version 2011 geothermal information request

PUBLIC VERSION

2011 GEOTHERMAL INFORMATION REQUEST

Evaluation of Responses

B&V PROJECT NO. 174209

PREPARED FOR

PacifiCorp

16 APRIL 2012

®

®

©Black & Veatch Holding Company 2011. A

ll rights reserved.

PacifiCorp | 2011 GEOTHERMAL INFORMATION REQUEST (PUBLIC VERSION)

BLACK & VEATCH | Table of Contents i

Table of Contents 1.0 Executive Summary ............................................................................................................................ 11

1.1 Review Procedure ................................................................................................................................ 1‐2 1.2 Recommendations ............................................................................................................................... 1‐2

2.0 Introduction .......................................................................................................................................... 21 2.1 Objectives ................................................................................................................................................ 2‐1 2.2 Approach ................................................................................................................................................. 2‐1

3.0 Document Development and Scoring Approach ...................................................................... 31 3.1 GIR Document Development ........................................................................................................... 3‐1 3.2 Evaluation Approach .......................................................................................................................... 3‐1

4.0 Summary of Responses ..................................................................................................................... 41 4.1 AltaRock Energy, Inc – Buck Mountain ....................................................................................... 4‐3 4.2 Altarock Energy, Inc. – Mount St. Helens North ...................................................................... 4‐3 4.3 Altarock Energy, Inc. – Mount St. Helens Southeast .............................................................. 4‐3 4.4 Caldera Geothermal, Inc. – McGee Mountain ............................................................................ 4‐4 4.5 Caldera Geothermal, Inc. – Teels Marsh ..................................................................................... 4‐4 4.6 Davenport Newberry Holdings LLC ............................................................................................. 4‐4 4.7 Eureka Green Systems LLC .............................................................................................................. 4‐4 4.8 Gradient Resources, Inc ..................................................................................................................... 4‐5 4.9 Ida‐Therm LLC ...................................................................................................................................... 4‐5 4.10 Oski Energy LLC .................................................................................................................................... 4‐5 4.11 Standard Steam Trust – Marys River ........................................................................................... 4‐5 4.12 Standard Steam Trust – Marys River Southwest .................................................................... 4‐6 4.13 Standard Steam Trust – Newdale .................................................................................................. 4‐6 4.14 Standard Steam Trust – Parma....................................................................................................... 4‐6 4.15 Surprise Valley Hot Springs ............................................................................................................. 4‐6 4.16 Western Energy Resources .............................................................................................................. 4‐7

5.0 Recommendations .............................................................................................................................. 51 Appendix A: GIR Response Document ............................................................................................................ 1


BLACK & VEATCH | Table of Contents ii

LIST OF TABLES Table 1‐1 Summary of GIR Responses ............................................................................................................. 1‐1 Table 1‐2 Projects Identified for Further Investigation ........................................................................... 1‐2 Table 4‐1 Summary of GIR Responses ............................................................................................................. 4‐1 Table 5‐1 Projects Identified for Further Investigation ........................................................................... 5‐1

LIST OF FIGURES Figure 4‐1 Proposed GIR Project Locations .................................................................................................... 4‐2


BLACK & VEATCH | Executive Summary 1‐1

1.0 Executive Summary PacifiCorp has an interest in increasing the amount of geothermal energy sources in its

generation portfolio and is currently investigating a wide range of opportunities. An All Source

Request for Proposals (RFP) has recently been released to solicit bids from mature projects that are developed sufficiently to enter into a Power Purchase Agreement (PPA). As a way to identify

promising early stage development opportunities that are less mature than those ready to enter

into a PPA, PacifiCorp issued a Geothermal Information Request (GIR) in late 2011. Respondents to the GIR and RFP are mutually exclusive groups; this report documents the GIR process.

The GIR was open from October 5, 2011 through October 31, 2011. Information on 16

projects was received from 10 respondents. The proposed projects represent a range of different early stage development phases (defined in Section 3 of this report).

Table 1‐1 summarizes the GIR responses that were received.

Black & Veatch and GeothermEx provided an independent review of the responses to the GIR. This document provides the results of the reviews.

Table 1‐1 Summary of GIR Responses

PROJECT DEVELOPER LOCATION SIZE (MW)

DEV’T PHASE

RESOURCE TYPE

Buck Mountain AltaRock Energy, Inc Klamath Falls, OR 10‐60 0 Dual Flash EGS

Mt St. Helens N AltaRock Energy, Inc Soda Springs, WA 10‐60 0 Dual Flash EGS

Mt St. Helens SE AltaRock Energy, Inc Marble Mtn., WA 10‐60 0 Dual Flash EGS

McGee Mtn. Caldera Geothermal, Inc Humboldt Co., NV Undef. 1 Not Specified,

Likely Binary

Teels Marsh Caldera Geothermal, Inc Mineral Co., NV Undef. 0 Binary

Newberry

Volcano

Davenport Newberry Deschutes Co., OR 15‐42 2 Likely Flash/

Binary EGS

Grays Lake Eureka Green Systems Grays Lake, ID 200 0 Binary or

Single Flash

Unspecified Gradient Resources Inc Various 15‐45 0 Binary and

Dual Flash

Renaissance Ida‐Therm LLC Honeyville, UT 100 1 Binary

Cove Fort Oski Energy LLC Cove Fort, UT 15 2 Binary (Kalina)

