The Pleasures and Pains of Owning and Operating a Geothermal Plant

1. The Pleasures and Pains of Owning and Operating a Geothermal Plant Presented by Garth Larsen PacifiCorp -Plant Manager Blundell Geothermal Plant

2. Blundell Geothermal Plant

3. Blundell Geothermal Plant

4. Blundell Geothermal Plant Blundell is a single generating unit located about 14 miles northeast of Milford Utah on the Roosevelt Hot Springs road. Blundell plant was built by Utah Power &Light in the early 1980�s. It has been commercially operated since July 31, 1984. Steam is produced through a single flash process that is separated in centrifugal wellhead separators. The power plant consists of a turbine/generator, condenser, cooling tower and associated brine transfer, brine injection and condensate equipment.

5. Blundell Geothermal Plant (cont.) Steam enters the turbine at 108.3 PSIA at a saturated temperature of approximately 340 degree F. Blundell produces 23 net MW per hour, annually it produces around 195,000 MWH of electricity. Plant infrastructure, electrical generating equipment and substation/transmission is 100% owned by PacifiCorp. Production wells, steam separators and brine injection wells are owned and operated by Intermountain Geothermal Company a wholly owned subsidiary of CalEnergy.

6. Pleasures of operating a Geothermal Plant Electricity is produced using the thermal resource provided by �Mother Nature�. Extraction of the geothermal fluid is done without pumping and has little to no long-term negative impact on the geothermal reservoir. Brine and condensate are mixed and re-injected into the geothermal reservoir thus maintaining a renewable resource. Very little losses occur and very few natural resources are consumed in the production of electricity. The natural environment and habitat is not disturbed or negatively impacted by the plant or its people. No recordable emissions or significant odors (H2s) are emitted.

7. Pleasures of operating a Geothermal Plant (cont.) The technology has been tested over a significant amount of time and tends to be very stable in its application at Blundell. Costs and steam (fuel) prices are well known, with plenty of history and predictability. Workforce is well seasoned and trained with minimal turnover. Vast bank of plant technical resources within PacifiCorp's Technical Services group, Generation Engineering, Technical Operation and others in the coal-fired generating stations. Co-exist with cattle ranchers, wildlife enthusiasts, recreational activities, campers, ATV adventurers, hunters and sightseers.

8. Pains of operating a Geothermal Plant Location of the resource is not be close to the load. Adequate transmission requires upgrade to 138k Longevity and capacity of the resource is not known with absolute certainty Geothermal fluid is corrosive and heavily burdened with minerals. These minerals are very harsh and can be very detrimental to equipment, piping, pumps and turbine steam path. Costs tend to be some of the highest in the portfolio. Economies-of-scale are difficult to attain as total generation for the site is significantly lower than other generating stations in PacifiCorp's fleet using fossil fuels.

9. Pains of operating a Geothermal Plant (cont.) Marginal costs vs. marginal revenue analysis tends to indicate that expansion is less attractive than other alternatives without Production Tax Credits (PTC). Expansion utilizing a �bottoming cycle� causes a certain degree of risk as re-injected brine will be at lower temperatures. Expansion of the field requires significant contract negotiations, BLM and Utah State Division of Air Quality permits. Incentives/PTC are in place as of the enactment of the Energy Policy Act of 2005. However, the window of time for PTC eligibility for geothermal expansion is too short for significant financial consideration. Although knowledge and education has improved awareness, electrical production from geothermal still suffer from an" out-of-site, out-of-mind� mentality in terms of the general public.

10. Pleasures versus Pains Conclusion: All stakeholders within the realm of PacifiCorp are definitely the benefactors of clean geothermal electrical energy production at Blundell. Given all positive and negative issues, the positive far exceed the negative. The resource is being maintained and utilized, electric utility customers are being served, employees are receiving compensations, suppliers are exchanging goods and services for monetary reward and the environment is being protected.