A fight is brewing to build Colorado’s first geothermal plant as neighbors oppose development

The proposed geothermal plant will surround Rodeo Road and County Road 323, the dirt road leading towards Mount Princeton, taking at least 3,000 acres on state land outside Buena Vista. (Hugh Carey, The Colorado Sun)

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NATHROP — Oh, to be of an advanced age and staring out over a field of sagebrush knowing you’re closer than ever to realizing a dream that may not be fulfilled in your own lifetime.  

So it was with Fred Henderson on a day in April, when a brisk wind was hustling winter out of Chaffee County. 

Henderson, 87, stood on County Road 323 not far from Mount Princeton Hot Springs Resort in Nathrop. He was looking at the 3,500 or so acres he and his business partner, Hank Held, lease from the Colorado State Land Board. One hand was tucked in the pocket of a jacket that hung loosely on his slender frame. The other gestured toward the land as he described the geothermal power plant he and Held have been trying to launch for more than a decade and was now, he felt, inching toward reality. 

Signs this will happen are becoming more and more evident. Since 2019, when the legislature ordered the Colorado Oil and Gas Conservation Commission to reprioritize health and environment as they considered drilling permits, the state has been adding provisions to advance one of the few untapped sources of clean energy in Colorado: geothermal. 

The most significant move was an order from the legislature to the COGCC, now known as the Colorado Energy and Carbon Management Commission, to create rules for exploration and development of the vast reserves of boiling underground water sitting below the earth’s crust. It’s all part of ambitious goals to reduce climate warming greenhouse gas emissions and wean Colorado from oil and gas by 2050.

This spring, Polis signed House Bill 1252, which establishes a state grant program for geothermal energy projects, and House Bill 1272, which includes an investment tax credit for exploration of new geothermal wells, the drilling and development of new wells and investments made for geothermal electricity production. House Bill 1247 requires the state to conduct studies to assess the use of “advanced energy solutions,” including geothermal. 

Will Toor, executive director of the Colorado Energy Office, says he sees a time in the not-too-distant future when geothermal will fill the gap solar and wind energy leave in a fully renewable green-energy system. While wind and solar will generate about 80% to 85% of Colorado’s future energy needs, he said, geothermal could fill in the remaining demand, “providing the balance that allows us to maintain a reliable grid while still having zero emissions.”

We’ll need this kind of generation if promises, like the one Xcel Energy made to provide 100% carbon-pollution-free power to Colorado federal facilities by 2030, are to be kept.

Henderson — whose career in energy and mineral exploration and development has spanned the spectrum from coal and lead to geothermal — said he’s trying to develop an energy source generations of future Hendersons and others can use “right where Mother Nature put it.” 

Geothermal development in Colorado

Historically, experts believed Colorado’s geothermal resources were suitable only for direct-use applications — heating buildings or growing plants in greenhouses — and a few of those have popped up in recent years. Colorado Mesa University is pioneering geo-exchange technology to heat and cool its buildings with water. The National Western Center is heating Colorado State University’s Denver spur campus with sewage transferred to clean water pipes shooting out of the National Western Center campus. And Steamboat Springs approved a plan for developers of the Brown Ranch to use a geothermal system to heat houses, which could save future residents $195 million over 30 years. 

Held and Henderson want to use the hot water for direct use to generate electricity, but Tom Plant, a Colorado Public Utilities commissioner in Buena Vista, said “there are a lot of unknowns.”

Mt. Princeton Geothermal is tiny — just Henderson and Held. And for the 12 years they say they’ve been working on their project, “we’ve gotten almost zero help from anybody, government or whatever,” Henderson said. 

The state’s green-energy shift is giving them hope. They’ve recently entered talks with an investor who may be willing to put up the millions the men need to move onto phase two of their geothermal development plan: prove that a reservoir of hot water capable of generating 10 megawatts of energy lies beneath the land in Chaffee County.  

But former Colorado Gov. Bill Ritter, who helped establish Colorado as a national leader in renewable energy and is now director of the Center for the New Energy Economy at Colorado State University, said the only way any green energy development is going to advance is if people are willing to make sacrifices — and some aren’t. 

That’s what Held and Henderson are currently facing, even as their project seems to be gaining traction. Opposition to their plan comes from residents of the Lost Creek Ranch subdivision a mile away from the future plant site. The neighbors say a geothermal plant could contaminate their drinking water wells, create noise pollution and ruin the view of 14,196-foot Mount Princeton, which could drive down home values.

When a project of this scale threatens to take hold, pushback is inevitable. Ritter said a green-energy shift will require all sorts of adaptation: “Before we ever develop geothermal, we’re going to develop significant wind, significant solar and significant storage, all of which have downsides. But it’s important, in a world where we see devastating greenhouse gas emissions and climate change, to literally test the waters.”

