FALLON, Nev.—Churchill County has hit a gusher of riches with the geothermal plants pumping energy out of its patch of the Nevada desert. It's the kind of sudden wealth that often leads to foolish spending.  But precious little of this windfall is being frittered away. Instead, this rural county of 25,000 people has poured much of the $12.6 million in geothermal-related revenues it's collected since 2005 into protecting its economic future.  For example, $2.2 million has gone into measures to make sure there will continue to be plenty of water not only for the geothermal industry, but also for new ventures outside the energy sector, like the milk-processing plant the county is courting. The plant would need enough water for as many as 40,000 cows, or double the size of the current local dairy herd, says County Commission Chairman Norman Frey. "The good things can't keep happening without us investing adequate revenues," Mr. Frey says.  That kind of foresight is unusual in energy country. A bumper sticker that circulated in Texas when the oil boom there tanked in the 1980s read: "PLEASE GOD, Just Give Me One More Oil Boom. I Promise Not to Blow It Next Time."  Every boom story is different, of course. Churchill County's circumstances aren't exactly like those anywhere else. But as the drive for greater domestic energy production continues to transform communities around the U.S., Churchill's approach offers lessons worth considering.  One reason local governments often don't invest enough to guard against a future energy bust is that they are so busy keeping up with rapid population growth. In Mountrail County, N.D., for instance, the population has shot up about 20% to more than 7,600 over the past decade as its oil production has soared over the same time to more than four million barrels a month from 28,000 a month. That means much of the local windfall from oil royalties has to be plowed into basic infrastructure, such as an expanded sewer system and new roads, says County Auditor Joan Hollekim.  Churchill County has reaped a windfall from geothermal plants  Churchill County's energy boom is different from Mountrail County's in a crucial way: Like renewable-energy projects in many other communities, Churchill's geothermal plants have brought little increase in permanent employment. Each of the seven plants operating in the county took about 150 workers to build but now employs only 12 to 15 workers, says County Manager Brad Goetsch. The county's population has grown just 3.7% in the past decade.  "That's good, because we don't have to spend a lot in new infrastructure for them," says Mr. Goetsch. Instead, he says, the county can afford to look ahead more and expand its economic base.  For example, it spent $3.5 million on construction of a juvenile detention center that opened Aug. 15. Besides meeting a demand for a local place to house at-risk youth rather than send them to other counties, Churchill County's 16-bed facility has enough extra beds to accommodate juveniles from other parts of Nevada.  With contracts in hand to house troubled youth from Lyons and Nye counties, the juvenile center not only is bringing in new revenue but also has created 12 jobs, with the potential for more, says County Comptroller Alan Kalt. "Here we are filling a community need while creating new economic opportunity," Mr. Kalt says.  The revenue has helped pay for runway repairs at the Fallon Airport...  Fixing up infrastructure to encourage economic growth has also been part of the spending plan. In 2009, the county gave the city of Fallon $250,000 toward a $1.5 million project to repave the Fallon Municipal Airport. The grant enabled Fallon to secure federal money for the project.  The money was needed to repair a runway where the pavement was filled with cracks and holes, says City Engineer Jim Souba. "We had heard comments from business aircraft owners who said they didn't want to land in Fallon because the runway was so lousy," Mr. Souba says. "Here, the county is getting some money and doing things with it to perpetuate business."  Geothermal remains the dominant industry here, with three of the plants ranking among the top five taxpayers in Churchill County. And county officials say they want to do everything they can to keep the industry going as long as they can, such as plowing $1.3 million into upkeep of roads, including the remote ones the plants use.  Less directly, spending of nearly $1 million on four new trucks for the Fallon/Churchill Fire Department also benefits the geothermal industry, along with everyone else in the county. One of the new trucks helped douse a wildfire that threatened a geothermal plant in the desert north of Fallon, says Ed Harris, administrative coordinator of the volunteer fire department. "This helps us tremendously," he says.  The industry is happy with the county's investments, too. "I think they are doing the right thing," says Francesco Venturini, chief executive officer of Enel Green Power North America Inc., a unit of Italy's Enel SpA that is building a hybrid solar-geothermal plant at the base of the Stillwater Mountains east of Fallon. "I'm glad they are using the money in the right way."  Churchill County still has immense untapped geothermal deposits, Mr. Goetsch says. But any future developments won't be as lucrative as the county's existing plants.  ...And for new equipment for the local fire department  The Nevada Legislature this year passed a bill that reduces the sales and property taxes to be paid to counties by new geothermal developments. And another threat looms in Washington, however unlikely it may appear in the current political climate: Passage of the Obama jobs bill would eliminate payments of rents and royalties by the existing plants, as well as any new ones, to the county.  There's also no guarantee that the geothermal industry will continue to grow. Like other forms of renewable energy, it faces the challenge of competing against steadily declining natural-gas prices. Mandates from state legislatures for utilities in Nevada and California to increase their use of renewable energy are expected to help stoke demand, but the future remains uncertain.  That's partly why, despite the windfall thus far, Churchill County officials say they have been reluctant to embark on projects they don't feel are absolutely necessary—especially with the state and national economies continuing to struggle. For example, they spent $1 million to renovate an old medical office building into a new home for the district attorney's office, rather than shell out the estimated $2.5 million it would have taken for a new building, they say.  "We're a bunch of farmers here," says Mr. Frey, himself a farmer, "and so we tend to be conservative."  Mr. Carlton is a staff reporter in The Wall Street Journal's San Francisco bureau. He can be reached at jim.carlton@wsj.com.
Churchill County is spending its money with its sights set on the future, determined not to squander its fortune the way others have