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ENLARGE
Kim Lamb/LVN photo
Maintenance Mechanic Mark Kelsey stands near one of the generators at the Soda Lake 1 geothermal plant. The two Soda Lake plants produce a combined output of 23.1 megawatts at full capacity.
Less than 50 words in an obscure amendment included in a Department of the Interior appropriations bill may cost Churchill County — along with other counties in at least six Western states — millions of dollars in lost revenue.
The Lahontan Valley News has learned that H.R. (House Resolution) 2996 was tacked on to the bill to have all money derived from sales, bonuses, rentals and royalties under the Energy Policy Act of 2005 revert to the federal government as originally provided in the Geothermal Act of 1970.
Instead of the counties receiving a share of this money, the government will snatch back the money unless Congress votes to override the amendment.
Tim Josi, president of the National Association of Counties Western Interstate Region, stated in a letter to both Sen. Harry Reid (D-Nev.) and Congressman Dean Heller (R-Nev.) that the 2005 act gave “counties a 25 percent share of geothermal revenues to support county departments impacted by local geothermal development and production.”
Josi also stated, “The recent passage of the FY2010 Interior Appropriations Bill effectively redirected the county geothermal revenue sharing funding back to the United States treasury.”
Churchill County Comptroller Alan Kalt said Churchill and the other counties stand to lose all their derived money from geothermal for the first quarter (October-December) of the new federal calendar year that began on Oct. 1.
“We average between $25,000 to $40,000 per month based on the energy produced,” Kalt said. “The amount could be as high as $100,000 (for the quarter).”
Churchill County has seven geothermal plants.
Josi estimates this change will hurt at least 31 counties in six states including Nevada, California, Idaho, New Mexico, Oregon and Utah. In Nevada, for example, the Public Utilities Commission of Nevada said the following Nevada counties besides Churchill are engaged in active geothermal production: Elko, Esmeralda, Humboldt, Lander, Mineral, Nye, Pershing and Washoe.
“This will have a significant impact to all geothermal counties,” said Brad Goetsch, Churchill County manager.
He likened it to having the government take all the appropriated revenue from the counties that have gold mining.
“The oversight committee was not aware of it (the provision) reverting back. They didn't see it coming,” he added.
County Commissioner Norm Frey has been championing the drive to rectify the congressional recent action. Furthermore, Frey is working with NACO and Josi to reverse the federal government's money grab.
“We need to be organized and work together to see that our revenues are enhanced,” Frey said. “If the U.S. government is serious about developing geothermal energy, communities should be considered in the plans. We have things headed in a positive direction.”
Congressional help
Reid and Heller have presented separate amendments. In essence, Reid's S.2607 is repealing a provision of the 2010 act relating to geothermal energy receipts.
“Sen. Reid introduced a bill with Sen. (Diane) Feinstein (D-Calif.) to correct the situation by repealing the provision affecting the counties' share of geothermal development on public lands,” said Reid spokesman Jon Summers. “He also introduced legislation with Nevada's congressional delegation to extend the counties' geothermal revenue share permanently and establish a new county share of solar and wind development on public lands. This will ensure Nevada counties benefit from these renewable energy projects.”
Sen. John Ensign (R-Nev.) is also adamant the provision is correct and is a co-sponsor to Reid's bill.
“It's vitally important that we restore the counties' share of federal funding so that basic services can be available to the Nevadans who need them,” Ensign said in a prepared statement.
Kalt said unless Congress can correct the situation, geothermal exploration may slow down in the states that have active operations and especially those states wanting to tap into geothermal energy.
Heller agrees with the local assessment. He said the bills are acted upon so quickly that sometimes a piece of legislation is inserted into the bill and not caught.
“This small portion will have a huge impact. Geothermal is huge in my district,” Heller said during a rural press conference from Washington, D.C., on Thursday morning. “No other state is affected as much by this provision.”
Heller said Nevada is big on geothermal and is also expanding solar as an alternative energy.
