Rule2024-08099
Rights-of-Way, Leasing, and Operations for Renewable Energy
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 1, 2024
Effective
July 1, 2024
Issuing agencies
Interior DepartmentLand Management Bureau
Abstract
This final rule updates procedures governing the BLM's renewable energy and right-of-way programs, focusing on two main topics. The first topic is solar and wind energy generation rents and fees, implementing new authority from the Energy Act of 2020 to "reduce acreage rental rates and capacity fees, or both, for existing and new wind and solar authorizations" and making certain findings required by the statute. The second topic is expanding agency discretion to process applications for solar and wind energy generation rights-of-way inside designated leasing areas (DLAs). In addition to these two main topics, this final rule makes technical changes, corrections, and clarifications to the regulations. This final rule will update the BLM's procedures governing the BLM's administration of rights-of-way issued under Title V of the Federal Land Policy and Management Act (FLPMA), including for solar and wind energy applications and development authorizations.
Full Text
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[Federal Register Volume 89, Number 85 (Wednesday, May 1, 2024)]
[Rules and Regulations]
[Pages 35634-35684]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08099]
[[Page 35633]]
Vol. 89
Wednesday,
No. 85
May 1, 2024
Part VI
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; Final Rule
Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules
and Regulations
[[Page 35634]]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 2800
[BLM_HQ_FRN_MO# 4500177145]
RIN 1004-AE78
Rights-of-Way, Leasing, and Operations for Renewable Energy
AGENCY: Bureau of Land Management, Interior.
ACTION: Final rule.
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SUMMARY: This final rule updates procedures governing the BLM's
renewable energy and right-of-way programs, focusing on two main
topics. The first topic is solar and wind energy generation rents and
fees, implementing new authority from the Energy Act of 2020 to
``reduce acreage rental rates and capacity fees, or both, for existing
and new wind and solar authorizations'' and making certain findings
required by the statute. The second topic is expanding agency
discretion to process applications for solar and wind energy generation
rights-of-way inside designated leasing areas (DLAs). In addition to
these two main topics, this final rule makes technical changes,
corrections, and clarifications to the regulations. This final rule
will update the BLM's procedures governing the BLM's administration of
rights-of-way issued under Title V of the Federal Land Policy and
Management Act (FLPMA), including for solar and wind energy
applications and development authorizations.
DATES: This rule is effective July 1, 2024.
FOR FURTHER INFORMATION CONTACT: Jayme Lopez, Interagency Coordination
Liaison, by phone at (520) 235-4581, or by email at <a href="/cdn-cgi/l/email-protection#85e0ebe0f7e2fcc5e7e9e8abe2eaf3"><span class="__cf_email__" data-cfemail="0f6a616a7d68764f6d636221686079">[email protected]</span></a> for
information relating to the BLM Renewable Energy programs and
information about the final rule. Please use ``RIN 1004-AE78'' in the
subject line. 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. Executive Summary
II. Background
III. Discussion of Public Comments on the Proposed Rule
IV. Section-by-Section Discussion
V. Procedural Matters
I. Executive Summary
In 2021, the Bureau of Land Management (BLM) initiated preliminary
activities related to rulemaking through listening sessions seeking
public comment on the BLM's potential use of the Energy Act of 2020 (43
U.S.C. 3003) authority to ``reduce acreage rental rates and capacity
fees'' to ``promote the greatest use of wind and solar energy
resources.'' In May 2022, the BLM published BLM Manual section 2806.60
as interim guidance to implement that authority from the Energy Act of
2020 pending completion of this final rule. On June 16, 2023, the BLM
published a proposed rule (88 FR 39726 \1\) in the Federal Register,
that, among other things, proposed updates to the BLM's methodology for
determining acreage rents and capacity fees for solar and wind energy
development projects, including providing opportunities for reductions
to rents and fees under the authority of the Energy Act of 2020. The
BLM also proposed more flexibility in how the BLM processes
applications for solar and wind energy development inside DLAs, and
updates to how to prioritize solar and wind energy applications. The
proposed rule also suggested technical changes, corrections, and
clarifications to the existing right-of-way regulations. After
considering comments on the proposed rule and other factors, the BLM
prepared this final rule.
