4.8.1 Setting

Petroleum and natural gas supply most of the energy consumed in California. Petroleum (used primarily for transportation) provides about 50 percent of the state’s energy needs, and natural gas provides about 29 percent (California Energy Commission, 1994). The remaining comes from a variety of energy resources, including coal, nuclear, wind, geothermal, and hydropower.

Roughly 21 percent of California’s total energy use is consumed as electricity. Geothermal, hydropower, nuclear and "other" account for 50 percent of the electricity generated, natural gas fuels 31 percent, and coal accounts for 19 percent of the generated power. Petroleum accounts for less than 1 percent. The major users of electricity are: commercial, 13 percent; industrial, 10 percent; and residential, 10 percent.

The California Energy Commission has formulated and adopted a set of energy policies. These include policies to develop programs that meet energy and environmental quality needs; to promote competitive markets and energy efficiency technologies; to balance energy, economic, and environmental goals; to collaborate with the electricity and natural gas industries to redefine government’s energy regulatory role; and to implement policies to achieve cost-effective building and appliance efficiency (California Energy Commission, 1994).

Specific plans, recommendations, and actions include the following:

The plants to be divested use three primary fuels: natural gas, distillate, and at the Geysers, geothermal steam.

Regarding the Geysers Geothermal Plant, since 1960, many electric power generating units have been built on The Geysers Known Geothermal Resource Area (KGRA) to convert geothermal heat into electrical energy. The Geysers now generate more energy than any other developed geothermal field in the world. However, the geothermal steam fields have been in gradual decline for several years.

The Geysers KGRA was once touted as a geothermal baseload resource of up to 2,400 MW and boasted 1,984 MW of installed capacity in 1989. However, although all installed units initially were operated as baseload, the projected capacity was never achieved and probably never will be. It is not a "unitary" steam field: i.e., each operator is not "assigned" a percentage of the field to utilize. Instead, the more wells an operator builds, the more the operator is free and able to tap the resource. As a result, too many wells have been used to tap the KGRA. The steam resource is being unsustainably drawn upon, and the steam pressure from the field has been dropping for many years, currently to as low as 200 pounds per square inch (psi) from a peak of 500 psi. (1)

As the steam fields declined, maintaining plant efficiency has become more difficult due to the decrease in available energy from each pound of steam. As a result, over 40 percent of installed capacity has been shut down or lost due to reduced steam pressure, and more shutdowns are expected. In the long term, total Geysers dependable capacity may drop to as low as 700 MW. Except in a few cases, it no longer serves as a baseload resource. (Additional information is presented in Attachment C.)

PG&E has performed modifications to the power production equipment and processes that affect the efficient conversion of the steam energy to electrical energy. Condensate water from the generating units at the Geysers plant is returned to the steam suppliers for reinjection into the steam fields. Injection of water into the steam fields increases the recoverable steam reserves and enhances the steam deliverability by reducing the pressure decline. The quantity of condensate available for reinjection depends on the consumptive use of condensate (for cooling purposes -- which in turn depends on weather conditions), but it amounts to from 5 percent to 30 percent of the steam supplied to the Geysers plant (PG&E, 1998b). Wastewater from domestic and sanitary uses also is reinjected into the steam fields.

In addition to the steam condensate and plant wastewater, municipal wastewater is being injected into the steam fields. The Lake County Wastewater Pipeline Project (the "Southeast Regional Wastewater Treatment Plant Facilities Improvement Plan and Geysers Effluent Pipeline and Effluent Injection Project") was developed with the dual purpose of providing expanded wastewater treatment capabilities in the region, and providing the steam fields with a dependable supply of water by injecting the wastewater effluent directly into the Geysers geothermal field. The system began operation in 1997 (PG&E, 1998b).

Although the overall effects are not yet known fully, the Lake County wastewater injection project could produce additional steam that could provide as much as an additional 70 MW of generation capacity, roughly half of which would be available for the Geysers plant. As a result of these actions, the steam rate (i.e., pounds of steam per kWh) has remained fairly constant (PG&E, 1998b).

4.8.2 Significance Criteria

For the purposes of this report, an impact would be considered significant if the project would promote exploitation of an energy or mineral resource in a wasteful or inefficient manner.

A project that conflicted with established energy conservation plans would also be considered to have a significant impact.

4.8.3 Impacts and Mitigation Measures

None.

None required.

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Operational changes by new owners of divested plants are not precisely known at this time, although it is reasonable to expect that the prime outcome of divestiture -- lower electricity prices -- would result from the increased supply of energy generated by the divested plants.

The California Energy Commission addressed electricity supply efficiency in its discussion of energy policy (1994), and in its biannual Energy Report (1997). It is expected that increased efficiencies would take place through technological advances, rebuilding of older power plants using new generation technologies and through improved information systems that allow owners to locate system problems and make corrections faster, as well as allow consumers to make informed choices regarding their energy suppliers.

PG&E is planning to sell its older fossil-fueled power plants. The new owners, with higher initial capital costs to recover, might be inclined to run the plants at higher capacity factors than they are operated at present (see Attachment C). However, the sale would not affect the efficiency of the electrical generating units. Whereas future air quality emission controls are likely to slightly reduce the fuel efficiency of the plants for sale (for the benefit of better air quality), new owners are expected to operate the plants efficiently so that fuel is not wasted.

As described in the setting, the steam fields in the Geysers area are being managed to prolong the steam resources to the extent possible. The obvious incentive is for the new owner of the Geysers Power Plant to efficiently use the remaining geothermal steam resources.

This impact would be less than significant.

None.

None required.

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The projected increase in electricity consumption from the project would require additional fuel. However, divestiture would not be expected to significantly affect the availability of known resources, because the increased fuel demand would be met by existing in-state and out-of-state resources. Other mineral resources would not be affected by the project. No impact would occur.

None.

None required.

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References - Energy and Mineral Resources