A family ranch located near the intersection of Ouray San Miguel and Montrose counties is ground zero for a hopeful geothermal energy project.

The 960-acre Good Shepherd Ranch, owned by the Zahniser family since 1950, recently received permission from the state to drill two exploratory wells to test for geothermal potential. The ranch, located at about 9,000 feet in elevation, is currently used for grazing sheep in the summertime.

The plans include developing a 20- to 80-megawatt geothermal power plant, with a goal of contributing clean energy to the grid in the region by 2029.

Wendy Zahniser Fenner, who lives on Log Hill Mesa, presented those draft plans to the San Miguel Power Association’s board of directors at their meeting last week and received positive feedback on the project. In that presentation to SMPA, Fenner called the project “shovel-ready,” noting the permit for test well drilling was approved Nov. 1. That exploration drilling and data collection is expected to happen from February to March 2025.

Though the majority of the ranch is located in Montrose County, and the development of the wells would be located within that jurisdiction, such a project could benefit San Miguel and Ouray counties, too.

The location is key for the project, Fenner explained. A 230 kilovolt power transmission line, owned by the Western Area Power Administration, is located close to the northwest side of the property.

Another possible access to the grid and contributing power is a San Miguel Power Authority three-phase transformer located close to the property.

“There is potential to provide enough energy for both,” she said.

Sheep graze and bed down at the Good Shepherd Ranch, located near the intersection of Montrose, Ouray and San Miguel counties. The ranch, currently owned by the Zahniser family, is located at the west end of the Ridgway Fault, and has geothermal energy potential that will be explored this spring with test drilling by ZGEO Energy. The 960-acre ranch contains many depressed areas like this small valley, which are not visible from neighboring roads. Photo courtesy Wendy Zahniser Fenner

Generation of the idea

Fenner, who grew up in Montrose and has a background in civil engineering, first learned about geothermal energy by accident when she was living in Las Vegas more than a decade ago. She was helping a man who was trying to start a solar company and needed her help with an educational kiosk. She visited the Department of Energy and first learned of geothermal energy.

She was reminded of it again when she returned to western Colorado and interviewed for a job with Montrose County. She saw a map on the wall showing geohazards in the region, and realized the family ranch was not only located at the nexus of the counties, but also at the intersection of some notable geologic features.

Fenner points to cross sections of the area’s geology, using maps from the U.S. Geological Survey, which show the Good Shepherd Ranch isn’t just located at the intersection of three counties — it’s also at the west end of what geologists refer to as the “Ridgway Fault” and in a hotbed of potential geothermal activity.

Ten years ago, she and her family filed their first business paperwork with the state to form a holding company for the geothermal project. Now, it’s known as ZGEO Energy.

Fenner was still living in Las Vegas at the time, but soon returned to the region.

She started taldng temperature readings of soil at the ranch, which they called the Horsefly Ranch at the time. She noticed higher temperatures near an area where a fault pushed up rock at a 90-degree angle, intersecting with the surface.

She paid special attention to patches of dirt where the Earth seemed to poof up.

“It would push up this pile of dirt,” she said. “I guess you could say (it was) belching.”

These were all good signs of something happening underneath the surface. And sure enough, when she pulled out a temperature gun and started taldng readings, she found spots that were consistently measuring more than 150 degrees Fahrenheit, far hotter than the ambient temperature.

This temperature reading of the surface of the soil at the Good Shepherd Ranch was taken in the area where the Ridgway Fault connects with the ground surface on the ranch. Readings like this, as well as geologic mapping and other surveys, helped inform the location of two test wells that will be drilled to explore for geothermal potential this spring.
Photo courtesy Wendy Zahniser Fenner

“There was something exciting going on under there,” Fenner said.

She took GPS coordinates of the spots she documented and started talking to people and doing more research.

Fenner said she’s been in talks with Colorado Mesa University about possible training and education opportunities with the project, and has already worked with students from the Colorado School of Mines at the site to do surveys.

“We have a general sense of where the magma chamber is,” she said, which helped identify the ideal location for drilling test wells.

Timing is right

Since Fenner first started documenting the soil temperatures and looking up geology maps, interest in geothermal energy has grown, the technology has improved, and the political climate has pushed geothermal into public interest.

