The state should make better use of the millions of dollars it receives in royalties from geothermal energy production on Hawaii island, according to a panel formed to study the alternative energy source.

The state has received more than $15 million in royalties since the early 1990s from Puna Geothermal Venture, which supplies about 20 percent of Hawaii island’s peak electrical load with its 38-megawatt power plant. Puna Geothermal operates the state’s only geothermal plant.

The 11-member Geothermal Working Group — made up of state and county officials and representatives from environmental, labor, community and cultural groups — issued its report to the Legislature this week.

The panel recommended, among other things, that the state "make the allocation of geothermal royalties more transparent to show how benefits come back to the community."

The royalties are divided three ways with 50 percent going to the state Department of Land and Natural Resources, 30 percent to Hawaii County and 20 percent to the Office of Hawaiian Affairs.

Some state lawmakers have pushed for greater oversight of how the proceeds from the royalties are spent. The Senate last session approved a resolution calling for a state audit of the geothermal leasing and royalty program.

The Geothermal Working Group recommended that a community advisory board be established to make suggestions on how the DLNR should spend royalties it receives.

The panel also said lawmakers should "encourage the DLNR to use geothermal royalties to identify promising geothermal sites and to further develop the resource."

The report’s estimate of geothermal potential on the island was drawn from previous research done by a consultant for the state Department of Business, Economic Development and Tourism. DBEDT issued a report in 2005 estimating that Hawaii island had the potential to produce up to 1,400 megawatts of geothermal energy, mostly in the rift zones around the Kilauea Caldera. Peak demand on Hawaii island is about 185 megawatts.

The working group report made reference to a study done in the 1980s to evaluate the feasibility of laying a 500-megawatt undersea cable to carry geothermal-generated energy to Oahu.

The feasibility study concluded that running such a cable across the 6,100-foot-deep Alenuihaha Channel between Hawaii and Maui "posed exceptional engineering challenges," according to the working group report.

One of the working group’s members is Richard Ha, president of Hamakua Springs County Farms, a producer of vegetables and fruits.

Ha also is chairman of Kuokoa Inc., a company seeking to buy Hawaiian Electric Co. and get it off fossil fuel.