[Federal Register Volume 59, Number 206 (Wednesday, October 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26537]
[[Page Unknown]]
[Federal Register: October 26, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Bonneville Power Administration
Newberry Geothermal Pilot Project; Record of Decision
AGENCY: Bonneville Power Administration (BPA), DOE.
ACTION: Notice of Record of Decision.
-----------------------------------------------------------------------
SUMMARY: The Bonneville Power Administration has issued a Record of
Decision (ROD) to purchase electrical power from the proposed Newberry
Geothermal Pilot Project (Newberry Project), to provide billing
credits\1\ to Eugene Water & Electric Board (EWEB), and to provide
wheeling services to EWEB for the transmission of this power to their
system. BPA has decided to acquire 20 average megawatts (aMW) of
electrical power from a privately-owned geothermal power plant on the
west flank of Newberry Volcano in Deschutes County, Oregon. The
Newberry Project will generate 30 aMW and will be developed, owned, and
operated by CE Newberry, Inc. of Portland, Oregon. In addition, BPA has
decided to grant billing credits to EWEB for 10 aMW of electrical power
and to provide wheeling services to EWEB for the transmission of this
power to their system. BPA expects the Newberry Project to be in
commercial operation by November 1997.
---------------------------------------------------------------------------
\1\One method that BPA uses to acquire energy resources is
Billing Credits. With this innovative mechanism, authorized by the
Northwest Power Act, BPA provides a credit to an eligible customer
for load reduction actions and energy resource developments. A
complete description of the Billing Credits Policy is presented in
an Environmental Assessment (DOE/EA-0180, June 1982), which has been
made available to the public.
---------------------------------------------------------------------------
BPA has statutory responsibilities to supply electrical power to
its utility, industrial and other customers in the Pacific Northwest.
The Newberry Project will be used to meet the electrical power supply
obligations of these customers. The Newberry Project will also
demonstrate the availability of geothermal power to meet power supply
needs in the Pacific Northwest and is expected to be the first
commercial geothermal plant in the region
ADDRESSES: Copies of the Newberry Project FEIS, Executive Summary,
Appendices, and Comment Report, (DOE EIS-0207, June 1994), and the
USFS/BLM ROD are available from the Fort Rock Ranger District, 1230 NE
Third Street, Suite A262, Bend, Oregon 97701; telephone (503) 383-4703.
Copies of this ROD, the MAP, and the Resource Programs EIS are
available from BPA's Public Involvement Office, PO Box 12999, Portland,
Oregon 97212 or by calling BPA's nationwide toll-free document request
line, 1-800-622-4520.
FOR FURTHER INFORMATION CONTACT: Ms. Katherine S. Pierce, NEPA
Compliance Officer for the Office of Energy Resources--RAE, Bonneville
Power Administration, PO Box 3621, Portland, Oregon 97208, telephone
(503) 230-3962.
Public availability: This ROD will be distributed to all persons
and agencies known to be interested in or affected by the proposed
action or alternative.
SUPPLEMENTARY INFORMATION:
Purpose and Background
The Bonneville Power Administration (BPA) is a self-financing
Federal power marketing agency with statutory responsibility to supply
electricity to utility, industrial, and other customers in the Pacific
Northwest. The Pacific Northwest Electric Power Planning and
Conservation Act (Northwest Power Act) requires BPA to meet its
customers' electric power requirements. 16 U.S.C. 839d(a)(2). As part
of its mission, BPA is responsible for acquiring conservation and
additional generation resources sufficient to meet the future needs of
its utility customers. Section 6(d) of the Northwest Power Act
authorizes BPA to acquire experimental, developmental, demonstration,
or pilot projects of a type with potential for providing cost-
effective service to the region. 16 U.S.C. 839d(d).
