Geothermal plant goes forward at full steam

BARBARA MARQUAND

Tucked away in a southwest Reno neighborhood is a utility so tiny most locals have never heard of it, yet it has attracted interest from researchers in other states and the federal Environmental Protection Agency.

The Nevada Geothermal Utility Co. uses geothermal energy to heat 111 homes at less than what Sierra Pacific gas customers pay and with little impact on the environment.

The utility, which has quietly served two subdivisions for 25 years, will never grow to be a giant. But its new owners are investing money on upgrades to keep it afloat and eventually turn a profit.

"We'd like to be able keep this thing going another 20 to 25 years," says President Richard Campbell Sr.

Nevada is a hotbed of geothermal energy with more hot springs per square mile than any other state.

While big power plants use geothermal energy to generate electricity, Nevada Geothermal Utility Co. uses it to provide space and water heating. It's one of only three utilities of its kind in the state the other two are in Elko. Here's how the system works:

Two production wells pump the geothermal water through heat exchangers, which transfer the heat from the well water to clean city water. The hot city water then is piped through an underground distribution system to homes, where it goes through additional heat exchangers to transfer heat for hot water heaters, pools, furnaces and driveway de-icing systems. The city water travels in a closed loop and is never consumed. The geothermal water is injected back into the ground to be heated and reused.

Customers in the utility district now pay a flat rate based on 75 percent of Sierra Pacific's gas rates. But the actual amount they pay is closer to 60 percent because of the geothermal system's high efficiency.

Developer Frank Warren created the utility to serve new homes in two subdivisions he developed in the early 1980s Warren and Manzanita estates, located in what's known as the Moana geothermal area in southwest Reno. Warren figured access to geothermal energy would be a selling point for the new lots.

In recent years Warren decided he wanted out of the utility business and asked his attorney, Campbell, to look for buyers. After a couple of deals fell through, Campbell considered the opportunity himself. A former chief legal counsel for Sierra Pacific, he had years of industry experience, and he hated to see the little utility shut down.

"It's something that's worthwhile," he says. "It benefits the environment, and it's unique."

Campbell then teamed up with Bruce Harvey, a former financial manager for Sierra Pacific, and geologist Dennis Trexler to buy the company stock from Warren. The deal was final in April, and the team brought on a fourth officer, Tom Hulbert, to help direct the company. The utility employs two maintenance workers and contracts with another business to handle day-to-day operations.

Even a tiny utility operation comes with big challenges.

"We knew going in that it would need some upgrading," Campbell says. "It was operable, but it was old."

The company spent $123,000 last year replacing two pumps, and this summer it plans to spend $150,000 to computerize the pump system and add new heat exchangers. It's also working on a proactive maintenance program to prevent leaks and downtime for the system.

In November, the system was shut down for 12 days after some bearings failed in the primary well.

(Customers are supposed to have backup systems to stay warm during outages.) Repairs are challenging because the parts are highly specialized and expensive, and often there's a long waiting time for getting orders fulfilled. Harvey says the utility is working with suppliers to make sure replacement parts are kept in stock and to keep downtime to a minimum when repairs are necessary.

Despite the challenges, the directors remain committed to keeping the company going not just for the sake of profitability but for the environment, too. Researchers from other states and the EPA have highlighted the utility in a variety of studies as a green energy alternative.