The Salida Geothermal Prospect (Poncha Hot Springs) was evaluated for industrial and commercial direct heat applications at Salida, Colorado, which is located approximately five miles east of Poncha Hot Springs. Chaffee Geothermal, Ltd., holds the geothermal leases on the prospect and the right-of-way for the main pipeline to Salida. The Poncha Hot Springs are located at the intersection of two major structural trends, immediately between the Upper Arkansas graben and the Sangre de Cristo uplift. Prominent east-west faulting occurs at the actual location of the hot springs. Preliminary exploration indicates that 1600 gpm of geothermal fluid as hot as 250°F is likely to be found at around 1500 feet in depth. The prospective existing endusers were estimated to require 5.02 x 101° Btu per year, but the total annual amount of geothermal energy available for existing and future endusers is 28.14 x 101° Btu. The engineering design for the study assumed that the 1600 gpm would be fully utilized. Some users would be cascaded and the spent fluid would be cooled and discharged to nearby rivers. The economic analysis assumes that two separate businesses, the energy producer and the energy distributor, are participants in the geothermal project. The producer would be an existing limited partnership, with Chaffee Geothermal, Ltd. as one of the partners; the distributor would be a new Colorado corporation without additional income sources. Economic evaluations were performed in full for four cases: the Base Case and three alternate scenarios. Alternate 1 assumes a three-year delay in realizing full production relative to the Base Case; Alternate 2 assumes that the geothermal reservoir is of a higher quality than is assumed for the Base Case; and Alternate 3 assumes a lower quality reservoir. 11 refs., 34 figs., 40 tabs.