Henderson and Held’s hot water vision 

To understand Henderson and Held’s work in progress, it helps to understand them.

Henderson settled in Chaffee County after meeting “a lovely lady who had 12 wolves,” he said. Held grew up in Salida in the 1950s and ’60s. The two crossed paths after a professor at Colorado School of Mines said they should meet. Henderson is a Harvard-trained geologist with decades of work in energy and mineral exploration and development; Held is a lawyer and investor who has specialized in international leasing and credit development.  

Held said his interest in geothermal started when, wanting vine-ripened tomatoes in the middle of winter, he wondered if he could build a geothermal greenhouse near Mount Princeton Hot Springs Resort. That later turned into him thinking, “If we’re going to bring hot water to the surface, why can’t the geothermal hot water spin a turbine before we use it for something else?”

He and Henderson hit it off because they both thought the Mount Princeton area held a tremendous geothermal resource, and they started working together to see if it was true. The first thing Henderson did was track down maps of wells the American Metal Climax company, owner of Climax Mine near Leadville, had drilled in the Mount Princeton Hot Springs area in its search for geothermal energy production in the 1970s. From these, he developed a theory that the deepest hot springs in the area were likely hotter than anyone had originally thought, and probably perfect for the capture of geothermal heat.  

Using Climax company data, Henderson discovered several drill sites focused on springs close to the Earth’s surface that weren’t hot enough to generate geothermal energy. According to the Energy Information Administration, geothermal electricity generation requires water or steam at temperatures between 300 and 700 degrees. Water this hot is generally located in reservoirs a mile or two underground. It’s then pumped through a well under high pressure. When the water reaches the surface, the pressure is dropped, which causes the water to turn into steam. And the steam spins a turbine, which is connected to a generator that produces electricity. 

The ground required to drill a well must also be permeable, to allow both for the large-scale movement of hot water and transport of heat to the surface. 

Acting on an educated hunch that a deep reservoir of such water sat thousands of feet below ground in the vicinity of Mount Princeton, Henderson enlisted the geoscientific and engineering company Dewhurst to hunt for sites with geothermal energy potential. The results of this assessment, showing a number of potential commercial geothermal reservoir targets in Chaffee County, were further evidence that Henderson was onto a deep bath of water hot enough to produce 10 megawatts of geothermal energy, which can power around 8,000 homes. Held funded the whole thing. 

Now, the men had proof of concept. What they needed was more money. Henderson estimated it would cost $5 million for an outside geothermal developer to come in with the right equipment and drill the test hole on the State Land Board land. But this is where Henderson said the project hit its first major snag: convincing companies that could do the drilling to do it in a state where there has been zero development of geothermal as an energy source.

Outside investors don’t want to spend years and millions of dollars proving a well site only to be told they can’t develop it, Henderson said. “So that created a problem of us getting to do what we want to do.”  

Chaffee County, like the rest of Colorado, abides by so-called 1041 powers, the set of rules passed in 1974 that regulate areas and activities of state interest through a local permitting process. Geothermal development is one such activity, and Chaffee County, Henderson said, “has a really onerous set of rules.” 

The wait for energy office funding

Held and Henderson were struggling to develop one of the oldest forms of heating on Earth. 

Archaeological evidence shows that the first human use of geothermal resources in North America occurred more than 10,000 years ago with the settlement of Paleo-Indians at hot springs in places like the ancestral lands of the Shoshone-Bannock peoples along the Salmon River in what is now known as the Frank Church-River of No Return Wilderness in central Idaho. 

Thousands of years later, geothermal energy from hot springs near Boise warms more than 5 million square feet of residential, business and governmental space through district heating systems with miles of pipes. California has more than 150 geothermal projects either in development or up and running. The federal government has a stake in 18 geothermal plants operating on Bureau of Land Management land in Nevada. A 22-megawatt facility produces enough energy to power approximately 17,000 homes in eastern Oregon and Idaho.

But in Colorado, the general public still largely associates hot springs with places to soak their bones.

Anyone tuning into the 2023 Western Governors Association meeting in Boulder, however, would have heard David Turk, deputy secretary of the Department of Energy, say Colorado is one of five Western states holding 95% of the United States’ geothermal potential. 

Geothermal is a relatively inexpensive source of electricity (6 cents to 9 cents a kilowatt), but trails wind (2.6 to 5 cents) and utility-scale solar (3 to 4 cents). It can also be reused, by cooling and reinjecting water after the energy in it is extracted.  

