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STATEMENT OF BASIS AND PURPOSE <br />FOR 2004 GEOTHERMAL RULES <br />This "Statement of Basis and Purpose" has been prepared to elaborate on and clarify the <br />reasons for and the intent of the Geothermal Rules. <br />RULE 1 TITLE <br />The title of the Rules reflects their purpose of providing for the permitting and construction <br />of geothermal wells and the appropriation of geothermal fluids. The short title adequately <br />describes the Rules and does not conflict with any other known title. <br />Sections 37-90.5-106 and 107, C.R.S. (2003), give the State Engineer the authority to <br />issue permits for geothermal wells and to adopt rules and regulations necessary to <br />protect the public health, safety, welfare and the environment, and to prevent the waste of <br />any geothermal resource. This section also requires the State Engineer to adopt rules for <br />the assessment of reasonable fees for the processing and granting of permits. <br />In addition to the specific authority cited above, the proposed Rules are necessary for the <br />State Engineer to carry out his responsibilities and authority with respect to the <br />administration and protection of vested geothermal and water rights, pursuant to Sections <br />37-80-102(g) and (k), and Section 37-90-108, C.R.S. (2003). <br />RULE 3 SCOPE AND PURPOSE <br />The purpose of these Rules and Regulations is to enable the State Engineer to carry out <br />the provisions of the Geothermal Resources Act, Article 90.5 of Title 37, C.R.S. These <br />Rules and Regulations establish minimum standards required for protecting the public <br />health, safety, welfare, and the environment, and preventing the waste of geothermal <br />resources that may result from the construction and use of geothermal wells. <br />These Rules are limited to the permitting of individuals to perform/supervise drilling and <br />grouting in the construction of vertical closed -loop geoexchange systems, and to <br />perform/supervise excavation and backfilling of horizontal closed -loop geoexchange <br />systems, the permitting and the constructing of, and the diversion of geothermal fluids <br />