Proposed Rule2023-12178
Rights-of-Way, Leasing, and Operations for Renewable Energy
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Published
June 16, 2023
Issuing agencies
Interior DepartmentLand Management Bureau
Abstract
The Bureau of Land Management (BLM) is proposing to amend its existing right-of-way (ROW) regulations, issued under authority of the Federal Land Policy and Management Act (FLPMA). The principal purpose of these amendments would be to facilitate responsible solar and wind energy development on public lands managed by the BLM. The rule would adjust acreage rents and capacity fees for solar and wind energy, provide the BLM with more flexibility in how it processes applications for solar and wind energy development inside designated leasing areas, and update agency criteria on prioritizing solar and wind applications. The rule would also make technical changes, corrections, and clarifications to the existing ROW regulations. This rule would implement the authority granted to the Secretary of the Interior (Secretary) in the Energy Act of 2020 to "reduce acreage rental rates and capacity fees" to "promote the greatest use of wind and solar energy resources" and achieve other enumerated policy goals.
Full Text
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[Federal Register Volume 88, Number 116 (Friday, June 16, 2023)]
[Proposed Rules]
[Pages 39726-39762]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12178]
[[Page 39725]]
Vol. 88
Friday,
No. 116
June 16, 2023
Part V
Department of the Interior
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Bureau of Land Management
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43 CFR Part 2800
Rights-of-Way, Leasing, and Operations for Renewable Energy; Proposed
Rule
Federal Register / Vol. 88, No. 116 / Friday, June 16, 2023 /
Proposed Rules
[[Page 39726]]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 2800
[BLM_HQ_FRN_MO#4500171739]
RIN 1004-AE78
Rights-of-Way, Leasing, and Operations for Renewable Energy
AGENCY: Bureau of Land Management, Interior.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Land Management (BLM) is proposing to amend its
existing right-of-way (ROW) regulations, issued under authority of the
Federal Land Policy and Management Act (FLPMA). The principal purpose
of these amendments would be to facilitate responsible solar and wind
energy development on public lands managed by the BLM. The rule would
adjust acreage rents and capacity fees for solar and wind energy,
provide the BLM with more flexibility in how it processes applications
for solar and wind energy development inside designated leasing areas,
and update agency criteria on prioritizing solar and wind applications.
The rule would also make technical changes, corrections, and
clarifications to the existing ROW regulations. This rule would
implement the authority granted to the Secretary of the Interior
(Secretary) in the Energy Act of 2020 to ``reduce acreage rental rates
and capacity fees'' to ``promote the greatest use of wind and solar
energy resources'' and achieve other enumerated policy goals.
DATES: Please submit comments on this proposed rule on or before August
15, 2023. The BLM is not obligated to consider any comments received
after this date in making its decision on the final rule.
This rule includes a proposed new information collection
requirement that must be approved by the Office of Management and
Budget (OMB). If you wish to comment on the new information collection
requirement in this rule, please note that such comments should be sent
directly to the OMB, and that the OMB is required to make a decision
concerning the collection of information contained in this rule between
30 and 60 days after publication of this document in the Federal
Register. Therefore, comments to the OMB on the proposed new
information collection are best assured of being given full
consideration if the OMB receives them by July 17, 2023.
ADDRESSES: Mail, personal, or messenger delivery: U.S. Department of
the Interior, Director (630), Bureau of Land Management, 1849 C St. NW,
Room 5646, Washington, DC 20240, Attention: 1004-AE78.
Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In the
Searchbox, enter ``RIN 1004-AE78'' and click the ``Search'' button.
Follow the instructions at this website.
For Comments on Information-Collection Activities: Written comments
and suggestions on the information-collection requirements should be
submitted by the date specified above in DATES to <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Find this specific information-collection by
selecting ``Currently under Review--Open for Public Comments'' or by
using the search function.
If you submit comments on the information-collection burdens, you
should provide the BLM with a copy at the addresses shown earlier in
this section, so that we can summarize all written comments and address
them in the final rulemaking. Please indicate ``Attention: OMB Control
Number 1004-0206 (RIN 1004-AE78)'' regardless of the method used to
submit comments on the information-collection burdens. Comments not
pertaining to the proposed rule's information-collection burdens should
not be submitted to OMB. The BLM is not obligated to consider or
include in the Administrative Record for the final rule any comments
that are improperly directed to OMB.
FOR FURTHER INFORMATION CONTACT: Jayme Lopez, Interagency Coordination
Liaison, by phone at (520) 235-4581 and by email at <a href="/cdn-cgi/l/email-protection#7a1f141f081d033a181617541d150c"><span class="__cf_email__" data-cfemail="81e4efe4f3e6f8c1e3edecafe6eef7">[email protected]</span></a>, or
Jeremy Bluma, Renewable Energy Advisor, by phone at (208) 789-6014 and
by email at <a href="/cdn-cgi/l/email-protection#85e0ebe0f7e2fcc5e7e9e8abe2eaf3"><span class="__cf_email__" data-cfemail="5b3e353e293c221b393736753c342d">[email protected]</span></a> for information relating to the BLM
Renewable Energy program and information relating to the substance of
the rule with a subject line of ``RIN 1004-AE78''.
Individuals in the United States who are deaf, deafblind, hard of
hearing, or have a speech disability may dial 711 (TTY, TDD, or
TeleBraille) to access telecommunications relay services. Individuals
outside the United States should use the relay services offered within
their country to make international calls to the point-of-contact in
the United States.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background
A. Introduction
B. Need for the Rule
C. Statutory Authority
III. Discussion of the Rule
IV. Procedural Matters
I. Public Comment Procedures
If you wish to comment on this rule, you may submit your comments
to the BLM by mail, personal or messenger delivery during regular hours
(7:45 a.m. to 4:15 p.m.), Monday through Friday, except holidays, or
through <a href="https://www.regulations.gov">https://www.regulations.gov</a> (see the ADDRESSES section).
Please make your comments on the rule as specific as possible,
confine them to issues pertinent to the rule, and explain the reason
for any changes you recommend. Where possible, your comments should
reference the specific section or paragraph of the proposal that you
are addressing. The BLM is not obligated to consider or include in the
Administrative Record for the rule comments that we receive after the
close of the comment period (see DATES section) or comments delivered
to an address other than those listed above (see ADDRESSES section).
Comments, including names and street addresses of respondents, will be
available for public review at the address listed under ADDRESSES
section. Before including your address, telephone number, email
address, or other personal identifying information in your comment, be
advised that your entire comment, including your personal identifying
information, may be made publicly available at any time. While you can
ask us in your comment to withhold from public review your personal
identifying information, we cannot guarantee that we will be able to do
so. As explained later, this proposed rule would include revisions to
information collection requirements that must be approved by the Office
of Management and Budget (OMB). If you wish to comment on the revised
information collection requirements in this proposed rule, please note
that such comments must be sent directly to the OMB in the manner
described in the DATES and ADDRESSES sections above. Please note that
due to COVID-19, electronic submission of comments is recommended.
II. Background
A. Introduction
This proposed rule sets forth changes to the BLM's Renewable Energy
and ROW programs related to two main topics. The first topic is solar
and wind energy rents and fees, implementing new authority from the
Energy Act of 2020 (43 U.S.C. 3003) to ``reduce acreage rental rates
and capacity fees, or both, for existing and new wind and solar
authorizations'' if the Secretary makes certain findings. The second
[[Page 39727]]
topic is making public lands available to solar and wind energy
application inside of a designated leasing area without first holding a
competitive offer.
Solar and Wind Energy Rents and Fees
FLPMA generally requires ROW holders to ``pay in advance the fair
market value'' for use of the public lands, subject to certain
exceptions. The Energy Act of 2020, 43 U.S.C. 3003, introduced a new
exception to FLPMA's fair market value requirement, allowing the BLM,
on behalf of the Secretary, to ``reduce acreage rental rates and
capacity fees, or both, for existing and new wind and solar
authorizations'' if the agency makes certain findings, which can
include that the existing rates ``impose economic hardships'' or
``limit commercial interest in a competitive lease sale or right-of-way
grant,'' or ``that a reduced rental rate or capacity fee is necessary
to promote the greatest use of wind and solar energy resources.''
Through this proposed rule, the BLM proposes changes to acreage
rents and capacity fees for solar and wind energy ROW authorizations in
order to ``promote the greatest use of wind and solar energy
resources,'' maximize ``commercial interest'' in lease sales and ROW
grants, and avoid ``economic hardship'' to ROW holders. By implementing
these proposed changes, the BLM would promote solar and wind energy use
on public lands and underpin an increase to the share of clean energy
that is part of the United States' domestic power infrastructure.
For example, the BLM expects that the proposed reductions in solar
and wind energy acreage rent and capacity fees will facilitate solar
and wind energy development by increasing commercial interest and
encouraging additional investment in the use of public lands. These
proposed reductions should particularly benefit smaller scale projects
or projects that are on the margins of being economically profitable,
increasing interest among renewable energy developers.
Through the rent and fee adjustments contemplated in this rule, the
BLM also expects that lower acreage rental rates and capacity fees for
solar and wind energy generating facilities would translate into lower
costs for energy deployment, increasing renewable energy market
penetration in domestic energy production. By reducing costs to
producers, these reduced rates may also reduce electricity costs to
rate payers. Additionally, the BLM proposes reductions to capacity fees
tied to a holder's use of American made parts and materials consistent
with direction in the Energy Act of 2020. The BLM anticipates that the
proposed Buy American capacity fee reductions would increase economic
certainty for renewable energy projects on BLM-managed public lands. By
incentivizing the use of American made parts and materials in exchange
for a reduced capacity fee, the BLM expects to reduce costs for
developers, which in turn will stimulate increased demand for domestic
production of renewable energy parts and materials. These intended
outcomes would serve to promote the greatest use of wind and solar
energy resources on public lands. Currently, wind and solar energy
developers face a choice between relying on foreign-sourced parts and
materials or paying higher prices for domestically sourced parts and
materials, if available. (See for example the Department of Energy's
Solar Photovoltaics--Supply Chain Deep Dive Assessment.\1\) Uncertainty
in global supply chain dynamics, as seen in recent years, has the
potential to delay deployment of solar and wind energy development
projects on public lands. Using incentives to create demand for
American-made renewable energy parts and materials will help develop
domestic supply chains and reduce impacts on renewable energy
deployment on public lands from potential supply-chain delays. Similar
to the proposed rental fee and capacity fee reductions described in the
previous paragraphs, the BLM believes that incentivizing the use of
parts and materials that qualify for the Buy American reduction will
increase the responsible deployment of renewable energy and will
increase commercial interest in the use of public lands, promoting the
development of solar and wind energy resources on public lands.
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\1\ <a href="https://www.energy.gov/sites/default/files/2022-02/Solar%20Energy%20Supply%20Chain%20Report%20-%20Final.pdf">https://www.energy.gov/sites/default/files/2022-02/Solar%20Energy%20Supply%20Chain%20Report%20-%20Final.pdf</a>.
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Consistent with the BLM's authority under FLPMA, the BLM would
require ROW holders to pay in advance either an acreage rent or a
capacity fee for solar and wind energy generation installations. The
proposed rule's methodology for calculating a capacity fee is based on
actual energy production, which is a change from the BLM's 2016 rule,
Competitive Processes, Terms, and Conditions for Leasing Public Lands
for Solar and Wind Energy Development and Technical Changes and
Corrections (81 FR 92122). The 2016 rule discusses the capacity fee in
detail at 81 FR 92122, page 92134. The 2016 rule bases the MW capacity
fee on a technology's (i.e., photovoltaic or concentrating solar-
thermal) nameplate capacity as an estimate of the energy that could be
generated at each facility. This rule proposes, instead, to base the
capacity fee for solar and wind energy generation facilities on actual
energy generation at each facility. The BLM believes this change would
more accurately reflect the actual capacity for energy production of an
individual project based on a developer's selection of technology,
project design and the solar or wind resource available at particular
sites. This change to the capacity fee indexes the required payment to
the developments' energy generation, being greater when the capacity
generates more energy and less when generating less. In the context of
this rule, the term ``capacity fee'' is defined as ``the fee charged to
right-of-way holders once energy production commences that is based on
the production of energy on public lands from solar and wind energy
generating facilities.''
The BLM would also calculate an acreage rent for wind and solar
ROWs based on per acre values for pastureland from the National
Agricultural Statistics Service (NASS) Cash Rents Survey. The acreage
rent would be the minimum rent paid to the BLM for solar and wind
energy generating facilities once a grant or lease is issued, whether
or not energy is generated on the ROW in a given year. The capacity fee
would be collected in place of the acreage rent if the capacity fee
exceeds the acreage rent. The capacity fee would reflect the value of
solar or wind energy resources used to generate electricity on the
public lands. One component of the capacity fee, the MWh rate, which is
based on wholesale prices for the major trading hubs serving 11 western
States or on prices received by the ROW holder under a power purchase
agreement, would be reduced by 80 percent until 2036 under this rule
based on authority provided by the Energy Act of 2020 (codified at 43
U.S.C 3003) and would only be adjusted by a fixed annual adjustment
factor once set at the beginning of the grant or lease period. If the
BLM collects the capacity fee, no acreage rent would be required that
year. This fee calculation relies on BLM's direction under sections
504(g) and 102(a)(9) of FLPMA to collect ``the fair market value'' for
the use of the public lands and its resources, which Congress further
clarified in the Energy Act of 2020 to confirm that the BLM could
``consider acreage rental rates, capacity fees, and other recurring
annual fees in total.'' Starting in 2036, under Sec.
2806.52(b)(1)(ii), the MWh rate reduction would decrease from 80
[[Page 39728]]
percent to 20 percent of the wholesale price per Megawatt hour (MWh).
This change in the MWh rate reduction in 2036 would not affect existing
ROWs and would only apply to new or renewed ROWs for which the MWh rate
is set at the beginning of their authorization using the current rate
of the MWh rate schedule applicable in 2036.
This rule aims to improve payment predictability for grant and
lease holders by fixing the key data used for determining the acreage
rent and the capacity fee--the state-wide pastureland rent values and
the wholesale price of electricity--at the time the ROW is issued. In
doing so, these rates would be set for the term of the ROW and only
adjusted by the annual adjustment factor and, in the case of the
capacity fee, by the holder's actual annual production.
See preamble Sec. 2806.50 for a more detailed discussion of the
BLM's proposed methodology for determining the acreage rent and
capacity fee.
Lands Available for Solar and Wind Energy Applications
Under this rule, the BLM would have the option to make public lands
inside designated leasing areas available for non-competitive leasing
by application, while retaining discretion to conduct competitive
offers, either within or outside of designated leasing areas. This is a
change from the BLM's 2016 rule, Competitive Processes, Terms, and
Conditions for Leasing Public Lands for Solar and Wind Energy
Development and Technical Changes and Corrections, which required
authorizations within designated leasing areas to be offered
competitively before the agency could proceed with a non-competitive
application process.
The BLM designated solar energy zones through the 2012 Western
Solar Plan (<a href="https://blmsolar.anl.gov/documents/solar-peis/">https://blmsolar.anl.gov/documents/solar-peis/</a>), which
identified approximately 285,000 acres of agency preferred development
locations for solar with high potential for solar energy production and
low conflicts with other resources and uses. Subsequently, the BLM
designated approximately 388,000 acres of preferred development
locations for solar in California through the 2016 Desert Renewable
Energy Conservation Plan (<a href="https://blmsolar.anl.gov/documents/drecp/">https://blmsolar.anl.gov/documents/drecp/</a>)
and over 192,000 acres of preferred development locations for solar
energy in Arizona through the 2017 Restoration Design Energy Project.
After the 2016 rule went into effect, the BLM initially observed that
solar and wind energy developers generally did not submit nominations
or expressions of interest on their own accord for lands within agency
preferred locations and instead continued to actively submit non-
competitive applications outside of such locations. In the past two
years, however, the BLM has offered designated leasing areas
competitively and identified greater levels of competitive interest
inside and outside of designated leasing areas. Nonetheless, the BLM
believes that by revising the regulations to allow the agency greater
flexibility to use competitive processes in circumstances where
competitive interest exists and to issue leases without a competitive
process where no competitive interest exists across all BLM-managed
public lands, the BLM can maximize interest in renewable energy leasing
and accelerate the deployment of solar and wind energy on the public
lands. Therefore, the BLM proposes to revise its rules to allow
applications to be filed within designated areas without first holding
a competitive offer, while preserving for the BLM the discretion to
hold a competitive offer in response to competing applications,
nominations, or expressions of interest, or on its own initiative. See
Sec. 2804.23 for cost recovery considerations related to competing
applications and subpart 2809 for the competitive process for solar and
wind energy applications or leases.
Need for the Rule
FLPMA provides the BLM with comprehensive authority for the
administration and protection of the public lands and their resources
and directs that the public lands be managed ``on the basis of multiple
use and sustained yield'' unless otherwise provided by law (43 U.S.C.
1732(a)). Further, FLPMA authorizes the BLM to issue rights-of-way on
the public lands for electric generation systems, including solar and
wind energy generation systems, and mandates that the United States
receive fair market value for the use of the public lands and their
resources unless otherwise provided for by statute (43 U.S.C. 1764(g)).
On December 27, 2020, the Energy Act of 2020 was enacted, establishing
a minimum goal of ``authoriz(ing) production of not less than 25
gigawatts of electricity from wind, solar, and geothermal energy
projects by not later than 2025.'' To date, the BLM has authorized
projects on public land that are estimated to support more than 13
gigawatts of electricity from renewable energy sources. Current
information regarding the BLM's approved energy developments and number
of gigawatts is available on its website.\2\ The Energy Act of 2020
also provided the BLM with new authority to reduce rates below fair
market value based on specific findings, including ``that a reduced
rental rate or capacity fee is necessary to promote the greatest use of
wind and solar energy resources'' 43 U.S.C. 3003(b)(2). The BLM
proposes to implement the direction in the Energy Act of 2020 through
this rulemaking process.
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\2\ <a href="https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects">https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects</a>.
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On January 27, 2021, President Biden issued Executive Order (E.O.)
14008, ``Tackling the Climate Crisis at Home and Abroad.'' Section 207
of E.O. 14008, titled ``Renewable Energy on Public Lands and in
Offshore Waters,'' instructs the Department of the Interior ``to
increase renewable energy production on (public) lands.''
The changes in this rulemaking would provide clearer direction for
the BLM in processing proposed renewable energy right-of-way
applications on public lands while also supporting the goals of the
Energy Act of 2020 and E.O. 14008.
Statutory Authority
Section 310 of FLPMA (43 U.S.C. 1740) authorizes the Secretary to
promulgate regulations to carry out the purposes of FLPMA and other
laws applicable to public lands. Section 302 of FLPMA (43 U.S.C. 1732)
also provides comprehensive authority for the administration and
protection of the public lands and their resources and directs that the
public lands be managed ``under principles of multiple use and
sustained yield,'' unless otherwise provided by law (43 U.S.C.
1732(a)). Sections 501, 504, and 505 of FLPMA authorize the Secretary
to grant ROWs on public lands; to issue regulations governing such ROWs
and charge rent for such ROWs; and to impose terms and conditions on
ROW grants, respectively (43 U.S.C. 1761, 1764, and 1765). Sections 304
and 504 of FLPMA (43 U.S.C. 1734(b) and 1764(g)) also authorize the BLM
to collect funds from ROW applicants or holders to reimburse the agency
for its costs incurred while working on a proposed or authorized ROW.
