2 Colo. Code Regs. § 404-1-1310

Current through Register Vol. 47, No. 20, October 25, 2024

Section 2 CCR 404-1-1310 - EQUITABLE COMPENSATION FOR GEOTHERMAL RESOURCES

a. A permit application for a Geothermal Resource Unit may request the inclusion of Allocated Geothermal Resources owned by unleased interest owners in the GRU, provided that the unleased interest owners are equitably compensated by the Operator for use of those Allocated Geothermal Resources.

b. In its permit application for a Geothermal Resource Unit which includes a request that the Commission include Allocated Geothermal Resources owned by unleased interest owners, the Operator will include the following:

(1) Evidence that the Operator owns, or has secured the written consent of Owners of more than 45% of the Allocated Geothermal Resources to be included within the proposed Geothermal Resource Unit. Such evidence may be provided prior to or after drilling of a well, but no later than 90 days in advance of the date the matter is to be decided by the Director or Commission pursuant to Rule 510.

(2) Evidence that the Operator tendered to the unleased interest owners a good faith, reasonable offer to lease or participate at least 90 days prior to the decision on the Geothermal Resource Unit. For the purposes of this Rule 1310, "good faith" means a state of mind consisting in observance of reasonable commercial standards of fair dealing in Deep Geothermal Operations, and absence of intent to defraud or seek unconscionable advantage.

(3) A proposed plan for equitable compensation to any impacted interest Owner of an Allocated Geothermal Resource to be included in the Geothermal Resource Unit.

c. Upon a showing by the applicant that it has complied with the Commission's rules, the Director or Commission may deem an Owner to be a nonconsenting interest owner in the Geothermal Resource Unit if:

(1) The Operator certifies that it provided notice to all nonconsenting interest owners to be included within the proposed Geothermal Resource Unit. The Operators will comply with Rule 303.e.(3) for the procedure for providing notice. The notice must include:

A. The Operator's contact information including its electronic mail address, phone number, and physical address(es) to which the public may direct questions and comments;

B. The Operator's proposed plan for equitable compensation for all Geothermal Resources to be included in the Geothermal Resource Unit;

C. ECMC's information sheet about the procedural steps involved with the Director's and Commission's review of permit application for the Geothermal Resource Unit;

D. ECMC's information sheet about the Commission's public comment process and the relevant deadlines;

E. ECMC's information sheet about how the public may view the status of the permit application for the Geothermal Resource Unit on the Commission's website; and

F. Information on how the public may learn more details about and ask questions about the permit application for the Geothermal Resource Unit prior to the closure of the public comment period.

G. All written information provided pursuant to this Rule 1310.c.(1) will also be provided in all languages spoken by 5% or more of the population in all census block groups within 2,000 feet of each proposed Geothermal Resource Unit.

(2) After receiving an offer to participate, and being given at least 60 days to review the offer, the Owner does not elect in writing to consent to participate in the cost of the Well(s) concerning which the Geothermal Resource Unit order is sought. The offer to participate will include the following information, at a minimum:

A. The location and objective depth of the Well(s).

i. Directional Wells will include the estimated measured depth and true vertical depth ("md", "tvd"); and

ii. Horizontal Wells will include the estimated measured depth, true vertical depth, and lateral length ("md", "tvd", and "ll");

B. The estimated drilling and completion cost in dollars of the Well(s) (both the total cost and the Owner's share);

C. The estimated spud date for the Well(s) or range of time within which spudding is to occur; and

D. Contact information for an Operator representative who will be available to answer Owner questions, and ECMC's brochure describing its procedures for reviewing and approving applications for Geothermal Resource Units which include nonconsenting interest owners.

E. An authority for expenditure prepared by the Operator and containing the information required above, together with additional information deemed appropriate by the Operator may satisfy these obligations.

(3) If, after receiving a good faith offer to lease and given at least 60 days to review the offer, the unleased interest owner has failed to accept or refused a reasonable offer to lease.

(4) For an offer to lease to be considered reasonable and have been made in good faith, the offer will be written in clear and neutral language and include information on which the offered price can be determined to be fair. At any hearing or in written comment on the Geothermal Resource Unit, the burden of showing that an offer to lease is not reasonable or not made in good faith is upon the Owner of the Allocated Geothermal Resources who opposes inclusion in the Geothermal Resource Unit.

d. A nonconsenting interest owner will be subject to cost recovery.

e.Consideration and Approval or Denial. A permit application for a Geothermal Resource Unit that will include nonconsenting interest owners will be considered concurrently with the associated permit application for the GRU, pursuant to Rule 1309. If an Operator submits a permit application to include nonconsenting interest owners after approval of a GRU, the permit application to include nonconsenting interest owners is subject to the approval or denial provisions of Rule 1305.e.

2 CCR 404-1-1310

47 CR 17, September 10, 2024, effective 9/30/2024