The Pacific Northwest Electric Power and Conservation Planning
Council (Council), in its 1986 Power Plan, noted that ``* * *
approximately 4,400 megawatts of cost-effective electrical energy could
be obtained through the development of regional geothermal resource
areas.'' However, because the resource had not been confirmed, it was
not included in the portfolio of the 1986 Plan. The Power Plan called
for methods of confirming this resource so that it would be available
when needed. Newberry Volcano, Oregon, was identified as one of the
most promising sites.
The Newberry Project was selected under the BPA Geothermal Pilot
Project Program. The goal of the Program is to initiate development of
the Pacific Northwest's large, but essentially untapped, geothermal
resources, and to confirm the availability of this resource to meet the
energy needs of the region. The primary underlying objective of this
Program is to assure the supply of alternative sources of electrical
power to help meet growing regional power demands and needs.
BPA's purposes for this action are to:
(1) Meet contractual obligations to supply requested, cost-
effective power to BPA customers, having considered potential
environmental impacts and mitigation measures in its decision;
(2) Assure consistency with BPA's statutory responsibilities,
including the Pacific Northwest Electric Power Planning and
Conservation Act (Northwest Power Act), while taking into consideration
the Pacific Northwest Electric Power and Conservation Planning
Council's (Council) Conservation and Electric Power Plan (Power Plan)
and Fish and Wildlife Program; and
(3) Test the availability of geothermal energy to provide a
reliable, economical, and environmentally acceptable alternative energy
source to help meet the region's power needs.
To make these decisions, BPA cooperated on and adopted the Newberry
Geothermal Pilot Project Final Environmental Impact Statement (FEIS)
(DOE/EIS--0207, June 1994). The FEIS was tiered to the Resource
Programs Environmental Impact Statement (RPEIS-DOE/EIS-0162), which
considered the environmental tradeoffs among the resource types
available to meet BPA's needs.
The FEIS evaluated the exploration, development, utilization, and
decommissioning phases of the Newberry Project as well as related
transmission, wheeling, and billing credit components. Alternative A is
the CEC/EWEB proposal, and Alternative B is the three Federal agencies'
modification of the proposal. In addition to identifying and analyzing
the environmental impacts of these two alternatives for the Newberry
Project, the FEIS also evaluated the No Action alternative. By
contract, the Newberry Project is required to meet all Federal, state,
and local requirements. The FEIS fulfills the requirements of the
National Environmental Policy Act (NEPA) and meets the needs of the
U.S. Forest Service (USFS) and the Bureau of Land Management (BLM), who
have documented their decisions in a separate, joint ROD. BPA has also
determined that this action is consistent with the Council's 1991 Power
Plan.
Based on the information analyzed and disclosed in the FEIS and
associated documents, including the USFS/BLM ROD, BPA has determined
that the preferred alternative is Alternative B with the conditions and
mitigation and monitoring elements described in the USFS/BLM ROD. A
Mitigation Action Plan (MAP) developed from the FEIS analysis is
available. It requires implementation of the specific mitigation
requirements described in the FEIS and USFS/BLM ROD.
BPA develops and publishes a biennial integrated least cost plan,
the Resource Program. In its Draft 1990 Resource Program, BPA said it
would be willing to participate in up to three geothermal pilot
projects. The purpose of these projects would be to initiate
development, confirm resources, and determine the ability to develop
three of the largest, most promising sites in the region. BPA agreed to
purchase--in joint ventures with regional utilities--up to 10 average
megawatts (aMW) from each of three projects. After receiving comments
from customers supporting the projects, and after the Council approved
this approach in its 1991 Power Plan, BPA published a solicitation that
resulted in seven proposals.
The objectives of BPA's solicitation were to:
(1) Meet contractual obligations to supply requested, cost-
effective power to BPA customers, having considered potential
environmental impacts and mitigation measures in its decision;
(2) Assure consistency with BPA's statutory responsibilities,
including the Northwest Power Act, while taking into consideration the
Council's Power Plan and Fish and Wildlife Program; and
(3) Test the availability of geothermal energy to provide a
reliable, economical, and environmentally acceptable alternative energy
source to help meet the region's power needs. Three projects were
selected for contract negotiations on December 17, 1991. One of the
selected projects was a proposal by the California Energy Company (CEC)
and the Eugene Water & Electric Board (EWEB) to develop a 30-aMW
geothermal power plant and supporting facilities at Newberry Volcano,
Oregon.