As defined by FLPMA, the term ``right-of-way'' includes an easement,
lease, permit, or license to occupy, use, or traverse public lands (43
U.S.C. 1702(f)). See Title V of FLPMA (43 U.S.C. 1761-1772).
The Energy Act of 2020 authorizes the Secretary to reduce acreage
rental rates and capacity fees if the Secretary makes certain findings,
which can include that
[[Page 39729]]
the existing rates ``impose economic hardships'' or ``limit commercial
interest in a competitive lease sale or right-of-way grant,'' or ``that
a reduced rental rate or capacity fee is necessary to promote the
greatest use of wind and solar energy resources'' (43 U.S.C. 3003).
III. Discussion of the Rule
43 CFR Part 2800 Rights-of-Way Authorized Under FLPMA
Part 2800 of the CFR describes requirements for ROWs issued under
FLPMA. This rule would revise the rent and fee schedules for solar and
wind energy development ROWs. This rule would also modify the
application process for public lands inside of solar and wind
designated leasing areas available to allow for either competitive or
non-competitive leasing processes. Other changes, including updated
solar and wind prioritization provisions and establishing criteria for
a ``complete application,'' would correct or clarify existing
regulations.
Section 2801.5 What acronyms and terms are used in the regulations in
this part?
This section contains the acronyms and defines the terms used in
this rule.
Paragraph (a) provides for the acronyms used in this part. The
acronym ``FLPMA,'' meaning the Federal Land Policy and Management Act
of 1976, as amended (43 U.S.C. 1701 et seq.), would replace the term
``Act'' from these rules. This change provides clarity to which act the
BLM is referencing.
Paragraph (b) provides for the terms used in this part. The
proposed rule would:
Remove the term ``Act'' which means the Federal Land Policy and
Management Act of 1976 (43 U.S.C 1701 et. seq.). This revision is
consistent with the addition of the acronym ``FLPMA'' under paragraph
(a) of this section;
Remove definitions of ``Megawatt (MW) capacity fee,'' ``Net
capacity factor,'' ``Megawatt hour (MWh) price,'' ``Rate of return,''
and ``Hours per year'' from this rule. Because under this proposed rule
the BLM would no longer charge a megawatt capacity fee based on solar
and wind energy generation facility nameplate capacity, definitions
related to the nameplate capacity fee are no longer necessary and would
be removed from this rule;
Revise the definition of the term ``Megawatt hour (MWh) rate'' to
mean the 5 calendar-year average of the annual weighted average
wholesale prices per MWh for major trading hubs serving 11 western
States of the continental United States. This revision is consistent
with the BLM's proposed change to implement a capacity fee;
Add the term ``Buy American'' to mean an item or product that
qualifies for the Buy American preference under Section 52.225-1(b) of
the Federal Acquisition Regulations (FAR) (48 CFR 52.225-1(b)) or a
successor regulation. Section 52.225-1(b) of the FAR identifies certain
categories of items or products that qualify for the Buy American
preference in federal acquisition. Generally, under section 52.225-
1(b), the preference applies to ``domestic end products'' and
``commercially available off-the-shelf'' (or ``COTS'') items, with an
additional provision specifying qualification rules for an ``end
product that consists wholly or predominantly of iron or steel or a
combination of both.'' Each of the terms quoted above, in turn, is
defined in section 52.225-1(a). The BLM proposes to use the term ``Buy
American'' as a catch-all term to refer to items for which the Buy
American preference is available under section 52.225-1(b) of the FAR;
Revise the term ``Grant'' to reflect that solar or wind energy
leases are not covered under the definition. The change is consistent
throughout the proposed rule and provides reader clarity where the BLM
will issue a solar or wind energy grant and where a solar or wind
energy lease will be issued;
Add the term ``Capacity fee'' to mean the fee based on the amount
of electricity produced from solar or wind energy resources on the
public lands. This proposed change is consistent with the BLM's
proposed change to implement a capacity fee that is based on
production;
Revise the term ``Reasonable costs'' to be consistent with the rule
change replacing the words ``the Act'' with the acronym ``FLPMA.'' This
change is intended to improve readability and consistency with the
rules in this part. See changes to acronyms under paragraph (a) of this
section for further discussion on the use of acronyms;
Add the term ``Renewable Energy Coordination Office (RECO)'' to
mean one of the National, State, district, or field offices established
by the Secretary under 43 U.S.C. 3002(a) that is responsible for
implementing a program to improve Federal permitting coordination with
respect to eligible projects on covered land and such other activities
as the Secretary determines necessary;
Add the term ``Solar and wind energy lease'' to mean any right-of-
way issued under Title V of FLPMA within an area identified in a BLM
land use plan as a designated leasing area. Any right-of-way not issued
within an area identified as a designated leasing area would be a
grant. This term is introduced for readability; and
Add the term ``solar or wind energy development'' to mean the use
of public lands to generate electricity from solar or wind energy
resources on public lands. This definition is intended to clarify that
the term ``energy development'' refers specifically to uses of public
lands that directly involve the generation of electricity on public
lands, and not to other uses of public lands that might indirectly
support energy production. The addition of this definition clarifies
which ROW grants and leases are subject to the conditions in Section
50265(b)(1) of the Inflation Reduction Act, which apply to ``a right-
of-way for wind or solar energy development on Federal land.''
Section 2801.6 Scope
The scope in 43 CFR part 2800 would clarify that the regulations in
this part apply to leases as well as grants. Paragraph (a)(1) includes
the additional language ``or leases'' when describing the authorization
types, clarifying that the scope includes both instrument types.
Section 2801.9 When do I need a grant or lease?
Section 2801.9 explains when a grant or lease is required for
systems or facilities located on public lands. Section 2801.9(d) would
be revised to extend the thirty-year maximum term to 50 years for ROWs
for solar or wind energy development and for other uses that support
solar or wind energy development, and to make other technical changes.
Paragraphs (d)(3) and (4) are consolidated into new paragraph (d)(3),
removing differences between grants and leases inside and outside
designated leasing areas.
New paragraph (d)(4) would add storage facilities that are separate
from energy generation facilities to the list of systems, facilities,
and related activities for energy generation, storage, or transmission
projects for which a grant or lease is required. Similarly, paragraph
(d)(6) would add electric transmission lines with a capacity of 100kV
or more. The BLM proposes to add these paragraphs to specifically
describe the additional types of authorizations required for various
components of solar and wind energy developments, or their related
infrastructure that may be operated, and thus processed, separately.
[[Page 39730]]
FLPMA requires the BLM to limit each ROW granted under FLPMA ``to a
reasonable term in light of all circumstances concerning the project,''
including among other factors, ``the cost of the facility, its useful
life, and any public purpose it serves'' (43 U.S.C. 1764(b)). The BLM
considered different alternatives for the maximum term of a grant or
lease for solar or wind energy development and for other uses that
support solar or wind energy development, such as freestanding energy
storage and electric transmission. Among other alternatives, the BLM
considered providing for 5- or 10-year extensions to the initial term
length with continued operations. However, the BLM believes, based on
its experience administering such ROWs, that the reasonable term of a
grant or lease is best limited to a 50-year term for large
infrastructure ROWs, considering the cost of the facility, its useful
life, and the public purpose it serves.
Considering the cost of the facility may include the financing
terms and the payback period a prospective grant or lease holder may
enter into under a loan or grant program. When evaluating the useful
life of a project, the BLM may consider the time it takes before a
facility is no longer economically feasible to operate or the projected
time until repowering (i.e., updating components of a facility to
increase useful life or energy production). The economic life of
technology has been increasing and is expected to continue doing so
with the advent of new materials in solar or wind energy facilities.
The method for financing or repowering may also change over time with
further advances with the maturation and advancement of the renewable
energy market. Additionally, a facility may also be part of a Federal,
Tribal, state or local government energy plan or infrastructure project
which may also indicate the need for a longer ROW term. In providing
for ROW terms that may be up to 50 years, the BLM would be able to take
into consideration the cost of the facility, its useful life and public
purposes it serves up to a 50-year term as these considerations may
change over time or with specific projects.
The BLM is interested to hear from commenters whether other
alternatives for maximum terms of grants and leases would be more
appropriate, including, potentially, the existing 30-year maximum term;
a maximum term longer than 50 years; no regulatory limitation to a ROW
term; extending the initial term by 10-year intervals with updated
power purchase agreements; or reducing the initial term based on the
factors listed in 43 U.S.C. 1764(b).
Subpart 2802--Lands Available for FLPMA Grants or Leases
Subpart 2802 would be revised to add ``or leases'' to the title to
clarify for readers that public lands are available for both grants and
leases, consistent with other revisions in this rule regarding leases.
Section 2802.11 How does the BLM designate right-of-way corridors and
designated leasing areas?
Section 2802.11 explains how the BLM designates ROW corridors and
designated leasing areas. Section 2802.11 would be revised to explain
how the BLM designates areas through its land use planning process,
including the non-exhaustive list of factors it considers. The rule
would add a new factor for access to electric transmission. Sec.
2802.11(b) would be revised to improve readability and consistency
between the BLM's regulatory authority under part 2800 and its
statutory authority under the FLPMA.
Paragraph (b)(1) is revised to be consistent with section 202(c)(9)
of FLPMA (43 U.S.C. 1712(c)(9)), to include Tribal land use plans.
Paragraphs (b)(10) and (b)(11) would be added to provide more
detail for what the BLM considers when designating new leasing areas
for solar and wind energy. In the BLM's experience with its energy
programs, it has considered multiple criteria that are either specific
to a particular region or State, as well as many common considerations
all such types of development must consider. The proposed rule would
identify two such factors that the BLM typically considers.
The BLM proposes to add ``access to electric transmission'' in
(b)(10) as a factor to be considered. This factor is intended to ensure
that planning efforts for prioritizing solar and wind energy
development take into consideration access to electric transmission. In
the BLM's experience, accessibility to transmission is a key component
for successful developments on public lands. The BLM also proposes to
add a factor in (b)(11) derived from its 2012 Western Solar Plan.\3\
Section A.2.6 of Appendix A of the Plan explained that areas designated
for solar development (termed solar energy zones in the Plan) would be
relatively large areas where energy development is feasible and there
is a low potential for conflict due to environmental, cultural, and
other relevant criteria. The Western Solar Plan sets forth a four-step
process for identifying new or expanded solar energy zones. The four
steps are as follows:
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\3\ <a href="https://eplanning.blm.gov/eplanning-ui/project/2017069/510">https://eplanning.blm.gov/eplanning-ui/project/2017069/510</a>.
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(1) Assess the demand for new or expanded areas;
(2) Establish technical and economic suitability criteria;
(3) Apply environmental, cultural, and other screening criteria;
and
(4) Analyze proposed areas through the land use planning process
described in part 1600 of this chapter.
In the rule, the BLM proposes to carry forward three of these four
steps, excluding the establishment of technical and economic
suitability criteria because technical and economic criteria have and
will change rapidly for utility-scale solar energy development and in
the BLM's experience it has not been feasible or appropriate to utilize
those criteria for the establishment of designated leasing areas. The
BLM proposes to include steps (1), (3), and (4) above to the factors
listed in Sec. 2802.11(b)(11).
Section 2803.10 Who may hold a grant or lease?
Section 2803.10 provides the criteria for who may hold a grant or
lease. Some BLM ROWs may cross more than one State. Therefore, the BLM
proposes to revise existing provisions to clarify that a holder who is
of legal age and authorized to do business in one State must also meet
this requirement in each other State in which the ROW grant they seek
is located.
Section 2803.12 What happens to my application or grant if I die?
Section 2803.12 explains how the BLM administers a ROW or an
application for a ROW in the event of the holder's or applicant's
death. Paragraph (a) would be added to this section to address a
situation in which an applicant dies before the ROW is granted and
clarifies that an application does not hold any transferable rights. If
an applicant dies before the grant or lease is issued as described in
43 CFR 2805.10, the application cannot be transferred to another person
and is deemed denied. Existing paragraphs (a) and (b) would be
renumbered as (b) and (c) and revised.
Paragraph (b) would be revised to include leases, clarifying that
any inheritable interest in the grant or lease would be distributed
under state law. Paragraph (c) would be revised to include the
additional provision that if the BLM distributes a grant to an
unqualified holder, the receiver must comply with all the terms,
conditions,
[[Page 39731]]
and stipulations of the grant. The BLM also replaces the word
``distributee'' to ``receiver'' to improve clarity to readers that when
the BLM distributes a grant or lease, the instrument would be received
by the holder.
Section 2804.12 What must I do when submitting my application?
Section 2804.12 explains what an applicant must do when submitting
a ROW application. Section 2804.12 would be revised to remove a
provision that limits solar and wind energy development applications to
public lands outside of designated leasing areas, revise the
application fee requirements for solar and wind rights-of-way, and
specify when an application becomes ``complete.''
The BLM proposes to remove existing paragraph (c)(1), which limits
solar and wind energy development applications to public lands outside
of designated leasing areas, to allow applications to be submitted on
public lands inside or outside of designated leasing areas without the
BLM first holding a competitive offer under subpart 2809. As discussed
previously in the summary and background sections of this notice, this
change will make designated leasing areas available to noncompetitive
applications.
Paragraph (c) would be revised to update the requirements for
payment of an application filing fee for solar or wind energy
development ROWs and for short-term ROWs, which include project-area
testing applications. The paragraph would also address the relationship
between application filing fees and reasonable costs. Application
filing fees are an existing per-acre fee collected by the BLM as a cost
recovery payment and are intended to discourage applicants from
applying for more land than is necessary for a proposed project and
also to provide an early cost recovery payment. This rule would clarify
that application filing fees are applied towards payment of reasonable
costs to the government for processing applications as required under
FLPMA. New provisions would be added to clarify that a cost recovery
agreement may be required under Sec. Sec. 2804.14 through 2804.22 of
this part for processing an application if the application filing fees
are insufficient to cover the government's costs in processing such an
application. Any cost recovery overpayment under an agreement,
including application filing fees, may either be refunded to the
applicant or applied to the monitoring costs of the ROW grant or lease
consistent with this part if the project is approved.
This rule would remove periodic (at least once every 10-year)
updates to the application filing fee amounts using the IPD-GDP. The
BLM is proposing to remove these periodic updates because they are not
necessary in light of the BLM's ability to establish a cost recovery
agreement with an applicant. Alternatively, the BLM considered but did
not propose in this rule that it may continue updating the rate every 5
years through policy. Cost recovery agreements may include
consideration for changes from inflation or government indirect costs
that are not captured by the application filing fee.
The BLM is interested in comments regarding its proposed removal of
the periodic update to the application filing fee.
Section 2804.12(f) would be revised to clarify that the BLM will
use a deficiency notice pursuant to existing Sec. 2804.25(c) to inform
applicants of additional information that the BLM requires in order to
process their application. This could include, for example, an updated
plan of development (POD). Paragraph (f) would also be revised to
remove a reference to part 2880, which applies to oil and gas pipeline
ROWs under the Mineral Leasing Act (MLA) rather than to FLPMA ROWs, to
avoid confusion to readers.
The BLM proposes to add paragraph (j), describing what constitutes
a complete application. Under this rule, a complete application would
be one that meets or addresses the requirements of Sec. 2804.12, as
appropriate for the application submitted. Identifying when an
application is complete will support consistency in agency actions that
require completed applications, such as when the BLM would prioritize
solar and wind energy development applications under Sec. 2804.35. The
proposed revision would clarify that the BLM will notify an applicant
in writing when their application is complete. Additional information
may be necessary for the BLM to continue processing a complete
application if necessary, resource data is not submitted earlier. If
the BLM determines that additional information is necessary after an
application becomes complete, it may issue a deficiency notice under
Sec. 2804.25(c). Additional sections in this rule that refer to
complete applications are Sec. 2804.25, How will the BLM process my
application?, and Sec. 2804.35, Application prioritization principles
for solar and wind energy facilities. In addition, complete
applications are discussed in this preamble in the context of Sec.
2084.30, which this rulemaking proposes to remove and reserve.
Section 2804.14 What is the processing fee for a grant application?
This section provides for collection of a fee to reimburse the
Federal Government for its costs in processing an application for use
of public lands.
Paragraph (c) would be revised to update the BLM's address to read
as U.S. Department of the Interior, Bureau of Land Management, 1849 C
Street NW, Room 5645, Attention: Lands, Realty, and Cadastral Survey,
Washington, DC 20240. This revision would be made so that the public is
aware of where to obtain a copy of the current cost recovery schedule.
The BLM also posts the cost recovery schedule online at <a href="http://www.blm.gov">http://www.blm.gov</a>.
Section 2804.22 How will the availability of funds affect the timing of
the BLM's processing?
Section 2804.22 provides that if the BLM has insufficient funds to
process your application, the bureau will not process your application
until funds become available or you elect to pay full actual costs
under Sec. 2804.14(f). Current text of Sec. 2804.22 would become
paragraph (a). The BLM proposes to add ``continue to'' to this
provision to clarify that if the BLM is processing an application, the
BLM will not continue to process the application until funds become
available or the applicant elects to pay full actual costs under Sec.
2804.14(f).
Section 2804.22 would be revised to improve readability and add new
provisions under paragraphs (b) and (c). New paragraph (b) would allow
the BLM to deny an application after 90 days if requested reasonable
costs for processing an application have not been received. Cost
recovery agreements can provide for a portion of the funds to be used
for the BLM to hire additional staff or contractors.
New paragraph (c) would provide that the BLM may enter into a cost
recovery agreement with an applicant in which a portion of the funds
may be used to hire additional staff or contractors to aid in
application processing. If such cost recovery payments are provided to
the BLM, the funds paid must be non-severable (non-refundable) once
committed to the hiring of an employee. Payment of such funds would
allow the BLM to increase its application-processing capacity.
[[Page 39732]]
Section 2804.23 What costs am I responsible for when the BLM decides to
use a competitive process for my application?
Existing Sec. 2804.23 describes when the BLM will use a
competitive process and how such a process is initiated. Portions of
the existing section that address when the BLM would use a competitive
process have been relocated to subpart 2809, along with portions of the
existing Sec. 2804.30, or have been removed for reasons explained
below. Therefore, revised Sec. 2804.23 is limited to addressing issues
related to cost recovery in competitive processes.
The section title would be revised, changing ``if'' to ``when.'' In
this paragraph, the applicant would be required to pay the application
costs when the BLM decides to use a competitive process.
Existing paragraph (a) would become introductory text, and existing
paragraphs (a)(1) and (2) would be renumbered as paragraphs (a) and
(b). The introductory text has been revised to remove the term
``competing applications for the same facility or system,'' which is a
term that is not used elsewhere in the regulations and is not clearly
defined, and instead refer to situations in which ``the BLM decides to
use a competitive process,'' which matches the title of this section as
well as the language used in subpart 2809. Apart from this change, the
substance of the retained text has not changed.
Provisions found under existing paragraph (b) would be removed, but
the substance of these provisions--that the discretion to decide
whether to conduct a competitive process resides with the BLM--is
addressed in proposed Sec. Sec. 2809.10(a) and 2809.12. The provisions
of existing paragraph (c) can be found in existing Sec. 2809.13(b)
(which addresses the notice requirements for notices of competitive
offerings), and in proposed Sec. Sec. 2809.10(a) and (e) (which
address the BLM's discretion and the circumstances under which the BLM
will not conduct a competitive offer). Changes to the substance of
these provisions are addressed below in the context of those sections.
Existing paragraphs (d) and (e) would be removed from the regulations
to be consistent with this rule which would allow for applications to
be submitted inside designated leasing areas without first holding a
competitive offer.