He, along with Congressman Mike Thompson (D-Calif.), has sponsored H.R.4060 to repeal the recent action. Both congressmen are also members of the Ways and Means (Budget) Committee.
“We need to change these provisions and re-instate county allocations,” Heller said. “I am pushing as hard as I can.”
Heller remains optimistic that both bills will reverse the action, but he said it will be difficult since this is part of President Barack Obama's budget.
Not the first money grab
This is not the first time the Nevada counties have been affected by other governments taking geothermal money.
The Nevada legislature passed a Senate bill in a special session almost one year ago to take geothermal money from the counties and channel the funds to the state treasury. Churchill County lost up to $6 million in revenues from geothermal and minerals leases on federal lands.
Under previous legislation, the state kept the first $7 million in revenues from the lease of federal lands. Many of the state's geothermal and mineral resources are located on federal lands, and lease revenues above $7 million were deposited into the Account for Revenue from the Lease of Federal Lands and distributed to counties where most of the geothermal activity is occurring. The counties' share amounted to about 25 percent.
When the Senate bill was passed, Assemblyman Pete Goicoechea estimated at the time Mineral County would lose $2 million; Elko County, $1.6 million, Esmeralda County, $1 million; and Pershing County, $600,000.
Because of the amendment to the Interior bill, Kalt said the Bureau of Land Management is also suffering funding issues. The BLM is losing 25 percent of its funding for the time the agency takes to license and regulate the industry and to explore suitable areas on federal land for geothermal construction.
Local projects will suffer
If the geothermal money is not restored locally, Kalt said many capital improvement projects in the county — such as the construction of a new juvenile probation office — will not occur.
Money from the geothermal leases would have also been applied toward projects like a new jail, new administration buildings and bridge projects.
Kalt, however, pointed out the county's actual operating budget does not totally rely on geothermal revenue.
Nevertheless, Heller said royalties for geothermal work provides huge economic benefits for the counties.
Although there is no definite timetable on when the bill will be acted upon, Kalt said he is optimistic Congress will tackle the Omnibus Spending Bill in mid-December.
Heller said, however, that will depend on what the leadership from both the Senate and House is able to do with the bill and whether or not it can be included at that time.
The Lahontan Valley News has learned that H.R. (House Resolution) 2996 was tacked on to the bill to have all money derived from sales, bonuses, rentals and royalties under the Energy Policy Act of 2005 revert to the federal government as originally provided in the Geothermal Act of 1970.
Instead of the counties receiving a share of this money, the government will snatch back the money unless Congress votes to override the amendment.
Tim Josi, president of the National Association of Counties Western Interstate Region, stated in a letter to both Sen. Harry Reid (D-Nev.) and Congressman Dean Heller (R-Nev.) that the 2005 act gave “counties a 25 percent share of geothermal revenues to support county departments impacted by local geothermal development and production.”
Josi also stated, “The recent passage of the FY2010 Interior Appropriations Bill effectively redirected the county geothermal revenue sharing funding back to the United States treasury.”
Churchill County Comptroller Alan Kalt said Churchill and the other counties stand to lose all their derived money from geothermal for the first quarter (October-December) of the new federal calendar year that began on Oct. 1.
“We average between $25,000 to $40,000 per month based on the energy produced,” Kalt said. “The amount could be as high as $100,000 (for the quarter).”
Churchill County has seven geothermal plants.
Josi estimates this change will hurt at least 31 counties in six states including Nevada, California, Idaho, New Mexico, Oregon and Utah. In Nevada, for example, the Public Utilities Commission of Nevada said the following Nevada counties besides Churchill are engaged in active geothermal production: Elko, Esmeralda, Humboldt, Lander, Mineral, Nye, Pershing and Washoe.
“This will have a significant impact to all geothermal counties,” said Brad Goetsch, Churchill County manager.
He likened it to having the government take all the appropriated revenue from the counties that have gold mining.
“The oversight committee was not aware of it (the provision) reverting back. They didn't see it coming,” he added.