The challenge is getting the power to places where it can be used. To get electricity from a geothermal plant in the Mount Princeton area to the Sangre de Cristo Electric Association, for example, the plant would have to tie into an Xcel Energy high-voltage transmission line running from near Dillon to just west of Salida and then into the San Luis Valley through two main lines, one owned by Xcel Energy and one shared with Tri-State Generation and Transmission Association, according to Tri-State spokesman Lee Boughey. 

“If we develop these reserves without the infrastructure to transmit, it does us no good,” Turk said. “Right now, we’re building out only 1% of our transmission capabilities and we need to build out like we never have in this country.” 

Turk sat on a panel of geothermal experts a year after Polis announced his “Heat Beneath Our Feet” initiative as chair of the Western Governors Association, a post he was voted into in 2022. The plan touted geothermal exploration and development as Colorado’s next big green-energy venture. 

The legislation Polis signed this year, including bills designed to slash greenhouse gas emissions and make the state more environmentally resilient, piggybacked what federal legislators had done in the two years prior. And the Inflation Reduction Act, signed in 2022, was supposed to provide a runway that would make green-energy exploration and development smoother and more affordable. 

Among funding the Colorado legislature created for geothermal development last year is the bipartisan House Bill 1381, a $12 million grant program within the Colorado Energy Office. But Henderson said he and Held haven’t seen any of that money because “the state keeps delaying getting the grant funding out, and I don’t believe they’ve called for specific bids.”

That was resolved Wednesday, when the energy office announced its first request for applications will open no later than Nov. 14, with information on final eligibility criteria and the application process on the grant website. 

Meanwhile, Henderson and Held are dealing with another issue. 

No geothermal in our backyard

Henderson calls the residents of the Lost Creek Ranch subdivision “NIMBYs.” They’re also his “archnemeses,” and they’ve been protesting for close to a decade, he said. “Now, other people in the county are taking up their call, and the problem is, all I’ve seen them say is based on just a lot of misinformation. All kinds of things they claim in (one of the local newspapers) get people stirred up.” 

A change.org petition the group created in July states its central objection to Held and Henderson’s plan: “There are over 1,900 private wells within 5 miles of the current proposed site. The drilling required by a geothermal project of this magnitude poses a real threat to these wells and the homes that they serve. 366 of these homes are within a 2-mile radius of the proposed site.” 

In late July, the group held an informational meeting led by Tom McCracken, a local math teacher, at a church in Buena Vista. 

“That’s how we’ve been doing it,” he later said. “Just grassroots. There’s no corporation. It’s just us literally saying, ‘Not in our backyard,’ because (the proposed development) is, literally, in our backyard.” 

McCracken sent The Colorado Sun a 32-page document laying out in detail the many reasons the group is worried about the plant. Location is the biggest concern, he said, because of all geothermal plants in the Western U.S., none are as close to a residential area as this one, and no one knows what could happen to the homeowners’ wells should Mt. Princeton Geothermal drill. 

The Union of Concerned Scientists says there have been no reported cases of water contamination from geothermal sites in the United States, however.

McCracken also said the drill site sits on land over a tectonic fault line and “it just so happens our houses are also built on that fault line,” making the group worry that drilling could increase the potential for earthquakes. 

Seismologists say geothermal drilling itself does not cause earthquakes, but the steam removal and water return can do so, by producing new instability along fault or fracture lines. Still, Henderson said he’s “not that concerned about earthquake risks,” because the geologic formation the plant would sit on is “the north end of a rift zone that’s been pulling apart for 25 million years.” 

The Lost Creek group also worries about noise pollution and odor the proposed plant would create. But in closed-loop systems, which is likely what Henderson and Held would build, gasses removed from the well are not exposed to the atmosphere and are injected back into the ground after giving up their heat. So air emissions are minimal, writes the Union of Concerned Scientists. And as for noise, Henderson said they can engineer a buffer “so noise should not be a problem.”  

ABOVE: Elk and other big game, along with hunters, regularly migrate through Maxwell Park public land west of Highway 285. BELOW: People soak at Mount Princeton Hot Springs in Feburary with the Chalk Cliffs in background. The mineral rich waters of the hot springs resort was established on this site in 1879. (Photos by Hugh Carey, The Colorado Sun)

Hits to the housing market, damaged real estate value, and viewshed impact round out the Lost Creek group’s complaints. McCracken also questions claims that building a plant will create jobs in Chaffee County. “You know, everyone says you’re going to have good jobs if this goes through, but this is Buena Vista,” he said. “It’s not like people here will automatically be qualified for those jobs. All of those workers will be brought in. And that’s going to be even more detrimental to our affordable housing.” 

There are intangibles his group takes issue with as well.

