Geothermal in Pagosa Springs — The Mountain Town News

August 8, 2014


From The Mountain Town News (Allen Best):

Nobody doubts that the Colorado town of Pagosa Springs has hot water. It bubbles to the surface at around 140 degrees and in quantities sufficient to sustain a large commercial spa and several more public pools along the San Juan River.

As well, the hot water heats 13 businesses and 5 homes in downtown Pagosa Springs plus the Archuleta County courthouse, delivering this energy at a cost roughly 20 to 25 percent below the going rate for natural gas and 30 percent less than electricity.

But is there sufficient hot water available to produce electricity, warm 10 acres of greenhouses, and deliver heat to 600 homes?

Geologic modeling suggests there is, but until additional wells are drilled, as is expected later this summer, there’s no way of knowing for sure. If those exploratory wells confirm large volumes of hot water, then two large-bore wells will be required to extract the hot water and, after the heat is transferred from the water, return it underground.

Federal and state grants this year have given the project traction. The U.S. Department of Energy delivered $3.9 million, followed by $1.9 million from state sources. The town and county governments created a consortium called the Pagosa Area Geothermal Water and Power Authority to provide 30 percent in local funds, or $520,000, as required by the federal grant.

A private company, Pagosa Verde, which is pushing the project, came up with an equal amount in in-kind services. It owns 20 percent of the project and has the backing of a South Carolina-based investment firm called Natural Energy LLC.

Another milestone occurred in late May, when Colorado Gov. John Hickenlooper stopped in Pagosa to sign H.B. 14-1222 into law. The law, co-sponsored by Sen. Ellen Roberts, a Republican from Durango, and Sen. Gail Schwartz, a Democrat from Snowmass Village, lengthens the repayment period and otherwise provides great flexibility for private-activity bonds issued with the backing of the state government for geothermal and other renewable energy projects.

Michael McReynolds, policy advisor at the Colorado Energy Office, says the new law recognizes the large costs of proving the geothermal resource exists before development can occur.

However, other areas of the state are interested in replicating the business model of diverse revenue streams being assembled at Pagosa Springs. “It really depends upon the specific communities and what they want to pursue,” he said when asked if the new law will be used to finance other community renewable energy projects.

Jerry Smith, the chief executive at Pagosa Verde, says the new law was “huge” in allowing the project in Pagosa Springs to go forward.

In providing access up to $16.7 million available for as little as 2 percent interest, Smith’s project can now proceed. He estimates the need to spend $26 million before revenue can be gained.

“It’s a community-scale project, replicable throughout the Rocky Mountain states. I wanted town and county citizens to own it,” says Smith. “They only way they could participate was by forming an authority, similar to a housing authority. It’s a quasi-governmental authority.”

The public-private partnership is called Pagosa Waters LLC.

Because of the lower-cost money produced by the state and federal grants plus the clear bonding authority enabled by the new state law, he sees a financial path opening up.

Bonds will be just 2 percent. “That’s essentially free money,” he says. “We can borrow as much as we need to secure revenue for the project, “and it’s a way we go.”

Cheap borrowed money also relieves the onus of finding extremely hot water and arranging for sale of electricity, says Smith. If tests reveal merely hot water, such as bubbles up in the local springs, then that’s still hot enough for greenhouses and living rooms.

From the Romans forward

Hot water originating underground has long been put to practical uses. Romans at Pompei used hot water to heat buildings.

The Idaho Capitol Building has been heated with water drawn from 3,000 feet below ground, but 86 buildings with more than 5.5 million square feet of space are also heated by a separate geothermal heating district, according to Jon Gunnerson, geothermal coordinator for the City of Boise Public Works. It is the largest geothermal heating system in the United States, he says.

Commercial electrical production from geothermal sources began in 1911 in Larderello, Italy. The first commercial electrical production in the United States began in 1960 at The Geysers in California.

In 2013, according to the Geothermal Energy Association, the United States had 3,386 megawatts of installed geothermal capacity, or about three times as much as the trio of giant coal-fired power plants found in the Comanche complex near Pueblo, Colo.