Colorado Gov. Jared Polis has championed geothermal energy and chose it as his initiative when he was elected chairman of the Western Governor’s Association in 2022. Since then he’s held summits to connect and study potential — including the Colorado-Iceland Clean Energy Summit in June, which Fenner attended.

Fenner sees geothermal energy development as a way to not only increase clean power production, but also boost jobs in a depressed part of the state where jobs have been lost due to coal power plant closures.

Stimulating the local economy and transitioning coal, oil and gas workers to a different sort of energy production is a goal for her. Shifting the workforce to this newer technology could help workers who didn’t transition to other high-paying jobs after Tri-State Generation and Transmission shut down the Nucla coal-fired power plant in 2019. These communities — including Nucla and Naturita — have not recovered economically.

Having the project located in the economically depressed West End, in the same Census-designated area where the Nucla plant shut down, means more opportunity for federal tax credits and possible stimulus money. ZGEO also plans to source materials here in the U.S., which could lead to even more tax cuts.

The project

Geothermal plants produce constant energy, have low emissions and convert heat to electricity.

The proposed project features a closed system that doesn’t consume any water, and the project does not use fracking. These geothermal wells are drilled to a depth between 6,000 and 10,000 feet into the Earth.

“We’re drilling deep enough that we’re not impacting tributary water rights,” Fenner said.

Fenner said the plan is to use a binary, air-cooled system, which will use geothermal heat to warm an organic fluid with a lower boiling temperature than water. Then this heated fluid gets pumped through a system where it vaporizes, turns a turbine to generate power, goes through a condenser and gets injected back into the well.

Geothermal power creates steam to spin a turbine, which generates the electricity. But in this case, it’s a closed system, so the steam is contained.

Fenner said there are some advantages to operating a plant like this at high elevation, where water boils at 195 degrees, much less than the 212 degrees it takes to boil at sea level. She also said the plant is expected to perform even more efficiently when temperatures are cold.

“In the wintertime we’re going to probably produce 10% more energy,” she said.

Because the ranch is located in a remote location with partially sunken areas, Fenner said she envisions building a geothermal plant that would not have a visual impact to neighbors, especially since the steam produced will be captured.

Eventually, Fenner said she hopes to also include agribusiness as part of the vision for the Good Shepherd geothermal project.

Possibilities include diverting excess heat and using it in food production greenhouses and partnering with organizations like Veterans to Farmers. The goal would be to produce food, create jobs and further boost the economy.

“We feel like it would be a no-brainer to do that,” she said.

Next steps

ZGEO Energy has submitted a proposal to Tri-State Generation and Transmission Association, responding to a request for proposals in September. Tri-State provides electricity to more than 1 million customers across almost 200,000 square miles in the West.

“We’ve given them the proposal and if we make the first cut, we’ll be negotiating a power purchase agreement with Tri-State,” Fenner said.

A contract to sell power would give ZGEO leverage to move forward with construction plans, if the test wells turn out to show potential for development.

ZGEO has signed a contract with the Colorado Electric Transmission Authority for assistance obtaining right-of-way agreements from neighbors for the transmission lines necessary to transmit the power to the grid.

ZGEO also has a purchase agreement to buy the Good Shepherd Ranch from the Zahniser family, Fenner said.

Jim Zahniser stands on top of a massive lava rock on Good Shepherd Ranch. His grandfather, Webb Zahniser, purchased the land in 1950 and used his Cessna airplane to herd sheep from Spring Creek Mesa in Montrose to the summer grazing pasture at Good Shepherd Ranch. Now Jim’s daughter, Wendy Fenner, is working to use the ranch for a possible geothermal energy project to benefit the region.
Photo courtesy Wendy Zahniser Fenner

Fenner’s great-grandfather originally purchased the property, and she thinks her ancestors would be proud of the idea to use the family ranch to produce geothermal energy and help the region through power production, jobs and, eventually, other agricultural uses.

“If they were here, I think they would be very pleased with what we’re proposing to do,” she said.

Fenner is also reaching out to community groups and giving presentations, and ZGEO is looking for investors in the project. Anyone interested can contact Fenner at wzfenner@zgeoenergy.com.