Former mine struggles to reinvent itself

SCE, Government prove difficult obstacles.

Pine Creek Mine is attempting to generate hydroelectric power (and income), but it contends Southern California Edison—and the U.S. Forest Service—is making that difficult.

Craig Rossell, part-owner of the Mine with Lynn Goodfellow, explained to The Sheet how the Mine’s attempt to use snowmelt runoff flowing through the Mine to generate hydroelectric power recently got complicated.

Pine Creek Mine, also known as the “Mine in the Sky,” was once the country’s largest tungsten mine. The Mine is located north of Bishop, past Rovana, at the end of Pine Creek Road. Though few would know it now, the Mine used to be a major contributor to the Eastern Sierra economy, employing 300 during its peak production, said Mine Caretaker Tom Haenni. The Mine itself is gargantuan: Haenni said it rises from an elevation of 8,000 to more than 11,000 feet, or double the height of the Empire State Building.

The Mine began tungsten production during WWI, and ran at peak capacity during WWII, turning a profit of $70-$80 million during the Korean and Vietnam Wars, until China began to produce tungsten more cheaply in the 1990s. The Mine officially shut down in 1991.

The Mine went up for auction in 2000, and Lynn Goodfellow, owner of Goodfellow Crushers based out of Utah, happened to see an advertisement for the auction while staying in Tonopah. Goodfellow raced down to purchase the property from former owner Avocet Tungsten, Inc.

Haenni said that Goodfellow did much to clean up the property, which had fallen into disrepair after Mine operations ceased. He estimated Goodfellow hauled about 300 semi truckloads of waste off the property to clean it up.

Remaining structures include the engineering, office, and crusher buildings. crusher buildings.

Goodfellow’s original plan was to create a museum at the Mine, but “then we had a pretty serious avalanche that took the south side of the mill out,” Haenni said. Since then, Goodfellow has sought other ways to make the Mine property viable.

“But it’s an uphill battle, just because it’s called a mine,” he said.

Some possible uses of the Mine’s ample supply of clean, fresh snowmelt runoff, which spills through old mine shafts and eventually pours into Morgan Creek, is to put a brewery in at the Mine, an underground fishery, or even hydroponic gardening.

Investing in renewable energy

Most recently, the Mine invested in creating hydroelectric power. At present, the Mine uses one generator with the capacity to produce about 250 kilowatts of energy per month, although Rossell said it currently produces about 170 kw. “It’s a small amount, but it helps,” he said.

The Mine was able to begin selling its hydroelectric power to Southern California Edison (SCE) because of the California Renewable Energy Small Tariff (CREST) program, which began in 2006 pursuant to a 1969 bill. SCE and other public utilities now buy CREST electricity from small renewable facilities like Pine Creek Mine and then distribute that electricity to consumers. SCE buys renewable energy because, like all energy providers in California, it has a Renewables Portfolio Standard goal to provide 33 percent of energy from renewables by 2020.

In order to qualify for the CREST program, hydroelectric producers must prove their entitlement to the water and be certified by the California Energy Commission (CEC) as a renewable power resource.

According to Rossell, the CEC pre-certified Pine Creek Mine as a renewable power facility in 2012, and the Mine entered into a power purchase agreement with SCE at that time. For about nine months, the Mine produced power and SCE distributed it to the grid.

But during that time period, Rossell said the CEC listed the facility at Pine Creek as “incomplete” on its website. He claimed it did this without providing any other form of notification to the Mine.

According to CEC Information Officer Michael Ward, “In October 2012, after changes were made to the facility and it repowered, the applicant applied to the Energy Commission for precertification of the new conduit hydroelectric facility. The application was incomplete, but the Energy Commission worked with the applicant who resubmitted it in November 2012.”

Ward said that application was also incomplete, and that Pine Creek Mine didn’t submit a new application until August 2014. That application was approved, and Pine Creek Mine was certified as a renewable energy producer in April 2015.