This Administrative Record of Decision sets out the reasons for
BPA's decision to execute a Power Purchase Agreement with CE Newberry,
Inc. (a subsidiary of CEC), through which BPA will purchase electrical
output from the proposed Newberry Project; to execute a Billing Credits
Generation Agreement with EWEB for a portion of the output from the
Newberry Project; and to provide wheeling services to EWEB for the
transmission of this electricity to their system.
Legal Authority
BPA is a self-financing power marketing agency with the United
States Department of Energy. BPA was established by the Bonneville
Project Act of 1937, 16 U.S.C. 832 et seq., to market wholesale power
from the Bonneville Dam and to construct power lines for the
transmission of this power to load centers in the Northwest. As other
Federal dams and transmission lines were built, the combined power and
transmission facilities have been integrated into a single power supply
system. Today, BPA markets power from 30 Federal hydroelectric projects
and two nuclear plants. BPA's transmission systems contain 14,797
circuit miles and provide about half of the region's power and three-
fourths of its transmission capacity.
BPA sells wholesale electric power to 126 utilities, 13 direct
service industrial customers (DSIs), and several government agencies.
BPA's primary marketing area is the Pacific Northwest region, comprised
of the states of Washington, Oregon, Idaho, that portion of Montana
lying west of the continental divide, and small portions of California,
Utah, Wyoming, and Nevada. 16 U.S.C. 837 and 839a(14). BPA also has
congressional authorization to sell or exchange wholesale power outside
the Pacific Northwest to the extent that such power is surplus to the
needs of the region. See 16 U.S.C. 837a.
The Northwest Power Act directs BPA to serve the net power
requirements of any Pacific Northwest electric utility requesting
service, and to serve existing DSIs in the Pacific Northwest. 16 U.S.C.
839c(b)(1) and (d). Although BPA cannot own or construct electric
generating facilities, the Northwest Power Act permits BPA to acquire
rights to the output or capability of electric power resources. See 16
U.S.C. 839a(1) and 16 U.S.C. 839d. BPA may acquire a major resource (a
resource having a planned capability greater than 50 aMW and acquired
for more than 5 years, 16 U.S.C. 839a(12)) if it is consistent with the
Council's Power Plan. 16 U.S.C. 839d(c)(1)(D). If the resource is not
major, the Northwest Power Act instructs that the resource must be
consistent with the priorities required of the Plan. 16 U.S.C.
839d(b)(1) and (2).
The Northwest Power Act authorizes BPA to acquire experimental,
developmental, demonstration, or pilot projects of a type with
potential for providing cost-effective service to the region. 16 U.S.C.
839d(d).
BPA is also directed by the Northwest Power Act to grant billing
credits to a customer, if requested. 16 U.S.C. 839d(h). A billing
credit agreement is a contract between BPA and a customer, under which
BPA gives the customer a credit on its power bill for the difference
between BPA's wholesale power rate and the cost of power from a new
resource. The energy and capacity on which the credit is based is the
net amount the resource reduces the customer's load on BPA.
Finally, BPA must satisfy all requirements of the National
Environmental Policy Act (NEPA). 42 U.S.C. 4321 et seq.
Description of Need
BPA load forecasts for the 1990 Resource Program showed that if the
medium load growth rate occurs, BPA must acquire 500 aMW by the year
2000 to meet customers' needs. Pacific Northwest Loads and Resources
Study, 1990. If utility and DSI loads grow at the medium-high rate, BPA
will need to acquire an additional 1,500 aMW by the year 2000. The
analysis in BPA's Resource Programs Environmental Impact Statement
(RPEIS) showed that geothermal is a reliable source of electric power
that can help meet energy needs in the Pacific Northwest. Final
Environmental Impact Statement: Resource Programs, 1993.