Marys River Standard Steam Trust Elko Co., NV 134 1 Binary

Marys River SW Standard Steam Trust Elko Co., NV 124 1 Binary

Newdale Standard Steam Trust Newdale, ID Undef. 1 Binary




DEV’T PHASE

RESOURCE TYPE

Parma Standard Steam Trust Parma, ID Undef. 0 Binary

Surprise Valley Surprise Valley Hot

Springs

Modoc Co., CA 2‐5 0 Binary

Wendel Western Energy

Resources

Wendel, CA 40 0 Not Specified

1.1 REVIEW PROCEDURE The project reviews occurred at the Black & Veatch and GeothermEx offices from November

4 until November 28, 2011. Each response was independently reviewed by three reviewers (two

from Black & Veatch and one from GeothermEx) and project features were compared and reconciled. The development phase of each project was determined based upon the amount of

testing, permitting and development that has been completed at each site. An overview of the main

evaluation criteria and phase identification guidelines can be seen in Section 3.

1.2 RECOMMENDATIONS Black & Veatch and GeothermEx reviewed the projects and recommended projects that

were the best matches to PacifiCorp’s development criteria. The two leading projects from each of the three development phases were selected for further consideration. This does not mean, however, that these are the only projects that should be considered viable for future development.

Table 1‐2 summarizes the projects recommended for further investigation.

Table 1‐2 Projects Identified for Further Investigation

PHASE DEVELOPER PROJECT LOCATION MW TYPE

2

Oski Energy Cove Fort Cove Fort, UT 15 Binary (Kalina)

Davenport Newberry Newberry

Volcano

Deschutes County,

OR 15 Likely Binary

/Flash EGS

1 Standard Steam Trust Newdale Newdale, ID Undef. Binary

Ida‐Therm Renaissance Honeyville, UT 100 Binary

0

AltaRock Energy Buck Mountain Klamath Falls, OR 10 Dual Flash EGS

Surprise Valley Surprise Valley

Hot Springs

Modoc County, CA 2‐5 Binary

It should be noted that each of the projects reviewed has development risks that are higher

than most projects that bid into a typical renewable energy PPA process. The review team focused



on recommending projects with good geothermal resource potential that had realistic expectations

for development timing, costs, and were located close to PacifiCorp transmission. Two projects were recommended that propose the use of enhanced geothermal systems

(EGS) technology which has not been commercially demonstrated in the US: AltaRock Buck

Mountain and Davenport Newberry. The resource at Buck Mountain may turn out to be suitable for a conventional binary system, making it lower risk than a project relying solely on the success of

EGS technology. Newberry Volcano is one of the most promising EGS systems in the US at this time

by virtue of its very high resource temperatures (>600°F). Other “Phase 0” projects that are not listed in

Table 1‐2 may have potential for consideration by PacifiCorp if additional projects are of

interest. AltaRock’s Mount St. Helens Southeast project has geothermal resource potential, but the review team was concerned about the pursuit of additional EGS projects due to the technology risk

and cost. Gradient’s proposed portfolio of projects may eventually be suitable for consideration,

but since so little information was provided on the location of the projects and because of the fact that Gradient has not secured leases, it was deemed prudent for PacifiCorp to defer consideration of

these opportunities until after additional development has progressed.


BLACK & VEATCH | Introduction 2‐1

2.0 Introduction PacifiCorp is one of the West’s largest utilities, serving approximately 1.7 million customers

in six states. PacifiCorp has an interest in increasing the amount of geothermal energy in its

generation portfolio. The company is currently investigating a wide range of geothermal resource opportunities including entering into option agreements on early stage development projects and

power purchase agreements (PPAs) with geothermal projects nearing completion. As a way to

investigate opportunities for early stage project involvement, PacifiCorp issued a Geothermal Information Request (GIR) on its website to solicit project information from geothermal developers.

The GIR was open from October 5, 2011 through October 31, 2011.

The GIR is completely separate from the All Source Request for Proposals (RFP) for electric generation facilities that PacifiCorp issued in the early part of 2012. The All Source RFP solicits

proposals for generation facilities that use eligible fuel sources, including geothermal resources.

The All Source RFP is for projects that can bid an executable resource by summer 2012, would be provided with a notice to proceed in approximately the second quarter of 2013, and would be

online by summer peak 2016. Companies that have a geothermal resource project that will likely

be submitted in response to the All Source RFP were cautioned not to submit information on those particular projects in response to the GIR.

2.1 OBJECTIVES The primary goal of this project was to obtain information on potential commercially viable

geothermal power generation resources that can provide power to the PacifiCorp service territory.

The information will be used by PacifiCorp for resource planning purposes. To support this

objective, a GIR was developed to:

Identify projects that PacifiCorp may consider as co‐developer or participant

Assist in structuring future formal Requests for Proposals (RFPs) for geothermal resources

Identify what types of commercial structures or resources are needed to facilitate development of geothermal resources

Assist both PacifiCorp and the regulatory agencies to identify the level of development and

viability of geothermal resource opportunities

Identify how to promote geothermal power development with reduced risk, while

maintaining a low cost for renewable energy delivered to PacifiCorp and its customers

2.2 APPROACH Black & Veatch and GeothermEx compiled a list of the most important items to be

considered when assessing the potential of a new geothermal prospect. These were consolidated

into a draft GIR response form that was reviewed with PacifiCorp. A set of evaluation criteria was

established in parallel with the response form to assure that all material needed to perform the


BLACK & VEATCH | Introduction 2‐2

assessment would be provided by the respondents. After further modifications, this GIR document

was published on PacifiCorp’s website. Black & Veatch and GeothermEx methodically assessed the strengths and weakness of each

response based on pre‐defined criteria and guidelines. The projects were weighted according to

relative importance of each criterion and were then compiled into one of four categories: Experience, Project, Economics, and Readiness. Projects with good geothermal resource potential

were recommended to PacifiCorp for further consideration. This does not mean, however, that

these are the only projects that should be considered viable for future development.