Section 2804.25 How will the BLM process my application?
Section 2804.25 explains how the BLM would process your
application. Revisions in this section would eliminate the provision
for a mandatory pre-processing public meeting under existing paragraph
(e)(2)(i); clarify that Tribal governments are accorded equal treatment
with state and local governments during application reviews; and make
technical changes.
Existing provisions in paragraph (e) describe how the BLM processes
solar and wind ROW applications. This paragraph is not intended to
enumerate all the steps that the BLM may be required to take under
other authorities, including its obligations under NEPA (which are
incorporated in paragraph (e)(4)) or its obligations to engage in
Tribal consultation (which are similarly referenced in paragraph
(e)(7)), and any changes to this paragraph would not affect those
obligations or the steps that the BLM takes to comply with them.
Rather, the purpose of this paragraph is to describe how the BLM
carries out certain steps that are distinctive to the ROW application
review process, such as prioritizing applications (existing paragraph
(e)(2)(ii)) and reviewing a proposed POD (paragraph (e)(3)).
The proposed rule would remove a provision in this paragraph
requiring a pre-processing public meeting in the affected area of a
potential ROW (existing paragraph (e)(2)(i)), while leaving in place a
provision that allows for such a meeting to occur at the BLM's
discretion (paragraph (e)(1)). Such pre-processing public meetings are
in addition to the opportunities for public participation that exist
during the environmental review process, and from coordination and
consultation sessions that the BLM holds with state, Tribal, and local
governments, and are a unique feature of the solar and wind ROW
application process. The BLM's experience, since its last rulemaking
for solar and wind energy in 2016, demonstrates that this unique
procedural step is redundant and not necessary to ensure adequate
public participation and coordination with Tribal, and local
governments. Participation and interest in these pre-processing
meetings are not as strong as it was when solar and wind energy
development was a relatively unfamiliar use of public lands, and these
meetings are often confused with public meetings that are held later
during the environmental review process. Removing this provision would
reduce costs, shorten processing times, and remove redundant or
unnecessary process requirements for these proposals. However, should
the BLM decide that a public meeting is advisable (for example, in
response to a request for such a meeting), it will give notice, under
existing provisions in paragraph (e)(1) of this section, in the Federal
Register, or may use other notification methods such as a local
newspaper or the internet to announce a public meeting.
Other changes within this section would clarify that Tribal
governments are accorded equal treatment with state and local
governments under paragraph (e)(2)(ii) (formerly paragraph
(e)(2)(iii)); remove references to the prohibition on filing non-
competitive applications within designated leasing areas, which would
no longer exist under the proposed regulations; and simplify language
related to application prioritization under Sec. 2804.35 in paragraph
(e)(2)(i) (formerly paragraph (e)(2)(ii)).
Additionally, the BLM would revise paragraph (e)(5), which
currently reads, ``The BLM will determine whether your proposed use
complies with Federal and State laws,'' by removing ``and State.'' This
revision provides clarity on the BLM's role regarding State laws. The
BLM is not responsible for enforcing State law or ensuring that an
applicant complies with State law, and removing this provision from the
regulations would remove potential reader confusion as to the Federal
Government's responsibility under State law. To the extent that State
law is applicable to development on Federal lands, consistency with
State law may be relevant to an application's prioritization under
Sec. 2804.35(a)(4).
Paragraph (f) addresses the segregation of lands within a ROW
application. Segregation removes the lands covered by a ROW application
from appropriation under the public land and mining laws. The BLM would
revise this paragraph to clarify that a segregation would not be
extended unless the application is complete (as defined in Sec.
2804.12(j)) and a cost recovery payment has been received that includes
the application filing fee. For further information on these
segregations, please see the BLM's Segregation of Lands-Renewable
Energy final rule published on April 30, 2013 (78 FR 25204).
Section 2804.26 Under what circumstances may the BLM deny my
application?
Section 2804.26 explains the circumstances under which the BLM may
deny an application.
Paragraph (a)(4) would be revised to be consistent with the
proposed revisions for acronyms and terms found in Sec. 2801.5, where
the BLM replaces the term ``the Act'' with ``FLPMA.'' For further
discussion on this proposed
[[Page 39733]]
revision, see this preamble for a discussion of revisions under Sec.
2801.5.
New paragraphs (a)(9) and (10) would incorporate into this section
requirements that are discussed elsewhere in the rule. Paragraph (a)(9)
provides for denying an application if the applicant fails to comply
with a deficiency notice within the time specified by the BLM under
Sec. 2804.25(c). Paragraph (a)(10) provides that an application may be
denied for failing to pay costs, as noted in proposed Sec. 2804.22(b).
Paragraph (c) would be removed, since the placement of this
provision (which references requests for alternative requirements under
Sec. 2804.40) in section 2804.26 may be read incorrectly to suggest
that an applicant may request alternative means of complying after the
BLM denies the application. Section 2804.40 provides that applicants
must request alternative requirements in a timely manner (see Sec.
2804.40(c)). A request that is received after an application has been
denied is not timely. Removing this provision in this section improves
clarity regarding when such requests may be made.
Section 2804.30 What is the competitive process for solar or wind
energy development for lands outside of designated leasing areas?
Section 2804.30 would be removed and reserved. Some portions of the
existing section are duplicative of provisions in existing Sec. Sec.
2809.13, 2809.14, and 2809.17, which address competitive leasing inside
of designated leasing areas; because the BLM proposes to use the same
process for competitive leasing inside and outside of designated
leasing areas, there is no need to describe this process twice. Other
portions of the existing section are proposed for inclusion in revised
sections of subpart 2809, while others would be removed for the reasons
explained below.
Existing paragraph (a) would be removed, because the BLM would no
longer distinguish between lands inside or outside of designated
leasing areas for purposes of competitive leasing. Criteria and
procedures for selecting parcels for competitive leasing are discussed
in revised Sec. 2809.12.
Existing paragraph (b) is duplicative of existing Sec. 2809.13(a),
which the BLM does not propose to revise.
Existing paragraph (c) is substantially similar to proposed Sec.
2809.10(a).
Existing paragraph (d) is duplicative of existing Sec. 2809.13(b),
which the BLM does not propose to revise, except that the sentence in
existing section (d) that reads, ``The notice would explain that the
successful bidder would become the preferred applicant (see paragraph
(g) of this section) and may then apply for a grant,'' corresponds to
proposed new section 2809.13(b)(7), as discussed below.
Existing paragraph (e) is duplicative of existing Sec. 2809.14,
which the BLM does not propose to revise.
Existing paragraphs s (f) and (g) correspond to Sec. 2809.15,
which the BLM proposes to revise as discussed below.
Existing paragraphs (h)(1) through (3) correspond to Sec.
2809.17(a) through (c), which the BLM proposes to revise as discussed
below.
Existing paragraph (h)(4) is duplicative of existing Sec.
2809.17(d) and would be removed for the reasons discussed below in
connection with that section.
Section 2804.31 Reserved
Section 2804.31, title, ``How will the BLM call for site testing
for solar and wind energy?'' would be removed and reserved. The BLM has
not had competitive interest in a site testing right-of-way since the
regulations were finalized in 2016, and thus has not held a competitive
process to authorize a site testing ROW during that period. The BLM has
received input that the use of a competitive process for a site testing
ROW prohibitively increases the time and cost for processing an
application. This change does not eliminate rights-of-way for site
testing, which may still be issued upon BLM approval of an application
for site testing under Sec. 2801.9(d)(1) and (d)(2); nor does it
eliminate the use of competitive processes for solar and wind energy
development rights-of-way, which can be found in Sec. Sec. 2809.11 and
2809.13.
The BLM is interested in comments on the BLM proposing to remove
the rules for a call for a competitive process for site testing ROWs
for solar and wind energy and whether there is any value in keeping
this rule for the future.
Section 2804.35 Application Prioritization Principles for Solar and
Wind Energy Development Rights-of-Way
Section 2804.35 would be retitled from ``How will the BLM
prioritize my solar or wind energy application?'' to ``Application
prioritization principles for solar and wind energy development rights-
of-way'' to more clearly identify the content of this section.
Revisions to this section are based on the BLM's experience with the
existing prioritization criteria and their potential for causing
confusion and misunderstanding of the criteria's use. The existing
Sec. 2804.35 prescribes screening criteria under which an application
is evaluated and then assigned high, medium, or low priority. However,
in practice, a single application may meet criteria that are associated
with more than one priority level. Furthermore, the relative importance
of different criteria may vary from location to location due to
resource considerations. Likewise, not all prioritization criteria are
equally relevant for every application. These practical concerns create
confusion within the existing regulations. Additionally, evaluation
using the existing criteria removes some discretion from the BLM to
best determine an application's priority because use of the criteria to
prescribe the priority level fails to recognize and give weight to
local resource issues and circumstances.
Revisions in this section therefore would not assign specific
criteria to specific priority levels. Instead, the revised section
would clarify that relevant factors including those set forth in the
regulation are to be used holistically to prioritize applications in a
manner that would facilitate environmentally responsible developments
and ensure that agency workloads are directed appropriately. The
revised section would also explicitly recognize that the BLM may
identify additional criteria in step-down guidance, which may be
national in scope or specific to an area.
Paragraph (a) clarifies that the purpose of prioritizing
applications is to allocate agency resources to processing applications
that have the greatest potential for approval and implementation.
Paragraph (b) identifies factors that the BLM may consider when
prioritizing applications. The proposed factors are similar to the
existing criteria inasmuch as they focus on the extent to which an
application avoids known resource, use, or policy conflicts and
complies with relevant plans and policies, but they are less
prescriptive than the existing criteria. This rule proposes factors
that are inclusive of the existing rule's criteria found in this
section. The rule would provide discretion to the BLM as to how best to
apply the factors to prioritizing processing of solar or wind energy
generation applications, taking into account the multiple
considerations that are relevant to each area and office managing
public lands.
The first factor would consider whether the proposed project is
located within an area preferred for such development, such as a
designated leasing area. These areas have
[[Page 39734]]
previously been identified as posing less severe resource conflicts
through the land use planning process, and the BLM may reasonably
presume that developments proposed within these areas are more likely
to proceed to approval.
The second factor would consider whether the proposed development
avoids adverse impacts to or conflicts with known resources or uses on
or adjacent to public lands, and includes specific measures designed to
further mitigate impacts or conflicts. When submitting an application
to the BLM, the applicant must address known potential adverse resource
conflicts, including those for sensitive resources and values that are
the basis for special designations and protections, as well as
potential conflicts with existing uses on or adjacent to the proposed
energy generation facility.
The applicant must also include specific measures to mitigate
impacts or conflicts with resources and uses. While subsequent
consultation, public comment, and environmental review processes may
reveal unknown resource or use conflicts, the BLM may reasonably
presume that projects with fewer known conflicts are more likely to
proceed to approval and successful implementation.
The third factor would consider whether the proposed project is in
conformance with the governing BLM land use plans. Applications should
identify whether the proposed project is in conformance with the
governing land use plan or would require an amendment or revision to
the plan. The BLM may, in its discretion, consider applications for
solar or wind energy generation facilities that would require an
amendment or a revision to the governing land use plan under part 1600
of these regulations. However, such application could require greater
resources to process and could present resource conflicts, which would
result in a lower priority.
The fourth factor would consider whether the proposed project is
consistent with relevant State, local, and Tribal government laws,
plans, or priorities. The purpose of this determination is not to
enforce these State, local, or Tribal but rather to ensure comity and
identify projects that are more likely to be successfully approved. In
addition, applying this principle helps to ensure that the BLM takes
into account the existing resource knowledge and expertise that may be
available through State, local, and Tribal plans and priorities. To
carry out this prioritization, the BLM may enter into agreements with
State, local, or Tribal governments or rely on existing agreements.
The fifth factor would consider whether the proposed project
incorporates the best management practices set forth in the applicable
BLM land use plans and other BLM plans and policies. Like the first
four principles, this principle ensures that the BLM takes into account
the knowledge and expertise that has gone into formulating these
existing policies and also recognizes that an application that would
require an amendment to existing plans or policies is likely to require
more time and effort to process.
Under the sixth factor, the BLM would consider any other
circumstances or prioritization criteria identified by the BLM in
subsequent policy guidance or land use planning. Such guidance or
planning could describe new criteria in addition to the proposed
principles or may describe regional or local criteria that may be used
when prioritizing solar and wind energy applications. Under paragraph
(c), once applications are complete (as defined in Sec. 2804.12(j) of
this part), the BLM would go through a process to prioritize those
complete applications (as defined in Sec. 2804.12(j) of this part),
based on all available information. Available information may include
information provided in the application or its plan of development,
applicant responses to deficiency notices, and information provided to
the BLM in public meetings or consultations, including consultations
with other Federal agencies and with State, local, or Tribal
governments.
Paragraph (d) would allow the BLM to re-prioritize an application
based on new information that the BLM has received or on changes the
applicant has made to the application. Changes to an application may
include changes that clarify an applicant's proposal or the related
plans, studies, and inventories. Once the BLM begins processing an
application, the BLM will generally continue processing that
application to completion and decision, to the extent possible.
Nonetheless, the BLM reserves the right to re-prioritize an
application, and adjust its workload accordingly, if circumstances
warrant such re-prioritization.
The BLM is interested in comments regarding its proposed
prioritization principles for solar or wind energy developments. Are
the factors appropriate? Should the BLM consider additional factors,
such as co-location with energy storage, or other proposed or existing
energy facilities, or proximity to transmission infrastructure
facilities as a consideration?
Section 2804.40 Alternative Requirements
Section 2804.40 provides for situations when a requestor is not
able to meet the requirements of this subpart and wants to request
alternative requirements from the BLM. The introductory paragraph would
be revised to clarify that requests for alternative requirements apply
only to the application requirements set forth in this subpart, and not
to other requirements related to ROWs, such as the requirement to pay
rent as set forth in subpart 2806. This revision would improve clarity
and avoid potential misunderstandings.
Section 2805.10 How will I know whether the BLM has approved or denied
my application or if my bid for a solar or wind energy development
grant or lease is successful or unsuccessful?
Section 2805.10 provides for how the BLM communicates to an
applicant that their application or bid is successful. This section
would be revised to improve consistency and clarity within the BLM's
regulations and to avoid confusion over the timing of appeals. Existing
paragraphs (a) and (d), which the BLM does not propose to revise,
specify that the agency decision occurs when the BLM transmits an
unsigned grant or lease to the successful applicant or when the BLM
notifies an unsuccessful bidder or applicant that their bid or
application has not been successful (see also the discussion below of
Sec. 2809.15, which clarifies the process through which a successful
bidder may proceed to become a presumptive lease holder, and eventually
a lease holder). Existing paragraph (b), which the BLM similarly does
not propose to revise, clarifies that the unsigned grant or lease
document will specify the terms and conditions of the grant or lease.
These paragraphs identify the point at which the BLM has made its
decision to approve, approve with modifications, or deny the
application, which typically marks the endpoint of the BLM's decision-
making process. This decision marks the appropriate time for appeal of
the BLM's decision.
Existing paragraph (c) injects potential confusion into this scheme
by stating that after the applicant signs and returns the grant, ``BLM
will sign the grant and return it to you with a final decision issuing
the grant,'' and that the applicant ``may appeal this decision under
Sec. 2801.10 of this part.'' This language suggests that an appealable
decision occurs any time the BLM
[[Page 39735]]
issues a grant or lease by returning a signed ROW instrument to the
applicant, even though the step of issuing the ROW often does not
require the BLM to exercise discretion.
Under the proposed rulemaking, paragraph (c) would be revised to
replace the text ``BLM will sign the grant and return it to you with a
final decision'' with the text ``The BLM will issue the right-of-way by
signing the grant or lease and transmitting it to you,'' and by
removing the sentence ``You may appeal this decision under Sec.
2801.10 of this part.'' The purpose of this revision is to remove the
confusing reference to a ``decision'' in paragraph (c), to recognize
that the act of issuing the grant is not an appealable decision. The
BLM also proposes the technical change of replacing ``grant'' with
``grant or lease.''
While the proposed revision would clarify that the act of issuing a
grant or lease by returning a signed ROW instrument to the applicant is
not typically an appealable decision, the revised text retains the
critical language clarifying that it is the BLM's act of returning the
signed instrument to the holder that constitutes the ``issuance'' of
the ROW. Identifying the point in time at which the ROW is ``issued''
is important for calculating when the term of a ROW begins to run (see
Sec. 2805.11) and when the holder's obligation to pay rent begins (see
Sec. 2806.12). Identifying the point at which the ROW is ``issued'' is
also important for clarifying which actions are subject to the
conditions in Section 50265(b)(1) of the Inflation Reduction Act, which
imposes conditions on when the Secretary may ``issue a right-of-way for
wind or solar energy development on Federal land.'' Under both the
current and the proposed text of Sec. 2805.10(c), the ROW is issued
when the BLM transmits the signed instrument to the holder.
Section 2805.11 What does a grant or lease contain?
Section 2805.11(b) addresses the duration of ROWs. Section
2805.11(b)(2) provides specific terms for solar and wind energy grants
and leases. Paragraphs (b)(2)(iv), (b)(2)(v), and (b)(4) would be
revised to update the maximum terms for solar and wind energy
generation facilities, energy storage facilities that are separate from
energy generation facilities, and electric transmission lines with a
capacity of 100 kV or more. The term for a grant or lease for these
types of authorizations may be up to 50 years. Revisions under this
section are consistent with those made under Sec. 2801.9(d).
Paragraph (b)(2)(iv) would be revised to include updating the
maximum term for both grants and leases, consistent with changes under
this rule that allow for applications to be filed within designated
leasing areas without first holding a competitive offer.
Paragraph (b)(2)(v) would be revised to set the maximum term for
ROWs for energy storage facilities that are separate from energy
generation facilities. Although these ROWs are generally treated as
linear ROWs, rather than solar or wind energy development ROWs, for
purposes such as rent calculation, the BLM believes that allowing a
longer maximum term, commensurate with the maximum term for solar or
wind energy development ROWs, will facilitate the transition to cleaner
sources of energy in the United States.
Paragraph (b)(4) would be added to update the term for electric
transmission lines with a capacity of 100 kV or more.
Section 2805.12 What terms and conditions must I comply with?
Section 2805.12 provides terms and conditions that apply to ROWs.
The BLM proposes to revise paragraph (e)(2) to clarify that the option
of requesting alternative stipulations, terms, or conditions does not
apply to terms or conditions related to rents or fees. As with requests
for alternative application requirements under Sec. 2804.40, requests
for alternative stipulations, terms, or conditions under Sec. 2805.12
are limited to technical obligations of the applicant or holder and not
to the holder's obligation to compensate the United States for the use
of the public lands and their resources. Requests for exemptions or
deviations from the general rent provisions of subpart 2806 should be
made under provisions of that subpart that specifically address such
exemptions or deviations, such as existing Sec. 2806.15(c) (which the
BLM does not propose to revise), which sets forth a procedure for
asking the BLM State Director to waive or reduce a holder's rent
payment, or proposed Sec. 2806.52(b)(1)(i), which describes certain
circumstances under which the BLM may calculate rent based on an
alternative MWh rate. The applicability of those provisions would not
be affected by this proposed revision to Sec. 2805.12.
Section 2805.13 When is a grant or lease effective?
Section 2805.13 title and section is revised to add ``or lease'' to
clarify that this section applies to both grants and leases.