County Commissioner Norm Frey has been championing the drive to rectify the congressional recent action. Furthermore, Frey is working with NACO and Josi to reverse the federal government's money grab.
“We need to be organized and work together to see that our revenues are enhanced,” Frey said. “If the U.S. government is serious about developing geothermal energy, communities should be considered in the plans. We have things headed in a positive direction.”
Congressional help
Reid and Heller have presented separate amendments. In essence, Reid's S.2607 is repealing a provision of the 2010 act relating to geothermal energy receipts.
“Sen. Reid introduced a bill with Sen. (Diane) Feinstein (D-Calif.) to correct the situation by repealing the provision affecting the counties' share of geothermal development on public lands,” said Reid spokesman Jon Summers. “He also introduced legislation with Nevada's congressional delegation to extend the counties' geothermal revenue share permanently and establish a new county share of solar and wind development on public lands. This will ensure Nevada counties benefit from these renewable energy projects.”
Sen. John Ensign (R-Nev.) is also adamant the provision is correct and is a co-sponsor to Reid's bill.
“It's vitally important that we restore the counties' share of federal funding so that basic services can be available to the Nevadans who need them,” Ensign said in a prepared statement.
Kalt said unless Congress can correct the situation, geothermal exploration may slow down in the states that have active operations and especially those states wanting to tap into geothermal energy.
Heller agrees with the local assessment. He said the bills are acted upon so quickly that sometimes a piece of legislation is inserted into the bill and not caught.
“This small portion will have a huge impact. Geothermal is huge in my district,” Heller said during a rural press conference from Washington, D.C., on Thursday morning. “No other state is affected as much by this provision.”
Heller said Nevada is big on geothermal and is also expanding solar as an alternative energy.
He, along with Congressman Mike Thompson (D-Calif.), has sponsored H.R.4060 to repeal the recent action. Both congressmen are also members of the Ways and Means (Budget) Committee.
“We need to change these provisions and re-instate county allocations,” Heller said. “I am pushing as hard as I can.”
Heller remains optimistic that both bills will reverse the action, but he said it will be difficult since this is part of President Barack Obama's budget.
Not the first money grab
This is not the first time the Nevada counties have been affected by other governments taking geothermal money.
The Nevada legislature passed a Senate bill in a special session almost one year ago to take geothermal money from the counties and channel the funds to the state treasury. Churchill County lost up to $6 million in revenues from geothermal and minerals leases on federal lands.
Under previous legislation, the state kept the first $7 million in revenues from the lease of federal lands. Many of the state's geothermal and mineral resources are located on federal lands, and lease revenues above $7 million were deposited into the Account for Revenue from the Lease of Federal Lands and distributed to counties where most of the geothermal activity is occurring. The counties' share amounted to about 25 percent.
When the Senate bill was passed, Assemblyman Pete Goicoechea estimated at the time Mineral County would lose $2 million; Elko County, $1.6 million, Esmeralda County, $1 million; and Pershing County, $600,000.
Because of the amendment to the Interior bill, Kalt said the Bureau of Land Management is also suffering funding issues. The BLM is losing 25 percent of its funding for the time the agency takes to license and regulate the industry and to explore suitable areas on federal land for geothermal construction.
Local projects will suffer
If the geothermal money is not restored locally, Kalt said many capital improvement projects in the county — such as the construction of a new juvenile probation office — will not occur.
Money from the geothermal leases would have also been applied toward projects like a new jail, new administration buildings and bridge projects.
Kalt, however, pointed out the county's actual operating budget does not totally rely on geothermal revenue.
Nevertheless, Heller said royalties for geothermal work provides huge economic benefits for the counties.
Although there is no definite timetable on when the bill will be acted upon, Kalt said he is optimistic Congress will tackle the Omnibus Spending Bill in mid-December.
Heller said, however, that will depend on what the leadership from both the Senate and House is able to do with the bill and whether or not it can be included at that time.