1990 Resource Program
BPA's 1990 Resource Program, issued July 1990, defined the actions
BPA would take to develop new resources to meet the power requirements
of its customers. The 1990 Resource Program focused on Fiscal Years
1992 and 1993, and included near-term actions to prepare for these
years. One of these actions was an offer to participate in geothermal
pilot projects aimed at confirming resources and determining
developability at three of the largest, most promising sites in the
Pacific Northwest.
The 1990 Resource Program was developed through an extensive public
process that included a technical review panel. Many of the comments
received supported BPA's participation in geothermal pilot projects.
Council Plan
The Council's 1991 Power Plan noted that the geothermal
confirmation program in BPA's 1990 Resource Program was consistent with
the recommendations of the Council's Research, Development, and
Demonstration Advisory Committee. The Council's ``Recommended
Activities for Implementing the 1991 Power Plan'' included geothermal
demonstration projects initiated by BPA and the region's utilities. The
Council acknowledged that energy costs of a demonstration plant would
likely be higher than the marginal cost of other new resources, but the
premium would decline over time.
Pilot Project Solicitation
Request for Proposals
BPA published a Request for Proposals (RFP) in Commerce Business
Daily on July 5, 1991. The RFP stated that BPA would be willing to
purchase up to 10 aMW of electric power from each of three projects
located in or near the BPA service area. Other conditions specified in
the RFP were:
BPA would not finance projects but only purchase output
Part of the output from each project had to be purchased
by another utility
Overall project size could be greater than 10 aMW
The proposed site had to be capable of supporting at least
100 MW
The proposed site had to be suitable for operation as a
Federal geothermal unit
The resource area had to be undeveloped for electric power
production
The power contract had to include an option for BPA to
purchase subsequent output from the site
Projects that would allow BPA to be a cooperating agency
in a BLM environmental process were strongly preferred
These conditions were intended in part to limit the number of
proposals likely to be submitted. BPA could devote only a small amount
of staff time to evaluating proposals, and therefore tried to be quite
specific about what it wanted.
Project sponsors were encouraged to submit project outlines or
summaries ahead of time before developing detailed proposals. This was
intended to prevent developers from spending money developing proposals
that would not meet program goals. Several developers met with program
staff or discussed the RFP on an informal basis before submitting
proposals. Letters of intent were due September 3, 1991, and proposals
were due October 1, 1991.
Further information on BPA's Geothermal Pilot Project Program was
published prior to the solicitation in an article in a geothermal
industry trade journal, the Geothermal Resources Council BULLETIN
(December 1990). The article specified that the projects had to be in
three different resource areas, preferably involving different resource
developers. This article was provided to developers and others who
inquired about the RFP or the Geothermal Pilot Project Program.
Proposals Received
Seven proposals were received. Two of them clearly did not meet
program objectives, and a third was withdrawn by the sponsor during the
evaluation period.
One of the projects not meeting program objectives was located in
Canada. Although projects located outside the United States were not
excluded in the RFP, a foreign project would not have met the program
goal of testing ability to overcome (U.S.) institutional barriers to
development. Furthermore, a Canadian project would not be subject to a
Bureau of Land Management (BLM) environmental process.
A project was proposed at Raft River, Idaho, employing a power
cycle (the ``Kalina'' cycle) considered to be precommercial. Testing
new power plant technologies was not a goal of the program, and
previously developed sites were specifically excluded by the RFP. In
the early 1980s, Raft River was the site of a demonstration plant
developed by the U.S. Department of Energy. Sponsors of the Canadian
and Raft River projects were notified on October 30, 1991, that their
proposals had been eliminated from consideration.