Section 2805.14 What rights does a right-of-way grant or lease convey?
The title would be revised from ``What rights does a grant
convey?'' to ``What rights does a right-of-way grant or lease convey?''
The title would be revised to clarify that this section applies to both
grants and leases.
Paragraph (g) would be revised to remove the text ``solar or wind
energy development'' and add ``right-of-way'' to read as ``right-of-way
grant or lease'' to capture every instrument or type of ROW
authorization that the BLM may issue. This revision would clarify for
readers that an applicant may apply to renew any ROW grant or lease,
including those for solar or wind. This revision would clarify that
holders of all ROW grants and leases may apply for a renewal under
Sec. 2807.22. ROW grants or leases would include those issued for
solar or wind energy developments, communication sites, or other types
of uses authorized by a ROW grant or lease.
Section 2805.16 If I hold a grant or lease, what monitoring fees must I
pay?
This section provides for a monitoring fee to reimburse the Federal
Government for its costs in inspecting and monitoring the public lands
subject to a ROW and for its ongoing costs administering the ROW.
Proposed paragraph (b) would update the BLM's headquarters address
to read as U.S. Department of the Interior, Bureau of Land Management,
1849 C Street NW, Room 5645, Attention: Lands, Realty, and Cadastral
Survey, Washington, DC 20240. This revision is made so that the public
is aware of where to obtain a copy of the current cost recovery
schedule. The BLM also posts the cost recovery schedule online at
<a href="http://www.blm.gov">http://www.blm.gov</a>.
Subpart 2806--Annual Rents and Payments
In subpart 2806, the BLM sets forth the rent calculation
methodologies for solar and wind energy development ROWs. Section
504(g) of FLPMA, 43 U.S.C. 1764(g), requires ROW holders, subject to
several narrow exceptions, ``to pay in advance the fair market value''
for the use of the public lands. Section 102(a) of FLPMA, 43 U.S.C.
1701(a), clarifies that ``it is the policy of the United States that .
. . the United States receive fair market value of the use of the
public lands and their resources unless otherwise provided for by
statute.'' The BLM has consistently taken the position that this
statutory mandate includes the authority to charge acreage rent and
capacity fees
[[Page 39736]]
that reflect the fair market value of the public lands and their
resources. For example, the preamble to the 2016 rule explained that
``(t)he BLM has determined that the most appropriate way to obtain fair
market value is through the collection of multicomponent fee (sic) that
comprises an acreage rent, a MW capacity fee, and, where applicable, a
minimum and a bonus bid for lands offered competitively . . . (T)he
collection of this multicomponent fee will ensure that the BLM obtains
fair market value for the BLM authorized uses of the public lands,
including for solar and wind energy generation'' (81 FR 92122, page
92134). As the BLM explained in 2016, the use of a multicomponent rent
and fee structure that comprises an acreage rent, a MW capacity fee,
and in some cases also a minimum and a bonus bid, assists the BLM in
achieving important objectives, including identifying the fair market
value for the use of public land. The multicomponent fee proposed in
this proposed rule would continue to achieve important BLM objectives,
including allowing the BLM to capture fair market value for use of the
land (subject to reductions pursuant to Energy Act of 2020 authority).
For solar and wind energy development ROWs, the fair market value
requirement of Section 504(g) of FLPMA has been supplemented since the
2016 rulemaking by the Energy Act of 2020, 43 U.S.C. 3003, which
reaffirms that the ``Secretary may consider acreage rental rates,
capacity fees, and other recurring annual fees in total when evaluating
existing rates paid for the use of Federal land by eligible projects,''
and confers on the Secretary new authority to reduce acreage rental
rates and capacity fees if the Secretary makes certain findings.
Consistent with FLPMA and the Energy Act of 2020, the BLM proposes
to continue to determine rent for solar and wind energy ROWs based on
acreage rent rates and capacity fees, although under a revised
methodology that provides the BLM with more flexibility to ensure
rental fees and rates are adjusted to appropriately respond to changes
in the renewable energy market. The revised methodology would also
reflect the direction in the Energy Act of 2020, including to propose
rules for certain rate reductions and to meet the Congressional goal of
permitting 25 GW by 2025. The BLM also proposes to introduce through
this rulemaking certain rate reductions, implementing the authority of
the Energy Act of 2020.
Acreage rent rates for solar and wind energy ROWs would be
determined under the proposed rule using the NASS Cash Rents Survey,
which reflects the value of the land at the time the ROW is issued.
This per-acre land rental value would be multiplied by an encumbrance
factor (which differentiates between solar and wind energy facilities)
and an annual adjustment factor that accounts for changes in the value
of the land over the lifetime of the ROW due to inflation and similar
factors. Because the NASS Cash Rents Survey used for solar and wind
acreage rents reflects a valuation of annual rent, no rate of return is
applied when determining solar and wind energy acreage rents.
Once a solar or wind energy generation facility is producing
electricity, the BLM would charge the higher of the acreage rent,
described in the previous paragraph, or the capacity fee for the ROW.
The capacity fee is determined using the annual production multiplied
by either wholesale power pricing information or pricing figures
specific to a project's power purchase agreement, to determine the
market value of the energy generated from the project. The wholesale
power pricing information or other pricing figures, like the
pastureland rental value used for calculating acreage rents, would be
fixed at the time the ROW is issued and would be updated using a fixed
annual adjustment factor. This market value of the energy generated
would then be multiplied by a rate of return based on a percentage of
wholesale pricing, and by certain policy-based fee reduction factors
tied to the Energy Act of 2020, to arrive at a capacity fee.
Section 2806.10 What rent must I pay for my grant or lease?
Section 2806.10 provides rent requirements that apply to all grants
and leases, requiring payment in advance, consistent with Section
504(g) of FLPMA, as amended.
New Sec. 2806.10(c) would clarify to a reader that the per acre
rent schedule for linear ROW grants must be used unless a separate rent
schedule is established for your use, such as with communication sites
under Sec. 2806.30 or solar and wind energy development facilities per
Sec. 2806.50, or the BLM determines that none of these schedules
applies pursuant to Sec. 2806.70.
Section 2806.12 When and where do I pay rent?
Paragraphs 2806.12(a) and (b) describe the proration of rent for
the first year of a grant and the schedule for payment of rents.
Paragraphs 2806.12(a) and (b) would be revised by deleting the term
``non-linear,'' which is not defined in the regulations, to clarify
that these provisions apply to all ROW grants or leases.
Section 2806.20 What is the rent for a linear right-of-way grant?
Section 2806.20(c) addresses how to obtain a current rent schedule
for linear ROWs. This paragraph would be revised to update the BLM's
mailing address of record by reference to Sec. 2804.14(c) that would
also be updated.
Solar and Wind Energy Development Rights-of-Way
The existing regulations contain two undesignated center headings
to organize and differentiate sections pertaining to solar (see
existing 2806.50 through 58) and wind (see existing Sec. Sec. 2806.60-
68) energy rights-of-way. This proposed rule would revise those
sections and undesignated headings to provide a single set of
provisions for all solar and wind energy development ROWs. Existing
regulations have solar and wind rights-of-way separated into different
sections, even though rents, fees, and the required payments for solar
and wind rights-of-way are similar. The rent, fee, and payment
requirements under the proposed rule are discussed in the following
sections and would be the same for both solar and wind except for the
difference in the encumbrance factor used in calculating the acreage
rent that is discussed under Sec. 2806.52(a). Sections 2806.60 through
2806.68, which address wind energy rents and fees, would be removed and
consolidated with solar energy rents and fees under 2806.50 through
2806.58.
The BLM has considered several alternative methods for valuing
solar and wind energy facilities on public lands. In May 2022, the BLM
issued its interim solar and wind energy rent policy in an update to
the BLM Right-of-Way Manual (Manual), Section 2806.60--Rent: Solar and
Wind Rights-of-Way Rents, Fees, and Reductions, which incorporated the
Secretary's authority under the Energy Act of 2020 to implement changes
to the solar and wind energy rents and fees, including reductions. The
Manual provides for updates to the rent adjustment methodology under
regulation or law. The BLM issued this interim policy after first
releasing a draft update to Section 2800.60 of the Manual for public
review and comment, see <a href="https://www.blm.gov/press-release/blm-seeks-public-input-proposed-guidance-renewable-energy-blm-public-lands">https://www.blm.gov/press-release/blm-seeks-public-input-proposed-guidance-renewable-energy-blm-public-lands</a>
(December 3, 2021). In the BLM's release of the draft update to the
manual, it solicited comments on alternatives for reduced rent payments
and offered two rent adjustment options that would rely on the
Secretary's
[[Page 39737]]
authority under the Energy Act of 2020, 43 U.S.C. 3003, to reduce
acreage rental rates and capacity fees if, among other things, the
Secretary determines ``that a reduced rental rate or capacity fee is
necessary to promote the greatest use of wind and solar energy
resources.'' The two primary options would have generally sought to
either adjust the baseline acreage and capacity fees or provide for a
nominal acreage rent and a capacity fee. After reviewing the comments
received on the draft update, the BLM amended Section 2806.60 \4\ of
the Manual with its update to renewable energy rent that provides for
adjustments to baseline acreage rents and capacity fees that result in
a reduction in total payments for solar and wind energy facilities.
Manual 2806.60 does not provide for a nominal acreage rent and a
capacity fee.
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\4\ <a href="https://www.blm.gov/sites/default/files/docs/2022-05/MS-2806%20rel%202-307%20Chapter%206.pdf">https://www.blm.gov/sites/default/files/docs/2022-05/MS-2806%20rel%202-307%20Chapter%206.pdf</a>.
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The BLM determined that the most expeditious way to implement rent
changes was by an interim adjustment to the 2016 methodology as
reflected in the Manual and subsequently to use this rulemaking to
further address its proposed rate setting methodology based on an
acreage rent and a capacity fee. In this rulemaking, the BLM considered
as an alternative the rates released in Manual Section 2806.60--Rent:
Solar and Wind Rights-of-Way Rents, Fees, and Reductions, which
implements a state-wide per acre value based on non-irrigated land
values and a reduced capacity fee that is the same for both solar and
wind energy. Please see the BLM's release of its updated Right-of-Way
Manual Section 2806.60 for further information. Under this proposed
rule, the rates would generally be lower for solar and wind energy ROWs
and allow existing holders to choose to keep the updated rate
methodology set by the Manual.
The BLM understands, based on comments received for the draft
Manual and other engagement with industry representatives and grant and
lease holders, that predictability of project costs is critical to the
success of an energy generation facility. This includes the costs of
energy development through its life, including those for construction,
operations, and maintenance.
Although land use expenses, such as annual payments for rents and
fees, are a small portion of an energy generating facility's operating
expenses (generally 1-3 percent of costs), these amounts are important
to a developer as they contribute to determining if a certain facility
may be successful or not. Under existing regulations the BLM adjusts
the rates based on changes in land values and power pricing, among
other considerations. More recently, the rates for solar and wind
energy development acreage rents have increased by more than 300
percent in some locations while capacity fees have decreased by about
50 percent. These unanticipated rate changes affect existing holder
payments, raising concerns over project viability in future years for
projects that are typically associated with 30-year ROWs.
Under the current regulatory method, established in 2016, the rates
for acreage rent and wholesale power pricing would likely increase
again when the next adjustments are made starting in 2026. These
increases to the BLM's rates would be based primarily on recent NASS
per-acre land survey data and western power trading pricing in
wholesale markets which are both trending upwards in recent years.
Changes or variability in rates present an uncertainty to potential ROW
holders. The BLM aims through this rulemaking to improve the
predictability of public land rental rates for solar and wind energy
development, while continuing to adhere to FLPMA's fair market value
requirement, except where rates would be reduced to promote the
greatest use of the public lands consistent with the Energy Act of
2020.
The 2016 rule did not require the BLM to use a particular source
for electricity market wholesale trading data when determining the
value for wholesale market pricing, in order to provide the agency with
flexibility to use the best available data. Such flexibility is
maintained in this proposed rule. Currently, the BLM uses the SNL
Energy dataset from S&P Global. Under the proposed rule, however, the
BLM would elect to use the wholesale market pricing data from the
Energy Information Administration at this time because it is free and
open to the public, which would provide additional transparency into
the BLM's rate schedule. The BLM would still retain flexibility to
utilize different data sources in the future. Wholesale market pricing
data from the Energy Information Administration may be found on the
Administration's website: <a href="https://www.eia.gov/electricity/wholesale/">https://www.eia.gov/electricity/wholesale/</a>.
The BLM is interested in receiving comments and information
discussing the BLM's proposed changes to the solar and wind energy
acreage rent and capacity fees and whether the rule reasonably
implements changes to BLM regulations under Title V of FLPMA and the
Energy Act of 2020. Is the BLM proposing a reasonable methodology for
valuing solar and wind energy development ROWs, including any
preference for alternatives to the BLM's proposal in this rule. Is the
BLM's proposal to use free and publicly available wholesale market
pricing information appropriate when setting its rates? Are there other
options that are more appropriate for use in the BLM's rate setting
methodology?
Under this rule, the BLM proposes changes to the acreage rent and
capacity fees that would greatly improve payment certainty. Payment
certainty would be improved through the BLM establishing an acreage
rate and capacity fee rate at the beginning of a grant or lease term
and then adjusting it annually by a fixed percentage of the rate
established in the first year of the grant or lease term, and by the
annual energy production. This is different than current methodology
which updates rates periodically based on changes in land values
derived from the NASS Census of Agriculture, conducted every five
years, and estimated energy generation capacity of solar and wind
facilities.
The BLM's proposed acreage rent would use an average of the state-
wide pastureland rent from the NASS Cash Rent Survey instead of
adjusted non-irrigated land values to determine the acreage rent. The
acreage rent would be the minimum payment made to the BLM each year,
regardless of energy generation on public lands, and would compensate
the United States for the privilege obtained by the developer in
securing the right to use and build improvements on the public lands.
See Sec. 2806.52(a) for further information on the acreage rent.
The BLM also proposes a capacity fee based on wholesale power
prices to compensate the United States for the value of the solar and
wind energy resources used by the developer on public lands. The
capacity fee would be collected annually, but only when the fee exceeds
the acreage rent for the year. See Sec. 2806.52(b) for further
information on the capacity fee.
This rule also proposes certain reductions to the capacity fee
under the authority granted to the Secretary in the Energy Act of 2020,
which provides that annual acreage rent and capacity fees may be
reduced if the Secretary determines that a reduced rental rate or
capacity fee is necessary to promote the greatest use of wind and solar
energy resources, among other reasons. Reductions to the capacity fee
are discussed in greater detail under Sec. 2806.52(b)(1)(ii) and (iii)
for the MWh
[[Page 39738]]
rate reduction and Buy American reduction. The BLM considered but did
not pursue several reductions for siting developments in designated
areas, use of energy storage, efficiency of technology used, payment of
compensatory mitigation fees, and project sizing. These reductions
would be applied to solar or wind energy developments depending on the
specifics of the project and whether it would qualify for one or
multiple reductions. The BLM did not propose multiple reductions
because it made for a more complex rate structure that may help
individual projects that qualify for the reduction(s) but did not seem
to promote the deployment of solar or wind energy on public lands
collectively.
This rule proposes a single reduction, to apply to all
developments, to the annual weighted average wholesale power price,
referred to as the MWh rate reduction, as well as a Buy American
reduction that is project-specific. For the reasons explained below and
in the introduction to this notice, the BLM believes that these
proposed rate reductions would reduce economic hardships on developers,
maximize commercial interest in lease sales, and promote the greatest
use of wind and solar energy resources.
The BLM is interested to hear comments from readers on its proposed
capacity fee rate reductions and use of the Energy Act to promote the
greatest use of solar and wind energy resources on public lands. How
might the BLM utilize its authority under the Energy Act of 2020
differently to provide a reduction to the capacity fee? How might the
BLM utilize this authority differently to promote the greatest use?
Additionally, the BLM would like to receive comments on whether the BLM
should use multiple project specific reductions or whether other
reductions may be more appropriate toward meeting the goals of the
Energy Act of 2020.
Section 2806.50 Rents and Fees for Solar and Wind Energy Development
Existing Sec. 2806.50 requires a holder of a solar ROW to pay both
an annual rent and a phased-in capacity fee in advance each year. Under
the proposed rule, this section would be modified to require the holder
of a solar or wind energy development ROW to pay the greater of either
an annual rent or a capacity fee in advance each year, consistent with
Section 504(g) of FLPMA (43 U.S.C. 1764(g)). Because this proposed rule
uses a fee based on production, it would remove the phased-in MW
capacity fee. The phased-in MW capacity fee in the current regulations
is based on the nameplate capacity, an estimation of energy generation
potential of a technology, and apart from the phase-in factor, is paid
regardless of the amount of energy that is actually produced.
The acreage rent or capacity fee, as applicable, calculated
consistently with the requirements found in Sec. Sec. 2806.11 and
2806.12. The acreage rent would be calculated according to the formula
set forth in Sec. 2806.52(a), while the capacity fee would be
calculated according to the formula set forth in Sec. 2806.52(b).
Section 2806.50 would be retitled adding ``and wind'' consistent
with changes under this rule to consolidate both solar and wind energy
rent, fee, and payment provisions. Revisions also include the addition
of ``wind'' and ``grant or lease,'' clarifying that this section
applies both to grants and leases issued under this part.
The BLM is also interested in public comments regarding its
proposal to move from a fee based on the nameplate capacity of a
project to a fee based on the energy produced at a solar or wind energy
generation facility sited on public lands. Additionally, the BLM would
like input on whether it should implement minimum efficiency criteria
for developments to support the greatest use of solar and wind energy
resources on public land. If so, what criteria should the BLM follow
and what penalties, if any should the BLM include for facilities that
would not meet these criteria?
As proposed, and as noted in the draft economic and threshold
analysis, the BLM believes that this rule would not have a significant
economic impact on a substantial number of small entities, and further,
that any potential impacts on small entities are unlikely, and would
only occur in a limited set of circumstances. The BLM is not aware of
developers and operators of solar or wind energy facilities on public
lands \5\ that would typically qualify as a small business under the
Small Business Administration regulations at 13 CFR part 121, which
define what constitutes a small business for the relevant industries.
Additionally, entities that develop solar or wind projects on public
land are often an affiliate of a larger company or a financial
investment company that does not qualify as a small business, and
therefore the affiliate company would also not qualify as a small
business. The BLM provides further information on small business and
the number of potentially affected establishments in its draft economic
and threshold analysis (Table 8).
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\5\ Wind: <a href="https://www.blm.gov/sites/default/files/docs/2021-11/PROJECT%20LIST%20WIND_October%202021.pdf">https://www.blm.gov/sites/default/files/docs/2021-11/PROJECT%20LIST%20WIND_October%202021.pdf</a>. Solar: <a href="https://www.blm.gov/sites/default/files/docs/2023-03/PROJECT_LIST_SOLAR_FY2022.pdf">https://www.blm.gov/sites/default/files/docs/2023-03/PROJECT_LIST_SOLAR_FY2022.pdf</a>.
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The BLM is interested on comments whether small business may be
impacted and whether that impact would be negative or positive. How is
this rule negatively or positively affecting small business, and how
might the BLM more fairly include small business if it is negatively
impacted?
Section 2806.51 New and Existing Grant and Lease Rate Adjustments
Section 2806.51 would be retitled from ``Schedule Rate Adjustment''
to ``New and Existing Grant and Lease Rate Adjustments,'' clarifying to
readers that this section applies to both new and existing grants and
leases.