BLACK & VEATCH | Document Development and Scoring Approach 3‐1

3.0 Document Development and Scoring Approach

3.1 GIR DOCUMENT DEVELOPMENT Black & Veatch used experience gathered in developing previous utility RFIs and RFPs as

the basis for the GIR response document. Modifications to criteria used in other solicitations were applied to reflect the focus on geothermal resources and the early stage development status for the

projects that would likely be responding. For example, while detailed information on financing and

interconnection requirements are typical in utility PPA solicitations, data requests in these areas were deemphasized.

After completion of an initial draft, the GIR response document was provided to

GeothermEx for their review and comment. GeothermEx provided input on the technical aspect of the information request as a way to distinguish between projects and their development status.

The completed draft was then sent to PacifiCorp for review and final comment. After incorporation

of comments and discussion with PacifiCorp, the document was published on PacifiCorp’s website, with notification e‐mails sent to a list of potential respondents. This list was developed by

GeothermEx based on their database of known developers. Follow‐up calls were made by

PacifiCorp and Black & Veatch with this list of respondents. The GIR document can be seen in Appendix A.

3.2 EVALUATION APPROACH Prior to evaluating any proposal, the evaluation procedures, criteria, and guidelines were

established by the evaluation team. These were based on PacifiCorp GIR requirements and the review team’s experience in similar evaluation processes. The team collaborated with PacifiCorp to

refine the criteria. The goal was to identify all important aspects of the proposed projects that

would be necessary to consider and determine the weighting of each criterion. The criteria and guidelines were approved by PacifiCorp.

The main review criteria utilized during this process are outlined below.

Experience – This category measures how likely it is that the responding company can

actually execute the project based on previous experience. Factors include the company’s

experience developing and executing similar projects and the relevant experience of the project management team.

Project – This category measures the viability of the project and associated generating technology. Factors include the project feasibility and resource sufficiency to support the

proposed production.



Economics – This category measures factors affecting the financial viability of the project.

Factors such as price reasonableness and level of support required were evaluated for this category.

Readiness – This category measures how far along the development pathway the project has proceeded. Projects that have completed advanced development work would receive

the highest evaluations.

Each project was classified by its development phase, with scores for projects within similar

phases being grouped together. The Geothermal Energy Association (GEA) defines four phases of

geothermal energy project development1. Besides using the four development phases defined by GEA, in this report Black & Veatch identifies projects that do not meet the minimum Phase 1

threshold as “Phase 0” projects. PacifiCorp has an interest in investigating geothermal projects in

all stages of development. Below is a summary of the guidelines set forth by GEA for classifying project development

phases. Criteria are grouped by GEA into Resource Development, Transmission Development, and

External Development activities.

Phase I: Resource procurement and identification

Resource Development: for a project to be considered a Phase I project at least two of the following Resource Development criteria must be met.

Literature Survey Complete

Geologic Mapping Completed, Geophysical and Geochemical Sample Sites Identified Geochemical and geophysical surveys in progress

‐AND‐

Transmission Development: for a project to be considered a Phase I project all of the following Transmission Development criteria must be met.

Internal transmission analysis complete.

‐AND‐ External Development: for a project to be considered a Phase I project all of the following

criteria must be met.

Land or lease acquired Permitting process for exploration drilling (TGH and/or slimholes) underway

Phase II: Resource Exploration and Confirmation

Resource Development: for a project to be considered a Phase II project at least one of the

following Resource Development criteria must be met. Temperature Gradient Holes (TGH) Drilled

1 “New Geothermal Terms and Definitions: A Guide to Reporting Resource Development Progress and Results to the Geothermal Energy Association” GEA, November 2010, available at www.geo‐energy.org



Slim Hole Drilled

One Full Size Discovery Well Drilled ‐AND‐

Transmission Development: for a project to be considered a Phase II project at least one

of the following Transmission Development criteria must be met. Interconnection application submitted and queue position established

Transmission feasibility studies underway

‐AND‐ External Development: for a project to be considered a Phase II project one of the

following External to Resource Development criteria must be met.

Permit for Slim Hole Drilling Applied for or Approved Permit for Production Well Drilling Applied for or Approved

Phase III: Permitting and initial development

Resource Development: for a project to be considered a Phase III project at least two of

the following Resource Development criteria must be met.

At least one full size production well drilled and operational At least one full size injection well drilled and operational

Reservoir characterization completed and sustainable reservoir capacity determined

‐AND‐ Transmission Development: for a project to be considered a Phase III project at least two

of the following Transmission Development criteria must be met.

Interconnection feasibility study complete System impact study (SIS) underway or complete

Interconnection facility study underway

Transmission Service Request Submitted (if appropriate) ‐AND‐

External Development: for a project to be considered a Phase III project at least two of the

following External to Resource Development criteria must be met. Plant permit application complete or in process

Power purchase agreement secured or in negotiation

Financing secured, or being secured, for portion of project construction

Phase IV: Resource Production and Power Plant Construction

Resource Development: for a project to be considered a Phase IV project at least two of

the following Resource Development criteria must be met.

