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NATURAL RESOURCE AND ENVIRONMENTAL LAW—WATER LAW ergy electric generation projects to meet the renewable energy standard requirements more efficiently. The renewable energy standard has been implemented by rules promulgated by the Colorado Public Utilities Commission (PUC) that concern the development and acquisition of renewable re- sources by utilities subject to the Commission’s jurisdiction.73 The PUC rules also define and provide guidance regarding the system of tradable renewable energy credits (REC) that are derived from the development of renewable energy sources.74 The PUC has defined RECs as contractual rights to the full set of non-energy attributes, including any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to a specific amount of electric energy gener- ated from an eligible energy resource.75 A REC therefore is a part of the bundle of sticks derived from exploitation of renewable re- sources. One REC results from one megawatt-hour of electric en- ergy generated from an eligible energy resource. RECs are tradable commodities that can achieve significant value in secondary mar- kets such as the Chicago Climate Exchange.76 Current Issues Facing Geothermal Development As with any energy infrastructure development, there is poten- tial for conflict with geothermal energy development above and below ground. Geothermal resource development involves drilling to access deep aquifers. Groundwater resources in Colorado are a product of delicate balances of the earth’s resources, and new types of water development naturally raise concerns in the arid West. Geothermal power plants are industrial-sized operations that may be located in rural areas. The land surrounding areas rich in geot- hermal resources usually are mountainous. In Colorado, these scenic areas may be used for recreation, may be a part of wildlife corridors, or may be associated with cultural resources. All of these issues must be given careful consideration. One major concern in the development of geothermal resources is that conflicts may arise between existing geothermal resource users that rely on the hot water sources for commercial hot springs, home heating, or other established uses.77 Many of the thermal springs and wells in Colorado currently are being used in direct applications, such as recreation pools and spas, aquaculture, greenhouses, and the heating of buildings. These entities have a vested interest in main- taining their current use of geothermal waters, which could be im- pacted or eliminated by development of the resource. Thus, a poten- tial geothermal energy development will be scrutinized in an injury analysis not only by the SEO, but also by owners of geothermal wa- ter rights, before a permit or decree are granted. A second major concern is the possible incidence of surface sub- sidence, similar to what has occasionally occurred in areas where groundwater, oil, or gas has been pumped. Subsidence may be miti- gated if thermal water is returned to the subsurface reservoir after extraction of heat.78 All power production facilities require transmission intercon- nection to the grid to provide power.79 Siting of transmission lines and substations can be a volatile issue to local communities. Some geothermal facilities located in rural areas may require construc- tion of significant mileage of new transmission lines to connect to a utility grid system. The BLM planned its first contemporary offer to sell lease rights to develop geothermal energy in Colorado in November 2009, but the lease sale was delayed.80 BLM spokesperson Jim Sample said the agency delayed the geothermal sale “to give us time to work on our agreement on how to handle geothermal with the state.”81 In February 2010, an additional review and delay was prompted by concerns expressed at a BLM public meeting held in Buena Vista. The lease/sale may involve roughly 800 acres near Mount Princeton west of Buena Vista, and is being closely moni- tored by interested stakeholders. The lease/sale has not been rescheduled as of the publication of this article. Conclusion All the issues surrounding geothermal resource development discussed in this article require coordination between federal and state agencies, balanced with the concerns of local communities. Affected communities and agencies must be included early in the planning process. 70 The Colorado Lawyer | September 2010 | Vol. 39, No. 9PDF Image | Getting Into Hot Water: The Law of Geothermal Resources in Colorado
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