Paragraph (a) directs readers to the appropriate section setting
forth the different rental schedules for different types of ROWs.
Paragraph (b) explains the process for selecting a rate adjustment
method for a new grant or lease.
Paragraph (c) informs holders of existing solar or wind energy
development ROWs that they may request that the new rate methodology
set forth in this proposed rule be applied to their existing grant or
lease. Existing holders would have 2 years from the date this rule
becomes effective to request a change to the new rate adjustment
method. The BLM would continue to apply the grant or lease holder's
current rate methodology if a timely request is not received. A request
to change the rate adjustment method would require the holder's
agreement to the BLM re-issuing the grant or lease with updated Terms
and Conditions found under this part, pursuant to Sec. 2806.70.
Section 2806.52 Annual Rents and Fees for Solar and Wind Energy
Development
Section 2806.52 currently provides the methodology that the BLM
uses to determine the acreage rent and the MW capacity fee for solar
and wind energy development ROWs. The current regulation provides for
payment of both the acreage rent and the MW capacity fee (based on the
MW capacity of the solar or wind energy generation facility).
The BLM proposes to require payment of the greater of either an
acreage rent, which is calculated in advance of authorization, or a
capacity fee, which is calculated once energy generation begins (Sec.
2806.50). Section 2806.52 would be revised to provide the methodology
for the BLM to determine the acreage rent (Sec. 2806.52(a)) and
capacity fee (Sec. 2806.52(b)).
[[Page 39739]]
Paragraph (a) would provide that acreage rent would be determined
by multiplying the authorized number of acres (rounded up to the
nearest tenth) by the state-specific per-acre rate from the solar and
wind energy acreage rent schedule in effect at the time a grant or
lease is issued. The acreage rent would be the minimum yearly payment
for a grant or lease and would not be required if the capacity fee
under paragraph (b) of this section exceeds the acreage rent. Paragraph
(a)(1) explains that the per acre rate is calculated by multiplying the
state-specific per-acre value by the encumbrance factor and a factor
that reflects the compound annual adjustment since the start of the
grant or lease term, according to the formula A x B x ((1 + C)
[supcaret]D)).
Paragraph (a)(1)(i) would clarify that ``A'' would be the per-acre
rate, using the state-specific per-acre value from the solar or wind
energy acreage rent schedule for the states where a project is located
for the year when the grant or lease is issued. The per-acre rate for a
grant or lease would not change once issued, even with updates to the
acreage rent schedule; instead, the acreage rent would be adjusted by
the annual adjustment factor, ``C'' in the formula above, under
2806.52(a)(1)(iii). To calculate the current acreage rent schedule for
a state, the BLM would use the most recent 5-year period average of
NASS pastureland rent values. The average per acre value would be
determined by using only the years with reported NASS pastureland rents
within the 5-year period. Updates to the per acre rate would occur
every 5 years in the acreage rent schedule consistent with the timing
of rent adjustments under Sec. 2806.22 for the linear rents schedule.
The current 5-year average ranges from $2.10 per acre in Arizona to
$12.60 per acre in California with a median value of $6.62 per acre in
the Western States, based upon the pastureland rent value in the NASS
Cash Rents Survey through 2021.
Using Nevada as an example for how the BLM would average NASS
pastureland rents, assume that values of $10.00, $13.00, and $10.00 per
acre were reported respectively for 2019, 2020, and 2021. NASS reported
values during the 5-year period only for those 3 years and did not
report values for 2017 and 2018. Therefore, the BLM would average the
reported values using three years for that 5-year period. Thus, the 5-
year average would be $11.00 per acre.
Paragraph (a)(1)(ii) would clarify that ``B'' in the formula above,
would be the encumbrance factor. For solar energy development
facilities, a 100 percent encumbrance factor would be set in this rule,
and for wind energy a 5 percent encumbrance factor would be set. A 100
percent encumbrance factor reflects a virtual exclusion of all other
uses on the ROW. A lesser encumbrance factor recognizes that an
authorized use or development only partially encumbers the land,
allowing other uses to co-exist. This proposed rule would maintain the
existing 100 percent encumbrance factor for solar energy developments.
This rule proposes to reduce the encumbrance factor for wind energy
from 10 percent to 5 percent to account for changes in technology over
the years and the comparative reduction in land occupied by wind energy
generation facilities which use fewer wind turbines and generally meet
or exceed older wind energy facility nameplate capacities. For wind,
this rule proposes a 5 percent encumbrance factor, reflecting that
relatively little exclusion of other uses would occur. This is also
consistent with changes in lands where the National Renewable Energy
Laboratory (NREL) has noted that wind projects now typically occupy one
to four percent of the land within the project area. You may read
further in NREL's news release and analysis, NREL Explores the Dynamic
Nature of Wind Deployment and Land Use.\6\
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\6\ https://www.nrel.gov/news/program/2022/nrel-explores-the-
dynamic-nature-of-wind-deployment-and-land-
use.html#:~:text=Through%20comprehensive%20spatial%20analysis%20of%20
U.S.%20wind%20power,and%20plant%20design%20are%20changing%20land%20us
e%20requirements.
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Paragraph (a)(1)(iii) clarifies that ``C,'' in the formula above,
would be the annual adjustment factor, which is 3 percent, and
Paragraph (a)(1)(iv) clarifies that ``D'' would be the year of the
grant or lease term, where the first year (whether partial or a full
year) would be 1 and the final year for a grant or lease authorized for
a 50-year term would be 51 (assuming a partial first year). Currently,
the BLM sets and adjusts the annual adjustment factor based on the
average annual change to the Implicit Price Deflator--Gross Domestic
Product (IPD-GDP) for the ten-year period immediately preceding the
year that the NASS Census data become available, to reflect the loss in
value due to inflation. Under the proposed rule, the annual adjustment
factor would be fixed at 3 percent. In reviewing the IPD-GDP, average
annual change for the last five-year period (2017-2022) was 3.27
percent, while for the ten-year period before that the average annual
change was 2.39 percent. This difference highlights the fact that
inflation in 2017-22 has been significantly greater than for years in
the preceding 10-year period. Under the proposed rule, the annual
adjustment factor would be fixed at 3 percent, derived by rounding the
average annual change from the past 15 years to the nearest full
percent. Setting this factor would improve future rate predictability.
Paragraph (a)(2) would describe where you may obtain a copy of the
current per acre rates for solar and wind energy rent schedule.
Paragraph (b) would provide that the capacity fee is calculated by
multiplying the MWh rate or the alternative MWh rate (which is
described below), the MWh rate reduction, the Buy American reduction,
the rate of return, and the annual power generated on public lands for
the grant or lease in question (measured in MWh) by a factor that
reflects the compound annual adjustment. The capacity fee is paid
annually beginning in the first year that generation begins for the
energy generation facility. There would be no capacity fee levied for
the first year or any other year if the acreage rent exceeds the
capacity fee. The proposed formula for calculating the annual capacity
fee is A x F x G x B x C x (1 + D) [supcaret]E.
Paragraph (b)(1)(i) would clarify that ``A'' is either the MWh
rate, an amount determined based on the average of the annual weighted
average wholesale price per MWh for the major trading hubs serving the
11 Western States of the continental United States, or the alternative
MWh rate. The MWh rate is calculated based on the wholesale prices from
the full five calendar-year period preceding the most recent MWh rate
adjustment before the ROW was issued, rounded to the nearest dollar
increment. There is no MWh rate phase-in for energy generation
facilities except for existing holders that elect to continue paying
under their current rate adjustment method per Sec. 2806.51(c).
The BLM may use an alternative MWh rate when a grant or lease
holder enters into a power purchase agreement with a utility for a
price per MWh that is lower than the average of the annual weighted
average wholesale price. In those instances, the BLM would determine if
the rate in the power purchase agreement is appropriate to use instead
of the MWh rate. For example, an alternative MWh rate may not be
appropriate if the utility issues itself a power purchase agreement for
its solar or wind energy development. If the rate in the agreement is
appropriate, then the BLM would set an alternative MWh rate for the
grant or lease at the rate shown in the agreement.
[[Page 39740]]
In paragraph (b)(1)(ii), ``B'' is the MWh rate reduction. The BLM
proposes to set the capacity fee based on 20 percent of the wholesale
price per MWh or alternative MWh rate until 2036. This reduction is
consistent with the authority provided in the Energy Act of 2020
allowing the Secretary to reduce acreage rental rates and capacity fees
if, among other things, the Secretary determines ``that a reduced
rental rate or capacity fee is necessary to promote the greatest use of
wind and solar energy resources.'' Further, this reduction would help
BLM meet the minimum goal under the Energy Act of 2020 for
``authoriz(ing) production of not less than 25 gigawatts of electricity
from wind, solar, and geothermal projects by not later than 2025.''
Implementing this reduction is necessary to promote the greatest use of
wind and solar energy resources and maximize commercial interest in
lease sales by lowering the entry cost of prospective energy generating
facilities and further supporting existing facilities that may have
capacity fee rates that exceed market value, impose economic hardship,
or limit future commercial interests.
Starting in 2036, the MWh rate reduction factor would increase to
80 percent of the wholesale price per MWh--that is, the capacity fee
would now be based on 80 percent of the wholesale price per MWh or
alternative MWh rate. This continuing 20 percent reduction would be
consistent with the Energy Act of 2020 authority to reduce acreage
rental rates and megawatt capacity fees when the Secretary determines
that reducing the rate would ensure that the BLM's rates are
``competitively priced compared to other available land.''
The BLM is interested to hear from commenters whether the reduction
to the wholesale price per MWh should be limited to a specific period
of time or conditioned on national or regional (i.e., renewable
portfolio standard) priorities. The BLM has also considered whether a
shorter period of time to set its rates would be appropriate instead of
using a 5-year average of wholesale market pricing. Should a different
period of time be provided in the final rule, or should the BLM allow
for the reduction to continue until further rulemaking or a change in
the statutory framework? Additionally, the BLM considered conditioning
this reduction on renewable portfolio standards, in which a State may
set a specific objective for additional energy from renewable energy
resources. If such a provision were added to the final rule, the BLM
would lower its MWh rate for projects that help a State to meet its
renewable portfolio standard.
Finally, the BLM has considered, but not proposed in this rule,
tiering the wholesale power pricing to the potential energy of the
solar or wind energy resource in a given location based on solar energy
insolation values or wind energy by meter per second, in which case,
the BLM would lower the power pricing for locations that are of lower
energy resource potential to promote renewable energy development that
may have a lower overall production capacity. In addition to the
proposed expiration of an 80 percent reduction to the price per MWh
rate used in determining a capacity fee, the BLM is interested to hear
from commenters whether a different reduction may be more appropriate,
if at all.
In paragraph (b)(1)(iii), ``C'' is the Buy American reduction. As
explained above, the BLM proposes to promote the development of wind
and solar energy resources on public lands by helping to offset some of
the costs of using American-made items in solar and wind energy
development facilities. The Federal Acquisition Regulations (FAR), 48
CFR 52.225-1(b), describe certain categories of items or products that
are eligible for the Buy American preference in Federal acquisition. As
noted above, in the discussion of proposed Section 2801.5, the BLM
proposes to adopt the term ``Buy American'' to refer to any item that
is eligible for the Buy American preference in Federal acquisition
under section 52.225-1(b) of the FAR. Paragraph (b)(1)(iii) of Section
2806.52 of the BLM's proposed regulation would reduce the capacity fee
for solar or wind energy generation facilities according to the
percentage of the total cost of the facilities on the ROW attributable
to Treasury items. The reduction to the capacity fee would be as
follows:
(A) 25 percent or more of the total facility cost attributable to items
qualifying for Buy American preference = 5 percent reduction
(B) 35 percent or more qualifying for Buy American preference = 10
percent reduction
(C) 45 percent or more qualifying for Buy American preference = 15
percent reduction
(D) 55 percent or more qualifying for Buy American preference = 20
percent reduction
To qualify for this capacity fee reduction, the percent of the
energy generation facility's total cost that consists of items
qualifying for the Buy American preference would have to meet or exceed
the percentages set forth in this section. The holder would have to
identify the items qualifying for the Buy American preference in the
energy generation facility and provide sufficient documentation (e.g.,
purchase orders for end products, materials and supplies of the
facility; as-built or construction plans) to demonstrate that these
items, in the aggregate, represent the specified percentage of the
facility's total cost.
Once an energy generation facility qualifies for a Buy American
reduction, the facility would have that same reduction for the term of
the grant or lease. The BLM would only revisit the reduction at the
time of an assignment, amendment or renewal of an energy generation
facility grant or lease to determine what reduction, if any, it may
qualify for. The BLM would apply the version of the FAR in effect at
the time the ROW is issued If the FAR is amended in the future in such
a way that section 52-225-1(b) of the FAR no longer provides a clear
meaning for the term ``Buy American,'' as defined in these proposed
regulations, the BLM would continue to apply the most recent version of
the FAR that provides such a workable definition until such time as the
BLM is able to amend these regulations.
Also, the proposed Buy American reduction increases incrementally
based on the percentage of the total facility cost attributable to
items qualifying for Buy American preference. The BLM recognizes that,
in other contexts, such as direct federal procurement, qualification
for a domestic content preference is based on reaching a set percentage
and is not altered by reaching a higher percentage. The BLM seeks
comment on whether it should establish a fixed reduction based upon a
set percentage rather than the escalating approach proposed in this
rule.
The Buy American reduction to the capacity fee is proposed in this
rule under the authority of the Energy Act of 2020, 43 U.S.C. 3003, to
``promote the greatest use of wind and solar energy resources,'' avoid
``economic hardships'' to ROW holders, and maximize ``commercial
interest'' in lease sales and ROW grants. Providing this reduction
would defray some costs in sourcing from domestic supply chains, which
would support continued deployment of solar and wind projects on public
lands if foreign supply chains are disrupted.
Deployment of renewable energy technology on public lands has been
impeded, particularly in recent years, by unreliable foreign supply
chains as a result of international developments, a worldwide pandemic,
and
[[Page 39741]]
manufacturing limitations. There have been several instances of
international developments, such as the Russia-Ukraine war, that
resulted in disruptions to supplies and limited investment in solar and
wind energy resources on public lands, created economic hardships for
ROW holders, or limited commercial interest in lease sales and ROW
grants. Such recent developments include the enactment of the Uyghur
Forced Labor Prevention Act, Public Law 117-78 (``UFLPA''), which aims
to prevent the importation of goods produced using forced labor in
China. The UFLPA imposes a rebuttable presumption that ``any goods,
wares, articles, and merchandise mined, produced, or manufactured
wholly or in part in the Xinjiang Uyghur Autonomous Region of the
People's Republic of China'' are made with forced labor, and are
therefore prohibited from importation into the United States. A
significant portion of the global supply chain for photovoltaic panels
and their components involves the Xinjiang region, and although panels
imported into the United States no longer incorporate components from
Xinjiang, the United States' efforts to combat the use of forced labor
has impacted the import of solar energy components and precursor
materials.
At the same time, the United States has reduced importation of
Russian mineral resources and imposed sanctions against the Russian
Federation as the Russia-Ukraine war has progressed, resulting in
increased demand for domestic minerals (e.g., steel, aluminum, iron,
copper, and silicon). As of November 2022, the United States had
reduced US goods trade with Russia to about $500 million worth of goods
from its peak of about $2.65 billion in March 2022 (the month after the
Russian-Ukraine war started) per the U.S. Census Bureau.\7\ Trade in
goods between the United States and the Russian Federation continues to
decline with the implementation of US tariffs against Russian imports.
These imports of necessary minerals have nearly stopped in the past
year, having a significant effect on the available resources used in
manufacture and development of solar and battery storage facilities.
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\7\ <a href="https://www.census.gov/foreign-trade/balance/c4621.html">https://www.census.gov/foreign-trade/balance/c4621.html</a>.
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In addition, the worldwide COVID-19 pandemic that started in 2020
revealed vulnerabilities in the United States' supply chains for
materials, supplies, and other goods used in its carbon-free clean
energy markets, such as in solar and wind energy developments, among
other things. Vulnerabilities in supply chains include international
shipping, where shipping vessels and containers waited for months
during labor shortages and quarantine periods before becoming available
to the American public. Uncertainty in global supply chain dynamics
have significant potential to cause delays and higher prices for solar
and wind energy development projects on public lands. Potential tariffs
to foreign-sourced items and components result in dramatic decline in
project deployment. According to the Solar Energy Industries
Association's U.S. Solar Market Insight Q2 2021 report, supply chain
constraints for critical solar components, such as polysilicon, steel,
aluminum, and semiconductor chips, lead to higher prices. In response
to the U.S. Department of Commerce's anti-circumvention tariffs on
solar products from Southeast Asia countries, the President made an
emergency declaration on a temporary duty-free importation of solar
cells and modules to curb disruption to solar projects.
These developments highlight the importance of secure, reliable
domestic supply chains to the development of solar and wind energy
resources on public lands and demonstrate how the proposed Buy American
reduction, by supporting those domestic supply chains, would promote
the greatest use of those resources, while also reducing economic
hardships for developers. By offsetting some of the costs of
domestically sourced parts and materials, the Buy American reduction
would reduce the economic dependence of developers on unreliable global
supply chains and support the efforts of domestic suppliers. In this
way, the proposed Buy American reduction supports the transition to
more-reliable domestic supply chains which would, in turn, increase
commercial interest in the use of public lands and promote the
development of solar and wind energy resources on public lands.
Recent Presidential determinations and legislation are similarly
intended to strengthen domestic supply chains for renewable energy
components, highlighting the importance of such domestic supply chains
to the development of domestic energy generation. On March 31, 2022,
and most recently on June 6, 2022, the President signed determinations
permitting use of the Defense Production Act Title III authorities for
domestic clean energy technologies (including solar photovoltaic
components; transformers and electric grid components; heat pumps;
insulation; and electrolyzers, fuel cells, and platinum group metals),
reiterating the Administration's commitment to a carbon pollution-free
electricity sector. In addition, the Creating Helpful Incentives to
Produce Semiconductors for America Act, aka, the ``CHIPS Act,'' was
signed on August 9, 2022, providing for improvements to manufacturing
of important components for clean energy, among other things,
furthering the objective to improve domestic supply chains. The
Infrastructure Investment and Jobs Act, Public Law 117-58, signed on
Nov. 15, 2021, also provides funding for electric vehicles and clean
energy technologies, including manufacturing of energy storage and its
components, increasing domestic supply chains. We anticipate that there
will be significant increases in domestic manufacturing over the next
five years that will benefit the solar and wind energy generation
industries. The BLM would encourage a more rapid deployment of
domestically made items by providing a reduction to solar and wind
energy development facilities using qualifying items for the Buy
American preference, thereby increasing further commercial interest in
public lands and expediting deployment of solar and wind energy
developments and maximizing the greatest use of solar and wind energy
resources on public lands.
The BLM is aware that other Federal agencies (e.g., Office of
Management and Budget) may currently be developing policy relevant to
domestic content requirements, including those authorized by the
Inflation Reduction Act. The BLM may consider using a definition from
one of those policies as an alternative to the domestic content
definition under Buy American and would welcome comments to that
effect.