Plant equipment on order Plant construction underway

Production and injection drilling underway

‐AND‐



Transmission Development: for a project to be considered a Phase IV project the

Interconnection Agreement must be signed. If the transmission of power from the project to the end user requires point‐to‐point service through one or more utility networks then all of the below

criteria must be met for the project to be considered a Phase IV project.

Interconnection Agreement Signed Transmission System Service Request studies completed

‐AND‐

External Development: for a project to be considered a Phase IV project all of the following Resource Development criteria must be met.

Plant permit(s) approved

EPC contract signed PPA secured


BLACK & VEATCH | Summary of Responses 4‐1

4.0 Summary of Responses Responses were received to the GIR from 10 respondents, who submitted information on 16

different projects. Table 4‐1 summarizes the projects for which information was received.

Table 4‐1 Summary of GIR Responses


DEV’T PHASE

RESOURCE TYPE

Buck Mountain AltaRock Energy, Inc Klamath Falls, OR 10‐60 0 Dual Flash EGS

Mt St. Helens N AltaRock Energy, Inc Soda Springs, WA 10‐60 0 Dual Flash EGS

Mt St. Helens SE AltaRock Energy, Inc Marble Mtn., WA 10‐60 0 Dual Flash EGS

McGee Mtn. Caldera Geothermal, Inc Humboldt Co., NV Undef. 1 Not Specified,

Likely Binary

Teels Marsh Caldera Geothermal, Inc Mineral Co., NV Undef. 0 Binary

Newberry

Volcano

Davenport Newberry Deschutes Co., OR 15‐42 2 Likely Flash/

Binary EGS

Grays Lake Eureka Green Systems Grays Lake, ID 200 0 Binary or

Single Flash

Unspecified Gradient Resources Inc Various 15‐45 0 Binary and

Dual Flash

Renaissance Ida‐Therm LLC Honeyville, UT 100 1 Binary

Cove Fort Oski Energy LLC Cove Fort, UT 15 2 Binary (Kalina)

Marys River Standard Steam Trust Elko Co., NV 134 1 Binary

Marys River SW Standard Steam Trust Elko Co., NV 124 1 Binary

Newdale Standard Steam Trust Newdale, ID Undef. 1 Binary

Parma Standard Steam Trust Parma, ID Undef. 0 Binary

Surprise Valley Surprise Valley Hot

Springs

Modoc Co., CA 2‐5 0 Binary

Wendel Western Energy

Resources

Wendel, CA 40 0 Not Specified

A map of the location, size and development status for each project can be seen in Figure 4‐1 on the following page. Also provided on this map is information on known

geothermal regions from Idaho National Laboratory, boundaries of the PacifiCorp service territory,

and the location of major PacifiCorp transmission lines. Following Figure 4‐1 is a summary of each response, with basic information on each project and its

development status.



Figure 4‐1 Proposed GIR Project Locations



4.1 ALTAROCK ENERGY, INC – BUCK MOUNTAIN AltaRock Energy, Inc. (“AltaRock”) proposes a 10 MW demonstration dual flash

hydrothermal project near the John C Boyle reservoir, southwest of Klamath Falls, Oregon, on

Weyerhaeuser geothermal leases. In addition to the planned hydrothermal development, EGS

technology may be implemented to supplement the in situ permeability of the resource, as

required. The proposed interconnection point is on the PacifiCorp system four miles away, near John C Boyle dam which is scheduled for retirement.

The Klamath Falls area has some existing geothermal energy systems (mainly geothermal

heating) and is a known geothermal resource area. If EGS technology is successfully demonstrated, it would benefit the geothermal industry as a whole.

The project is at an early stage of exploration. Permits have been identified and potential

geothermal resources have been initially characterized, but this is based on such work as a literature search, field geology, geothermometry, remote sensing, and stress‐direction estimates.

4.2 ALTAROCK ENERGY, INC. – MOUNT ST. HELENS NORTH AltaRock proposes a 10 MW demonstration dual flash hydrothermal project north of Mount

St. Helens outside the National Monument on Weyerhaeuser surface and geothermal leases. Follow

on development could enlarge the project by up to 50 MW increments until the resource associated with the thermal anomaly is fully developed. Expansion of the project would continue using any

discovered hydrothermal resources until the limit of economic development is reached. Further

expansion would be done using EGS technology. The proposed interconnection point is through another utility (Lewis County PUD), 10 miles away.

The project is at an early stage of exploration. Permits have been identified and geothermal

resources have been initially characterized, based on preliminary assessment work such as a temperature‐gradient hole, geothermometry, structural mapping and earthquake swarms.

4.3 ALTAROCK ENERGY, INC. – MOUNT ST. HELENS SOUTHEAST AltaRock proposes a 10 MW dual flash hydrothermal project southeast of Mount St. Helens,

outside the National Monument area on Weyerhaeuser geothermal leases. This site may be able to

support a binary project based on initial resource assessment. A PacifiCorp substation is three

miles away, at Smith #1 Dam. If the demonstration size project is successful, expansion would develop the hydrothermal resource to the fullest possible extent. Expansion beyond any identified

hydrothermal resource would be through the use of EGS technology proprietary to AltaRock.

The project is at an early stage of exploration. Permits have been identified and geothermal resources have been initially characterized, based on a literature search, field geology,

geothermometry, temperature‐gradient holes, and stress‐direction estimates.



4.4 CALDERA GEOTHERMAL, INC. – MCGEE MOUNTAIN The McGee Mountain project area is located in Humboldt County, Nevada, about 20 miles

southwest from the community of Denio on the Oregon border. The project technology type and

size was not specified by the respondent. The total area of land and accompanying geothermal

leases at McGee Mountain is about 8,535 acres.

