LAKE COUNTY – The federal government is asking Lake County to return more than $256,000 in geothermal revenues that it said was mistakenly paid to the county.

The United States Department of the Interior sent County Administrative Officer Kelly Cox a letter, dated May 5, asking for the approximately $256,202.64 back after it was paid to the county earlier in the fiscal year.

The 2010 Department of the Interior Appropriations Bill, HR 2996 – enacted late last year – takes away millions of dollars in geothermal royalties paid to Lake and 30 other counties across California, Idaho, Nevada, Oregon, New Mexico and Utah, as Lake County News has reported.

Counties with geothermal royalties have been receiving the funds since 2007 under the auspices of the Energy Policy Act of 2005. Lake County received just over $3.6 million over 2007 and 2008, the most of any other county in the United States, according to Department of the Interior records.

The funds have been used in Lake County for a variety of projects, including community improvement projects in Anderson Springs and the purchase of more than 1,500 acres on the top of Mt. Konocti.

Congressman Mike Thompson and several other members of Congress whose districts are directly affected by the loss of the funds are working to restore the payments.

Cox told Lake County News that he spoke with Thompson May 20, and that Thompson said he expected the work to restore the geothermal legislation to counties will happen this week.

While the new legislation was supposed to stop the payments, Lake County still received a check from the federal government which shouldn't have been issued.

The Department of the Interior Minerals Management Service's letter offered the county two options – immediate repayment or entering into a repayment agreement that requires return of the funds by Dec. 31, otherwise the debt will begin to accrue interest.

Last week Cox took the agreement to the Board of Supervisors, which approved it in the consent agenda.

Cox reported that the the Department of the Interior is aware of the effort to restore the funds, which is why it offered the repayment agreement as an option.

He told the board in his report that, since it appears likely that the funds will be restored, “there doesn't appear to be a need to immediately repay these funds to the federal government.”

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