Navy Use of § 2922 Authority
CAPT Clayton Mitchell
NAVFAC Energy Office
2011 ADC WINTER FORUM | PAGE 1
Key Energy Legislative Provisions
 10 USC 2922A
 Establishes contract duration for provision and operation of energy
production facilities.
 10 USC 2917
 Permits Secretary of military department to develop geothermal
resources beneath withdrawn public lands.
 10 USC 2916
 Permits military to sell, or authorize the sale by a contractor of
electricity produced from alternate energy or cogeneration facilities.
Funds to be invested in account for electricity.
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10 USC § 2922A Authority – Contracts for Energy
 Contract up to 30 years in duration
 Purchase energy either from:
 production facilities on real property under SECNAV jurisdiction or;
 on private property
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Requires SECDEF approval
Sometimes (mistakenly) referred to as the Power Purchase
Agreement (PPA) statute.
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DON Applications of §2922A

None to date.
 China Lake Geothermal often mistaken as under § 2922A.
 Miramar Land Fill Gas (currently in-progress) would represent DON’s initial use of § 2922A
authority
 Potential future opportunities at:
o
o
o
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29 Palms (Solar )
NSWS China Lake (Solar)
NAS Fallon (Solar)
Navy interpretation of § 2922A1
 Section A references §2917 – authorizes geothermal energy resource
development.
 Section A2 references provision and operations of an energy production facility
(not specifically renewable or geothermal) on land under jurisdiction of the
Secretary concerned or on private property.
 Navy interprets that withdrawn land would fall under the jurisdiction of the
Secretary concerned.
o Except when the withdrawal notice notes specific conditions:
 Executive Order
 Other statues
2011 ADC WINTER FORUM | PAGE 4
China Lake Geothermal Plant
Contractual Overview
• Public/Private Venture
• Generally considered a “revenue” contract vs FAR
contract.
• DON can take revenue or power
• Not considered a FAR Contract because it does not
involve the expenditure of appropriated funds for
either services or supplies.
Production Capacity
• Power Plants (4) – Navy (2)/BLM (2)
• Net Production Output: 270 MW
• Infrastructure
• Several FAR clauses have been incorporated into
the contract
• §2922A often mistakenly cited as the enabling
authority for China Lake plant.
• Originally authorized under 10 USC § 2867 and
2889; the precursor to § 2917
 Turbine-Generator Sets: (9)
 Transmission Lines: (2)
 Productive Wells: (166)
 Piping (Linear Feet): +200,000
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Miramar Landfill Gas Overview
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Contractor Scope:
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Government Scope:
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Develop/ construct/ operate/ maintain renewable power generation facility
Methane gas extracted from landfill (15 years - § 2922A)
Located on MCAS Miramar real property leased to the city of San Diego
3 MW Renewable Energy at MCAS Miramar
25,542 MWH annual capacity/ 18,809 MWH/yr minimum delivery
Contractor to deliver renewable power NLT (9) months after contract award
Construct/ own/ operate/ maintain power transmission infrastructure to new facility
Strategic Objectives:
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Reduce MCAS Miramar’s reliance on fossil fuels
At a later date, the Government may negotiate provisions to include “Black Start” capability to
mitigate electric grid failure
USMC to retain Renewable Energy Credits
Pre-established price for predictability and budgetary planning
Potential delivery of 33% to 50% of installation’s annual mission essential energy requirement.
Miramar Challenges
Coordination of multiple contracts
 Government construction of transmission/distribution lines
o Portion of the transmission lines funded under ARRA – should be awarded after PPA is
awarded.
o If transmission line completed but PPA not awarded, then no complete and usable system.
 Contractor construction of production facility
 Power Purchase Agreement for commodity utility
o Take or Pay Legal Considerations
o Termination Clause Legal Considerations
QUESTIONS?
China Lake Geothermal Plant History
• Project Location: NAWS China Lake
• Key Milestones:
 Start Initial Testing: 1964
 Test Initial Well: 1977
 Initial Contract Award: 1979
 California Energy Corporation
 Follow-on contractor: Terra-Gen
 Contract Renegotiation (30 years): 2005
• Type of Contract: “Unique”
 Navy receives negotiated percentage of
contractor’s gross revenue up to ceiling of 20%.
• Business Model Revision Underway
 Co-locate solar PV or wind with geothermal
wells.
 Share transmission line with geothermal power.
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