Geothermal Power Development Review Describes Benefits to Local Economies

August 1, 2002

Warren Jensen, Center for Economic Development
Joe Wills

Geothermal Power Development Review Describes Benefits to Local Economies

A comprehensive review of the geothermal energy development planned for Northern California has been released by the Center for Economic Development (CED) at California State University, Chico. Titled “The Economic Impact of Calpine’s Geothermal Development Projects in Siskiyou County, California,” the report quantifies the local and regional economic benefits of two power plant projects proposed for the Glass Mountain Known Geothermal Resource Area, 45 miles south of Klamath Falls, Oregon. Geothermal energy is harnessed by sending dry steam, created when water is heated deep below the earth’s surface by exposure to hot porous rock, directly through a steam turbine.

Prepared by Professor David E. Gallo of CSU, Chico at the request of San Jose-based Calpine, an independent power producer and the projects’ proponent, the study concludes that the total impact on real (inflation adjusted) business revenue in Siskiyou, Modoc and Shasta counties in California and Klamath County in Oregon is an increase of almost $114 million over the projected 30-year life span of the project. On an annual basis, local income will increase by $3.8 million annually as a result of construction and operation of the new energy infrastructure.

As outlined in the report, “Under the two power plant scenario, Siskiyou County alone will gain more than $1 million annually in property tax and royalty revenues,” said Gallo. “These projects could serve as a considerable economic stimulus, particularly for a region with nearly double the national average unemployment.”

Thirty years is the industry standard for a power project. Toward the end of 30 years, an operator would assess the project’s viability and determine if the facility can continue operations as is, if retrofits are practical or if the project should be decommissioned.

The federal government identified the Glass Mountain area as a prime location for geothermal power production in the early 1970s and declared it a Known Geothermal Resource Area (KGRA). In the 1990s Calpine and another company, CalEnergy, began pursuing projects within the KGRA.

Copies of the study are available on the CED Web site. For more information, please contact Warren Jensen at 530-898-4598.

The Center for Economic Development is a nonprofit community outreach organization at CSU, Chico that provides technical assistance, applied research, and capacity-building assistance to economic development and planning professionals in 20 Northern California counties. The clients served include economic development corporations; economic development districts; community development organizations; local, sate, and federal government offices; consulting firms; small business development centers; small businesses; and local government officials.


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