Media Coverage

Off-Line Geysers Power Plant Sold

The Press Democrat

Michael Coit

October 13, 2005

Banking on increased demand for renewable power, a Santa Monica company has acquired a mothballed power plant at The Geysers' geothermal steam fields and plans to restart it next year.

US Renewables Group must extensively retrofit the Bottle Rock plant, which was shut down in 1990, but aims to resume generating up to 55 megawatts daily before the end of 2006.

Terms of the deal were not disclosed.

"We knew it had some issues that needed to be addressed, but we're obviously quite interested in those type of assets," said Jim McDermott, the company's chief executive officer. "There's a growing awareness that we need to meet energy demand with cleaner energy."

Soaring prices for natural gas, which powers plants generating 40 percent of California's electricity supply, has brought attention to increased reliance on renewable energy sources.

Bottle Rock would add to the 1,000 megawatts already generated daily from 21 plants atop the steam fields straddling Sonoma and Lake counties. A megawatt is enough to serve about 1,000 homes for a year.

The Geysers is the world's largest source of power generated by geothermal energy. Those megawatts contribute to the 11 percent of California's electricity that comes from renewable sources, including wind and solar energy.

California has a target of generating 20 percent of its energy from renewable sources by 2010. Some 20 other states also have renewable standards.

The market made the long-mothballed plant an attractive investment.

US Renewables acquired a controlling interest in Bottle Rock Power Corp., the company that purchased the plant from the California Department of Water Resources in the mid-1990s.

US Renewables must retrofit turbines and electrical systems, drill holes in the well field and complete other improvements. The company would not disclose the cost.

"It's essentially a complete rebuild," McDermott said.

Crucial to the project is completing an agreement to sell the power to an electricity provider. US Renewables is in talks with PG&E, McDermott said.

If Bottle Rock goes online, it will join 19 plants owned and operated by Calpine Corp., of San Jose, and two operated by the Northern California Power Authority, an agency serving cities and other public power providers.

The plants dot a 30-acre area in the Mayacmas Mountains.

"We wish them luck. Having more production coming out of The Geysers is a good thing for the area and California," said Kent Robertson, spokesman for Calpine.

Calpine in the past considered acquiring Bottle Rock.

"We were not so much interested in the plant itself as the steam," Robertson said.

Bottle Rock was built by the state during a geothermal boom in the 1980s when energy supplies again were a national concern.

The plant opened in 1985. But there was never sufficient steam volume or pressure to operate at capacity, and the plant was only generating 7 megawatts daily when shut down in 1990. The state never fired up a second sister plant.

Power production from The Geysers peaked at 2,000 megawatts in 1987.

Since then, projects to recharge the steam fields have stabilized power production at about 1,000 megawatts daily, enough for as many as 1 million households.

Lake County led the way in 1997 with a project that injects a mixture of wastewater and water from Clear Lake. Two years ago, four Sonoma County cities began sending wastewater to The Geysers, where it is injected deep underground to recharge the steam fields.

US Renewables was set up by energy industry veterans two years ago to acquire and operate renewable generating operations. The Bottle Rock acquisition adds to two landfill methane operations the company owns in California, and it is targeting biomass and ethanol facilities.

"We're very familiar with the California market. We have capital, and we're looking to invest," McDermott said.

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