2 versions

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (Sep 30, 2025)

A substantive refinement. v2 adds specific definitions for "geothermal electric generating facility" and "in-service date," and modifies the royalty calculation provisions to explicitly link the 10-year reduced royalty period to the in-service date of each individual facility. This clarifies the application of royalties for new facilities on existing leases.

H.R. 5638119th CongressIntroduced Sep 30, 2025

Geothermal Royalty Reform Act

Reported To HouseEnergySubstantive

View bill text

Sponsor: Rep. Kennedy, Mike [R-UT-3]
Committees: Natural Resources Committee (primary)
Last action: May 20, 2026

Bottom line

The Geothermal Royalty Reform Act aims to incentivize new geothermal electricity generation by applying a lower royalty rate to each new facility for its first decade of operation, rather than tying it to the overall lease.

What it actually does

This bill amends the Geothermal Steam Act of 1970 to change how federal royalties are calculated for geothermal energy production. It specifies that royalties will now be assessed on a per-facility basis rather than per lease. Crucially, the initial 10-year period of lower royalty rates will now apply to each individual geothermal electric generating facility starting from its "in-service date," potentially extending the period of lower rates for new facilities built on existing leases.

Proponents argue

Proponents argue that this reform will stimulate investment in geothermal energy by providing a more favorable and predictable royalty structure for new generating facilities. By resetting the 10-year lower royalty period for each new facility, it encourages the development of additional capacity on existing leases, thereby boosting renewable energy production and creating jobs. This approach recognizes the significant upfront capital investment required for geothermal projects and seeks to reduce financial burdens during critical early operational years.

Opponents contend

Opponents might contend that this bill could reduce federal revenue from geothermal leases by extending the period during which lower royalty rates are applied, especially if multiple facilities are developed on a single lease over time. They may argue that it constitutes a subsidy to geothermal developers at the expense of taxpayers, potentially without a clear demonstration of need or a guaranteed increase in overall geothermal production that justifies the revenue loss. Critics might also suggest that the existing royalty structure is sufficient and that this change primarily benefits industry stakeholders.

The bill is very short and straightforward, making it highly accessible for a reader to understand its core changes quickly.

Section 2(a) of the bill, amending Section 2 of the Geothermal Steam Act of 1970 (30 U.S.C. 1001)

Defines "Geothermal Electric Generating Facility" and "In-Service Date"

prominently featuredstraightforward

This provision adds two key definitions to the Geothermal Steam Act. A "geothermal electric generating facility" is defined as a facility that produces electricity using geothermal resources, including all necessary equipment, and is considered separate from other facilities unless they share a turbine. An "in-service date" is defined as the date a geothermal electric generating facility begins operating. These definitions are crucial for the subsequent changes to royalty calculations.

GroupImpactMechanismScale

GroupGeothermal energy developers and operatorsImpactClarifies the scope of "facility" for royalty purposes.MechanismStatutory definitions.ScaleApplies to all future and potentially existing geothermal operations under federal leases.

Supporters argue

Supporters argue these definitions provide necessary clarity and precision for implementing the new royalty structure, ensuring that the incentives are applied correctly to individual generating units.

Critics contend

No specific opposition is typically raised against definitional provisions unless they are seen as deliberately ambiguous or designed to create loopholes.

Tradeoffs

The definition of "separate facility" (unless sharing a turbine) could be seen as a point of contention, potentially allowing for more "separate" facilities than a broader definition might.

Section 2(b) of the bill, amending Section 5(a)(1) of the Geothermal Steam Act of 1970 (30 U.S.C. 1004(a)(1))

Amends Royalty Calculation to be Per-Facility

prominently featuredstraightforward

This provision changes the basis for calculating federal royalties on geothermal production. Previously, a lower royalty rate (not less than 10%) applied for the first 10 years of production under the lease. This amendment shifts that to apply to production from each geothermal electric generating facility for a 10-year period following its in-service date. After this initial 10-year period for a given facility, the royalty rate increases to not less than 15% for that specific facility.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (Sep 30, 2025)

See full diff

H.R. 5638119th CongressIntroduced Sep 30, 2025

Geothermal Royalty Reform Act

Reported To HouseEnergySubstantive

View bill text

Sponsor: Rep. Kennedy, Mike [R-UT-3]
Committees: Natural Resources Committee (primary)
Last action: May 20, 2026

Bottom line

What it actually does

Proponents argue

Opponents contend

The bill is very short and straightforward, making it highly accessible for a reader to understand its core changes quickly.

Section 2(a) of the bill, amending Section 2 of the Geothermal Steam Act of 1970 (30 U.S.C. 1001)

Defines "Geothermal Electric Generating Facility" and "In-Service Date"

prominently featuredstraightforward

GroupImpactMechanismScale

Supporters argue

Critics contend

No specific opposition is typically raised against definitional provisions unless they are seen as deliberately ambiguous or designed to create loopholes.

Tradeoffs

The definition of "separate facility" (unless sharing a turbine) could be seen as a point of contention, potentially allowing for more "separate" facilities than a broader definition might.

Section 2(b) of the bill, amending Section 5(a)(1) of the Geothermal Steam Act of 1970 (30 U.S.C. 1004(a)(1))

Amends Royalty Calculation to be Per-Facility

prominently featuredstraightforward