The Klamath Falls Geothermal District Heating system was completed in 1981. Due to the concerns of existing local well owners, a city ordinance was passed in June 1981 which effectively prevented the system from operating. A great deal of aquifer research was conducted and the system finally entered into "test" operation in 1984. After approximately 1 1/2 years of operation, leaks began to appear in the closed loop portion of the distribution piping and by February 1986 the system had to be shut down completely. Litigation over the failure dragged on until 1990 when a settlement was made which provided partial funding for replacement of the failed piping. These funds together with a loan from the Oregon Department of Energy provided for system repairs and by early 1991 the system was again online