Newsom holds California back with geothermal veto

By EPN Staff

California Gov. Gavin Newsom this month vetoed a bill that would have made it easier to explore for geothermal energy, ceding further ground to conservative-leaning states with less red tape.

Assembly Bill 527, which passed the legislature unanimously, aimed to exempt exploratory geothermal wells from the California Environmental Quality Act (CEQA) and align state rules more closely with federal standards and those in other western states.

Even the bill’s Democratic author told Politico she was “at a loss” over Newsom’s veto, saying, “We had tried to engage and didn’t hear anything back.”

Newsom argued the bill would impose new fees and delay ongoing regulatory updates, but industry advocates say those claims are weak. 

“This was a clean shot to accelerate geothermal today, and he whiffed it,” Zanskar Geothermal co-founder Joel Edwards said.

Newsom did sign narrower changes to geothermal permitting this month, but critics say it’s not enough to keep California competitive.

Why it matters

Geothermal currently generates less than 1% of U.S. power, but western states have the potential to produce one-tenth of the nation’s supply, according to the U.S. Geological Survey. 

California is the biggest state for geothermal by far, producing roughly two-thirds of the U.S. supply as of 2023, according to the Energy Information Administration. But that’s partly because of the state’s head start – it is home to the western hemisphere’s first, and currently the world’s largest, geothermal station.

New development in California has slowed dramatically. Since 1989, nearly all new geothermal development has occurred outside California,” Sonoma Clean Power CEO Geof Syphers said.

Nevada produces 26% of the country’s geothermal electricity generation while Utah, Hawaii, Oregon, Idaho and New Mexico make up the rest. Just a few months ago, Meta signed an agreement in New Mexico to develop 150 megawatts of geothermal power.

And state competition could increase in the near future.

New mapping software is providing easier access to the copious information developers need to identify prime geothermal spots far deeper in the Earth. One such project found Texas could be a geothermal “sleeping giant."

The bigger picture

While other states advance, California has been stuck with what one National Renewable Energy Laboratory analyst called “some of the most stringent permit regulations in the nation,” with Nevada’s rules viewed as far less restrictive. 

California lawmakers backed AB 527 as a way to keep geothermal investment — and jobs — from flowing east to states with friendlier rules, with the bill specifically citing Nevada and Utah’s “favorable regulatory environments.” 

Thomas Hochman, director of infrastructure policy at the Foundation for American Innovation, said on social media that “every geothermal developer and energy org I talked to was excited about this bill,” and called Newsom’s veto “a great shame.”