For the the past two legislative sessions, SB 3229 and SB 458 have been proposed by Senator Wakai while working closely with Dr. Nicole Lautze, Professor at the University of Hawaii and Director of the HGGRC.
SB 3229
In 2022, Senate Bill 3229: Relating to Geothermal Royalties was proposed. The bill sought three major proposals:
An increase in the percentage of the royalties received by the State from geothermal resources that are to be paid to the county in which the resources are located;
A requirement that the royalties paid to a county be used for further geothermal resources development.
A requirement that the county receiving geothermal royalties submit an annual report to the Legislature.
SB 3229 progressed through the legislative session but was vetoed by the Governor. In a testimony, the Department of Land and Natural Resources opposed the bill as it reduces the funding that the Department will receive without reducing their regulatory obligations regarding geothermal mining and permitting.
The Department further explains that the geothermal royalties that it receives are used to fund critical mineral programs like the Mineral Resources Program. This helps in carrying out regulatory functions to oversee, permit, and manage statewide mineral resources, including geothermal. The cumulative expenditures of this program since it was re-established in 2008 is roughly equal to the total royalties received by the State.
SB 458
For the 2023 legislative session, Senate Bill 458: Relating to Geothermal Royalties was proposed which, once again, to redistribute the geothermal royalties to the counties for specific purposes, including research. The bill’s proposals are as follows:
Cap the amount of royalties from geothermal resources that are to be paid to the State and to the county in which the geothermal resources are located;
Deposit royalties from geothermal resources into the University Innovation and Commercialization Initiative Special Fund, to be expended by the Hawaii Groundwater and Geothermal Resources Center, to further the discovery and development of geothermal resources; and
Require the entities that receive geothermal royalties to submit an annual report to the Legislature.
SB 458 did not pass through the conference committee. The Department of Land and Natural Resources once again expressed their opposition to the measure, as the reduction in geothermal royalties can compromise the Department’s regulatory functions.
As 2023 is the first year of a two-year legislative period, SB 458 will carry over to the 2024 session.
It bears noting that there were no geothermal royalties collected in 2020 due to the shutdown of the Puna Geothermal Venture (PGV) power plant, as confirmed by the Department of Land and Natural Resources. Operations at the Puna geothermal power plant have since resumed, and efforts are now underway for its capacity expansion.
