Legislation would ease way for geothermal

Jan 26 - McClatchy-Tribune Regional News - Ben Botkin The Times-News, Twin Falls, Idaho

Geothermal developers would have more reasons to locate and start projects on state-owned lands in Idaho, under legislation introduced Tuesday in the House Resources and Conservation Committee.

The legislation consists of four bills, all aimed at making the state's endowment lands a more attractive and realistic option to geothermal developers. The legislation is supported by Gov. C.L. "Butch" Otter and fits within his plans for alternative energy, said Kathy Opp, deputy director of the Idaho Department of Lands, in her presentation.

Here's what the legislation would do:

--Eliminate the existing 640-acre limit of a geothermal lease, with the state land board deciding a lease area. A geothermal area can span several thousand acres, which means that under the current system, multiple leases are needed for the same project.

--Eliminate the 10-year limit on lease durations, expanding the length to up to 49 years. Currently, 10 years simply isn't enough time for developers to make the investment and recoup costs, Opp said.

--Add more flexibility so that the land board can negotiate royalties for geothermal projects on state lands based on the uniqueness of each project. Under existing law, royalties must be at least 10 percent of the value of the resource produced. This bill eliminates that 10 percent minimum.

--Clarifies the bonding requirements for geothermal projects so the bonds don't duplicate those already required by the Idaho Department of Water Resources for well closures.

Magic Valley legislators welcomed the proposals, saying the measures are needed to attract development to state lands.

"In order to get a company to come in, it's just nearly impossible the way our law is now," said Rep. Bert Stevenson, R-Rupert and the committee chairman. "We've got to make these changes to encourage that geothermal development."

House Assistant Majority Leader Scott Bedke, R-Oakley, said the legislation will make the state's endowed lands more competitive, be a source of future revenues and align the state with industry standards.

Geothermal also has an important role because it's a base load energy source that is constant, said Rep. Fred Wood, R-Burley, unlike wind energy.

"If the wind doesn't blow, the energy isn't there," he said.

Rep. Donna Pence, D-Gooding, said geothermal development on state lands would be a good source of future revenue, though it won't happen soon enough for this year.

Power developer U.S. Geothermal, which runs a geothermal plant near Raft River, had a representative at the committee hearing. CEO Dan Kunz said he was pleased with the support for geothermal energy, but had different ideas about what royalties should be like.

"They should adopt the structure of the federal programs, where all fees and royalties are set," Kunz said. "The set-up is tried and true, and that's what we're suggesting."

Ben Botkin may be reached at bbotkin@magicvalley.com.

Laura Lundquist contributed to this story.