When SCE discovered that Pine Creek Mine was not certified, it notified the Mine that it was in default under the power purchase agreement. As it turns out, part of SCE’s contract with the Mine stipulated that if this should happen, when the CEC certified the facility and the Mine began to produce electricity again, SCE would take that power for free until the Mine had supplied enough electricity to pay off the electricity SCE had previously purchased from the Mine.

SCE had purchased $94,000 in electricity.

Rossell said that the CEC de-listed the Mine because of a single missing document: a Western Renewable Energy Generation Information System (WREGIS) generating unit ID number, which he claimed SCE said it would supply to the CEC. WREGIS is a registry for renewable generators and tracking system for renewable energy credits.

“We believe that we’re paying for SCE’s mistake,” Rossell said. “SCE got a sweet deal because of a technicality in a contract that we consider them to be responsible for.”

Rossell said it would take about a year and a half for the Mine to generate enough electricity to pay back the $94,000 so it could start making a profit again.

What’s worse is that it took about a year for the CEC to recertify the Mine.

“It’s still not clear why it took the Energy Commission as long as it did,” Rossell said. He contended that the CEC demanded “piles of paper … including environmental studies,” even though nothing at the Mine had changed.

Ward said that if an applicant provides all of the necessary materials, the CEC review process should take about 60 days. He did not explain why Pine Creek Mine’s review process had taken from August 2014 to April 2015.

Pine Creek Mine quickly notified SCE of its recertification. Rossell said the Mine offered SCE a smaller credit, one that would cover any monetary loss SCE might have suffered from having sold non-certified power during the first nine months of Pine Creek Mine’s hydroelectric facility operation. He alleged that SCE’s Ole Heum turned the offer down and insisted that SCE receive another $94,000 in electricity before it resumed paying for power.

“We’re trying to solve the problem with SCE before going to the Public Utilities Commission (PUC),” said Haenni. “… We will file a complaint with the PUC if it doesn’t work out with SCE. Another option would be to take SCE to court, but that would cost more than the $94,000 … that’s what they’re banking on.”

SCE responds

SCE Media Relations representative Robert Laffoon Villegas disagreed with Rossell’s assertion that SCE was responsible for the Mine’s CEC de-listing.

“SCE provided the WREGIS generating unit ID with sufficient time for Bishop Tungsten [Pine Creek Mine] to obtain all required certifications from the CEC, with the understanding Bishop Tungsten was in good standing with the CEC,” he said.

When asked for the date SCE submitted the generating unit ID number to the Mine, Villegas’ response: “SCE is not commenting on the specifics of the dispute at this time.”

Villegas also argued that while Rossell might contend that allowing SCE to make back its $94,000 was unfair, SCE does not actually turn a profit on the energy it buys from the Pine Creek Mine. Distributing renewable energy to customers “is not done at a loss or profit—actual incurred energy costs are passed on to SCE’s customers.”

As for Pine Creek Mine’s offer of a smaller credit to SCE to cover SCE’s loss of money, Villegas said “Discussions with counterparties are confidential and cannot be disclosed.”

A second hydroelectric project

In spite of Pine Creek Mine’s issues with SCE, Haenni said Goodfellow still hopes to complete a second hydroelectric project that could produce 1 megawatt of electricity, which Haenni said would be worth close to $1 million in annual revenue.

The Mine has already placed a plug in the ground 2,900 feet inside the mountain, flooding the access tunnel to create a 280 acre-foot pool of water, Haenni said.

But here Rossell explained that the Federal Energy Regulatory Commission (FERC) process has slowed down the Mine’s momentum. Rossell said the permitting for a second hydroelectric project required a 130-page document and 13 different environmental studies, including a historical study at a cost of about $80,000, as well as an endangered species study at a cost of about $70,000, which took over a year to complete.

All of that in spite the fact that “From day one, we said we were not touching anything outside,” said Haenni, who argued that all work would be done underground.