Less prominent than photovoltaic panels, geothermal was nonetheless responsible for 0.41 percent of all electrical generation last year, ahead of solar at 0.23 percent. Biomass, wind, and hydro all produced more than geothermal.

California far and away has the most geothermal installed capacity, followed by Nevada, then trailed more distantly by Hawaii, Utah, and Idaho.

In Colorado, geothermal resources have been used to heat small greenhouses associated with the Mt. Princeton Hot Springs, near Buena Vista, as well as commercial springs. But no electrical production has been achieved because of concerns that new uses will rob existing users of their heat.

“Until very recently, Colorado’s geothermal potential for generating electricity has been assigned little promise,” notes the Colorado School of Mines at its geothermal website. “This appears to be based more on a lack of study, rather than on sound science.”

The website article goes on to note that a 2008 report from the Massachusetts Institute of Technology found that Colorado is the top state in the nation for potential commercial development of its heat, mostly if deep wells are drilled near Rico, Trinidad and other hot spots in a process called enhanced geothermal recovery.

Potential in Pagosa

Just how much electricity the Pagosa project could produce depends upon the heat of water. Colorado School of Mines studies concluded a strong likelihood of substantial hot water 2,000 to 5,000 feet under the land leased by Smith’s company about two miles south of downtown Pagosa Springs. Hot water for the downtown heating district is drawn from a depth of 300 feet.

Smith says it’s a cinch that the water found 2,000 to 5,000 deep will be at least 140 degrees Fahrenheit, the temperature of the water found closer to the surface. If so, it should be enough to produce four megawatts of round-the-clock electricity, what is called base-load generation.

If the water is 250 degrees, as the geological modeling suggests, it could generate 12 megawatts—and still have residual heat for the greenhouses and the homes.

Archuleta County altogether has baseload demand for 20 megawatts of generation. Another renewable source, a proposed biomass plant that would burn forest products to generate electricity, would generate 5 megawatts. Both biomass and geothermal generators probably need to get paid more for their electricity by the local electrical cooperative, La Plata Electric, than what the cooperative currently pays.

Biomass plant proponent J.R. Ford last winter said he needed 15 to 20 percent more than what the La Plata and other electrical cooperatives pay wholesale provider Tri-State Generation and Transmission. Tri-State’s power comes primarily from coal, natural gas, and hydroelectric.

Distributed generation

Both the geothermal and biomass projects in Archuleta County are representative of small sources of electricity called distributed generation. In a famous 1976 essay published in Foreign Affairs, Aspen-area resident Amory Lovins advocated more localized generation as necessary to shift power production from giant but often distant coal-fired power plants. In that same essay, Lovins also stressed that more local sources of electricity would reduce the vulnerability of the grid to terrorism.

“Distributed energy is what the world needs to get to,” says Smith, who cites Lovins as one of his heroes.

Smith moved to Archuleta County in 1989 after a career in the entertainment industry in California. He describes himself as a “liberal arts guy who values things that most people find technical and dry.”

Pagosa Skyrocket via Native Ecosystems

Pagosa Skyrocket via Native Ecosystems

Geothermal is wet, of course, but whether it moves forward in Pagosa Springs depends upon the outcome of a review by the U.S. Fish and Wildlife Service. The 600 acres of land leased for the drilling between the San Juan River and Highway 84 has a plant species, the Pagosa skyrocket (Ipomopsis polyantha), which has been listed as endangered under the Endangered Species Act.

The plant grows one or two feet tall, often in the understory of Ponderosa pine, and has been found in only three places, all near Pagosa Springs.

The federal grant money triggered the need for a biological assessment, which will be the basis for a biological opinion. If adverse effects can be avoided, such as by using care in the placement of wells, the Fish and Wildlife Service can approve the drilling this summer.

Existing wells reach a maximum 1,200 feet, but Smith expects to need wells 2,500 to 5,000 feet deep. The working hypothesis is that the underground rocks at the site are fractured than those that provide the water for the commercial hot springs and downtown heating district.