It’s concerned that Held sits on the Chaffee County Planning and Zoning Commission, an appointed position. But Baker said he’s been a full member of the planning commission for “quite some time, and he’s only one member. And if anything came up regarding the geothermal plant he would be expected to recuse himself.”

Lost Creek Ranch residents are also bothered by the sense that several geothermal advocates — including Ritter, Colorado’s U.S. Sens. Michael Bennet and John Hickenlooper, the Colorado Energy Office, as well as Chaffee County Commissioner Keith Baker and Buena Vista Mayor Libby Fay — are treating Henderson and Held’s project like it’s a foregone conclusion. 

This originated with a meeting organized by the Center for the New Energy Economy on Jan. 17 at Mount Princeton Hot Springs. Ritter chaired it and several big and small energy players, including Tri-State Generation Generation & Transmission, Sangre de Cristo Electric Association, the Colorado Energy Office and Chaffee County commissioners, attended. Ritter focused on the role geothermal energy can play in filing the transitional gap toward net zero in Colorado. And Henderson said there was general consensus and interest by some entities that an effort should be made to fund the drilling and testing of Henderson and Held’s site to kick-start the development of the geothermal energy potential in Colorado. 

In February, Sangre de Cristo Electric sent a $1 million spending request for fiscal year 2024 to the Senate Appropriations Committee to help fund a test well to determine if resources exist to construct the plant. 

Sangre de Cristo, Ark Valley Energy Future, Baker, Fay and Tri-State Generation & Transmission sent letters of support for the project. And Bennet and Hickenlooper supported the request. 

Then, on July 31 at Sangre de Cristo’s monthly board meeting, director Dan Daly brought up for discussion the board potentially confirming a resolution of support for drilling. 

McCracken said his group expressed concerns over the project during several county commissioner meetings. 

“And what did they say?” he said. 

“We’re not involved in any geothermal projects and there are no geothermal projects.” 

The (current) future of geothermal development in Chaffee County 

McCracken insists his group isn’t against geothermal. “Just the location.” 

But if what Baker told The Sun is true, the protesters may be misdirecting their objections. 

“There’s nothing subterranean going on or anything going on that’s secretive — no illuminati project,” said Baker. “I did submit a letter to Senator Bennet’s office for some congressionally designated spending for the project, and I did submit a letter of support for their well, like I’ve done for many projects and businesses in Chaffee County.

“But a lot remains to be seen to determine if this is a viable project or a viable source for a viable project,” he said. “And many questions — has there been a good analysis done of subsurface strata? Could there be cross-contamination? What are the seismic effects? — have not been explored in any meaningful way yet. Fred and Hank have ID’d some of them and are working on them, but they haven’t answered them yet.”

So to say this project is in its infancy is an overstatement, he added.  

Bryce Carter, program manager for emerging geothermal markets at the Colorado Energy Office, agreed, saying while several low-temperature, shallow geothermal projects are up and running, deep geothermal projects are still a ways off. “But they are part of the goal in our plan to be carbon-free by 2050,” he added. 

As for the Mount Princeton project, Henderson said Held has found an investor from Iceland — where 66% of all houses are heated with geothermal energy — interested enough to have made multiple trips to Chaffee County. “But he hasn’t seen any money on the table yet,” he said. 

Of all the people who want Colorado to embrace green energy — while keeping oil and gas during the transition — Henderson may have the most at stake. 

He’s been working on this project since 2013, and he knows from other jobs he’s done in the past it can take 20 or 25 years to see a project from exploration to production. If this project mirrors those, a reality of Chaffee County geothermal could take another seven to 12 years. 

By then, who knows where Colorado will be with the carbon reduction targets that are written into state law. Realistically, Henderson won’t be alive to see the changes. But he keeps pushing his and Held’s project, “because geothermal is a great backup for the grid. It’s 24/7 green energy that doesn’t pollute.” 

The last time Henderson talked to The Sun was Friday as he was heading into the hospital for a surgical procedure. He sounded tired, as maybe he should have. At 87, he’s been working hard, trying to move the project a little farther forward. Now he waxed hopeful about the benefits all of the work he’s done could have for future generations, should funding for the drill site come through, the feasibility of building a plant be proven and the plant itself be constructed. 

“It’s the children’s generation that will be able to buy what I’m providing for them,” he said. “And it’s the best renewable energy source, because we take the water out of the ground, remove the heat and put the water back in, to use again.”

CORRECTION: This story was updated at 3:50 p.m. on Sunday, Sept. 3, 2023, to correct Colorado’s greenhouse gas emissions reductions goals under Senate Bill 16, which was passed by the legislature this year. The story was also updated to correct the title of David Turk, deputy secretary of the Department of Energy.