WASHINGTON, D.C. -- Three new geothermal power plants came online in the United States in the past month — two in Nevada and one in New Mexico — bringing the industry to 3,444 MW online in eight states and making energy decisions more important than ever. Federally, 2013 was a fairly quiet year for geothermal law, but leadership exploded at the state level: At least 25 pieces of legislation were enacted in 13 states over the past year that relate directly to geo power or geothermal heating systems. The list is summarized below.
These young, state-level laws governing the geothermal resources of Earth’s heat range from tax clarifications for ground source heating and cooling systems to public land use adjustments for high-temperature, electricity-generating power plants. Some of the measures are right on target with industry timelines; for example, new legislation (HB 85) in New Mexico provides for geothermal royalties matching federal rates, while at the same time the state’s first geo power plant just came online.
Representatives from U.S. states spoke to the industry at the GEA’s most recent National Geothermal Summit, last summer. Pictured: Kai Anderson, Chief Strategic Officer & Executive Vice President, Cassidy & Associates; Stacey Crowley, then-Director, Nevada Governor’s Office of Energy; Jonathan Weisgall, Vice President of Legislative & Regulatory Affairs, MidAmerican Energy Holdings Company; Karen Edson, Vice President, Policy and Client Services, California ISO; and Amy Lueders, State Director, Bureau of Land Management Nevada. Photo by Leslie Blodgett (GEA)
The state legislative influx wasn’t a sweeping win for environmental and renewable energy communities. Another new law drastically raised the cost of property for renewable energy developers seeking to build projects on Tennessee lands. Still, most of the news is good, and states are leading the way in renewable energy support and geothermal specifically.
In Nevada, the Ormat Technologies Don Campbell plant and the Gradient Resources Patua plant both came online within the past month. Nevada leads the nation in geothermal projects under development, and the legislature passed a handful of laws, creating potential for an additional several hundred new megawatts of geo power need.
“We are very excited to see the two new plants come on line,” says Paul Thomsen, Director at the Governor’s Office of Energy (GOE), “and GOE will continue to work to create a market for additional projects.”
Geothermal made significant strides in the 2013 legislative session, Thomsen says. One of Nevada’s new laws, AB 239, “will give developers the confidence they need to know that if they meet the criteria, they will receive a tax abatement.” Regulations for implementation have already gone through the governor’s office and are pending approval, which should happen next month (February 2014).
Thomsen says the renewable component of SB 123, which requires NV Energy to retire its two coal facilities and replace them with renewable energy, will be discussed by the Public Utilities Commission (PUC) in the first quarter of 2014. “Implementation of SB 123 will greatly affect how the geothermal industry will benefit,” he said. “It’s important for folks in the industry to participate.”
Of particular interest, Thomsen notes, will be a decision on whether the 300 MW of renewable energy that are required as part of the new law will be applicable to the state’s Renewable Portfolio Standard (RPS). If so, the state will likely fill its renewable portfolio requirements before it is scheduled to come up again in 2018. “We thought this law would be a bridge for renewable energy until the RPS would be available again, however, this is a big shift that could mean no one would need new RPS in 2018.” (See PUC Docket Number 13-06023).
PUC decisions often have a large impact. Another example is New Mexico’s vote to change how renewable energy credits are counted toward RPS goals so that a utility gets credit for 10,000 kWh if it uses only a fraction of that. Thus the percentage of renewable energy required for the state’s mix doesn’t change, but the actual target is reduced.
Thomsen says the industry in Nevada should pay attention to a study requested by the PUC that will look at benefits and costs associated with net metering. In some cases, what the utility characterizes as a cost or burden is actually a viable product or ancillary benefit when used effectively in geothermal development, he points out. A related bill, AB 428, has a public open hearing coming up this Thursday (January 16, 2014). (See PUC Docket Number 13-06018).
The 2013 acquisition of NV Energy by MidAmerican Energy Holdings could also hold benefits for geothermal. “The acquisition is interesting not only from a development standpoint but also for transmission,” Thomsen says. “We recognize that there’s a bigger marketplace in the West and we want to facilitate the exportation from Nevada to California. We’re going to continue to build that framework.”
Map: Thirteen U.S. States (in blue) enacted legislation related to or encompassing geothermal in 2013; data from Advanced Energy Legislation Tracker and GEA research.
Oregon has about 33 MW of geo energy on line and up to 270 MW in development. Diana Enright, Communications Manager for the state’s Department of Energy tells GEA, “Oregon has a long history of supporting clean energy technology through policies and programs, and the 2013 legislative session built on that foundation.” Oregon currently ranks in the top five among states that support clean energy technology, “and for its geothermal energy development,” Enright says.
Alex Schay, Project Originator & Owner of Carbon Solutions Northwest in Portland talked with GEA about four challenges he sees facing geothermal development in the state. First, natural gas prices are low, at roughly $4 per MMBtu and corresponding electricity prices for project owners at roughly $40 per MWh. Second, he says, negotiation of new avoided-cost electricity pricing and crediting periods for PURPA-eligible projects through the Oregon PUC’s UM 1610 process “may lead to uncompetitive tariff structures through 2020.”