September 21, 1998
Mr. Bruce Kaneshiro
CPUC EIR Project Manager
C/O Environmental Science Associates
225 Bush Street, Suite 1700
San Francisco, CA 94104-4207

Dear Mr. Kaneshiro:

I wish to thank CPUS/ESA staff for past presentations before this Board and attempts to fully address issues in the above referenced matter. Nevertheless, it was disappointing that a separate EIR could not be written as requested by the Board of the Geysers sale nor an official public hearing held in our area to allow formal verbal comment on the draft EIR. It would have made participation by the public much easier.

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I ask that the final EIR seriously consider the many and interrelated issues which were brought forward during our discussion, comments at the recently held public participation meeting of September 15, 1998, and the comments both written and verbal forwarded to you by Board of Supervisor members, the public and agency staff.

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The Geysers play an important role in the continued prosperity of Lake County, and your conclusion that effects of 1-2% are not a significant cause of concern is not acceptable. It is the Board’s feeling that if the sale of Geysers facilities results in a selling price lower than the tax base now established, Lake County and special districts will be adversely impacted. Mitigation of these impacts is quite essential. We realize that much of the DEIR scenarios are based on assumptions and forecasting, and ask that you take a more detailed and wider spectrum of scenarios and suggest specific mitigation steps should the less likely and desirable occur.

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For the record and to ensure that the statement is included in the EIR record, I want to repeat the statement included in May 13, 1998 letter, "It is vital to the well being of our county to preserve our air quality (the only air district in the state to meet all the ambient air quality standards), preserve our chosen waste treatment option of injecting waste water into the Geysers and recognize that the Geysers represent a significant direct and indirect component to our local economy. The Geysers is a world class environmental show piece for renewable green energy which needs to be preserved and promoted. It is of paramount importance that the long standing and mutual cooperative basis that has largely contributed to the success of the Geysers, as an environmental model project, be continued and viable under CPUC decisions as a result of deregulation and divestiture."

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We continue to request the opportunity to review, prior to the CPUC consideration of approval, the proposal and qualifications of the potential owner to assure that our needs will be protected.

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The Board is continuing to request that any new owners continue to honor existing written agreements and that unwritten operating protocols be incorporated as a precondition of a change of ownership. Other members of our community and staff have further enlarged upon these issues as part of the EIR process. We would especially like to see recommendations on those activities that have been identified.

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The EIR needs to examine in more detail green power policy to ensure a viable continuing industry in California and to tie that into this sale approval consideration. When appearing before the Board, ESA/CPUC staff stated federal law gave a 1.5 cent/KW subsidy to green power and the Geysers. Is this still a valid statement? AB 1890 funds apparently enabled operation during the current year’s high availability to hydro-power by ensuring a temporary transition floor of 3 cents/KW. The CPUC/ESA staff and DEIR contend that it is not an issue because of desirable economics, yet during the current year PX price apparently fell to zero cents/KW (Appendix C). Will AB 1890 apply to the Geysers Plants once the plants are sold, or will they be treated as merchant plants? Will they still be able to be assisted during transition years by AB 1890? Please, identify any incentives given to green power by state policy and explain how these will be incorporated into the CPUC’s consideration in utilizing the final EIR and decision on sale approval.

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Hydro-curtailment’s effect upon the steamfield management and the impact on industry’s continuing ability to manage our air, water, land and economic resources continues to be of concern. We realize that the question is not fully resolved, and we further understand PG&E and steamfield operators may identify specific mutual steps to address this concern. Any such steps, such as assurances of minimum generation consistent with protection of the steamfield integrity during all time periods including high hydro availability periods of time, should be identified, and it must be made clear how they will continue with new owners that are without PG&E’s resources and customers. This issue has been commented on extensively and we ask that the final EIR identify specific possible mitigation steps for all reasonable outcomes.

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Thank you for your consideration and commitment to a fair and factual final EIR that identifies potential impacts this divestiture proposal may have on our county, state and country, and identifies mitigation that could be implemented to achieve policy goals and protect our environment.

Sincerely
/s/
Louise Talley, Chairman
Lake County Board of Supervisors

CC: CPUC Members