The BLM is interested in receiving comments regarding the addition
of the domestic content reduction to the capacity fee and to other
parts of this rule where domestic content provisions are proposed. Is
there a more appropriate way than determining percentage of total cost
of qualifying items for the domestic content preference? Are there
other methods to promote the greatest use of solar and wind energy
generation on the public lands while strengthening the resiliency of
domestic energy supply chains that may be more appropriate or
preferred? Do the proposed reductions up to 20 percent fairly encourage
developers to qualify for using American-made products in their solar
or wind energy generation facilities, and support increasing demand for
clean energy technologies on public lands? What forms of documentation
would be
[[Page 39742]]
appropriate to provide to the BLM in order to qualify for this
reduction when applying for a grant or lease, and when demonstrating at
time of renewal or reauthorization?
The BLM also is interested in receiving comments on the possibility
of adding a reduction to the capacity fee of up to 20 percent based on
the use of union labor in project construction. Like the Buy American
preference, such a provision would offset some developer costs, thus
promoting the use of solar and wind energy resources on public lands,
while reducing economic hardships for developers who may also qualify
for certain tax incentives. Should the BLM incorporate a capacity fee
reduction in this rule for the use of union labor? Should the reduction
be contingent on a developer's commitment to enter into a project labor
agreement? What documentation should be required to qualify for this
reduction? What percentage reduction would be appropriate?
Paragraph (b)(1)(iv) explains how the BLM would apply the
alternative MWh rate and the Buy American reduction from paragraphs
(b)(1)(ii) and (iii) of this section. By default, the BLM would apply
the ordinary MWh rate under paragraph (b)(1)(i) and the MWh rate
reduction under paragraph (b)(1)(ii). A developer who wished to benefit
from the alternative MWh rate and the Buy American reduction would need
to submit a request for conditional approval prior to the issuance of a
grant or lease, along with sufficient documentation to demonstrate that
the development qualifies or may later qualify for these rate
reductions. In some cases, the BLM would not be able to determine
definitively in advance whether the proponent qualifies for these
reductions. The BLM could then conditionally approve the requested
reductions, but the reductions would not go into effect until the
proponent qualifies for the reduction. If energy generation begins
before the holder has demonstrated that the facility qualifies, the BLM
would charge the holder the full capacity fee. The capacity fee could
be updated for subsequent calendar years after the holder demonstrates
that the facility qualifies, but the BLM would not refund past payments
made before the rate reductions went into effect.
For example, an applicant or presumptive lease holder (see
Sec. Sec. 2809.13 and 2809.15, below) might request conditional
approval of an alternative MWh rate. In that situation, a request for
conditional approval for an energy generation facility may be granted
if the presumptive lease holder has entered into or intends to enter
into a power purchase agreement (see (b)(1)(i) of this section) that
has a lower rate than the MWh rate. Documentation submitted to the BLM
when requesting conditional approval may include draft or interim power
purchase agreements or confirmation in writing from the purchasing
party that negotiations have been entered into. While the BLM may then
conditionally approve the request for an alternative MWh rate, the
alternative rate would not go into effect and be used to calculate the
rental obligations until the power purchase agreement is finalized and
the BLM determines, in writing, that the facility actually qualifies
for the alternative rate. The holder's MWh rate would then be updated
for the next year's billing, but payments for past years would not be
reduced retroactively.
In another example of a request for conditional approval, an
applicant or presumptive lease holder might request conditional
approval of a Buy American reduction. In that example, a request for
conditional approval may be granted if the proponent demonstrates that
it has firm plans to use items qualifying for the preference.
Documentation submitted to the BLM when requesting conditional approval
may include procurement contracts or design documents showing that the
facility would meet sufficient levels to qualify for this reduction.
While the BLM may then conditionally approve the request for a Buy
American reduction, the reduction would not go into effect and be used
to calculate the proponent's rental obligations until the proponent
submits documentation of actual value incorporated into the facility,
such as fulfilled purchase orders and as-built design documents
demonstrating installation of the qualifying Buy American items in that
facility and the BLM determines, in writing, that the facility actually
qualifies for the reduction. The holder's MWh rate then would be
updated for the next year's billing, but payments for past years would
not be reduced retroactively.
Paragraph (b)(2) would clarify that ``D'' is the annual adjustment
factor, which is the same adjustment factor used for the annual acreage
rent under Sec. 2806.52(a)(1)(iii). See Sec. Sec. 2806.52(a) and
2806.22(a) of this preamble for further discussion on the annual
adjustment factor. The BLM understands that generally when a solar or
wind energy operator begins generating power, they are in an agreement
with a utility or other party to sell their power. It is customary that
such agreements include an escalation clause that increases the
purchase price of power each year of the agreement. These annual
escalations vary by agreement. Annual escalation rates generally range
between one and three percent each year of the agreement. There may be
some higher annual escalation rates; however, higher rates are not
common. The BLM believes, based on its experience with power purchase
agreements, that three percent annual adjustment factor is a fair and
reasonable escalation for the MWh rate.
Paragraph (b)(3) would clarify that ``E'' is the year of the grant
or lease term, which is the same number used for the annual acreage
rent under Sec. 2806.52(a)(1)(iv). See Sec. 2806.52(a) of this
preamble for further discussion on the year of the grant or lease term.
Paragraph (b)(4) would clarify that ``F'' is the rate of return,
which is proposed at 7 percent, an increase from the 2 percent
currently used in the BLM's recent Manual 2806.60 update for solar and
wind energy rents. In this rule, the rate of return is the relationship
of income to the total value for a granted use of the public land
resource. The rate of return accounts for the value of the
authorization each year for use of the resource on public lands which
is provided to the BLM through an annual payment. The BLM has
previously used a 10-year average of the yields on 20- and 30-year U.S.
Treasury bonds to ``build up'' a return for use in calculating the rate
of return, as described in its October 31, 2008, rulemaking, Update of
Linear Right-of-Way Rent Schedule. The rate of return minimum under the
existing regulations is 4 percent, but the BLM used the Energy Act
authority to lower the rate of return to 2 percent in its Manual
update. It is the BLM's experience that periodically ``building up,''
or calculating, the rate of return creates uncertainty for grant
holders as the Treasury bond rates are affected by changes to interest
rates, inflation, and economic growth. The BLM's proposal to set its
rate of return in this rule introduces a level of rate predictability,
including for future rate changes.
The BLM considered several options for determining a rate of
return. These options included retaining the current ten-year average
of the 20- and 30-year Treasury bond yields and the prime rates used by
banks for lending. Market capitalization rates and Gross Domestic
Product (GDP) by industry were also considered for determining a
reasonable rate of return for ROWs but were ultimately not proposed in
this rule. Treasury bond yields reflect the Federal Government's cost
of borrowing or equivalently the returns earned by investors in Federal
debt. A similar logic applies to prime rates, which
[[Page 39743]]
reflect the interest earned by private banks on their loans or assets
and which were also considered but not proposed in this rule.
The BLM notes that the 50-year simple (i.e., arithmetic) average of
the real annual return on 10-year Treasury Bonds is approximately 7
percent. This 50 years includes times when the United States went
through periods of stagflation, high inflation, economic boom, and
relatively calm market conditions. The average of the 10-year Treasury
Bond rates is a reasonable reflection of the return to government. As
proposed in this rule, solar and wind energy development terms would be
up to 50 years and use a 7 percent rate of return supported by the 50-
year average of the 10-year Treasury Bond rates. The proposed 7 percent
rate of return is also supported by the Council of Economic Advisors,
which estimates a real return to U.S. capital of around 7 percent from
1960 to 2014 using data from the National Income Product Accounts and
other sources.\8\ By setting the rate of return in this rule, it would
not be adjusted in the future, except by further rulemaking.
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\8\ Council of Economic Advisers Issue Brief, ``Discounting for
Public Policy: Theory and Recent Evidence on the Merits of Updating
the Discount Rate'' (January 2017).
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The BLM is interested in comments on the proposed codification of
the encumbrance factor and rate of return, and the acreage rent
calculations more generally. What alternative factors might the BLM
consider in setting rate of return? Does the BLM's proposed rate of
return improve predictability for holders? Does the proposed rate of
return accurately capture the fair market value of solar and wind
energy developments on public lands? Should the BLM consider allowing
for adjustment in the future or setting the rate based on inflation
parameters at the time of grant issuance, and if so, explain what
reasoning you believe supports future changes and what that might look
like? Please provide your comments and supporting references or
materials for that recommendation.
Paragraph (b)(5) would clarify that ``G'' is the estimated annual
power generated on public lands for the grant or lease in question. The
estimated annual power generated on public lands would be provided to
the BLM ahead of the first year of energy generation in a certified
statement from the grant or lease holder, and every year thereafter.
The BLM would bill annually to coincide with the calendar year,
consistent with the timing for acreage rent payments. Beginning in the
year following the first full year of production, the certified annual
statement provided to the BLM would also include the most recent year's
actual energy generation. The actual energy generation would be used to
calculate a corrected capacity fee, and any under- or over-payments for
the difference between estimated and actual energy generation would be
administered under Sec. Sec. 2806.13 and 2806.16, respectively. A
holder that underestimates energy generation by more than 10 percent of
the actual energy generation would be subject to a late payment fee and
other administrative fees, consistent with Sec. 2806.13.
For example, the BLM would require an annual certified statement
from the grant or lease holder by October of the second year of energy
generation that includes an estimate of energy generation for the third
year of energy generation, as well as actual production information for
the first year of energy generation. The following year, the BLM would
require an annual certified statement that includes the estimate for
the fourth year of energy generation and the actual energy generation
from the second year.
The BLM is interested in comments regarding the under estimation of
energy generation. Is a different percent of underestimation
appropriate or should the BLM implement such a provision after repeated
occurrences of under estimating power?
In instances where an energy generation facility crosses multiple
land ownerships, the reported estimate and actual energy generation
would be apportioned based on the energy generated on the public lands.
The reported energy generated on public lands would be determined by
prorating the project area's footprint on public lands with the total
project area footprint. This would include infrastructure that is
necessary for the energy generating facility, including any roadways,
fence lines, safety setbacks, and other infrastructure. However, this
would not include electric power lines or offsite substations unless
they are within the footprint of the project area or necessary to
generating energy. Under this provision, the BLM would not carve out
land from the footprint of the facility when apportioning energy
generation on public lands.
Paragraph (b)(6) would describe where you may obtain a copy of the
current MWh rate schedule for solar and wind energy generation.
Paragraph (b)(7) would provide for periodic adjustments to the MWh
rate. This paragraph applies unless you are an existing holder and
elect to continue paying under your current rate adjustment method per
Sec. 2806.51(c).
Paragraph (b)(7)(i) would clarify that the rate from the MWh rate
schedule for the first year of energy generation would not change once
your grant or lease is authorized. The annual adjustment factor under
Sec. 2806.52(b)(1)(i) would be applied to the MWh rate during the term
of the grant or lease. Any subsequent MWh rate schedule updates would
apply to new grants and leases.
Paragraphs (b)(7)(ii) and (iii) would provide that the MWh rate
schedule would be updated once every five years consistent with the
timing of acreage rent adjustments. The MWh rate schedule would include
the annual adjustment factor when setting the rate for the five-year
period.
Paragraph (b)(8) would provide that the general payment provisions
for rents under Sec. 2806.14(a)(4) also apply to the capacity fee.
Paragraph (c) would apply unless you are an existing grant or lease
holder and elect to continue with your current MW capacity fee
adjustment method. The fee would be set at the time of authorization or
re-issuance and not adjusted further except by the annual adjustment
factor from Sec. 2806.52(b)(2).
Section 2806.54 Energy Storage Facilities That are not Part of a Solar
or Wind Energy Development
Provisions of existing Sec. 2806.54 would be incorporated into
Sec. 2806.52 (see discussion relating to Sec. 2806.52). Existing
Sec. 2806.54 would be retitled from ``Rents and fees for solar energy
development leases'' to ``Rent for energy storage facilities that are
not part of a solar or wind energy development facility.'' Under this
rule, the BLM is removing differences in payment requirements for
grants and leases; therefore, the existing Sec. 2806.54 title and its
provisions are no longer necessary and would be misleading to a reader.
Revised Sec. 2806.54 would clarify that the rent the BLM
determines for an energy storage facility that is not part of a solar
or wind energy development facility would be based on the linear rent
schedule. Energy storage facilities may be authorized separately from a
solar or wind energy development facility. In these instances, the BLM
would apply the linear rent schedule unless the BLM determines that the
linear rent schedule does not apply per Sec. 2806.70, such as when the
BLM determines that a small site rent schedule applies to the energy
storage facility.
[[Page 39744]]
The BLM would not charge the rent or fee of a solar or wind energy
development ROW for an energy storage facility that is separate from
the energy generation facility, the purpose of which is simply to store
generated energy, and then deploy the stored energy as needed. Charging
a capacity fee would be inappropriate as there is no energy generation
from the facility. Using the pastureland rents for energy storage would
also be inappropriate, as use of those acreage rates are intended to be
coupled with the capacity fee to determine solar and wind energy
generation payments for use of public lands. Thus, the BLM proposes
that for energy storage facilities separate from an energy generation
facility, it would apply the linear rent schedule unless it determines
that the linear rent schedule does not apply per Sec. 2806.
Sections 2806.60 through 2806.68 would be removed for the reasons
discussed above. Information formerly contained in these sections are
now found under Sec. Sec. 2806.50 through 2806.58. Sections 2806.56
and 2806.58 are inclusive of all testing authorization types and do not
require revision to include wind energy testing. The BLM is interested
in reader comments regarding its valuation of energy storage that is
not part of a solar or wind energy generation facility. Is a different
method for collecting a rent warranted or appropriate for such
facilities on public lands? Should the BLM consider valuing battery
storage differently, such as based on how many hours of storage
capacity per MWh of energy may be deployed?
Subpart 2807--Grant Administration and Operation
Section 2807.20 When must I amend my application, seek an amendment of
my grant or lease, or obtain a new grant or lease?
Section 2807.20 describes when you must seek to amend your
application, grant, or lease.
Paragraph (b) would be revised to clarify that the requirements for
amending an application or grant are the same as processing a new
application, including payment of processing and monitoring cost
recovery fees. This paragraph would be revised to include ``except for
qualifying energy development grants and leases per Sec. 2806.51(c).''
That section describes rights-of-way in effect before the effective
date of this rule. See Sec. 2806.51(c) of this preamble for further
discussion on qualifying projects.
Paragraph (f) is a new paragraph that would describe how the BLM
would administer an existing grant or lease if the holder requests to
change the rent adjustment methodology. Any request would have to be
received within 2 years of the date this rule becomes effective and
would be processed as an amendment by which the BLM would re-issue the
grant or lease, without further environmental review, and update the
terms and conditions under Sec. 2805.12 and rent provisions under
Sec. Sec. 2806.50 through 2806.52. The BLM would be able to collect or
use processing and monitoring costs under Sec. Sec. 2804.14 and
2805.16 for handling the request. See section 2806.51(c) for further
discussion regarding requests to use the rent adjustment methodology of
this rule.
Section 2807.21 May I assign or make other changes to my grant or
lease?
Section 2807.21 provides the requirements for when a holder may
seek to assign or make other changes to a grant or lease.
Paragraph (e) would be revised to clarify that the BLM may issue
solar or wind energy development leases non-competitively inside a
designated leasing area, consistent with other changes proposed in this
rule. Additionally, the BLM could modify a grant or lease, such as
adding additional terms and conditions, except for solar and wind
energy leases unless required pursuant to Sec. 2805.15(e), which
provides for changes to terms and conditions as a result of changes in
legislation, regulation, or as otherwise necessary to protect the
public health or safety or the environment.
Subpart 2809--Competitive Process for Solar and Wind Energy Development
Applications or Leases
Subpart 2809 would be retitled from ``Competitive Process for
Leasing Lands for Solar and Wind Energy Development Inside Designated
Leasing Areas.'' Existing subpart 2809 is dedicated to competitive
solar and wind energy leasing specifically in designated leasing areas.
Revisions to subpart 2809 generally apply the same competitive process
both within and outside designated leasing areas. This change is
consistent with other revisions in this rule that would provide the BLM
with discretion to accept applications within designated leasing areas
and authorizing leases using a competitive offer or non-competitive
process based on whether competitive interest exists for the area.
Revisions generally include incorporating provisions describing
competitive processes outside of designated leasing areas, currently
found under Sec. Sec. 2804.30 and 2804.31, into subpart 2809 as
appropriate.
Section 2809.10 Competitive process for energy development grants and
leases
Section 2809.10 would be retitled from ``General'' and revised to
provide the same standard for the use of competitive processes on
public lands located both inside and outside of designated leasing
areas. As revised, paragraphs (a) through (d) explain that the BLM may
conduct a competitive process to consider solar or wind energy
development applications or leases: (1) on its own initiative; (2)
based on responses to a call for nominations; (3) based on a request
submitted by a member of the public in writing; or (4) when it receives
two or more competing applications. These provisions incorporate the
BLM's broad discretion under FLPMA to determine under what
circumstances it may utilize a competitive process to offer leases for
lands outside of designated leasing areas, as noted in the existing
text of Sec. Sec. 2804.23(b) and (c) and 2804.30(c). These provisions
standardize the BLM's discretion to utilize a competitive process for
lands within and outside designated leasing areas.
Existing paragraph (d) is proposed to be removed consistent with
changes made under Sec. 2804.35(b) and subpart 2809. Under existing
paragraph (d) the BLM generally prioritizes the processing of
competitive leases over non-competitive grants. Under subparts 2804 and
2809, the BLM proposes to provide greater flexibility and discretion to
process applications inside designated leasing areas by removing the
requirement in the current rule that the BLM can only accept
applications processed first through a competitive process.
Additionally, Sec. 2804.35(b) of this preamble provides additional
information on the BLM's proposed factors to prioritize applications.
The BLM has found that the requirement of the current rule to only
accept applications processed competitively extends the timeline and
increases costs, creating a barrier for authorizing projects in certain
DLAs where there was no competitive interest. The proposed changes
incorporate the BLM's broad discretion under FLPMA to determine under
what circumstances it may utilize a competitive process for lands both
inside and outside of designated leasing areas and standardize the
BLM's discretion to utilize a competitive process where competitive
interest exists for lands. The BLM anticipates that these changes would
lead to more deployment in these areas
[[Page 39745]]
because accepting applications within DLAs without the prerequisite of
holding a competitive process will likely generate more applications in
the most desirable locations. This in turn would provide BLM with the
flexibility to utilize a competitive process where there are multiple
competing applications. At the same time, applicants can also
proactively submit applications in DLAs that may not have competitive
interest, and the BLM can process the leases non-competitively. The
purpose of these changes is to ensure that the BLM is able to use the
most appropriate process given the circumstances of a particular
location, which the BLM believes will spur more competition for the
most desirable areas, while continuing to increase solar and wind
energy deployment consistent with the statutory direction in the Energy
Act of 2020.
Paragraph (e) would largely incorporate language currently found in
Sec. 2804.23(c), to establish the timing within which the BLM would
not initiate a competitive process for those lands where the BLM has
accepted an application, received a plan of development, and entered
into a cost recovery agreement. These provisions are intended to
improve certainty with applicants that the BLM would not hold a
competitive offer after an application has progressed substantively.
Consistent with the BLM's statutory authority, and to preserve its
discretion to utilize a competitive process where appropriate, Sec.
