MALTA -- Idaho is certainly no stranger to using water for power generation, but it doesn't usually require drilling a mile into the ground to access that water.

Xanti Alcelay-KTVB

U.S. Geothermal is drilling a mile below the surface of the earth to tap into geothermal power.

But that's exactly what's happening at the Northwest's first-ever geothermal power plant under construction in the Idaho desert.

The Raft River power project is near Malta, about 200 miles southeast of Boise.

On the surface it seems contradictory - going to the desert to harvest water.

But, if you dig deep enough, Daniel Kunz says the water and its significant power are plentiful.

"It’s like a straw into an underground lake of hot water," said Daniel Kunz, U.S. Geothermal Inc.

Kunz, a former executive with Morrison Knudsen, is now the CEO of U.S. Geothermal, a Boise-based company creating the first geothermal power plant in the Northwest. 

The company is drilling wells one mile deep, extracting 300-degree water, converting it into energy and then pumping it back into that same layer of the earth's crust.

"It’s clean. There are no emissions and what we like about it is - it's a renewable source, so we're taking the hot water out of the ground, we're putting the fluids back and the whole system will be allowed to regenerate and create new power for the future," said Kunz.

This Raft River project actually all began during the energy crisis in 1974.

Under the Jimmy Carter Administration, the Department of Energy built the world's first binary cycle power plant south of Malta - a $40 million pilot program that fizzled out in 1982 when President Reagan turned the project over to private enterprise.  A commercial venture that proved to be ahead of its time.

Now with more emphasis being placed on renewable resources in this country and less reliance on oil in foreign countries, Kunz says Idaho’s hot water is an energy gold mine.

“It’s a significant amount of power and we think this property could be as much as a 100 megawatts and maybe even more. We've seen reports where it could be even larger than that," said Kunz.

With financial backing from such heavy hitters as Goldman Sachs, U.S. Geothermal is investing $40 million into the project in preparation for production this time next year.

Using the existing wells, the company is aiming for 10 megawatts of power in its first phase, enough to power 10,000 homes and generate $5 million in revenue. 

"This is some of the best power you can make because it allows us to be independent of energy sources, our energy's right below us, we don't have to pay for it once we've made our initial investment into it, it's ours to use over the long term," said Kunz.

Already on board for that long term use is Idaho Power, which signed a 20-year purchase agreement.  U.S. Geothermal plans to start delivering that power next fall.

A significant part of that $40 million investment is in the giant drill rig that's digging those one-mile deep wells.

The drill and crew cost about $40,000 a day and will be on site for six months!