How will anybody know if the new wells are tapping a new source of heat instead of robbing the existing geothermal resource? Smith says his company will inject heat and pressure gauges on all local hot-water wells, “so they know immediately whether we are tapping the resource.” Colorado law and new regulations in Archuleta County protect existing geothermal users in case of damage to their resource.

Chris Gallegos, who administers the town’s geothermal heating district, says it’s “an unknown” whether Smith’s project would impair the existing users. “Through the test wells we should be able to determine whether the extraction of that heat would affect us or not,” he says.

Additional resources:

http://coloradogeologicalsurvey.org/energy-resources/renewables/geothermal/uses/electrical-generation/

http://www.eesi.org/files/geothermal_030206_gawell.pdf


Pagosa Springs hopes to tap geothermal for electrical generation

December 31, 2013
Geothermal Electrical Generation concept -- via the British Geological Survey

Geothermal Electrical Generation concept — via the British Geological Survey

From the Pagosa Sun (Randi Pierce):

The Town of Pagosa Springs council met in executive session with town attorney Bob Cole last Thursday, Dec. 19, with the topic of conversation centering on matters involving funding for a possible geothermal electric utility. According to town manager David Mitchem, council gave Cole instruction during the executive session. Mitchem said that the executive session did, “move the process forward,” but that no decisions were made at the meeting. A decision, Mitchem indicated, is expected in the next three weeks to a month…

Mayor Ross Aragon said the geothermal utility discussed Dec. 19 was the same contract the county [Archuletta] earmarked money for, and said the town and county have been and are expected to continue to be on par with each other in contributing to the project.

In 2013, both the town and the county pledged $65,000 toward research on geothermal resources and the possibility of using a geothermal resource to create power. That exploration work is being done by Pagosa Verde, LLC, headed by Jerry Smith.

More geothermal coverage here and here.


The Pagosa Springs Sanitation and General Improvement District board is moving ahead with wastewater pipeline

December 9, 2013
Wastewater Treatment Process

Wastewater Treatment Process

From the Pagosa Sun (Ed Fincher):

The Pagosa Springs Sanitation and General Improvement District board voted last week [week of November 25] to accept a bid from Hammerlund Construction Company for work on a pipeline and pumping stations needed to deliver wastewater from the town’s current lagoon site to the Pagosa Area Water and Sanitation District’s Vista treatment plant.

Art Dilione, special projects manager for Bartlett & West, the company tasked with handling the bidding process for the town, sent a letter to both town manager David Mitchem and Gregg Mayo, special projects director for PAWSD.

The letter, dated Nov. 19, explained how the project was originally bid on Oct. 2, but all of those bids came in well above the engineer’s estimate as well as the project’s budget, so those original bids were rejected and the project was rebid on Nov. 12.

More wastewater coverage here.


Pagosa Springs: Increased focus on water loss yields results

November 27, 2012

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From the Pagosa Springs Sun (Lindsey Bright):

During Tuesday afternoon’s PAWSD board of directors’ meeting, the directors looked at the gallons of water being produced both at Hatcher and Snowball.

At Hatcher, in the time since new meters were installed and monitored, Nov. 6-8, the plant produced 174,000 gallons of water, with 124,310 gallons sold — a loss of 49,690 gallons in the three-day period.

The Snowball treatment plant, which has one meter left to be installed, produced 10,951,611 gallons of water, with 7,697,100 sold between Sept. 29 and Oct. 28, making for a monthly loss of 3,254,511 gallons of water.

PAWSD District Manager Ed Winton said one area of water loss was discovered when PAWSD and Bartlett and West engineers, “shot elevations.” During the process, engineers realized the Reservoir Hill and Cemetery water tanks are not at the same elevation, as had been thought — there is a 38-inch disparity. Since the two tanks work together, when one is being filled, instead of filling completely, it fills part way and the other tank overflows.

Director Roy Vega asked how much of the overall water loss can be attributed to the tank overflowing.

Winton said he could not answer that, but did say that just fixing the tanks would not solve the overall water loss problem.

By the next regular meeting in December, all the new water meters should be installed at the treatment plants, which should provide accurate monthly numbers.

More Pagosa Springs coverage here and here.


