Tax credit may help Nevada’s geothermal plans

Suzanne Struglinski

Monday, Nov. 17, 2003 | 9:48 a.m.

WASHINGTON -- Geothermal energy production would get a production tax credit for the first time and it would be easier to lease federal land to create the energy under a current congressional proposal.

Meetings to finalize the the almost 1,000-page energy conference report start this week with Republican negotiators eager to get it to the floor by Friday, but Democrats disagree with some of what is and is not in the bill, so its exact fate still remains to be seen.

The pending conference report incorporated Nevada Republican Rep. Jim Gibbons' geothermal energy bill, which calls for one policy for geothermal energy development on Bureau of Land Management and Forest Service lands and encourages ranchers, local governments, small businesses and other energy users to use the resource by creating a simpler leasing process for "direct use" leases,

Nevada is one of the country's top geothermal states, with about 520,000 acres of public land leased for geothermal use, according to the BLM.

The pending bill also expands a renewable energy production tax credit to geothermal energy for the first time. The credit, first extended to wind power in 1992, offer a 1.8-cents-per-kilowatt-hour incentive for production.

Karl Gawell, executive director of the Geothermal Energy Association in Washington said this is "a more powerfull incentive" than an investment tax credit since it rewards how much power is produced. New geothermal facilities in place by Jan. 1, 2007, would receive the credit during their first five years of operation.

"Expanding the (production tax credit) to include geothermal energy will give investors the incentive needed to overcome the higher risk and large, upfront costs of new geothermal power plants," according to the association. "As a result, hundreds of new megawatts of geothermal power will come on-line in the next few years."

Gawell said Gibbons and Sen. Harry Reid, D-Nev., should both be thanked for their work to include the tax credit.

In the overall renewable energy components of the report, it authorizes $10 million ayear through 2008 for the Energy Department to study and complete a detailed report on all the available renewable energy resources such as wind, geothermal and solarpower.

The agreement's other specific impacts on Nevada are still being evaluated as last-minute negotiations take place.