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\1\ <a href="https://www.federalregister.gov/documents/2023/06/16/2023-12178/rights-of-way-leasing-and-operations-for-renewable-energy">https://www.federalregister.gov/documents/2023/06/16/2023-12178/rights-of-way-leasing-and-operations-for-renewable-energy</a>.
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II. Background
The BLM's governing regulations for rights-of-way, including for
solar and wind energy generation, are found at Title 43 CFR part 2800.
These regulations were last comprehensively updated by a final rule
published in the Federal Register on December 19, 2016, ``Competitive
Processes, Terms, and Conditions for Leasing Public Lands for Solar and
Wind Energy Development and Technical Changes and Corrections'' (81 FR
92122). That final rule built upon existing rights-of-way regulations
and policies to expand BLM's ability to responsibly facilitate solar
and wind energy development.
Most recently, the BLM amended components of 43 CFR part 2800 under
its final rule, ``Update of the Communications Uses Program, Cost
Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way,''
(89 FR 25922) on April 12, 2024. That final rule updated BLM
regulations to enhance the communications uses program, update its cost
recovery fee schedules, and add provisions governing the development
and approval of operations, maintenance, and fire prevention plans and
agreements for rights-of-way for electric transmission and distribution
facilities (i.e., powerlines). That final rule also included technical
changes to certain sections that this renewable energy rule proposed to
make changes to, as will be discussed further in the section-by-section
discussion of this final rule.
Solar and Wind Energy Rents and Fees
Title V of FLPMA (43 U.S.C. 1761-1772) generally requires grant
holders, leaseholders, or both (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, authorizing 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. These findings can include that the existing
rates ``exceed fair market value,'' ``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(b)(1)(A)-(C) and 3003(b)(2).
As reflected in this final rule, the BLM determined that the
changes to the acreage rents and capacity fees for solar and wind
energy right-of-way authorizations are needed to ``promote the greatest
use of wind and solar energy resources'' and maximize ``commercial
interest'' in lease sales and right-of-way grants. Reducing the acreage
rent and capacity fee in this final rule will encourage solar and wind
energy development with a goal of increasing the share of clean energy
that is part of the United States' domestic power infrastructure as
authorized by the Energy Act of 2020 and directed by Executive Orders
14008 and 14057. This will be done by decreasing the costs for
developers to construct and operate solar and wind energy development,
allowing them to increase investments in new facilities and thus
promote additional development. These changes will result in the most
additional deployment of solar and wind energy development (see
Regulatory Impact Analysis 3.1.D). The BLM's determination is supported
by a regulatory impact analysis of economic impacts, public comments
received on
[[Page 35635]]
the proposed rule, and the BLM's experience with solar and wind energy
development on public lands.
Reductions in costs will also benefit smaller-scale projects or
projects that are on the margins of being economically profitable.
Additionally, the BLM expects that the rule will not only increase
interest among renewable energy developers to use BLM-administered
public lands, but it will decrease the cost for developers such that
they may be able to invest in additional wind and solar projects on
Tribal, State, or private lands. Further, the decrease in cost to
developers is expected to translate, over time, to a reduction in the
average cost per MW of solar and wind energy, which will make solar-
and wind-generated energy more competitive with other energy sources
and will stabilize or even reduce the cost of energy to consumers, even
as the cost of other energy sources may experience increased
volatility.
