Geothermal Royalty Reform Act
The Geothermal Royalty Reform Act would amend the Geothermal Steam Act of 1970 to change how royalties are calculated for production from leased geothermal resources. Specifically, royalties would be based on production attributed to each electric generating facility that uses the geothermal resource, rather than on aggregate production across all facilities tied to a single lease. The bill adds facility-specific language to the royalty calculation in Section 5(a)(1) of the Geothermal Steam Act, ensuring that royalties are assessed “by such facility” and that the basis for production is considered “with respect to each electric generating facility producing electricity from such resources.” The text does not specify a new royalty rate; rather, it changes the unit of production used to compute royalties and the reporting basis. In short, if enacted, the government would collect royalties based on how much electricity is produced at each individual generating facility using the geothermal resource, rather than using a combined total for all facilities on a lease. This could affect government revenue and the way operators report and allocate production across facilities.
Key Points
- 1The bill changes the basis of royalty calculation from lease-wide production to per-facility production.
- 2Royalties would be calculated “with respect to each electric generating facility producing electricity from such resources” and “by such facility.”
- 3The change is limited to Royalty calculation language in Section 5(a)(1) of the Geothermal Steam Act of 1970; no explicit rate changes are introduced in the text provided.
- 4The amendment applies to each electric generating facility that uses the leased geothermal resources.
- 5Administrative implications include a potential need for facility-level production reporting and more granular tracking of output.