June 27, 2011
ENEL GREEN POWER NORTH AMERICA PAYS UNITED STATES TO SETTLE ALLEGATIONS OF UNDERPAYMENT OF ROYALTIES
DENVER – Enel Green Power North America, Inc. (Enel) has paid $31,000 to the United States to settle allegations that it underpaid geothermal royalties, in a settlement announced today by the U.S. Attorney’s Office, the U.S. Department of Interior’s Office of the Inspector General, and the Office of Natural Resources Revenue (ONRR).
On or about March 20, 2007, Enel acquired a geothermal operation in the Stillwater area, located near Fallon, Nevada. This matter involves a federal lease for the production of geothermal resources that Enel used for its geothermal operation. A geothermal operation essentially uses naturally occurring steam to create energy, including generating electricity. Congress has authorized the Department of the Interior to lease federal land to companies to harness geothermal resources and produce energy. Under these leases, companies must pay royalties to the United States for the privilege of using the federal land. The royalties are collected by ONRR.
Each month, companies are required to report to ONRR the amount of royalty that is due. With respect to this particular lease, Enel and its predecessor were required to pay ONRR royalties of 10 percent for all geothermal resources removed from the lease.
The United States alleges that Enel did not pay the proper amount of royalties that were due for geothermal production from the lease between January 1, 2005, and December 31, 2009. Enel paid less than the lease royalty rate, relying on some provisions of a handbook that ONRR published to provide guidance to companies with federal leases. The United States asserts that Enel’s documentation of its compliance with the handbook provisions was inadequate, and thus, additional royalties were due.
“Thanks to the hard work of the Department of Interior, Office of the Inspector General and the Office of Natural Resources Revenue, working closely with our Assistant U.S. Attorney, the government has been able to recover royalties it was due from Enel but never received,” said U.S. Attorney John Walsh.
"This settlement, the result of close coordination between DOI-OIG investigators, the United States Attorney's Office and ONRR, conveys to federal lease holders that the DOI-OIG is dedicated to investigating allegations of fraud and false claims to ensure that the Department, and the American public, receive all royalties to which they are due,” said John Dupuy, Assistant Inspector General for Investigations for the U.S. Department of the Interior, Office of Inspector General.
This matter was handled by Assistant U.S. Attorney Amanda Rocque.
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