San Diego Gas & Electric on Tuesday said it will shut down a $188.5-million demonstration geothermal power plant in Heber, Calif., because two companies failed to drill wells that supply the hot brines needed to drive the plant.
SDG&E Vice President Gary Cotton charged that Unocal Corp. and Chevron Geothermal Co. of California have fallen more than two years behind on a contract to complete the wells that extract brines from underground reservoirs, keeping the utility from operating the Imperial Valley plant at projected capacity.
Unless Unocal and Chevron renegotiate lower-cost contracts to compensate for the two-year delay, the project will "run out of money" before drilling is completed, Cotton said, adding that SDG&E "cannot continue to run the plant at the high cost at which it is now running."
Unocal and Chevron earlier drilled six production wells and five re-injection wells for the plant. However, a second set of wells was not completed before a May 8 deadline, according to SDG&E project manager Bob Lacy. As a result, the plant is operating at about half of its 45-megawatt capacity, the utility said.
Earlier this month, SDG&E closed the Heber plant for routine maintenance. But after Unocal and Chevron pushed back their drilling schedule until mid-1989, the utility decided to keep the plant closed for an "indefinite" period until "an agreement is worked out" with Unocal and Chevron, Cotton said.
A spokesman for Chevron, which is directing the drilling program, denied that the two companies have fallen behind schedule. "We have encountered some delays, but we're still planning on meeting our contractual requirements," Chevron spokesman Les Darling said.
A Unocal spokeswoman blamed "poor plant performance" the Heber plant for part of the drilling delays.
The Heber plant demonstrates the so-called binary process, which extracts relatively hot brines (300 to 500 degrees Fahrenheit) from beneath the Earth's surface. Those brines heat a second fluid that powers a turbine to produce electricity. Spent brines are re-injected into the geothermal reservoirs.
SDG&E has spent $60 million in ratepayer funds to build and operate the facility.
The utility's 10 partners--including the State of California, the Energy Department, Southern California Edison, Pacific Gas & Electric and the Electric Power Research Institute--contributed the remaining funding.
The state Public Utilities Commission has authorized SDG&E to spend as much as $94 million in ratepayer funds to build and operate the demonstration plant. SDG&E would exceed that spending cap if drilling is not completed until mid-1989, Lacy said.
The utility, which needs regulatory approval to spend money on the plant, lacks the money to cover an estimated $25-million shortfall that the delays will generate, Lacy said.
SDG&E said it hopes that the companies will provide brine at a lower cost. But if negotiations fail, the plant will be mothballed, Lacy said.