Four proposals received detailed evaluation. They were:
A proposal by the California Energy Company (CEC) and the
Eugene Water & Electric Board (EWEB) for a 30-MW project at Newberry
Volcano, Oregon.
A proposal by Vulcan Power Company (Vulcan) for a 30-MW
project at Newberry Volcano, Oregon.
A proposal by Trans-Pacific Geothermal Corporation for a
30-MW project at Vale, Oregon.
A proposal by Unocal Corporation for a 14-MW project at
Glass Mountain, California.
Evaluation Process
Proposals were evaluated by a project team composed of BPA staff.
Two sets of criteria were used. The first set, considered ``threshold''
criteria, were the criteria stated in the RFP. Proposals were
eliminated from further consideration if they failed to meet any of
these criteria except the utility cost sharing requirement. Threshold
criteria included:
Resource area considered capable of producing at least 100
MW. Since BPA required the sites to be undeveloped, there was no way to
know reservoir size with much certainty for the proposed sites. If
better data were not available, a resource estimate by the U.S.
Geological Survey or some other authoritative source was considered
sufficient basis for meeting this criterion.
Suitable for operation as a unit. For the purpose of
conserving the resource, Federal geothermal leasing regulations allow
geothermal leaseholders to unite with each other in the development or
operation of any geothermal resource area. The leases affected by such
a cooperative arrangement are called a unit, and one of the
leaseholders is designated the unit operator. 43 CFR 3243. BPA wanted
to encourage coordinated development and avoid resource depletion
problems experienced elsewhere, and therefore included suitability for
unitization as a selection criteria. The lease block had to be unitized
or suitable for unit operation with the developer as operator. If the
area was not already unitized, the developer had to control a large and
reasonably contiguous lease block. Bureau of Land Management staff were
consulted regarding the suitability of proposed sites for unitization.
It should be noted that unitization in itself was not the objective of
this requirement. The objective was to encourage coordinated
development and conservation of the resource.
Resource area not previously developed for electric power
production. A program goal was to develop new resources. If a power
project had already been developed at a site, the site did not meet
this criterion.
Output contract proposed. BPA was willing to purchase
output only, not finance projects.
Amenable to BPA receiving an option on future power from
the lease block. Since the cost of power from the first project was
expected to exceed the cost of other resources available to BPA, BPA
required a right of first refusal on up to 100 MW of additional
development at each site. Subsequent plants would benefit from
established infrastructure and lower risks, and the cost of power from
them would likely be more cost-effective.
Cost sharing by another utility. Initiating development of
Northwest resources would have regionwide benefit. A cooperative effort
that included cost sharing seemed appropriate. It was recognized that
developers might have difficulty enlisting another utility before BPA
identified candidate projects, so failure to meet this criterion did
not disqualify a proposal during the evaluation period. Developers were
notified of this.
Project allows BPA to be a cooperating agency in a BLM
environmental process. Staffing constraints would not allow BPA to be
the lead agency in the NEPA review. This criterion effectively limited
projects to Federal or Tribal land.
The second set of criteria addressed the developers ability to
complete the project successfully. These are standard criteria used by
BPA in previous and subsequent solicitations, and included:
Development team experience. How qualified was the project
team? Had they worked together on previous successful projects? A
salaried staff currently involved in project development or in
operating projects tended to be rated more highly than a listing of
consultants that would be hired for a proposed project. A salaried
staff was thought to indicate greater stability and commitment by the
developer to maintaining a long term presence in the geothermal
industry. There was also no guarantee that the listed consultants would
ever work on a proposed project.
Ability to finance the project. Proven ability to finance
projects was desired. Was the developer experienced in obtaining
construction and long term project financing? Was the financing plan
realistic? Audited financial reports were requested from each
developer, and Dun and Bradstreet financial information reports were
obtained, if available.
Project design. Had all important aspects of project
design been considered?
Transmission availability. Were transmission capacity or
wheeling services available to deliver the energy to the BPA grid?