Pagosa Springs: Fishery improvement project to take place over the next few weeks

November 19, 2012

pagosahotsprings.jpg

From the Pagosa Springs Sun:

The Town of Pagosa Springs would like to make residents and businesses at the east end of town aware of increased, construction-related traffic in the vicinity of the River Center.

Over the next several weeks, construction and hauling crews will be working behind the River Center performing various tasks associated with the town’s “Fishing is Fun” fish habitat and angler access project along the San Juan River corridor.

Work will include hauling dredged silt from the fishing ponds via dump truck to the sanitation lagoons on South 5th Street. Work will also include hauling river habitat enhancements (root wads, boulders, etc.) to the River Center

Construction activities will begin this week and continue intermittently until approximately mid-December. Work will be performed during the daytime work hours of 7 a.m.-5 p.m., Monday-Friday. Weekend work may be performed periodically, when necessary.

More San Juan River Basin coverage here.


Pagosa Area Water and Sanitation board meeting recap: Total expenditures in the draft budget = $1.3 million

October 26, 2012

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From the Pagosa Sun (Lindsey Bright):

During the meeting, the board reviewed the 2013 draft proposed budget for the first time during a regular meeting. This was an initial discussion on the budget, and no action was taken.

The General Fund total revenue in the 2013 draft proposed budget is $968,490, down from $991,102 in 2012.

The total expenditures in the draft budget is $1.3 million, up from $1.25 million in 2012. This increase is due to several incremental climbs in a variety of line items as well as the addition of three line items: Transportation Equipment, $18,000; Office and Administration Equipment, $11,500; and Administrative Building Remodel/SCAN Network, $50,433.

In the Water Enterprise Fund, the total budgeted revenue for 2013 is $4.54 million, down from $4.7 million in 2012. The total expense for Work in Progress in 2013 is $1.3 million, up approximately $500,000 from 2012. The areas where it increases most are: reservoirs/watersheds, $220,000; water treatment plant upgrade, $75,000; and distribution system upgrades, $703,772.

Total maintenance is proposed to be $151,959 in 2013, and total administration is proposed to be budgeted at $371,691.

Debt Retirement and Transfers is $1.07 million.

In the Wastewater Enterprise fund, the total revenue for 2013 is budgeted at $2.2 million, down nearly half from $4.1 million of the 2012 amended budget.

The biggest increase for the Wastewater Enterprise is in the Work in Progress category, where the Pagosa Springs Sanitation General Improvement District Pumping Project is budgeted at $1.24 million.

Total Wastewater Treatment for 2013 is budgeted at $401,000 with the biggest increase seen in line item Operator Salaries, rising to $82,623 from $38,200.

Total WasteWater Maintenance is budgeted at $73,444 for 2012, only a slight increase from the $68,946 in the 2012 amended budget.

More San Juan River Basin coverage here and here.


The Pagosa Area Water and Sanitation District tables Dry Gulch Reservoir Project for another day, another board

September 13, 2012

sanjuan.jpg

From the Pagosa Sun (Lindsey Bright):

During Tuesday’s Pagosa Area Water and Sanitation board of director’s meeting, with both directors Mike Church and Roy Vega excused, the board unanimously passed a motion to send a letter, “requesting substantial completion” to the Colorado Water Conservation Board regarding their $11. 2 million loan, of which only $9.2 million has been drawn and used.

The letter will be sent to Kirk Russell, CWCB’s finance section chief, who had recently told PAWSD that he needed a letter of intent and direction by Sept. 18 to present to the CWCB board.

PAWSD Business Manager Shellie Peterson will write the letter to inform the CWCB board that PAWSD does not, with the current board, intend on building Dry Gulch Reservoir and they will not be drawing the remainder of the loan out. The PAWSD board used $9.2 million of the CWCB loan, along with the San Juan Water Conservancy District’s $1 million CWCB grant, to purchase the Running Iron Ranch in 2007 as a reservoir site. Prior to this letter, there had been discussion by previous PAWSD boards considering use of the rest of the funds to buy a small portion of the adjacent Laverty property in order to have enough land to build the reservoir.

More Pagosa Springs coverage here and here.


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