders to become members of WREGIS' Stakeholder Advisory Committee (SAC). WREGIS is an independent, voluntary renewable energy generation tracking and registry system being developed by the WGA and the California Energy Commission to facilitate a credible market for renewable energy certificates. The WREGIS Working Group (WREGIS WG) listserve will serve as the primary method of communication to all stakeholders interested in becoming SAC members. To join the list-serve, go to: http://groups.yahoo.com/group/WREGIS-WG/join or send an e-mail to WREGIS-WG-subscribe@yahoogroups.com .
  
  
• Mayors attending the 73rd Annual U.S. Conference of Mayors held 10-14 June 2005 in Chicago, Illinois adopted a joint resolution calling upon Congress to recognize the economic importance to the nation’s communities of federal programs that encourage and support energy efficiency, energy conservation, renewable energy, and “green building." The U.S. Conference of Mayors went on to urge Congress to ensure that any final energy legislation includes strong federal support and federal funding to energy conservation, energy efficiency, renewable energy, and “green building" practices at the local level.
  
  
• The National Conference of State Legislatures (NCSL) will issue four publications on geothermal issues in the near future. They are titled: (1) Constitutional or Statutory Authority to Engage in Geothermal District Energy Development and Operation, (2) Geothermal Leasing, (3) State Regulation of Geothermal District Energy Systems, and (4) Geothermal Policy. When issued, the publications will be available at the NCSL online bookstore.
  
  
• On 24 May 2005, MidAmerican Energy Holdings Company announced that it had reached a definitive agreement with ScottishPower to acquire its subsidiary, PacifiCorp, and create an energy holding company serving approximately 3 million electric and natural gas customers in 10 contiguous states and 6.6 million customers worldwide. The transaction has a value of approximately $9.4 billion. PacifiCorp will operate under its current name and will continue to be headquartered in Portland. It will continue operating as Pacific Power in Oregon, Wyoming, Washington, and northern California, and as Utah Power in Utah and Idaho. CalEnergy Generation is a subsidiary of MidAmerican. For more information.
  
  
• An updated analysis conducted by the American Council for an Energy-Efficient Economy (ACEEE) shows how policy initiatives to increase investment in energy efficiency and renewable energy would reduce natural gas prices. Published in April 2005, "Impacts of Energy Efficiency and Renewable Energy on Natural Gas Markets: Updated and Expanded Analysis" found that increased energy efficiency and renewable energy measures would decrease natural gas prices by $2.05 per Mcf, or 37%, in the first year, with the price effect diminishing to $1.19 per Mcf or 20% by 2010, when natural gas markets are forecast to come into better balance. ACEEE's model founds that in the initial five years, energy efficiency produces most of the benefits with renewables becoming the dominant incremental effect in the final years of the study.
  
  
• The Organization for Economic Co-operation and Development (OECD), representing 30 developed countries announced in May 2005 that 27 of its member countries, including the United States, have agreed to special financing terms for renewable energy and water projects in developing countries. The agreement allows extended repayment terms of 15 years for those projects—compared to 12-year terms for conventional power projects—under a two-year trial period that begins on 1 July 2005. The renewable energies covered by the agreement include wind, geothermal, ocean, solar, and biomass. For more information.
  
  
• The Vienna, Austria-based Renewable Energy and Energy Efficiency Partnership (REEEP) has announced just over $1 million in funding for 18 clean energy projects in Africa, Asia, North America, Latin America, and Europe. The projects range from blueprints for national renewable energy policies to support for clean energy funds. Half focus on establishing policy and regulatory models; half on new financing techniques. Two-thirds of the projects are in the renewable energy sector. One of the 18 projects being funded is the Western Governors’ Association Clean and Diversified Energy Advisory Committee Recommendations Report. For more information.
  
  In addition, REEEP is financing the world’s first comprehensive database of every renewable energy law currently in force. REEEP is a public-private partnership launched at the Johannesburg World Summit on Sustainable Development in August 2002. It is funded by the governments of Austria, Canada, Ireland, Italy, Netherlands, Spain, United Kingdom, United States, and the European Union.

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State Roundup

Alaska

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American Samoa

No news.

