Alaska legislates to encourage geothermal power

In an effort to make geothermal power projects economically viable and to produce more affordable and reliable electric power for homes and businesses, Alaska’s Governor signed two senate bills, which will deregulate the industry and bring down costs.

The bill encourages safe exploration for and development of Alaska’s enormous geothermal energy. It also moves jurisdiction over the permitting and inspection of geothermal wells and operations from the Department of Natural Resources to the Alaska Oil and Gas Conservation Commission.

In an effort to make geothermal investment more attractive, the bill also reduces the royalty derived from geothermal leases on state land. The royalty rate has been 10 -15% of the gross revenue, but will now drop to 1.75% of the gross revenue during the first 10 years of income-generating production on state-leased lands, with a 3.5% percent royalty rate being implemented thereafter.

“This legislation makes geothermal power projects economically viable and therefore more likely to produce more affordable and reliable electric power for homes and businesses,” Governor Parnell said. “This bill assists companies seeking to build a commercial grade geothermal plant in Alaska by reducing the royalty payment.”

Senate Bill 277 was also enacted, this new piece of legislation effectively exempts from regulation facilities that generate electricity entirely from renewable energy resources when that electricity is sold to regulated utilities.

With the recent furor stemming from the enormous oil leak in the Gulf of Mexico and the recent oil spill from the Trans-Alaska pipeline, the state is clearly keen to move towards cleaner energy sources, which won’t damage its untouched landscape.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/07062010/alaska_legislates_to_encourage_geothermal_power/