1. Except as otherwise provided in subsection 2, every corporation or other person who sells geothermal energy to the public is affected with a public interest, is a public utility and is subject to the jurisdiction and control of the Commission. The authority of the Commission to regulate such persons is limited to the authority granted by this section and NRS 704.033 and 704.035.

2. This section does not apply to any corporation or other person described in subsection 4 of NRS 704.021 or to any political subdivision of the State authorized to sell energy to the public.

3. The Commission shall adopt just and reasonable regulations governing the sale of energy from geothermal resources to the public. The regulations must provide for a system of operating permits which:

(a) May not be denied because the area which the applicant proposes to serve is already being served by a gas or electric utility.

(b) May not convey an exclusive right to supply geothermal energy in the area which the applicant proposes to serve.

(c) Specify in each case the geographic area in which the applicant reasonably can provide the services authorized in the permit.

(d) Require the applicant to enter into a contract with each customer served by the utility. The form and scope of the contract must be subject to review and approval of the Commission. The contract must specify at least:

(1) The period of time during which service will be provided. The contract must provide for a period of at least 3 years unless such a provision is expressly waived by the customer.

(2) The rates or the formula for determining rates to be charged during the term of the contract.

(3) That the utility will submit to binding arbitration, pursuant to chapter 38 of NRS, matters relating to damages suffered by the customer as a result of a disruption in service and that in any such arbitration, the utility is liable for damages unless it establishes that the disruption was caused by circumstances beyond its control, or another affirmative defense, or establishes that it was not negligent.

4. Before issuing an operating permit the Commission must find that:

(a) The applicant is fit, willing and able to provide the services authorized in the permit.

(b) The applicant has tested the geothermal reservoir to determine whether it appears to be capable of providing sufficient energy to supply the intended uses.

(c) The system which the applicant intends to use to produce and distribute the heat meets appropriate standards.

5. The Commission has continuing authority to regulate the utilities described in this section to ensure that each utility adheres to the conditions set forth in its operating permit and that the utility provides adequate services.

(Added to NRS by 1981, 660; A 1997, 1912)