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Arizona

• After more than a year of studies and workshops, the Arizona Corporation Commission is considering changes to an "environmental portfolio standard" that requires electricity utilities regulated by the commission to get 1.1% of their power from solar or other renewable energy sources. Under the proposal, the new minimum would be 5% by 2015 and 15% by 2023, with at least 20% of the required power coming from solar. The changes also would increase monthly surcharges paid by customers. The surcharges are intended to let utilities recoup the higher costs of producing renewable energy. Members of the all-Republican commission acknowledged the change will cost consumers but say the mandate is in the public's long-term interest (Source: "Arizona moves toward requiring more solar energy from utilities" by Paul Davenport, North County Times, 1 June 2005).

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California

• In late June, 2005, the California Energy Commission (CEC) expects to announce a new Geothermal Resources Development Account (GRDA) solicitation to promote the development of new or existing geothermal resources and technologies. Up to $3.9 million will be awarded in grants and loans. Eligible projects include geothermal research, resource development, demonstration, commercialization, planning, environmental enhancement, and impact mitigation. Projects must be located in California or sponsored by a California-based company.
  
  Detailed information may be obtained by requesting a copy of the Program Opportunity Notice (Geothermal Program, California Energy Commission, Energy Generation Research Office, 1516 Ninth Street, MS-43, Sacramento, CA 95814-5512), or by visiting the CEC Geothermal Program website, where the Program Opportunity Notice will be posted when it is released.
  
  
• According to a staff report issued by the California Energy Commission, "an estimated 2,862 MW of generating capacity from geothermal may be available for development" in the state. The report drew on the geothermal resource assessment of California and western Nevada conducted by GeothermEx, Inc. Both "California Geothermal Resources" by Elaine Sison-Lebrilla and Valentino Tiangco (CEC-500-2005-070), as well as "New Geothermal Site Identification And Qualification," the Final Project Report for the Public Interest Energy Research (PIER) Program California Energy Commission (CEC P500-04-051) are available in PDF format.
  
  According to the U.S. Geological Survey's Assessment of geothermal resources of the United States (Circular 790, 1978), California has an identified geothermal potential of 12,206 MWe for electricity generation.
  
  
• Calpine Corporation announced on 25 May 2005 an aggressive strategic initiative to dramatically enhance the company's financial strength. The program is targeting accelerated debt reduction of more than $3 billion by the end of 2005, $275 million of annual interest savings, and approximately $200 million in annual operating cost reductions. It is designed to improve the value of Calpine's core power plant assets and strengthen its balance sheet, "...positioning Calpine to best capture the strong cash and earnings potential of our efficient, gas-fired and renewable, geothermal power fleet," according to Calpine Chairman, President, and CEO Peter Cartwright. For more information.
  
  
• In early May, Ormat Technologies Inc. completed negotiations for two new 25-year Power Purchase Agreements (PPA) with Southern California Public Power Authority (SCPPA) for the purchase of renewable energy from its geothermal projects at the Ormesa Geothermal Facilities and Heber Geothermal Facilities Complexes.
  
  Under both energy-only PPAs, 10 MW will be delivered at a fixed price of $57.50/MWh with an annual escalation of 1.5%. In addition, 30% of the Production Tax Credits if and when available, will be shared with the power purchasers. Deliveries under the Ormesa PPA are expected to start in the fourth quarter of 2006, and by the end of 2005 under the Heber PPA.
  
  
  Ormat broke ground on a new geothermal power plant within the Heber Geothermal Facilities Complex on 2 May 2005. The new plant is dedicated to William R. Gould, who served as the Chairman of Southern California Edison from 1980 through 1984, and was a driving force behind much of California's renewable energy programs. The new 10-MW plant is part of an 18-MW enhancement at the Heber Geothermal Facilities Complex. For more information.
  
  
• Glendale Water & Power (GWP) recently announced its new Power Sales Agreement with the Southern California Public Power Authority (SCPPA) to purchase up to 3 MW from the Ormat Geothermal Energy Projects. This investment will provide GWP with approximately 25 GWh a year of renewable energy for resale to its customers. Said Ned Bassin, Power Management Administrator, "The Ormat Project will go a long way toward helping us meet our goal of 20% renewables as a percent of retail sales by 2017." Twenty-five gigawatt hours is equal to 2% of GWP's 2004 retail energy sales. For more information.
  