2809.10(e) proposes that the BLM would decline to use a competitive
process after it receives a complete application and plan of
development, enters into a cost recovery agreement, and publishes an
Environmental Assessment or a Draft Environmental Impact Statement. The
BLM considered other possible criteria for identifying the point in
time at which it will decline to hold a competitive offer, including
some criteria that would cut off potential competition earlier in time
(such as 30-days after receiving a complete application, as defined in
Sec. 2804.12(j)), and other criteria, such as the initiation of
scoping, including through the publication of a notice of intent to
prepare an Environmental Impact Statement The BLM also considered
establishing a notice process, whereby the BLM solicits expressions of
interest in an area after receiving a first application, to determine
if there is any competitive interest. The BLM is interested in
receiving comments about (a) the benefits of a process by which the
agency would provide notice and how a public notice process can create
an efficient use of leases on BLM land, (b) how notice could be
communicated and what information could be included, (c) the cutoff
point for expressions of interest incorporated into this proposed rule,
(d) what information could be required for expressions of interest, (e)
whether expressions of interest should also be noticed, and (f) other
potential features of a notice process. The BLM is also interested in
receiving comments about other potential cutoff points or associated
public notice processes.
Section 2809.11 How will the BLM call for nominations?
Section 2809.11 would be retitled from ``How will the BLM solicit
nominations?'' to improve consistency with the revised section.
Proposed paragraph (a) provides that the BLM would publish a notice
in the Federal Register calling for nominations of lands to be offered
through a competitive process for solar and wind energy development,
and may use other notification methods, such as a newspaper of general
circulation in the affected area, or the internet. The first sentence
of this paragraph would be revised from ``The BLM will publish a notice
. . .'' to ``The BLM may publish a notice . . .'' to reflect the
proposed discretionary use of a competitive process discussed in Sec.
2809.10.
Paragraph (a) would also be revised to remove language specifying
that a call for nominations may only be issued for public lands inside
of designated leasing areas. The paragraph would also specify
information that will be included in a call for nominations as follows:
(1) The date, time, and location by which nominations must be
submitted;
(2) The date by which nominators will be notified of the BLM's
decision on timely submissions;
(3) The area or areas nominations are being requested; and
(4) The qualification for a nominator, which must include at a
minimum the requirements for an applicant, see Sec. 2803.10.
Paragraph (b) would provide the requirements for nominating a
parcel of land for a competitive offer. Paragraph (b)(1) would require
a payment of $5 per acre for nominated parcels. The nomination fee is
collected by the BLM under its cost recovery authority under Sections
304(b) and 504(g) of FLPMA, and the portion not spent in processing the
nomination and preparing for a competitive offer may be refunded to the
nominator if not successful in the competitive offer. These fees would
reimburse the BLM for the expense of preparing and holding a
competitive offer. The proposed revision would remove language that
adjusts the nomination fee for inflation. In the BLM's experience, this
inflation adjustment adds unnecessary complexity.
Paragraph (b)(2) would require the nomination to include the
nominator's name and address of record. This information is necessary
for the BLM to communicate with the nominator about a future
competitive offer for the parcel. The proposed revision changes
``leasing'' to ``submissions'', consistent with changes in this rule
allowing for applications for development to be submitted without first
requiring a competitive process to be held.
Paragraph (b)(3) would require that a nomination be accompanied by
a legal land description and a map of the parcel of land. This
information would help the BLM in identifying parcels in the
competitive offer. The BLM proposes adding language stating that
nominated lands may be the entire area or part of the area made
available in the call for nominations.
Paragraph (c) would provide that the BLM would not accept
nomination submissions that do not comply with this section, or from
submitters who are not qualified per Sec. 2803.10 to hold a grant or
lease. The requirement that a nominator must be qualified to hold a
grant is carried over and relocated from existing paragraph (d).
Existing paragraph (c) allowed interested parties to submit ``informal
expressions of interest.'' In the BLM's experience, the information
required by proposed paragraph (b) is the minimum information that the
BLM needs in order to efficiently process and consider a nomination; an
``informal expression of interest'' that does not comply with these
requirements imposes an undue burden on the agency and would not be
considered under the proposed regulation. At the same time, under the
proposed regulation, the BLM would consider nominations that do comply
with the requirements of paragraph (b) even if they are not submitted
in response to a published call for nominations, as set forth in
proposed Sec. 2809.10(c).
Paragraph (d) would state that a nomination cannot be withdrawn,
except by the BLM for cause, in which case the nomination fee would be
refunded. This provision is carried over and relocated from existing
paragraph (e). Existing paragraph (d) is removed consistent with the
addition of paragraph (a)(4) of this section which provides how to
qualify as a nominator.
[[Page 39746]]
Paragraph (e) would provide that the decision whether to hold a
competitive offer in response to a nomination lies in the BLM's
discretion.
Section 2809.12 How will the BLM select and prepare parcels?
Section 2809.12 describes how the BLM identifies parcels suitable
for competitive offer. Paragraph (a) would be revised to note that the
BLM may rely on any information it deems relevant in identifying
parcels for competitive offers, but also describe more accurately the
most common sources of information, which include nominations and
existing land use designations. In particular, the BLM may continue to
consider existing designated leasing areas, which are an example of
land use designations, although it will not be constrained to conduct
competitive offers in such areas.
Paragraph (b) would be revised to clarify that the BLM may conduct
necessary studies and site evaluation work, including applicable
environmental reviews and public meetings, either before or after
offering lands competitively. The existing regulations state that the
BLM ``will'' conduct such studies and site evaluation work before
holding a competitive offer. In practice, however, the BLM has
sometimes found that the necessary studies and site evaluation work
cannot be completed until the competitive offer is held and the
successful bidder has submitted an application or plan of development.
Accordingly, the BLM proposes to revise this regulation to clarify that
the timing of these studies and site evaluation work relative to the
competitive offer may vary depending on the circumstances. As noted
below, the proposed regulations also introduce the term ``presumptive
lease holder'' to clarify that the necessary environmental reviews must
be completed before the BLM irretrievably commits to allowing a
facility to be developed (see Sec. Sec. 2809.13 and 2809.15).
Paragraph (c) would be added to clarify that the BLM's decision to
conduct a competitive offer, or not conduct a competitive offer, is not
a decision to approve or deny a grant or lease and is not subject to
appeal.
Section 2809.13 How will the BLM conduct competitive offers?
Section 2809.13 describes how the BLM conducts competitive offers.
Paragraph (b) provides that the BLM publishes a notice of competitive
offer in the Federal Register and through other notification methods,
such as a newspaper of general circulation in the area affected or the
internet. Paragraph (b)(7) would be revised consistent with other
revisions in this rule that would allow the BLM to accept applications
within designated leasing areas without prior competitive offer. This
paragraph clarifies that the notice of competitive offer would state
whether a successful bidder would become a preferred applicant or a
presumptive lease holder. Preferred applicants would be required to
meet application submission requirements under Sec. 2804.12, and
presumptive lease holders would be required to submit a Plan of
Development per Sec. 2809.18. The difference between preferred
applicants and presumptive lease holders is discussed further in
connection with Sec. 2809.15.
Under paragraph (c), the BLM would notify nominators of its
decision to conduct a competitive offer at least 30 days in advance of
the bidding for the lands that were nominated if the nominator has paid
the nomination fees and demonstrated qualifications to hold a grant or
lease.
Section 2809.15 How will the BLM select the successful bidder?
Section 2809.15 explains how the successful bidder is selected.
This proposed rule introduces a new distinction between the term
``preferred applicant'' (used in the existing regulations and carried
forward into this rule) and the term ``presumptive lease holder'' (a
new term in this rule). The distinction between preferred applicants
and presumptive lease holders reflects the fact that the proposed
regulations allow the BLM to conduct competitive offers in a wider
range of circumstances than the existing regulations. The distinction
is intended to ensure that the BLM can properly balance the need to
expedite approval of proposed projects in areas where the environmental
impacts of solar and wind energy development are already well
understood with the need to ensure that the BLM does not commit public
land resources before completing the necessary analyses.
The term ``presumptive lease holder'' would describe those
situations in which at least one round of environmental review for
solar or wind energy development has been conducted before the
competitive offer is held, so that the environmental impacts of
potential development are relatively well understood before the
competitive offer is held, and the successful bidder has a high
likelihood of being able to obtain an authorization to develop its
proposed project. As set forth in paragraph (b)(1)(i), a successful
bidder would only be designated as a presumptive lease holder if the
lands for which the competitive offer is held are located within a
designated leasing area and the BLM has indicated in advance that the
successful bidder would become a presumptive lease holder (see also
Sec. 2809.13(b)(7)). These requirements would limit the use of the
term ``presumptive lease holder'' to situations in which the BLM has
previously completed an environmental analysis for solar or wind energy
development in the area through the land use planning process and has
specified in advance (through the notice of competitive offer) many of
the terms, conditions, and mitigation measures that would need to be
incorporated into an approved authorization. A presumptive lease holder
would therefore avoid the initial application review stage, which is
designed to ensure that the site is generally appropriate for solar or
wind energy development. A presumptive lease holder would have site
control for a solar or wind energy development, precluding other
competing solar or wind energy developments from siting on that land.
At the same time, the proposed regulations also recognize that even
in these cases, an additional site-specific environmental analysis may
be required before the BLM irretrievably commits to allowing a facility
to be developed. The BLM retains its full discretion in considering
whether to approve a presumptive lease holder's proposal based on site-
specific environmental analysis, which would typically be tiered to the
area-wide environmental analysis accompanying the identification of the
area as a designated leasing area. This proposed change would resolve
an ambiguity in the current rule regarding the appropriate timing of an
environmental analysis tiered to an area-wide environmental analysis
for a site-specific proposal. Paragraph (b)(1)(ii) therefore notes that
the presumptive lease holder's right to develop a project on the site
would remain contingent upon the BLM's approval of the presumptive
lease holder's proposed plan of development. Once the BLM approves the
proposed plan of development, following site-specific environmental
analysis, a lease could be awarded, conferring a right to develop a
project on the site, and the presumptive lease holder would become a
lease holder.
In contrast, in other cases under the proposed rule, the BLM could
conduct a competitive offer outside of a designated leasing area in
response to
[[Page 39747]]
receiving two or more competing applications or under any of the other
circumstances set forth in Sec. 2809.10, without having completed an
initial environmental analysis for solar or wind energy development in
the area. In such cases, as set forth in paragraph (b)(2), the
successful bidder would be designated a ``preferred applicant,'' and
would merely obtain the exclusive right to submit an application for
solar or wind energy development on the site, without competition from
other applicants for solar or wind energy development. Such an
application would be processed under Part 2804 in the same manner as an
application for a non-competitive authorization, and a full
environmental analysis would be conducted before the preferred
applicant can obtain the right to develop a project on the site. A
preferred applicant that fails to meet the requirements of Part 2804
may lose status as the preferred applicant and their application may be
denied consistent with Sec. 2804.26.
Accordingly, paragraph (a) would add ``preferred applicant or the
presumptive lease holder'' consistent with other revisions in this part
that clarify what the BLM may offer in a notice of competitive offer.
Reference to paragraph (b) of this section is updated consistent with
the addition of new paragraph 2809.15(b).
New paragraph (b) would provide that a successful bidder becomes a
presumptive lease holder or preferred applicant only after making
payments required in paragraph (d) of this section and satisfying
requirements for holding a grant or lease under Sec. 2803.10. The BLM
could move on to the next highest bidder or re-offer the lands under
Sec. 2809.17 if the successful bidder does not satisfy these
requirements.
Paragraph (b)(1) would describe the requirements to become a
presumptive lease holder, which are that the public lands successfully
bid upon are located within a designated lease area and that the notice
of competitive offer indicated successful bidders would become
presumptive lease holders. This paragraph also provides that a
presumptive lease holder would only be awarded a lease if the BLM
approves the plan of development that is submitted in accordance with
Sec. 2804.25(c).
Paragraph (b)(2) would describe the requirements for a preferred
applicant. A successful bidder who does not become a presumptive
leaseholder in accordance with paragraph (b)(1) would become a
preferred applicant. Applications for a grant or lease would be
processed for the parcel identified in the submission under Sec.
2809.12(b). As with presumptive lease holders, approval of a preferred
applicant's application is not guaranteed. However, the BLM would not
process other applications for solar and wind energy development on
lands where a preferred applicant has been identified, unless that
application is allowed by the preferred applicant. The BLM may consider
issuing authorizations for other uses, such as roadways, testing
facilities, recreation permits, or even ROWs under MLA authority on the
lands for which there is a preferred applicant. Processing
authorizations for other uses under Title V of FLPMA would be performed
under the subpart 2804 of this part. Recreation permits and ROWs under
MLA authority would be processed under part 2920 and 2880,
respectively. In some instances, such as when other applicants have
submitted applications for incompatible uses, the BLM may determine
that processing other applications must wait until it issues a decision
on a first-in-line solar or wind energy development facility.
Existing paragraphs (b) and (c) would be redesignated as (c) and
(d) respectively. Redesignated paragraph (c) is not revised, while
redesignated paragraph (d) is revised to make several technical
changes. Paragraph (d)(1) (currently paragraph (c)(1)) is added back
into this section without revision. Paragraphs (d)(2), (3), and (4)
(currently paragraphs (c)(2), (3), and (4)) are revised to replace the
words ``the day of the offer'' with the words ``the day on which the
BLM conducts the competitive offer.'' This proposal is made to prevent
confusion that sometimes arises under the existing regulations. The
intent of paragraph (d) is to specify that the successful bidder must
make certain payments on, or within fifteen days of, the day that the
BLM conducts the competitive offer and the bidder is identified as the
successful bidder. However, some readers have misunderstood ``the
offer'' in this paragraph to refer to the day on which the BLM offers
the lease to the successful bidder, as described in paragraphs (a),
(d), and (e) of the existing regulation. This reading creates an
internal contradiction: the successful bidder must make the specified
payments within a specified time after the BLM offers the lease to the
bidder, but the BLM cannot make the offer until it has received the
payments (see existing paragraph (d)). The proposed revisions would
avoid this internal contradiction by clarifying that the payments must
be made on or after the day on which the competitive offer is held, but
before the lease can be offered to the successful bidder.
Paragraphs (d)(3) and (4) would also be revised to update reference
to redesignated paragraph (c) for payment of the balance of bonus bids
after variable offsets, and to reflect the different payment
requirements for successful bidders who would become preferred
applicants and those who would become presumptive lease holders.
Paragraph (d)(5) would be added to clarify that successful bidders
may be required to pay reasonable costs in addition to payment of the
application filing fee when processing an application. Additional
reasonable costs may include a Category 6 cost recovery for the BLM to
complete processing the application. If a Category 6 cost recovery fee
is required, it would be reduced by the amount of the application
filing fee already paid. See Sec. 2804.19 of the existing regulations
for further information on Category 6 cost recovery.
Existing paragraph (d) would be removed from this rule as its
provisions are duplicative and no longer necessary for grants or
leases. The requirements of existing paragraphs (d)(1) and (d)(2) are
addressed in proposed paragraph (b) and in revised paragraph (e), while
existing paragraph (d)(3) merely cross-references Sec. 2808.12, which
would remain in effect without changes under the proposed rule, and
repeats a requirement of existing Sec. 2804.25(b)(1), which would
similarly remain in effect.
Paragraph (e) would be revised to explain that the successful
bidder would not become a preferred applicant or a presumptive lease
holder, and the BLM would keep all money that has been submitted with
the competitive offer, if the successful bidder does not satisfy the
payment terms under paragraph (d) of this section. In such a case, the
BLM could proceed to the next highest bidder or re-offer the lands
competitively under Sec. 2809.17.
Section 2809.16 When do variable offsets apply?
Section 2809.16 provides that a successful bidder may be eligible
for a variable offset of bonus bids.
Paragraph (c) would be revised by adding ``including progressive
steps towards.'' The BLM proposes this additional text to clarify to
readers that the offsets are not limited explicitly to what is listed
and that the BLM may use other factors, including progressive steps
towards the listed factors. Consistent with existing paragraph (b) of
this section, the BLM would identify further information on the
variable
[[Page 39748]]
offset in its notice, including what progressive steps may include.
Paragraph (c)(11) would be added to allow the BLM to provide an
incentive for use of items that qualify for the Buy American preference
in solar and wind energy generation facilities on public lands, to
complement the fee reduction described in Sec. 2806.52(b)(1)(iii). In
order to qualify for the Buy American variable offset, if offered,
prospective bidders must demonstrate how they meet the thresholds
identified within the Notice of Competitive Offer. A prospective bidder
would be required to provide sufficient documentation to the BLM prior
to the competitive offer to show that the bidder qualifies for this
variable offset. This may be documentation in an initial Plan of
Development provided to the BLM or other methods discussed in Sec.
2806.52(b)(1)(iii) of this preamble. As discussed below, the BLM may
hold in suspense the amounts corresponding to the variable offset until
the facility construction is substantially complete or the successful
bidder can otherwise demonstrate to the BLM that the required Buy
American items have been used in the facility.
The BLM is interested in receiving comments regarding the addition
of the Buy American variable offset. Responses to this section may also
be applied to other parts of this rule where Buy American incentives
are proposed. Are there other methods to implement a proposed variable
offset that may better provide the greatest economic benefit to the
American public or support increasing demand for clean energy
technologies on public lands? Is there an alternative method to provide
acceptable documentation to the BLM for qualifying items for the Buy
American preference in an energy generation facility? What are
reasonable levels to qualify for Buy American items within an energy
generation facility that could be met by a developer today and in the
future, such as when domestic production levels have increased further?
This paragraph would be further revised by renumbering existing
paragraph (c)(11) to (c)(12) and by revising it to read as ``other
factors'' by removing the word ``similar.'' This revision is also made
to emphasize that the BLM may use other factors, including progressive
steps towards those factors, when determining a variable offset for a
competitive offer.
The BLM is also interested in receiving comments on the possibility
of adding ``use of union labor'' to the list of variable offset factors
in Sec. 2809.16(c). That addition would parallel the proposed Buy
American variable offset and complement the proposed union-labor
reduction in the capacity fee discussed above in reference to Sec.
2806.52.
New paragraph (e) would provide for bidders to qualify for a
variable offset after a competitive offer is held. Some variable offset
qualifications may not be able to be demonstrated to the satisfaction
of the BLM until after the competitive offer is held, such as with new
provision 2809.16(c)(11) for energy development facilities that would
contain items qualifying for the Buy American preference. A bidder may
conditionally qualify for a variable offset before the competitive
offer and then later demonstrate their qualification to the BLM and
perfect their qualification. The way a bidder may conditionally qualify
for the variable offset would be described in the Notice of Competitive
Offer and could include methods such as a written statement to the BLM
that they intend to qualify for the variable offset and at what
percentage. The bidder, if successful, must later demonstrate to the
BLM that they have qualified for the variable offset at that
percentage. The BLM could set a deadline in the notice for bidders to
demonstrate that the proposed facility qualifies for the variable
offset. If the variable offset is not qualified for in the time
provided, or the bidder is not able to adequately demonstrate they
qualify for the variable offset, the bid money would be retained by the
U.S. Government as the balance of the bonus bid.
Section 2809.17 Will the BLM ever reject bids or re-conduct a
competitive offer?
Section 2809.17 identifies situations when the BLM may reject a
bid, offer a lease to another bidder, or re-offer a parcel.
Paragraph (b) would be revised to refer to the preferred applicant
or presumptive lease holder, consistent with other revisions in this
part for competitive processes, and to include the requirement that the
successful bidder satisfy the requirements of Sec. 2809.15. This
paragraph would provide that the BLM may make the next highest bidder
the successful bidder if the named successful bidder does not satisfy
the successful bidder requirements identified under Sec. 2809.15.