Site control. Developers were asked to provide copies of
lease documents or other evidence of site control.
Development schedule. Was the development schedule
realistic, well thought out, and logical? Did it include all important
activities?
Environmental impacts/siting issues/permits and licenses.
To what extent had environmental and siting issues been identified?
What progress had been made in obtaining permits and licenses? BPA
staff consulted with land management agencies in the project areas, and
requested additional information from developers, when necessary.
Cost of energy. This was used more as a starting point for
negotiations than as a selection criterion. BPA did not expect
developers to commit to a price until the terms and conditions of the
power contract were better known. Another reason for not selecting
based on price was to avoid being forced to select weak projects with
unrealistic power prices and to discourage ``low-ball'' bids.
The evaluation process included a preliminary evaluation of the
proposals, followed by requests from the BPA project team for
additional information and a final evaluation.
An issue of site control affecting the two proposed projects at
Newberry Volcano was examined. The ownership or ownership share of
three leases--OR 11987, OR 11992, and OR 45506--was a matter of dispute
between CEC and Vulcan. Since both developers considered it likely that
litigation would be necessary to resolve this dispute, and because
BPA's decision to purchase only output was thought to place all risk of
nonperformance on the developer, this was not a critical factor in the
selection process.
The BPA team selected three projects for further consideration, and
the Administrator was briefed and a final decision made on December 17,
1991. The proposers were notified of BPA's decision by registered
letter between December 18 and December 20, 1991.
The December 18 letter to Vulcan Power Company, which was not
selected, explained the reasons for BPA's decision. The CEC/EWEB
project was stronger in many respects and met BPA requirements for
utility cost sharing. Also, Vulcan lacked a history of successful
project development (the one project it attempted was unsuccessful). As
noted in the December 1990 Geothermal Resources Council BULLETIN
article mentioned above, only one project would be chosen at each site.
Contract Negotiations
The three projects selected for contract discussions were Glass
Mountain, Vale, and the CEC/EWEB Newberry Project. All three projects
were considered capable of meeting the goals of the program. Total
output from the three projects exceeded the 30 aMW BPA agreed to
purchase in the solicitation. But because the terms of the power
purchase contracts and the degree of participation by other utilities
were not known at this time (only one of the projects had identified a
utility partner), and in the interest of meeting program goals, BPA
agreed to consider purchasing more than 30 aMW. The Glass Mountain and
Vale Projects will, if appropriate, be the subject of separate Records
of Decision, and will not be discussed further in this document.
Negotiations for the Newberry Project began in January 1992, and
were completed in December 1992. The negotiations resulted in three
proposed agreements:
A Power Purchase Agreement between CEC and BPA;
A Billing Credits Generation Agreement between EWEB and
BPA;
A Power Purchase Agreement between CEC and EWEB.
Under its Power Purchase Agreement with CEC, BPA would purchase
approximately 20 average megawatts of output from the project and
receive an option on an additional 67 megawatts, if available in the
future. Under its Power Purchase Agreement with CEC, EWEB would
purchase 10 average megawatts from the project and receive an option on
33 megawatts, if available. BPA would give EWEB billing credits for 10
average megawatts under a Billing Credits Generation Agreement. The
term of the agreements is 50 years from the commercial operation date
of the project.
The price of energy will not exceed BPA's Alternative Cost, as
established in BPA's 1990 Billing Credit Solicitation. The Alternative
Cost is the estimated cost which BPA would incur as a result of
acquiring new resources, and is the upper limit on the amount of a
billing credit other than conservation.
Memorandum of Understanding
A Memorandum of Understanding (MOU) between CE Newberry, Inc. (a
subsidiary of the California Energy Company), EWEB, and BPA was
executed on December 17, 1992. The MOU acknowledged that the parties
had reached agreement on contract principles, and defined the roles of
the parties during the environmental review required by NEPA. The MOU
noted that BPA had not made a final decision to sign any power purchase
or other agreements, and that such power purchase obligation would not
arise, if at all, until the environmental impacts of the proposed
Newberry Project had been analyzed in accordance with NEPA.