  
• Governor Arnold Schwarzenegger announced greenhouse gas (GHG) emission reduction targets for California at the United Nations World Environment Day in San Francisco on 1 June 2005. The Governor signed Executive Order S-3-05 which establishes GHG targets and charges the California Environmental Protection Agency secretary with coordinating efforts to achieve them. For more information.
  
  On 12 May 2005, Governor Schwarzenegger submitted an energy reorganization proposal to the Little Hoover Commission. The plan would streamline state energy functions and establish a Cabinet-level energy department. Under the plan, the California Energy Commission and the Electricity Oversight Board will be part of the proposed Department of Energy. For more information.
  
  
• On 24 May 2005, San Francisco Board of Supervisors Jake McGoldrick and Ross Mirkarimi presented an amendment to the existing Payroll Expense Tax Ordinance which would establish a tax exclusion for qualified renewable energy businesses. The Payroll Expense Tax Exclusion for Qualified Renewable Energy Businesses (File Number 050922) would allow renewable-energy companies with 10 or more employees to be exempt from The City's business tax for 10 years or from the date the company relocates to San Francisco. The tax credit would have a window of 15 years. Mayor Gavin Newsom is said to support the idea of a tax credit for renewable-energy businesses (Source: "City weighs tax breaks for renewable-energy companies - Supervisor's plan would be first of its kind in U.S." by Justin Jouvenal, San Francisco Examiner, 25 May 2005).
  
  
• The Board of Water and Power Commissioners for the Los Angeles Department of Water and Power (LADWP) approved a policy on 23 May 2005 that sets a goal of increasing LADWP’s supply of energy from renewable resources to 20% by 2017, with an interim goal of 13% by 2010. The goals would be measured by the amount of electric energy sales to retail customers. LADWP will study the need for a renewable energy surcharge to meet the RPS goals. LADWP is in discussions with renewable resource providers that made a “short list" of proposals, including geothermal, that were submitted under the RPS June 2004 request for proposals. For more information.
  
  
• On 9 May 2005 at 3:37 p.m., a magnitude 4.4 earthquake shook The Geysers. "This is one of the largest in The Geysers' recorded history," said Charles Watson, chief geologist with Seismo-Watch, which tracks and maps earthquakes for The Press Democrat. Watson said Monday's quake had "strike flip," or sideways movement, more indicative of a typical quake. "This is a real earthquake rather than a geothermal quake," he said. Lake and Sonoma County sheriff's and emergency dispatchers reported no calls or reports of damage or injuries (Source: "Magnitude 4.4 quake hits The Geysers" by Randi Rossmann, The Press Democrat, 10 May 2005).
  
  
• Southern California Edison Co. asked the California Public Utilities Commission in April 2005 to approve construction of a 230-mile transmission line between California and Arizona that would provide California with an additional 1,200 MW of low-cost electricity. In approving the Devers-Palo Verde2 project, the California Independent Systems Operator determined that most years it would save ratepayers on its grid an average of $84 million in lower cost electricity, even after factoring in the $680 million cost of construction. The new transmission line, which Edison hopes to have operating by the summer of 2009, must also be approved by the Arizona Corporation Commission and the Bureau of Land Management (Source: "Scarcity worries Edison" by Leslie Berkman, The Press-Enterprise, 12 April 2005).

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Colorado

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Hawai'i

• Ormat Technologies, Inc. announced on 30 June 2005 that its subsidiary, Puna Geothermal Venture (PGV), completed the re-drilling of an existing production well at the Puna Geothermal Project on the Big Island. The well re-drilling increased net generating capacity of the power plant by approximately 4 MW, bringing total net generating capacity to approximately 29 MW.

  The re-drilling is part of an approximately $15 million existing enhancement program at Puna under which two additional wells are expected to be drilled. This plan is intended to increase the available geothermal fluid, and enable the plant to generate approximately 30 MW. Completion of this program is expected by the end of the year. The additional power will be sold to the Hawai'i Electric Light Company (HELCO), mainly during peak hours, under an existing power purchase agreement. For more information.

