Current Public Utility Considerations for Geothermal Power Producers and Direct Heat Distributors

Abstract

Public utility consideration are an important element of geothermal project planning for both electric generation and direct heat systems involving distribution. For electric generation, recent federal law an regulations mandate utility power purchases from small geothermal producers at potentially attractive rates, while eliminating the prospect of burdensome regulation which formerly would have resulted from such transactions. Unfortunately, these incentives are not currently available for direct heat distribution, of which the prospect of state utility regulation continues to present formidable obstacles to development. This paper reviews the benefits now available to geothermal power producers under federal law as implemented through recent rulemaking proceedings of the Federal Energy Regulatory Commission (FERC). It then discusses some of the problems create for direct heat developer/distributers by existing state regulatory practices, and outlines a greatly simplified scheme which could spur development and still accomplish the legitimate objects of traditional regulatory theory.