Mt. Princeton Geothermal LLC Regulatory Hurdles, Action Solutions and Geothermal Investment in Colorado Geothermal Working Group Denver, Colorado 28 April 2011 Frederick B. Henderson III, Ph.D. Chief Scientist, Mt. Princeton Geothermal LLC

Mt. Princeton Geothermal LLC Definition: Emerging Geothermal State – A state with good geothermal energy potential and little or no production Focus on hydrothermal potential; EGS 10+ years away State (Colorado) needs outside investment

METHODS PRESENTLY USED Steam Rising Injected Working Fluid

Mt. Princeton Geothermal LLC

General Plan : Completed Stage I geological, and geophysical studies to target deep reservoir (~$1+ Million) Spring – Summer 2011: Stage III permitting and deep reservoir drilling (~$3-5 Million) Mandatory for Stage III Fall 2012 – 2010: Stage III production and re-injection well permitting and drilling; surface plant permitting and development. (~$ 40 Million) Could be complicated by BLM lease sale issues and legal delays

Mt. Princeton Geothermal LLC Primary Barrier to Colorado Hydrothermal Geothermal Development? Attracting outside (?) Risk Investment for Stage II Deep Reservoir Confirmation Test Drilling First stated to Geo in 2007

Mt. Princeton Geothermal LLC Primary Barrier to Colorado Hydrothermal Geothermal Development? WHY? 1.General Economic Malaise Weak Geothermal Industry: only 4 companies with funds to invest. Merging and investing only in US and Non US elephant country; not US Greenfields or emerging states.

Mt. Princeton Geothermal LLC Geothermal Companies (GRC) Invite to/ Report on GTWG Agua Caliente; Alta Rock; Caldera; CalEnergy; Calpine; Chevron (Indonesia);Enel; Gradient; Iceland America; Magma; Mid America Energy; Nevada Geothermal; Ormat; Ram Power; Raser Tech; Sierra Geothermal

Mt. Princeton Geothermal LLC Primary Barrier to Colorado Hydrothermal Geothermal Development? WHY? 3.Investment community funding only proven projects, not prospects. 4.Colorado is expanding environmental and regulatory barriers antithetical to outside investment in geothermal energy

Mt. Princeton Geothermal LLC Suggested GTWG Action Solutions What would it take for the PUC allow Utility investment for drilling (Legislation?) Work with geothermal industry, investors and utilities to create financially meaningful a PPPAs (Preliminary PPA) for intermediate reservoir funding (Southern California Edison Model?)

Mt. Princeton Geothermal LLC Suggested GTWG Action Solutions Industry Emerging State Investment – Exploration Consortia – Industry Drilling Pool (with Government?) State wide effort to coordinate county development of geothermal 1041 stipulations with economic balance

A TYPICAL POWER TUBE INSTALLATION Harmonic Condenser Turbine Harmonic Boiler Temp F working temp. 210 To Customer Service Distribution Building Generators Down to Thermal Source When Needed Hot Rock Area ft.

Mt. Princeton Geothermal LLC Suggested GTWG Action Solutions State wide initiative to encourage counties to adopt Mono Countys successful 20 year County created HAC (Hydrologic Advisory Councils) composed of Federal, State and Local regulatory and technical experts to act as a public oversight body. Addresses agency overlap and public input.

Mt. Princeton Geothermal LLC Suggested Solutions Need a Critical Mass of Proponents: Geothermal Industry, Investors, National, State and Local Governments with a Common Voice to the Energy Consuming and Environmentally Sensitive Public and Legislature through GEA; GRC; Universities; GEO; GTWG; etc. to answer why invest in Colorado and Whats in for me for Concerned Citizens

Mt. Princeton Geothermal LLC POTENTIAL CHAFFEE COUNTY GEOTHERMAL ENERGY BENEFITS Mt. Princeton HS 10+ MW Poncha Springs 7-10 MW Cottonwood HS 5-10 MW Hecla Junction ?. Total MW

Colorado Preliminary Top 10 Hot Springs

COLORADO POTENTIAL 1/2 of 57 hot springs at 10 MW each ~ 300 MW or more

Mt. Princeton Geothermal LLC A KEY GTWG ISSUE: How can WE make Colorado more attractive to out side investor $$$