The project is at an early stage of development, but enough work has been done to categorize it as GEA Development Phase 1. Some permits have been identified and geothermal

resources have been characterized through geochemistry and temperature gradient wells. Permits

have been obtained for temperature gradient drilling.

4.5 CALDERA GEOTHERMAL, INC. – TEELS MARSH The Teels Marsh project area is located in Mineral County, Nevada, and was acquired by

Caldera Geothermal, Inc. (“Caldera”) in 2009. A binary plant of unspecified capacity is proposed. The area likely has potential for geothermal energy production as evidenced by the shallow

geoprobe investigations referenced by Caldera. This project is at a somewhat earlier stage of

development than Caldera’s other project, McGee Mountain. Moving the power to the PacifiCorp service territory would likely be more challenging than McGee Mountain due to its location in

southwest Nevada.

The project is at a very early stage of development. Geothermal resources have been characterized, but no test wells have been drilled. Caldera has geochemistry and two‐meter probe

data at the site.

4.6 DAVENPORT NEWBERRY HOLDINGS LLC Davenport Newberry Holdings LLC (“Davenport”) has leases on approximately 40,000 acres

of BLM land near Newberry Volcano in Oregon and is in the process of developing an EGS

demonstration project. This is an opportunity for participation in a high‐risk/high‐reward research

and development project to prove the commercial viability of EGS technology. The site is 14 miles from a Bonneville Power Administration substation at La Pine, near

Newberry Volcano National Monument. The project can be categorized as GEA Development Phase

2, making it one of the most advanced projects reviewed in this study. The respondent has secured leases for all required land. Geothermal resources have been characterized by the drilling of

several deep production/test wells. Considerable environmental work has been done, with

additional work in progress.

4.7 EUREKA GREEN SYSTEMS LLC Eureka Green Systems LLC, (“Eureka”) has leases on properties near Grays Lake, Idaho. A

binary or steam flash facility up to 200 MW of capacity has been proposed. The prospect can be categorized as very early stage. The resource is a blind geothermal system (no obvious surface

expression), with temperatures measured in a single oil and gas exploration well.



Limited initial project development has taken place other than securing the necessary site

leases. The site has almost five square miles under lease, with the sole resource data point from a previous oil and gas well close to the lease boundary.

4.8 GRADIENT RESOURCES, INC No detailed information available; site and project specifics to be determined.

4.9 IDA‐THERM LLC Ida‐Therm LLC (“Ida‐Therm”) has proposed a 100 MW binary project (Renaissance) to be

located near Honeyville, Utah. Limited project development activities have been accomplished to

date, though a discovery well has been drilled. Based on the work that has already been performed, it can be categorized as a GEA

Development Phase 1. The lease position appears solid. Permitting activities must be restarted

after failure of previously attempted development efforts at this site.

4.10 OSKI ENERGY LLC Oski Energy LLC (“Oski”) has proposed a binary (Kalina cycle) project near Cove Fort, UT.

Cove Fort is a GEA Development Phase 2 project, to be located on 3,600 acres of property with

resources estimated to support a 15 MW geothermal power plant. Most of the Oski lease position lies to the west of a thermal anomaly documented by

historical temperature gradient drilling. The proposed Kalina Cycle plant has one prior geothermal

application (Husevik, Iceland) and has not yet been successfully demonstrated in the US. The site is within five miles of a PacifiCorp substation.

The project is the most developed of all the submitted projects. Potential team partners

(major equipment suppliers, EPC contractor, etc.) have been contacted. State land use permits have been obtained and a NEPA review has been completed. A water appropriation application is still

pending from the Utah State Engineer.

4.11 STANDARD STEAM TRUST – MARYS RIVER Standard Steam Trust (“SST”) is proposing a 134 MW binary project to be located in Elko

County, Nevada. SST has leases on property which has been shown through surface features,

geochemistry, geophysics, and temperature gradient holes to have some resource potential based on GeothermEx estimates.

No confirmation of a transmission path from the nearby NV Energy line to PacifiCorp

service territory has been identified. There is no existing infrastructure in place, but the site benefits from no competition from offsetting development. Both Marys River projects are early

phase projects, although enough work has been performed to meet GEA Development Phase 1

criteria.



4.12 STANDARD STEAM TRUST – MARYS RIVER SOUTHWEST SST is proposing a 124 MW binary project to be located in Elko County, Nevada, on a

separate acreage block southwest of the Marys River site discussed above. SST has leases on

property which has been shown through surface features, geochemistry, geophysics, and

temperature gradient holes to have some resource potential based on GeothermEx estimates. The

Marys River projects can be categorized as GEA Development Phase 1.

4.13 STANDARD STEAM TRUST – NEWDALE SST has proposed a binary project of undefined size to be located near Newdale, Idaho. SST

has identified just over 13,000 acres of leased land that could be utilized for the Newdale project. A tie‐in substation has not been identified, but a PacifiCorp high‐voltage line runs close to the

property. A high proportion of the lease position (78 percent) is on private land.

As with the Marys River projects, the Newdale prospect is in the early development phase, although enough work has been performed to meet GEA Development Phase 1 criteria.

4.14 STANDARD STEAM TRUST – PARMA SST has proposed a binary project of undefined size to be located near Parma, Idaho. SST

has identified just over 27,000 acres of leased land that will be used for the Parma project, a binary plant. Legacy oil and gas wells from the 1970s indicate geothermal resources in the vicinity. SST

has performed a geophysical assessment to identify prospective drilling locations.

