Audit Assails Geothermal Project’s OK

State water and energy officials unnecessarily risked $50 million by approving a geothermal power plant without knowing whether it would generate enough steam to run at full capacity, the auditor general said Monday.

The state Department of Water Resources has suspended completion of the South Geysers project since learning that it would produce only enough steam to meet about half its planned capacity, Auditor General Thomas W. Hayes said in a report to the Joint Legislative Audit Committee.

The state already has spent $50 million on the $80-million project.

Hayes said that the department took the word of its contractor, Geothermal Kinetics Inc., that the project could produce enough steam to generate 55 megawatts of electricity. The company’s projections were based on wells that the firm drilled in the late 1970s. Tests in 1984 by a third party revealed that the property would produce enough steam to generate only 29 megawatts.

Testing Called Inadequate

“The department did not adequately test the supply of steam on the property before deciding to build the plant,” Hayes said.

He said that builders of geothermal power plants usually require confirmation of energy supplies from independent consultants before going ahead with projects like South Geysers.

Hayes said that Pacific Gas & Electric Co. warned in 1981 that there might be problems at South Geysers, but an independent analysis was not made until last year.

The Department of Water Resources referred questions on the audit to its chief counsel, Robert James. He said that water officials are studying various options, including buying steam from other suppliers and completing the project or selling the plant.

“We’ve got an investment in this, so we would like to complete the project,” he said.

The energy produced by South Geysers was to help power the state Water Project. Approval of the project was given in 1979 during the Administration of then-Gov. Edmund G. Brown Jr.

The audit report said that construction authorization for the project was given by the state Energy Commission under a set of guidelines that did not require assurances that there be enough steam available to operate the plant.

Energy Commission Chairman Chuck Imbrecht said that the commission would amend those regulations to remedy the problem.