HR5638-119

What This Bill Does

This bill amends the Geothermal Steam Act to make geothermal royalties facility-specific. The reported version defines a geothermal electric generating facility as the equipment and structures, including turbines and cooling equipment, that produce electricity using geothermal resources. A facility is treated as separate from another geothermal electric generating facility unless the facilities share a turbine.

The bill also defines in-service date as the date a geothermal electric generating facility begins operating. It then revises the royalty language so the first 10-year royalty period is measured from the in-service date of the geothermal electric generating facility producing the electricity. This matters for projects with multiple generating facilities on a lease because each facility can have its own royalty timing rather than being tied only to the lease's first production period.

Who Benefits and How

Geothermal electric generating facility operators benefit from clearer facility-by-facility royalty treatment. Developers that add later turbines or generating units benefit if the 10-year royalty period is measured from each unit's in-service date. Geothermal project investors benefit from more predictable royalty modeling for phased projects. BLM geothermal leasing staff benefit from definitions that clarify when facilities are separate. Electric utilities buying geothermal power may benefit if royalty clarity supports additional geothermal development.

Who Bears the Burden and How

BLM royalty administrators must update guidance, lease accounting, and royalty review procedures to apply the new facility and in-service-date definitions. States and counties that receive shares of geothermal royalties may face timing or revenue uncertainty if facility-specific treatment changes collections. Geothermal operators must document facility boundaries, turbine sharing, and in-service dates. Public-land oversight staff must verify that operators do not use facility definitions to avoid royalty obligations.

Key Provisions

• Adds a definition of geothermal electric generating facility for Geothermal Steam Act royalty purposes.
• Establishes in-service date as the date a geothermal electric generating facility begins operating.
• Provides that facilities are separate unless they share a turbine.
• Modifies royalty language to apply to electricity produced by each geothermal electric generating facility.
• Directs the 10-year royalty period to run from each facility's in-service date.