Measured resource temperatures in the high 300°F in a centrally located oil and gas exploration well (the Highland well) give some confidence that the resource has economic

potential. An Idaho Power Company transmission line runs through lease area, but the path to a

PacifiCorp substation is not yet identified. The leases comprise a relatively high proportion of BLM land (86 percent).

Parma is an early phase project, with a level of development falling below the threshold for

meeting GEA Phase 1 criteria. Project development has consisted primarily of lease acquisition.

4.15 SURPRISE VALLEY HOT SPRINGS Surprise Valley Hot Springs (“Surprise Valley”) has proposed a 2 to 5 MW binary cycle

project to be located on private land in Modoc County, California. The site is close to Surprise Valley Electric's transmission line. The land is privately owned, but there is some potential for wetlands

issues during development.

An existing shallow artesian well is onsite that could be used for production; besides this well, little other development work has been done. No interconnection or major equipment

procurement work has been undertaken. A literature survey and some resource evaluation have

been performed. The site is small, roughly 500 acres, but the respondent has complete control of the site. This project is classified as Development Phase 0.



4.16 WESTERN ENERGY RESOURCES The property proposed for future development by Western Energy Resources (“Western”)

is located in Wendel, CA (20 miles east of Susanville). The site is immediately adjacent to the

Wineagle geothermal plant (currently operated by Oski with a capacity of under 1 MW), and it is

also adjacent to a biomass plant that derives about 2 MW worth of heat from geothermal wells.

Western reports that a full‐diameter well was drilled on their property in October 2010. In addition, water supply wells are available. The property owners claim to be permitted for up to 14

geothermal wells onsite. Owners are looking to sell the property or to find a partner to develop the

resource. They state that a 40MW capacity geothermal plant is feasible. The project is reportedly close to existing transmission lines, but the transmission path to

PacifiCorp territory is unclear. No work has been done to date beyond initial wells, and minimal

documentation was submitted on the existing well. The respondent has complete control of the 1,500 acre site.


BLACK & VEATCH | Recommendations 5‐1

5.0 Recommendations Black & Veatch and GeothermEx evaluated the projects and selected leading projects from

each of the three development phases for further consideration. Multiple factors were utilized to

determine the projects that were recommended for further investigation. The intent was to select the top two projects from each development phase that would be the best fit for PacifiCorp’s

generation system. This does not mean, however, that these are the only projects that should be

considered viable for future development. Table 5‐1 summarizes the projects recommended for further investigation.

Table 5‐1 Projects Identified for Further Investigation

PHASE DEVELOPER PROJECT LOCATION MW TYPE

2

Oski Energy Cove Fort Cove Fort, UT 15 Binary (Kalina)

Davenport Newberry Newberry

Volcano

Deschutes County,

OR 15 Likely Binary

/Flash EGS

1 Standard Steam Trust Newdale Newdale, ID Undef. Binary

Ida‐Therm Renaissance Honeyville, UT 100 Binary

0

AltaRock Energy Buck Mountain Klamath Falls, OR 10 Dual Flash EGS

Surprise Valley Surprise Valley

Hot Springs

Modoc County, CA 2‐5 Binary

It should be noted that each of the projects reviewed has development risks that are higher

than most projects that bid into a typical renewable energy PPA process. The review team focused on recommending projects with good geothermal resource potential that had realistic expectations

for development timing and costs which were located close to PacifiCorp transmission.

Two projects were recommended that propose the use of enhanced geothermal systems (EGS) technology which has not been commercially demonstrated in the US: AltaRock Buck

Mountain and Davenport Newberry. The resource at Buck Mountain may turn out to be suitable for

a conventional binary system, making it lower risk than a project relying solely on the success of EGS technology. Newberry Volcano is one of the most promising EGS systems in the US at this time

by virtue of its very high resource temperatures (>600°F).

Other “Phase 0” projects may have potential for consideration by PacifiCorp if additional projects are of interest. AltaRock’s Mount St. Helens Southeast project has geothermal resource

potential, but the review team was concerned about the pursuit of additional EGS projects due to

the technology risk and cost. Gradient’s proposed portfolio of projects may eventually be suitable for additional consideration, but since so little information was provided on the location of the

projects and the fact that Gradient has not secured leases, it was deemed prudent for PacifiCorp to

defer consideration of these opportunities until after additional development has progressed.


BLACK & VEATCH | Recommendations 5‐2

The review team recommends not pursuing multiple projects with one developer until

more information can be provided for local resource potential or when a more established track record for development is established. For instance, the Newdale project appears to have the best

potential of the SST projects for future development with PacifiCorp, taking into account

considerations such as the location of the project, the percentage of private land, and contiguity of lease position. Having SST develop this project first would establish its viability as a company to

pursue other opportunities.