The USFS disagreed. The USFS is one of about 19 different agencies that reviewed the Mine’s preliminary permit with FERC. According to Inyo National Forest Public Affairs Officer Deb Schweizer, the USFS recently submitted comments expressing concerns about the impact of the second hydroelectric project on Forest Service lands. While much of the lower portion of the Mine resides on private land, the higher portions, including several roads, are on USFS land.

Schweizer said that the Mine’s preliminary permit claimed the project would only be on private lands, but that “Most likely the majority if not all of the project will be on Forest Service lands. That includes the intake, piping, powerhouse, transmission lines, and access roads.”

Schweizer said the USFS “is not opposed to the project going forward, we just need to make sure that the Forest Service concerns about impacts to archaeology and natural resources, for instance, are met.”

Schweizer said a National Environmental Policy Act (NEPA) would probably be required.

Haenni contended that this is just one more example of USFS attempting to interfere with the Mine. As he told it, when Goodfellow purchased the Mine, he delayed a reclamation plan that required the mine owner to address issues of physical and environmental safety. Haenni said the USFS wanted to take down all of the existing buildings.

“When Lynn bought the Mine, that totally ticked off the Forest Service,” Haenni said. “From there on, they did anything they could do to sabotage us and make life miserable.”

Schweizer said she didn’t think that getting rid of all of the Mine’s historic buildings was the USFS’s intent.

“We are a multiple-use agency; mining is an appropriate use in the Forest,” she said. Schweizer said the areas of primary concern are “shafts that have physical falling hazards,” as well as “tailing and settling ponds,” which could contaminate water in the area.

Nevertheless, Haenni characterized the USFS’s issue with the second hydroelectric project as the Forest Service’s continued resistance to any use of the Pine Creek Mine.

“You would think the U.S. Forest Service would be interested in clean energy,” he said.

Rossell remained hopeful that the second hydroelectric project would come to fruition. With the 60-day comment period completed, and FERC combing through comments from the USFS and other agencies, “Hopefully, we’re on our way.”

 

Update:

California Energy Commission (CEC) Information Officer Michael Ward contacted The Sheet last week to clarify why Pine Creek Mine’s application to become a renewable hydroelectric energy provider was first denied, and then took so long to approve.

While Pine Creek Mine co-owner Craig Rossell asserted that the Mine’s application was denied because Southern California Edison (SCE) failed to submit a Western Renewable Energy Generation Information System (WREGIS) generating unit number on time, Ward said this was not the case (SCE claimed it provided the generating unit number to the Mine in sufficient time).

“The October 2012 pre-application from Bishop Tungsten [Pine Creek Mine] was not disapproved by the Energy Commission because the WREGIS generating unit ID number was missing,” Ward said. “A  WREGIS ID was not required as part of the precertification process because the facility had not yet begun operations.”

Ward explained that the Mine’s 2012 application was disapproved not because of missing documents, “but because staff determined that Bishop Tungsten was a new conduit hydroelectric facility, not an existing one that had commenced commercial operations prior to Jan. 1, 2006.”

Because “significant changes had occurred at the facility” since the CEC had approved an original 2009 application, “a new application was required,” Ward said. “The applicant decided not to submit a new application, and the application was disapproved in January 2013.”

Ward said the CEC received the Mine’s next application on Aug. 29, 2014, but that the CEC did not deem the application complete until April 8, 2015 because of errors in the application’s commercial operations date and missing hydroelectric supplemental information, as well as “other required information such as a signature for precertification attestation, and because some responses on the application and supplemental forms were incorrect.”

Although typically the CEC’s review process takes about 60 days, that phase does not begin until the CEC deems an application complete.

“Once the requested documents were received, staff began evaluating the materials and on several occasions, contacted the applicant to provide additional information or clarification,” Ward said.

The CEC approved the Mine’s application on April 9, 2015.