  PGV completed refinancing the Puna Geothermal Project on 19 May 2005. Ormat financed PGV through two leases. PGV will lease its geothermal power plant to an unrelated company under a 31-year Head Lease, securing the investment with its rights to the geothermal resource and the power purchase agreement. PGV will simultaneously lease-back the Puna facilities from the Lessor under a 23-year Project Lease. A secondary stage of the lease transaction is intended to re-finance two new geothermal wells that PGV plans to drill this year. The transaction is non-recourse to Ormat Technologies which acquired PGV in June 2004. For more information.

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Idaho

• 
  
  U.S. Geothermal Inc. on 27 June 2005, announced that it has signed a service agreement for firm, point-to-point power transmission with the Bonneville Power Administration Transmission Business Line. The agreement guarantees up to 12 MW of electrical transmission capacity, an amount that accommodates the planned power production from phase one of the Raft River project. For more information.
  
  On 17 June 2005, U.S. Geothermal announced that it has entered into an agreement with Lockwood Greene E&C Inc., a subsidiary of CH2M Hill, to provide project construction management services for the phase one construction of a 10 MW geothermal power project at Raft River Idaho. For more information.
  
  In May 2005, U.S. Geothermal Inc. entered into two additional 10 MW Power Sales Agreements (PSAs) with Idaho Power Company for the electrical output from the second phase of the Raft River Geothermal Power Project. The phase two power plants are scheduled to begin power generation in December 2008. U.S. Geothermal will receive $53.90 per MW initially with an annual escalation of 2.3 % to a maximum of $85.04 per MW. The PSAs will be submitted to the Idaho Public Utilities Commission for final approval. U.S. Geothermal retains ownership of any renewable energy credits and intends to market them separately, which could significantly enhance the profitability of the project. For more information.
  
  
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  A new eight-page report, “Preliminary Feasibility Study for Potential Use of Geothermal Heat at Zoo Boise," shows that using geothermal in new exhibits tied to the City of Boise’s primary geothermal pipeline is worthy of additional study. Depending on the type of system chosen and other factors, expanded use of the city’s system could pay for itself in less than 10 years. Actual costs would depend on the type of system selected, such as a forced air or a radiant system, and the length and type of extension needed. The June 2005 report was written by the Geo-Heat Center, Oregon Institute of Technology, for the Idaho Energy Division.
  
  
• Idaho Redclaw Farms, LLC, has been building its business at the Raft River location since 2004. As of May, 2005, Idaho Redclaw had a few hundred crayfish in the brood stock, 600-700 maturing individuals, and a few thousand crayfish babies. Each crayfish will produce about one-quarter to one-third pound of edible meat. Marketing of the final product has not yet begun. Eventually, Idaho Redclaw plans to operate as a cascading application downstream of the new power plant at Raft River. Owner Neil Smeltzer is currently seeking investors to help him realize his company’s goals.
  
  
• The Idaho Department of Water Resources (IDWR) plans to contract with the University of Idaho 's Department of Agricultural Economics and Rural Sociology to conduct an economic impact analysis on the Willow Springs geothermal power generation prospect in southeastern Idaho . Idatherm, LLC. is planning to explore for high temperature geothermal resources along the Bingham and Bonneville county lines where a petroleum test well drilled in 1978 encountered over 400°F water at a depth of over 13,000 feet. Since the Willow Creek prospect is truly a wildcat venture, the economic impact analyses will include exploration costs, as well as costs for plant construction and operation. Owner Carl Austin is hopeful that the prospect will prove up resources for a 100 MW power plant, and is seeking investors.
  
  
• Washington and Valley counties may host geothermal outreach events this summer. In southern Washington County, three geothermal locations within 15 miles of Weiser have potential for both power generation and direct use. Ken Neely of IDWR made a brief geothermal overview presentation to the Washington County Economic Development Commission in March. Businesses at two of the locations near Weiser have recently expressed an interest. In Valley County , IDWR and the City of Cascade are planning a geothermal outreach event in late July.
  