BLACK & VEATCH Appendix‐1

Appendix A: GIR Response Document

Page | 1 Geothermal IR

Geo t her m al In fo r m at io n Req u est ( IR)

In t r o d u ct io n PacifiCorp is one of the West’s leading utilities, serving approximately 1.7 million customers in 6 states. PacifiCorp Energy has an interest in increasing the amount of geothermal energy sources in its generation portfolio to serve its customers. PacifiCorp is currently investigating a wide range of geothermal resource opportunities, including entering into option agreements on early-stage development projects and entering into power purchase agreements (PPAs) w ith geothermal projects nearing completion. PacifiCorp has issued a Geothermal Information Request (IR) on its website soliciting information from geothermal developers. The Geothermal IR will be open from October 5, 2011 through October 31, 2011. If your company is interested in replying to the Geothermal IR, please send an email to [email protected] with your company name and contact info. PacifiCorp will email reminders regarding deadlines for submitting the IR and will send out any clarifications to the IR to all the potential respondents who have submitted their company name and contact info. The Geothermal IR is posted on PacifiCorp’s website at www.pacificorp.com/ geothermalinfo. As a geothermal developer, we encourage you to participate in this IR. Geothermal developers can download the Geothermal IR document from the PacifiCorp website and send their responses to PacifiCorp via email or by mailing a paper copy. After receiving all responses to the IR, PacifiCorp will determine which projects are of greatest interest to PacifiCorp at this time and will investigate what steps can be taken increase the PacifiCorp’s geothermal resources in the future. PacifiCorp has hired Black & Veatch and GeothermEx to assist PacifiCorp in evaluating the responses to the Geothermal IR. The objectives of the Geothermal IR are:

• Identify projects that PacifiCorp may consider as project co-developer or participant • Assist in structuring future formal Requests for Proposals (RFPs) for geothermal

resources. • Identify what types of commercial structures or resources are needed to facilitate

development of geothermal resources. • Assist both PacifiCorp and the regulatory agencies to identify the level of development

and viability of geothermal resource opportunities. • Identify how to promote geothermal power development w ith reduced risk, while

achieving reduced cost for renewable energy delivered to PacifiCorp and its customers. PacifiCorp realizes your specific project may have unique needs.

PacifiCorp encourages all respondents to provide as much information as possible about their geothermal projects. Because PacifiCorp would like to identify geothermal projects across the spectrum of the development process, the questions in the IR cover projects at a range of levels of development maturity. Respondents with projects in early stages of development should feel free to skip any questions that pertain to later stages of development and project execution.

mailto:[email protected]�

http://www.pacificorp.com/geothermalinfo�


However, PacifiCorp encourages all geothermal developers who would like to work with PacifiCorp in the future to provide as much specific information about their projects as possible. PacifiCorp reserves the right to enter into direct discussions which could lead to direct negotiation with any IR respondent. PacifiCorp recognizes that some of the information requested may be highly confidential to respondents. Specific project production and financial information marked confidential by respondents will be kept confidential by PacifiCorp. PacifiCorp will enter into confidentiality agreements as needed. Im p o r t an t N o t e The Geothermal IR is completely separate from an A ll Source Request for Proposals (RFP) for electric generation facilities that PacifiCorp will issue within the next few months. The All Source RFP will solicit proposals for generation facilities that use eligible fuel sources. Eligible fuel sources are defined as resources that can be scheduled or dispatched. Geothermal resources would meet these criteria. It should be noted that the A ll Source RFP is for resources that can bid an executable resource by summer 2012, would be provided with a notice to proceed in approximately the second quarter of 2013, and would be online by summer peak 2016. I f your company has a geothermal resource project that w i l l l i kely be submi tted in response to the A l l Source RFP, they should not submi t information on that particular project to the Geothermal IR. If you have any questions about the Geothermal IR and how it relates to the planned A ll Source RFP, please send an email to [email protected]. Inst r u ct io ns If you are interested in replying to the Geothermal IR, please send an email to with your company name, project name(s) and contact info to [email protected]. PacifiCorp will email reminders regarding deadlines for submitting the IR and will send out any clarifications to the IR to all the potential respondents who have submitted their company name and contact info. A ll respondents are requested to complete to the extent possible the items listed below. A ttach additional documents as necessary. The completed IR can be emailed to PacifiCorp at [email protected] or it can be mailed to PacifiCorp at the following address:

Geothermal Info c/ o Ken Clark PacifiCorp Energy 1407 W. North Temple, Suite 210 Salt Lake City, UT 84116





1. Applicant Information

Lead Company/Organization Name Project Company/Organization Address PO Box / Street City / State / Zip

Main Contact Person First / Last / Title

Telephone

Fax Email Preferred Contact Method Telephone, email,mail, fax

Ownership Structure Sole proprietor / LLC / etc.

2. Project Information

Proposed Date of Initial Commercial Operation: DD/MM/YYYY

Projected Initial Net Capacity: kW

Net Annual Generation: MWh/yr

Projected Resource Decline : Percent Per Year (%)

Project Life: Years


3. Site information

Property Owner Name:

Physical Location of Project: Mailing address if applicable; alternatively, location with reference to state and nearest town; or Township, Range, and Section

Site Coordinates: (Latitude/Longitude)

Water Rights: (Ownership and Amount)

Provide map of project area, showing geothermal lease or ownership boundaries, as well as existing or proposed roads, wells, pipelines, and plant location(s) Include also any rights of way or easements that could affect project development. Degree of Site Control Geothermal development rights yet to be obtained Have an option for geothermal lease Have an option for ownership Have surface-occupancy rights throughout project area Have partial control of geothermal resource through lease or ownership Have complete control of geothermal resource through lease or ownership

3. Provide greater description of site control, including length of ownership, length of lease, any restrictions on surface occupancy, and any potentially conflicting development rights (e.g., mineral rights, agricultural access). Include known information about status and extent of any offsetting geothermal developments.