Environmental Considerations
National Environmental Policy Act Background
The National Environmental Policy Act (NEPA) is the basic national
charter for protection of the environment. It establishes policy, sets
goals, and provides means for carrying out its policy. NEPA requires
Federal agencies to make environmental information available to public
officials and citizens before decisions are made and before actions are
taken. Accurate scientific analysis, expert agency comments, and public
scrutiny are essential to implementing NEPA. The NEPA process is
intended to help public officials make decisions that are based on an
understanding of environmental consequences. NEPA mandates that Federal
agencies use all practical means to protect, restore, and enhance the
quality of the human environment and avoid or minimize any possible
adverse effects of their actions upon the quality of the human
environment.
Newberry Geothermal Pilot Project Environmental Impact Statement
On December 2, 1992, a Notice of Intent to Prepare an Environmental
Impact Statement (EIS) in accordance with NEPA was published by the
Environmental Protection Agency (EPA) in the Federal Register. This EIS
would analyze the environmental impacts of various alternatives related
to the development of the proposed Newberry Geothermal Pilot Project
(Newberry Project). The U.S. Forest Service (USFS) would be the Lead
Agency in this process; the Bureau of Land Management (BLM) and BPA
would be Cooperating Agencies.
BPA adopted the Newberry Geothermal Pilot Project Final
Environmental Impact Statement (FEIS) (DOE/EIS-0207, June 1994). The
FEIS was tiered to the Resource Programs Environmental Impact Statement
(RPEIS-DOE/EIS-0162), which considered the environmental tradeoffs
among the resource types available to meet BPA's need.
The FEIS evaluated the exploration, development, utilization, and
decommissioning phases of the Newberry Project as well as related
transmission, wheeling, and billing credit components. Alternative A is
the CEC/EWEB proposal, and Alternative B is the three Federal agencies'
modification of the proposal. In addition to identifying and analyzing
the environmental impacts of these two alternatives for the proposed
Newberry Project, the FEIS also evaluated the No Action alternative.
The Power Purchase and Billing Credits Agreements require that the
Newberry Project meet all Federal, state, and local requirements. The
FEIS fulfills the requirements of the National Environmental Policy Act
(NEPA) and meets the needs of the USFS and the BLM, who have documented
their decisions in a separate, joint Record of Decision (ROD). BPA has
also determined that this action is consistent with the Council's 1991
Power Plan.
The following alternatives were considered in the EIS:
Alternative A
Alternative A is the proposal as submitted by CE Exploration
(CEE, a subsidiary of the California Energy Company). It includes
exploration, development, production, utilization, and
decommissioning of the geothermal resources on CEE's Federal
geothermal leases on the west flank of Newberry Volcano. Highlights
of this alternative, which is described in more detail in the FEIS,
include development of exploration/production well pads at 14
specific locations; construction and operation of one 33-MW (gross
output) power plant at a specific site; construction of associated
pipelines and access roads; construction and utilization of an H-
frame, 115-kilovolt transmission line along the north side of Forest
Road 9735 to deliver power from the plant to an existing
transmission line; and mitigation and monitoring measures as
proposed by CEE. These would be permanent facilities with a contract
life of at least 50 years.
Alternative B
Alternative B is a modification of Alternative A developed by
the three Federal agencies that allows for greater siting
flexibility to minimize potential environmental impacts once the
geothermal resource is defined through exploration. It is similar to
Alternative A in plant design and size, size of the well field and
pads, and design of the facilities except for the transmission line.