  
• In late April 2005, the Idaho Public Utilities Commission approved an application by PacifiCorp to allow its larger customers to buy renewable energy in bulk at a reduced rate. Under the bulk option, customers who enroll for at least a year and purchase more than 100 1-MWh blocks of renewable energy will pay 70¢ for every block. PacifiCorp currently offers the bulk-purchase option to customers in Oregon and Utah, and recently received approval to offer it in Wyoming and Washington. For more information

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Kansas

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Montana

• Three Montana State University (MSU) engineering students recently examined ways for the Sleeping Buffalo Resort to use renewable energy resources to cut its annual $50,000 power bill. Located on Montana's Hi-Line, the resort features two hot-springs mineral pools, lodging, dining, and recreation. The MSU students examined the aging well and found that, although water emerges at 106°F, the well leaks. The students recommended using geothermal energy to provide space heating, either using a forced air radiator, convection, or in-floor radiant heating (Source: Waking a sleeping buffalo: "MSU students explore renewable energy on the Hi-Line" by Jean Arthur, Bozeman Daily Chronicle, 31 May 2005).
  

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Nebraska

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Nevada

• In a special session held on 7 June 2005, the Nevada State Legislature adopted Assembly Bill 03, a wide-reaching energy bill designed to encourage conservation and boost the usage of renewable energy by the state's utilities. The bill increases electric utilities' minimum renewables requirement to 20% by 2015 from 15% by 2013 under a 2001 bill. The bill also eliminates taxes for renewable energy systems, while allowing Nevada Power Company and Sierra Power Company to obtain energy credits from their conservation efforts for potential use in complying with state renewable requirements. The bill is expected to be signed into law by Governor Kenny Guinn. For more information.
  
  
• Nevada Geothermal Power Inc. (NGP) announced the beginning of its resource expansion program aimed at increasing the resources base at Blue Mountain by exploring for the deeper-hotter resource in June 2005. At the same time, the Company is continuing plans to develop the 30 MW moderate-temperature resource.
  

An 14 April 2005 report by Susan Petty, P.E. of thermal water chemistry from flow test results at DB-2 "confirms an earlier finding by Thermochem (February 19, 2004) which indicates a likely reservoir temperature of 250°C (480°F)."

Also in June 2005, NGP reported that exploration work at the Pumpernickel Geothermal Project (5710 acres/8.92 square miles) is underway.

In Phase I – 3D “E-SCAN"resistivity survey methods will be utilized to map the deep geothermal source waters feeding surface hot springs. Results are expected in four weeks. Subsequently a series of six 250-meter (820-foot) gradient wells will be drilled to test the interpretation of the E-SCAN survey.


• Nevada environmentalists are creating a coalition across the Great Basin to ensure a proposed 1,300-mile electric transmission line reserves space for renewable energy. Without specific guarantees for renewable-energy sources, the Progressive Leadership Alliance of Nevada (PLAN), which includes Citizen Alert and other groups, fears that the new power line will result in more coal-fired power plants in the West. The $3-billion Frontier Line project, which would run from Wyoming coal fields across Nevada to Southern California, is expected to save Californians $325-$400 million a year on their electric bills. The plan agreed to by the governors of California, Nevada, Wyoming, and Utah in April calls for half of the energy to come from renewable sources (Source: "Groups push renewable energy for power line project - Coalition says current plans inadequate" by Susan Voyles, Reno Gazette-Journal, 22 May 2005).
  
  
• Ormat Funding Corp. (OFC) , a wholly-owned subsidiary of Nevada-based Ormat Technologies, Inc., launched a new website in May 2005. OFC was formed to develop, construct, own, and acquire through certain direct and indirect subsidiaries geothermal power projects in the United States. Founded in 2001, the Company currently wholly-owns four geothermal power projects and a 50% interest in a fifth geothermal power project.
  
  
• The following information is provided courtesy of the Nevada Oil Reporter. For more information on BLM leases in Nevada, see the website: http://www.blm.gov/lr2000 (Source: Nevada Geothermal Update, March 2005).
  
  

  Non-Competitive Geothermal BLM Lease Applications, Pending:
  Kingzett, James M.	Hazen, Churchill Co. (4)
  Recent Geothermal BLM Leases Issued:
  None
  Competitive Sale Geothermal Lease Applications Dropped:
  None

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Wyoming

For further information on geothermal activities in Wyoming, contact: Ed Werner Business Development Director, Converse Area New Development Organization Tel: (307) 358-2000 Email: ewerner@candowyoming.com

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