Washington – Today Rep. Mike Thompson (CA-05) urged the President to maintain royalty payments to counties for geothermal energy production that help boost clean energy development and support local economies in counties like Lake and Sonoma Counties in his district. Geothermal royalty payments are eliminated in the White House’s budget proposal for Fiscal Year 2019. He was joined by seven other Democrats and Republicans.
“Counties in my district are leading the way in geothermal development that results in cleaner energy sources and these investments can be costly for our communities. So it is fair that royalty payments from that energy production be returned to the very communities that host them,” said Thompson. “That’s why I wrote to the President urging him not to cut those payments. Our district could lose out on valuable resources used to pay for public safety, infrastructure investment, and law enforcement services, while diminishing our capacity to continue investing in local clean energy. This proposal is shortsighted and must be reversed.”
Last year, Lake County received over $733,000 and Sonoma County received over $1.3 million in geothermal royalties.
“Elimination of federal geothermal royalties will result in the loss of $700,000 per year to rural Lake County, at a time when more cuts simply cannot be borne without major reductions in vital community services including local law enforcement, roads, libraries, parks and services to seniors. These funds are used to mitigate the impacts of the geothermal industry, providing vital services and resources to our citizens,” said Carol Huchingson, Lake County Administrative Officer.
“Lake County has been ravaged by wildfire, with five major wildfire disasters over the past three summers and 22 percent of the county’s land mass burned. As a result, the county is already facing a financial crisis. On a per capita basis, Lake County has lost almost double the amount of housing stock than Sonoma did in the North Bay Firestorm of 2017. As a rural county already struggling to recover from the recession, the additional losses brought on by wildfires are pushing an already cash-strapped local government to the brink of financial disaster. The additional loss of geothermal royalties will be devastating to Lake County,” said Lake County Supervisor Rob Brown.
“Sonoma County appreciates the Congressman’s continued leadership on this issue,” said Sonoma County Supervisor James Gore. “This elimination would come at a time when we are dealing with revenue reductions, and increased needs, from the 2017 wildfires.”
Full text of the letter is below and attached to this release.
April 27, 2018
The White House
Washington, DC 20500
Dear Mr. President:
We are disappointed that geothermal royalty payments to counties were eliminated in Fiscal Year 2019 budget request. We understand and support the need to propose a fiscally prudent budget, but repealing geothermal royalty payments to counties is a short sighted method that does little to address fiscal challenges.
In the bipartisan Energy Policy Act of 2005, Congress decided that, because of the high burdens geothermal production places on the counties where geothermal development is located, these counties should share in the revenue of the federal receipts. In turn, counties have used these revenues to pay for critical governmental services, such as road maintenance, public safety and law enforcement, and conservation easements. This revenue sharing has also made counties vested partners, and ultimately champions, in the continued development of geothermal energy—a clean, renewable, and domestic energy source that provides well-paying jobs in rural areas.
Ending the geothermal revenue sharing plan will have a significant negative impact on our districts, while the overall effect on our nation’s fiscal well-being would be miniscule— less than $4 million in 2019. Many of the counties that receive revenue from geothermal receipts are small, rural communities facing precarious budget situations. The loss of such revenue for these counties could result in the elimination or reduction of essential services. We strongly support geothermal revenue sharing with counties and we encourage you to consider it in future budget proposals.
We appreciate your attention to this issue and look forward to working with you to promote geothermal energy production and provide support for the surrounding communities.