06:59 AM PDT on Wednesday, June 28, 2006

Associated Press

BEND, Ore. -- A landowner wants $203 million or the right to drill geothermal test wells, expand a pumice mine and eventually build a vacation home subdivision inside the Newberry National Monument.

U.S. Forest Service

The Newberry Crater is located about 24 miles south of Bend.

James R. Miller of Portland has filed a Measure 37 claim with Deschutes County. It asks for development rights, or the compensation, mostly for the value of 8.5 million cubic yards of pumice on the land.

The initiated measure allows landowners to claim compensation, or a waiver of land-use rules, if the rules are changed while they own property. Miller, 82, a semi-retired mechanical engineer, said county rules have limited the property's potential.

"They superimposed one restriction after another on us," Miller said. The claim says Miller has owned or controlled the property since May 1969 as partner in two companies.

In 1990, the first President Bush signed a bill creating the monument, a designation that allows federal agencies to manage natural or historic features, but the areas can contain private property.

"It would be unfortunate to see either a geothermal plant or a 100-lot subdivision in the crater of Newberry Volcano," said Stu Garrett, a Bend doctor who led a citizens committee that drafted the bill to create it. "It would totally change the character of Newberry Crater."

Miller's 157-acre property borders East Lake, a fishing and camping destination inside the monument. It is a former mining claim with a cabin and two small pumice quarries. The county zoned the property as open space and conservation land in 1992, a designation meant to protect scenic or natural resources while limiting development.

Newberry, a collapsed volcano that last erupted about 1,300 years ago, is considered the best potential site for geothermal power generation in Oregon. Miller previously proposed a geothermal plant on his property. Geothermal plants use superheated steam from below the Earth's surface to spin turbines, creating electricity. A California company gave up on one project, and a Bend company is working on others.

The U.S. Forest Service manages the monument land surrounding Miller's property but says it would be inappropriate to comment on his claim.

"This is a private land issue with the county," said Sue Olson, a Deschutes National Forest spokeswoman.