New Mexico Administrative Code › Title 19 - NATURAL RESOURCES AND WILDLIFE › Chapter 11 - GEOTHERMAL RESOURCES DEVELOPMENT › Part 2 - PERMITS › Section 19.11.2.18 - FINANCIAL ASSURANCE FOR GEOTHERMAL WELLS AND FACILITIES

Current through Register Vol. 35, No. 13, July 16, 2024
Upon notification by the division that it has approved a new
				  geothermal well or facility permit, a geothermal well or facility permit
				  modification or a geothermal well or facility renewal permit but prior to
				  issuing the permit, an applicant shall submit acceptable financial assurance
				  for the geothermal well or facility affected by the permit action.
A. The applicant shall submit acceptable
				financial assurance in the amount of the plugging and abandonment cost for each
				geothermal well being permitted or, if permitting a geothermal facility, the
				estimated closure cost of the entire facility, including the plugging and
				abandonment costs for all geothermal wells and pits. The geothermal well's
				estimated plugging and abandonment cost or the geothermal facility's estimated
				closure cost shall be the amount provided in the plugging and abandonment or
				closure plan the applicant submitted with its application unless the division
				determines that such estimate does not reflect a reasonable and probable well
				plugging and abandonment or facility closure cost, in which event, the division
				shall determine the estimated well plugging and abandonment or facility closure
				cost and shall include such determination in its draft permit. If the applicant
				disagrees with the division's determination of estimated well plugging and
				abandonment or facility closure cost, the applicant may request a hearing as
				provided in 19.11.3.8 NMAC. If the applicant so requests, and no other person
				files a request for a hearing regarding the application, the hearing shall be
				limited to determination of well plugging and abandonment or facility estimated
				closure cost.
B.
Terms of
				financial assurance.
The financial assurance shall be on
				division-prescribed forms, payable to the state of New Mexico and conditioned
				upon the geothermal well's or facility's proper operation, and proper well
				plugging and abandonment or facility closure in compliance with state of New
				Mexico statutes, division rules and the geothermal well or facility permit
				terms. The permittee shall notify the division of a material change affecting
				the financial assurance within 30 days of discovery of such change.
C.
Forfeiture of financial
				assurance.
The division shall give the permittee and any surety 20 days'
				notice and an opportunity for a hearing prior to forfeiting financial
				assurance.
D.
Forms of
				financial assurance.
The division may accept the following forms of
				financial assurance.
(1)
Surety
				bonds.
A surety bond shall be executed by the applicant and by a
				corporate surety licensed to do business in the state, and shall be
				non-cancelable.
(2)
Letters
				of credit.
A letter of credit shall be issued by a bank organized or
				authorized to do commercial banking business in the United States, shall be
				irrevocable for a term of not less than 10 years and shall provide for
				automatic renewal for successive, like terms upon expiration, unless the issuer
				has notified the division in writing of non-renewal at least 90 days before its
				expiration date. The letter of credit shall be payable to the state of New
				Mexico in part or in full upon receipt from the director or the director's
				authorized representative of demand for payment accompanied by a notice of
				forfeiture.
(3)
Cash
				accounts.
An applicant may provide financial assurance in the form of a
				federally insured or equivalently protected cash account or accounts in a
				financial institution, provided the operator and the financial institution
				shall execute as to each such account a collateral assignment of the account to
				the division, which shall provide that only the division may authorize
				withdrawals from the account. In the event of forfeiture pursuant to Subsection
				C of 19.11.2.18 NMAC, the division may, at any time and from time to time,
				direct payment of all or part of the balance of such account (excluding
				interest accrued on the account) to itself or its designee for the well's
				plugging and abandonment or facility's closure.