It differs most in respect to the siting flexibility of well pads,
power plant, pipelines, and access roads and the mitigation and
monitoring measures to be included. It is described in detail in the
FEIS and highlights include development of exploration/production
well pads at 14 out of 20 possible locations; siting the individual
well pads within a 40-acre or less siting area; construction and
operation of one 33-MW power plant at one of three possible
locations; construction of associated pipelines and access roads;
construction and utilization of a single pole design 115-kilovolt
transmission line to the south of Forest Road 9735; and additional
mitigation and monitoring measures proposed by the agencies and
public. These facilities would also be permanent, with a contract
life of at least 50 years.
Alternative C
Alternative C is the No Action alternative. Under this
alternative, BPA would not acquire the energy output from the
proposed Newberry Project, thereby foregoing the opportunity to
supplement BPA's energy supply and to demonstrate the availability
of geothermal power to help meet the region's power needs. BPA would
also not provide billing credits to EWEB, with the same results as
above, and would not provide wheeling services to transmit the
energy. CEE would not go forth with the project without the power
purchase agreement, and EWEB would cease further involvement without
billing credits. This alternative is environmentally preferable, as
it would result in no impacts to the immediate environment.
Other Actions
Because the proposed action will not satisfy BPA's total need for
electrical energy, implementing the proposed action will not foreclose
consideration of other potential BPA resource actions. Resource types
potentially available to meet future load growth were comparatively
evaluated in the RPEIS and include:
Conservation (commercial, residential, and industrial
sectors);
Renewables (hydropower, wind, biomass, solar, and other
geothermal power);
Cogeneration;
Combustion turbines;
Nuclear; and
Coal.
Decision Factors and Issues
All of the project alternatives were evaluated against the purpose
and need for the Newberry Project, and only Alternatives A and B would
satisfy the need for electrical power. These alternatives would also
help BPA meet its contractual obligations and are consistent with BPA's
statutory responsibilities. Based on the information analyzed and
disclosed in the FEIS and associated documents, including the USFS/BLM
ROD, BPA has determined that the preferred alternative is Alternative B
with the conditions and mitigation and monitoring elements described in
the USFS/BLM ROD. The rationale for selecting Alternative B is
summarized in the USFS/BLM ROD by major issues that were of most
concern or apparent controversy. A Mitigation Action Plan (MAP)
developed from the FEIS analysis is available. It requires
implementation of the specific mitigation requirements described in the
FEIS and USFS/BLM ROD.
Environmental Consultations, Review, and Permit Requirements
BPA reviewed the status of all permits and licenses required for
the Newberry Project, consulted with CEE to satisfy area-wide, state,
and local environmental plans and programs, and developed a Mitigation
Action Plan MAP to assure that all environmental requirements are
addressed and that all practicable means to avoid, minimize, or
mitigate environmental impacts have been adopted. It implements the
specific mitigation requirements described in the FEIS and USFS/BLM
ROD. Development of the Newberry Project will be consistent with
environmental policies established by NEPA and the Oregon Energy
Facility Siting Council (EFSC), and will be consistent with the
requirements of the Council's Power Plan.
Monitoring and Enforcement
The MAP (Attachment 2) for the Newberry Project requires
implementation of mitigation measures necessary to reduce the
environmental impacts identified in the FEIS. The USFS, BLM, and BPA
all have responsibility for monitoring the progress of the Newberry
Project and ensuring that these measures are taken as appropriate. The
USFS and BLM responsibilities are detailed in the USFS/BLM ROD.
(Attachment 1). BPA will continue to monitor the Newberry Project
through its environmental oversight program. The Power Purchase and
Billing Credits Agreements stipulate the penalties for noncompliance
with these measures.
Decision
Upon consideration of the entire record, BPA has decided to execute
a Power Purchase Agreement with CE Newberry, Inc., execute a Billing
Credits Generation Agreement with EWEB, and provide wheeling services
for transmission of energy from the Newberry Project to EWEB's system.
Issued in Portland, Oregon on September 16, 1994.
John. S. Robertson,
Deputy Administrator.
[FR Doc. 94-26537 Filed 10-25-94; 8:45 am]
BILLING CODE 6450-01-P