4. Status of Proof of Resource (mark all that apply)

Surface manifestations Potentially commercial reservoir temperatures inferred from geochemistry Potentially commercial reservoir conditions inferred from geophysics Temperature-gradient wells above the reservoir Completed exploration well that penetrates the reservoir Production well(s) tested at potentially commercial rates Demonstrated well productivity equivalent to 25% of planned plant capacity Production/injection strategy confirmed by drilling and testing All drilling completed with at least 5% spare production and injection capacity

Provide, as an attachment, any collected geothermal data for the site that helps characterize the geothermal resource quality, quantity and proposed production and injection levels. Describe any test drilling that has been performed and the key findings. Include a table of existing or proposed wells, including well names, completion dates, shut-in wellhead pressures, static liquid levels, maximum temperatures and measured flow rates. Any back-up documentation that will facilitate resource evaluation will be helpful, including temperature-pressure surveys, geochemical analyses, mud logs, and drilling records. If available, provide any relevant third-party reports assessing the nature and capacity of the geothermal resource.

5. Type of Contract Desired (mark any of interest):

Power Purchase Agreement (PPA) PPA with Transfer Turnkey Sales Joint Venture with PacifiCorp Other (describe)

5. List reasons for preferences or “other” structure desired. (examples: share risk, reduce cost of capital, reduce cost to PacifiCorp, etc.)


6. Desired PacifiCorp Support List any support desired from PacifiCorp to develop or operate the project.

7. Pricing a. Estimate the electricity price (tariff) that would be desired from PacifiCorp to

make your project viable. Mention if this is levelized or will require escalation through the life of the project.

6. Early-stage projects may need a different kind of deal structure and risk mitigation. Late-stage projects may only need interconnection and a PPA.

7a. Enter price here, along with any major factors that could impact this price.


b. Describe contract terms that would increase your level of interest in negotiating with PacifiCorp rather than other potential off-takers of geothermal energy. As an example, items could include:

• Ability of a developer to adjust contract capacity up or down on an annual basis within some specified range.

• Guarantee of PacifiCorp to provide comparable pricing to subsequent expansion projects at the same site, subject to confirmation of adequate resource.

• Structure of power purchase agreement needed to secure financing.

c. Describe any state or federal incentives assumed to be part of the project

support structure and their availability.

7b.

7c.


d. Describe what the project plans to do with any Renewable Energy Credits (RECs) produced by the project.

7d.


8. Project Team Provide geothermal experience of the project team and contractors in the chart below. Attach additional team organizational charts and information as necessary.

Project Lead Engineering Drilling Construction Operator Financial Partner(s)

Other (list role)

Individual /Company / Organization Name

Years of Experience With Similar Projects

Name of Reference Project(s)

Size of Project(s)

Location (City/State) of Project(s)

Year the Project(s) went On-line

Role


9. Financial Information

List plans for financing all stages of the project, including development, resource identification, construction, and operation. List any private or public support mechanisms desired or required for financing.

b.

9.


10. Interconnection Requirements Provide the following information:

Interconnection Point / Substation

Distance to Delivery Point If known

Owner of the Interconnection Point PacifiCorp, BPA, WAPA, other

Nominal Voltage Output kV

Type of Interconnection Application LGIA, SGIA, other

Interconnection Capacity, kW

Date Interconnection Was Filed DD/MM/YYYY – if filed

Interconnection Application Status

Not Submitted Application Submitted System Impact Study Completed Facilities Study Completed Interconnection Agreement Completed


11. Technology

a. Identify the power plant technology that may be used through the check boxes below, with additional elaboration in the text box. Describe any main decision points remaining in the technology selection process.

Steam Cycle (Select One) Single Flash Dual Flash Binary Hybrid Cooling Type (Select One) Dry/Air Cooling Evaporative/Wet Cooling Hybrid/Wet-Dry Cooling Well Type (Select All That Apply) Self Flowing/Artesian Wells Pumped Wells

11a.


b. List the major pieces of equipment required and the procurement status of each. Include potential suppliers of major equipment (such as turbine manufacturers).

c. Provide the status of EPC contractor selection, any groups being considered, and the path

forward to finalization of the team.

11c.

11b.


12. Permits Provide a list of the major permits that will be required and the status of each. Use additional sheets as necessary.

Acquired Not Acquired Not Needed Drilling Permits 1. 2. 3. 4. 5. Construction Permits 1. 2. 3. 4. 5. Water Use Permits 1. 2. 3. 4. 5. State Land Use Permits 1. 2. 3. 4. 5. Federal Land Use Permits 1. 2. 3. 4. 5. Environmental Permits 1. 2. 3. 4. 5. Other: 1. 2. 3. 4. 5.


13. Other Utilities

Provide a list of other utilities that are being considered as potential project partners or power purchasers.

14. Milestone Schedule

a. List the expected milestone completion dates for the following stages of the project. If a listed stage is already complete, list the date it was finished.

Milestone Completion Date

Start of Drilling of Exploration Wells Start of Drilling of Full-Diameter Wells Demonstration of Well Capacity at 25% of Planned Plant Capacity Finalization of Development Team Selection of EPC Contractor Interconnection Study Completed All Permits Obtained Construction Financing Obtained Major Equipment Ordered Start of Construction of Surface Facilities Completion of Drilling Commercial Operation Date

13.


b. List the main development issues and key project risks that could delay meeting any of the milestones listed above. Outline any plans established to mitigate these risks.

c. Define any intermediate decision points that will play a factor on the project’s

viability and commercial operation schedule.

14b.

14c.


15. Other Factors

a. Describe any unique environmental, social, or economic benefits of your project.

b. List any other information you think would be helpful for PacifiCorp to understand to

assist in development of this project.

15a.

15b.

version 2011 geothermal information request

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