Paragraph (d) would be removed from this section as it is
unnecessary with other revisions made under this rule to make public
lands inside of designated leasing areas available to application
without a competitive offer. Paragraph (d) currently states that if no
bids are received for a notice of competitive offer inside a designated
leasing area, the BLM may make the lands available to application. This
provision would no longer be necessary, as this rule would make all
designated leasing areas available to application without first
requiring a competitive offer to be held. The existing provision also
states that lands can be re-offered; this provision is duplicative of
Sec. 2809.15(e).
Section 2809.18 What terms and conditions apply to a solar or wind
energy development lease?
Section 2809.18 lists the terms and conditions of solar and wind
energy leases, which are only issued inside of areas classified or
allocated for solar or wind energy (e.g., designated leasing areas).
The title would be revised from ``What terms and conditions apply to
leases?'' to clarify to readers that this section applies to all leases
for solar and wind energy development.
The introductory paragraph would be revised to clarify to a reader,
consistent with other changes in this rule, that a lease may be awarded
on a competitive offer or through an application. Any lease issued
would be subject to the terms and conditions of this section.
Paragraph (a) would be revised to clarify that a lease awarded from
a competitive offer provides site control to a lessee, but the lease
holder may not construct any facilities on the right-of-way until the
BLM issues a subsequent notice to proceed. As noted above in the
context of paragraph 2809.15(b)(1)(ii), the competitively awarded
lease, which is issued after the BLM reviews the plan of development,
confers on the lease holder the right to develop a facility. Before the
lease holder can begin actual construction, however, the BLM must issue
a notice to proceed or other form of approval to begin surface
disturbing activities.
Existing provisions in paragraph (a) referring to the term of a
lease would be revised to be consistent with the new provisions added
under Sec. 2805.11(b) which provide for a reasonable term for ROWs of
up to 50 years, considering the cost of the facility, its useful life,
and the public purpose it serves.
Paragraph (b) provides for rent terms for solar and wind energy
leases. This paragraph would be revised to require that rent must be
paid as specified in Sec. 2806.52. This change is consistent with
revisions under Sec. Sec. 2806.50 through 2806.58 that consolidate
solar and wind energy rents into the same sections.
Paragraph (f) provides for lease assignments under Sec. 2807.21.
The BLM would not make any changes to the lease terms or conditions, as
provided in
[[Page 39749]]
Sec. 2807.21(e). Changes to ROW terms or conditions would involve an
amendment action by the BLM in addition to the assignment action. This
paragraph would be revised to add ``apply to'' so that it is clear that
the lease holder must apply to the BLM for an assignment. An assignment
is not complete until the BLM has approved it.
Section 2809.19 Applications in Designated Leasing Areas or on Lands
That Later Become Designated Leasing Areas
Under Sec. 2809.19, the BLM explains how it would evaluate
applications for public lands that later become a designated leasing
area. This section is proposed to be removed in its entirety as it is
not consistent with the changes in this rule that allow for
applications in designated leasing areas without first holding a
competitive offer. Because designation of a designated leasing area
does not preclude non-competitive leasing, there is no need for the BLM
to automatically suspend a non-competitive leasing application because
the lands at issue are being considered for designation. At the same
time, the BLM may in its discretion deny an application, or assign the
application a low priority under Sec. 2804.35, if the BLM believes
that the proposed use would be incompatible with land use designations
that are being considered by the BLM through an ongoing land use
planning process.
Severability
Existing Sec. 2801.8 provides: ``If a court holds any provisions
of the regulations in this part or their applicability to any person or
circumstances invalid, the remainder of these rules and their
applicability to other people or circumstances will not be affected.''
The proposed revisions should be considered separately. If a court
holds any provision of one part of this proposed rule invalid, it
should not affect the other parts of the proposed rule. Any decision
finding any provisions in this rule to be invalid would not affect the
remaining provisions, which would remain in force.
V. Procedural Matters
Regulatory Planning and Review (Executive Orders 12866 and 13563) and
Modernizing Regulatory Review (Executive Order 14094)
Executive Order (E.O.) 12866 provides that the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget will review all significant rules. E.O. 14094 updates the
significance criteria in section 3(f) of E.O. 12866.
E.O. 13563 reaffirms the principles of E.O. 12866 while calling for
improvements in the Nation's regulatory system to promote
predictability, reduce uncertainty, and use the best, most innovative,
and least burdensome tools for achieving regulatory ends. The E.O.
directs agencies to consider regulatory approaches that reduce burdens
and maintain flexibility and freedom of choice for the public where
these approaches are relevant, feasible, and consistent with regulatory
objectives. E.O. 13563 emphasizes further that regulations must be
based on the best available science and that the rule making process
must allow for public participation and an open exchange of ideas. The
BLM has developed this rule in a manner consistent with these
requirements.
OIRA has determined that this proposed rule is a significant
regulatory action because it may cause material budgetary impacts.
Furthermore, the BLM's threshold analysis concluded that the rule
may have an effect on the economy of $200 million or more. The BLM
estimated that the rule would have distributional impacts in the form
of transfer payments from ROW applicants and holders to the BLM.
Transfer payments are monetary payments from one group to another that
do not affect total resources available to society. While disclosing
the estimated transfers are important for describing the distributional
effects of the rule, these payments should not be included in the
estimated costs and benefits per OMB Circular A-4.
The BLM is interested in public comment on the potential impacts of
this rule on the deployment of wind and solar energy generation on BLM-
managed public lands. Would this proposed rule cause increased
deployment of renewable energy development on public lands such that
the rule may have an annual effect on the economy of $200 million or
more? (See E.O. 14094 Sec. 1(b).) What data, models, or tools should
the BLM review when considering this question? What factors, aside from
BLM rents and fees, influence the siting of renewable energy
developments on public lands and would form the baseline for that
analysis? This rule is one among a suite of actions the Federal
government may take to encourage renewable energy development. How can
the BLM determine the contribution this rule will make to new renewable
energy development? Please provide information and reference citations
for comments informing the impacts of this rule.
For more detailed information, see the Economic and Threshold
Analysis for Revisions to 43 CFR 2800 (Economic and Threshold Analysis)
prepared for this rule. This Economic and Threshold Analysis has been
posted in the docket for the rule on the Federal eRulemaking Portal:
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. In the Searchbox, enter ``RIN 1004-AE78,''
click the ``Search'' button, open the Docket Folder, and look under
Supporting Documents.
Regulatory Flexibility Act
This rule will not likely have a significant economic effect on a
substantial number of small entities under the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.). The RFA generally requires that
Federal agencies prepare a regulatory flexibility analysis for rules
subject to the ``notice-and-comment'' rulemaking requirements found in
the Administrative Procedure Act (5 U.S.C. 500 et seq.), if the rule
would have a significant economic impact, whether detrimental or
beneficial, on a substantial number of small entities. See 5 U.S.C.
601-612. Congress enacted the RFA to ensure that government regulations
do not unnecessarily or disproportionately burden small entities. Small
entities include small businesses, small governmental jurisdictions,
and small not-for-profit enterprises.
The BLM reviewed the Small Business Size standards for the affected
industries. We determined that a small share of the entities in the
affected industries are small businesses as defined by the Small
Business Act (SBA). However, the BLM believes that the impact on the
small entities is not significant. Although the rule could potentially
affect a substantial number of small entities, the BLM does not believe
that these effects would be economically significant.
The rule would benefit small businesses by streamlining the BLM's
processes and reducing annual rent and capacity fee payments. These
reductions may motivate investment in additional generation capacity
and facilities by freeing up money that would have otherwise been paid
to the BLM as rents or fees. The rule does modify provisions in the
regulations that allow for an entity to request a waiver or reduction
to annual rent and capacity fee payments.
For the purpose of conducting its review pursuant to the RFA, the
BLM believes that the rule would not likely have a ``significant
economic impact on a substantial number of small entities,''
[[Page 39750]]
as that phrase is used in 5 U.S.C. 605. Therefore, the BLM has not
prepared an initial regulatory flexibility analysis.
Congressional Review Act
This rule is not a major rule under 5 U.S.C. 804(2). This rule:
a. Does not have an annual effect on the economy of $100 million or
more. The BLM did not estimate the annual benefits that this rule would
provide to the economy. Please see the Economic and Threshold Analysis
for this rule for a more detailed discussion.
b. Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions. The rule would benefit small
businesses by streamlining the BLM's processes.
c. Does not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises. The
rule would not have adverse effects on any of these criteria, it would
encourage solar and wind energy development and promote the greatest
use of solar and wind energy resources consistent with the Energy Act
of 2020.
Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate on State, local, or
Tribal governments, or the private sector of more than $100 million per
year. The rule does not have a significant or unique effect on State,
local, or Tribal governments, or the private sector. Under the Unfunded
Mandates Reform Act (UMRA) (2 U.S.C. 1531 et seq.), agencies must
prepare a written statement about benefits and costs, prior to issuing
a proposed or final rule that may result in aggregate expenditure by
State, local, and Tribal governments, or the private sector, of $100
million or more in any 1 year.
This rule is not subject to the requirements under the UMRA. The
rule does not contain a Federal mandate that may result in expenditures
of $100 million or more for State, local, and Tribal governments, in
the aggregate, or to the private sector in any one year. The rule would
not significantly or uniquely affect small governments. A statement
containing the information required by the UMRA is not required.
Governmental Actions and Interference With Constitutionally Protected
Property Right--Takings (E.O. 12630)
This rule does not affect a taking of private property or otherwise
have taking implications under E.O. 12630. Section 2(a) of E.O. 12630
identifies policies that do not have takings implications, such as
those that abolish regulations, discontinue governmental programs, or
modify regulations in a manner that lessens interference with the use
of private property. The rule would not interfere with private
property. A takings implication assessment is not required.
Federalism (E.O. 13132)
Under the criteria in Section 1 of E.O. 13132, this rule does not
have sufficient federalism implications to warrant the preparation of a
federalism summary impact statement. It does not have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. A federalism
summary impact statement is not required.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
a. Meets the criteria of Section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
b. Meets the criteria of Section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
Consultation and Coordination With Indian tribes (E.O. 13175 and
Departmental Policy)
The Department of the Interior (DOI) strives to maintain and
strengthen its government-to-government relationship with Indian Tribes
through a commitment to consultation with Indian Tribes and recognition
of their right to self-governance and Tribal sovereignty. We have
evaluated this rule under the DOI's consultation policy and under the
criteria in E.O. 13175 and have determined that it has no substantial
direct effects on federally recognized Indian Tribes, on the
relationship between the Federal Government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes, and that consultation under the DOI's
Tribal consultation policy is not required. However, consistent with
the DOI's consultation policy (52 Departmental Manual 4) and the
criteria in E.O. 13175, the BLM will consult with federally recognized
Indian Tribes on any renewable energy project proposals that may have a
substantial direct effect on the Tribes.
Paperwork Reduction Act
The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) generally
provides that an agency may not conduct or sponsor and, not
withstanding any other provision of law, a person is not required to
respond to a collection of information, unless it displays a currently
valid OMB control number. Collections of information include requests
and requirements that an individual, partnership, or corporation obtain
information, and report it to a Federal agency. See 44 U.S.C. 3502(3);
5 CFR 1320.3(c) and (k). This rule contains information-collection
requirements that are subject to review by OMB under the PRA).
Collections of information include any request or requirement that
persons obtain, maintain, retain, or report information to an agency,
or disclose information to a third party or to the public (44 U.S.C.
3502(3) and 5 CFR 1320.3(c)).
OMB has generally approved the existing information-collection
requirements contained in 43 CFR parts 2800 associated with wind and
solar rights-of-way grants or leases under OMB control number 1004-0206
(expiration date: June 30, 2026). Additionally, the BLM's regulations
at 43 CFR part 2800 require the use of Standard Form 299 (SF-299),
``Application for Transportation and Utility Systems and Facilities on
Federal Lands,'' for ROW applications and the regulations at 43 CFR
part 2800. OMB has approved the requirements associated with SF-299 and
has assigned control number 0596-0249.
This rule does not include any proposed or materially substantive
changes to the information-collection requirements currently contained
in 43 CFR parts 2800 and 2880 and approved by OMB as noted above. There
is a proposed new information-collection requirement contained in 43
CFR 2806.52(i) regarding an annual certified statement. The rule would
require that by October of each year wind and solar grant or lease
holders must submit to the BLM a certified statement identifying the
next year's estimated energy generation on public lands and the prior
year's actual energy generation on public lands. The BLM will determine
the capacity fee based on the certified statement provided. To prepare
the annual certified statement, grant or lease holders will need to
compile information based on capacity fee as instructed in 43 CFR 2806.
The information-collection requirements contained in 43 CFR 2800
and 2880 and approved under OMB
[[Page 39751]]
Control Number 1004-0206 and the proposed aforementioned new
information-collection pertaining to 43 CFR 2806.52(i) are described
below.
Activities That Require SF-299
The following discussion describes the information-collection
activities in this control number that require use of SF-299.
Application for a Solar or Wind Energy Development Project Outside
Any Designated Leasing Area (43 CFR 2804.12, 2804.25(c), 2804.26(a)(5),
and 2804.30(g)); and Application for an Electric Transmission Line with
a Capacity of 100 kV or More (43 CFR 2804.12, 2804.25(c), and
2804.26(a)(5)).
Section 2804.12(b) applies to solar and wind energy development
grants outside any designated leasing area; and electric transmission
lines with a capacity of 100 kV or more.
Section 2804.12(b) includes the following requirements for
applications for a solar or wind energy development project outside a
designated leasing area, and for applications for a transmission line
project with a capacity of 100 kV or more:
<bullet> A discussion of all known potential resource conflicts
with sensitive resources and values, including special designations or
protections; and
<bullet> Applicant-proposed measures to avoid, minimize, and
compensate for such resource conflicts, if any.
Section 2804.12(b) also requires applicants to initiate early
discussions with any grazing permittees that may be affected by the
proposed project. This requirement stems from FLPMA Section 402(g) (43
U.S.C. 1752(g)) and a BLM grazing regulation (section 4110.4-2(b)) that
require 2 years' prior notice to grazing permittees and lessees before
cancellation of their grazing privileges.
In addition to the information listed at Sec. 2804.12(b), an
application for a solar or wind project, or for a transmission line of
at least 100 kV, must include the information listed at Sec. Sec.
2804.12(a)(1) through (a)(7).
Section 2804.25 provides that the BLM will notify an applicant upon
receipt of an application and may require the applicant to submit
additional information necessary to process the application (such as a
POD or cultural resource surveys). As amended, Sec. 2084.25(c)
provides that, for solar or wind energy development projects, and
transmission lines with a capacity of 100 kV or more, the applicant
must commence any required resource surveys or inventories within 1
year of the request date, unless otherwise specified by the BLM. The
amended regulation also authorizes an applicant to submit a request for
an alternative requirement by showing good cause under Sec. 2804.40.
Applications for solar or wind energy development outside any
designated leasing area, but not applications for large-scale
transmission lines, are subject to a requirement (at Sec.
2804.12(c)(2)) to submit an ``application filing fee'' of $15 per acre.
As defined in an amendment to Sec. 2801.5, an application filing fee
is specific to solar and wind energy ROW applications. Section
2804.30(e)(4) provides that the BLM will refund the fee, except for the
reasonable costs incurred on behalf of the applicant, if the applicant
is not a successful bidder in the competitive process outlined in
subpart 2804.
Section 2804.26(a)(5) provides the authority that allows the BLM to
deny an application for a ROW grant if the applicant does not have or
cannot demonstrate the technical or financial capability to construct
the project or operate facilities within the ROW. Amendments to that
provision list the following ways an applicant may demonstrate their
financial and technical capability to construct, operate, maintain, and
terminate a project:
<bullet> Documenting any previous successful experience in
construction, operation, and maintenance of similar facilities on
either public or non-public lands;
<bullet> Providing information on the availability of sufficient
capitalization to carry out development, including the preliminary
study stage of the project and the environmental review and clearance
process; or
<bullet> Providing written copies of conditional commitments of
Federal and other loan guarantees; confirmed power purchase agreements;
engineering, procurement, and construction contracts; and supply
contracts with credible third-party vendors for the manufacture or
supply of key components for the project facilities.
General Description of a Proposed Project and Schedule for
Submittal of a Plan of Development (43 CFR 2804.12(b)(1) and (b)(2)).
Sections 2804.12(b)(1) and (b)(2) require applicants for a solar or
wind development project outside a designated leasing area to submit
the following information, using Form SF-299:
<bullet> A general description of the proposed project and a
schedule for the submission of a Plan of Development (POD) conforming
to the POD template at <a href="http://www.blm.gov">http://www.blm.gov</a>;
<bullet> A discussion of all known potential resource conflicts
with sensitive resources and values, including special designations or
protections; and
<bullet> Proposals to avoid, minimize, and compensate for such
resource conflicts, if any.
Application for an Energy Site-Specific Testing Grant (43 CFR
2804.12(a), and 2804.30(g)); Application for an Energy Project-Area
Testing Grant (43 CFR 2804.12(a), and 2804.30(g)); and Application for
a Short-Term Grant (43 CFR 2804.12(a)).
Section 2804.12(a) addresses the general requirements of an
application for a FLPMA ROW grant. Section 2804.30(g) authorizes only
one applicant (i.e., a ``preferred applicant'') to apply for an energy
project-area testing grant or an energy site-specific testing grant for
land outside any designated leasing area.
Each of these grants is for 3 years or less, in accordance with
Sec. 2805.11(b)(2). All of these applications must be submitted on SF-
299. Applications for project-area grants (but not site-specific
grants) are subject to a $2 per-acre application filing fee in
accordance with Sec. 2804.12(c)(2). Applicants for short-term grants
for other purposes (such as geotechnical testing and temporary land-
disturbing activities) are subject to a processing fee in accordance
with Sec. 2804.1.
Request To Assign a Solar or Wind Energy Development Right-of-Way
(43 CFR 2807.21).
Section 2807.21, as amended, provides for assignment, in whole or
in part, of any right or interest in a grant or lease for a solar or
wind development ROW. Actions that may require an assignment include
the transfer by the holder (assignor) of any right or interest in the
grant or lease to a third party (assignee) or any change in control
transaction involving the grant holder or lease holder, including
corporate mergers or acquisitions. The proposed assignee must file an
assignment application, using SF-299, and pay application and
processing fees.
The assignment application must include:
<bullet> Documentation that the assignor agrees to the assignment;
and
<bullet> A signed statement that the proposed assignee agrees to
comply with and be bound by the terms and conditions of the grant that
is being assigned and all applicable laws and regulations.
Environmental, Technical, and Financial Records, Reports, and Other
Information (43 CFR 2805.12(a)(15)).
Section 2805.12(a)(15) authorizes the BLM to require a holder of
any type of
[[Page 39752]]
ROW to provide, or give the BLM access to, any pertinent environmental,
technical, and financial records, reports, and other information. The
use of SF-299 is required. The BLM will use the information for
monitoring and inspection activities.
Application for Renewal of a Solar or Wind Energy Development Grant
or Lease (43 CFR 2805.14(g) and 2807.22).
Section 2805.14(g) provides that a holder of a ROW grant, which
includes solar or wind energy generating facilities, may be applied for
renewal in accordance with Sec. 2807.22.
Section 2807.22(c) provides that an application to renew a grant
must include the same information, on SF-299, that is necessary for a
new application. It also provides that processing fees, in accordance
with Sec. 2804.14, as amended, apply to these renewal applications.
Sections 2807.22(a) and (b) provide that an application for renewal
of any ROW grant or lease, including a solar or wind energy de
[…truncated; see source link]Indexed from Federal Register on June 16, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.