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OTHER IMPORTANT LEGAL TOPICS Geothermal Management District (GMD) The purpose of a GMD is to prevent waste of the geothermal resource, maximize the economic recovery of a proven and delineated geothermal resource, and to protect water and geothermal rights that have vested by prior appropriation or exist as correlative rights of land owners. There are no GMDs in the state, which adds uncertainty and a pioneering element to the application process. The resource should be divided under the principles of equitable apportionment, giving each interested party a right to their portion of the resource, while protecting prior, appropriated rights. GMDs are a legal tool allowing for landowners to agree on basic parameters for the use of geothermal resources, implying that landowners in a prospective GMD would support the application. Landowner opposition could be a significant barrier for an application to form a GMD. Because the resource must be divided equitably, detailed information about the nature and quantity of the geothermal resource must be presented by the applicant along with a comprehensive plan for the use of the resource and the "administrative controls" that would manage the resource. GMDs are approved under the authority of the state engineer and do not imply taxation authority. The State Engineer may impose conditions on the use of the resource regarding well spacing, reinjection requirements, apportionment of the resource to owners and other details. The State Engineer may delegate such authority to a GMD, once the GMD is created. Federal Leasing The U.S. Department of Interior, Bureau of Land Management (“BLM”) administers leasing on BLM and Forest Service lands, except geothermal leasing cannot occur on some designated areas such as wilderness, wilderness study areas, national wildlife or recreation areas, and other protected lands. While the federal land around Rico is not designated to exclude geothermal development, nominated parcels would be evaluated for impacts on wilderness characteristics and wildlife habitat. Mitigation may be required and development may not be allowed in some areas. Because of the patchwork pattern of private land (patented mining claims) interspersed among the federal lands around Rico, there is some uncertainty and potential for conflict between federal and state jurisdiction over the geothermal resource. A direct use lease allows a lessee to utilize a geothermal resource for commercial, residential, agricultural, public facilities or energy needs other than commercial energy production or generation of electricity. A direct use lease may be awarded to a qualified applicant without competitive bidding if, after notice, no nomination of the land for competitive bidding is submitted to the BLM and the BLM determines there is no competitive interest Geothermal leases for the commercial production of electricity are offered through a competitive bidding process. BLM also administers permits for exploration. Town regulatory powers 1041 permit authority If the Town enacts 1041 permitting authority it can regulate geothermal electrical power generation as an area of local interest. 18PDF Image | Geothermal Energy Master Plan Town of Rico, Colorado
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