The BLM also determined that the authority provided under the
Energy Act of 2020, 43 U.S.C. 3003, supports two other reductions to
the capacity fees under two potentially qualifying circumstances: (1) a
Domestic Content reduction when a grant holder or lease holder
demonstrates the use of American-made iron, steel, construction
materials, or manufactured products in the construction of the project
consistent with the requirements set forth in this final rule; and (2)
a reduction for Project Labor Agreements (PLAs), i.e., when the holder
uses PLAs to hire labor for the development and construction of a solar
or wind development. The additional, voluntary reductions offered in
this final rule advance the Energy Act of 2020 goal of promoting the
greatest use of solar and wind energy resources. First, a Domestic
Content reduction will provide an incentive to use components made or
manufactured in the United States in the construction of the solar or
wind energy development project by offsetting those costs, which, if
broadly adopted, could increase demand for domestically produced
renewable energy parts and materials and, over the long term, lead to
decreased costs for parts and materials, decreased reliance on
potentially volatile foreign-sourced parts and materials, and
ultimately increased economic certainty for and promotion of wind and
solar energy resources on public lands. Second, the PLA reduction will
incentivize good labor practices and in turn lead to responsible and
productive construction, minimize the potential duration, and improve
construction standards, thereby promoting the greatest use of wind and
solar resources. These reductions will also incentivize project
proponents to advance other Congressional and Administration goals that
strengthen the use of American products and manufacturing and the
associated labor markets.
Therefore, reductions in the final rule that rely upon authority
from the Energy Act of 2020 include an 80 percent reduction to the MWh
rate when setting the capacity fee and the two additional reductions to
the capacity fee for which right-of-way holders may qualify: a 20
percent Domestic Content reduction and a 20 percent PLA reduction. The
MWh rate reduction applies to projects when they are permitted (or
grants or rights-of-way are re-issued under 2806.51(c)) and continues
for the life of the grant. The MWh rate reduction will be 80 percent
through 2035, 60 percent for new authorizations in 2036, 40 percent for
new authorizations in 2037, and 20 percent for new authorizations in
2038 and beyond. Additional information on the MWh rate is found under
the discussions of Sec. Sec. 2801.5 and 2806.52(b) of this preamble,
as well as more broadly under part 2806 of this preamble.
This final rule also codifies a new rate-setting methodology for
solar and wind energy development projects. Under this rule, the BLM
will collect from right-of-way holders the greater of either an acreage
rent or a capacity fee. The BLM will assess acreage rent by applying
the rate schedule, based on a survey of values for pastureland from the
National Agricultural Statistics Service (NASS) Cash Rents Survey, to
the number of acres that the right-of-way authorizes for use. Capacity
fees reflect the value of generating electricity from solar and wind
energy resources, which are quantified by the number of megawatt hours
(MWh) of electricity produced from public lands. In this rule, the BLM
has changed the definition of capacity to move away from the maximum
capacity that a solar facility could produce and towards ensuring that
the capacity fee reflects the actual capacity for solar or wind energy
generation of a site covered by a given right-of-way grant or lease,
taking into consideration environmental or other factors that may
impact generation capacity of the site, including weather, servicing,
and Acts of God. As provided in the final rule, the BLM will determine
the capacity fee by considering the wholesale prices for major trading
hubs serving 11 western States, and documentation concerning the price
received by the right-of-way holder under a Power Purchase Agreement.
The final rule provides that, when issuing a grant or lease for
solar or wind energy development, or a renewal of such grant or lease,
the BLM will set the per-acre rate and the MWh rate (including
applicable reductions). The acreage rent and capacity fee will be
adjusted annually, however, using an annual adjustment factor set at
the beginning of the grant or lease term. Upon renewal of a right-of-
way, the per-acre rate and the MWh rate and reductions would be updated
based on the then-current rates, as well as any applicable reductions
for which the right-of-way holder qualifies at that time.
Existing right-of-way holders may elect to continue using their
current rate setting methodology, which may be updated periodically for
changes in the market, or change to the new rate setting methodology in
this final rule. Otherwise, the new rate setting methodology would only
apply to new or renewed rights-of-way. If an existing right-of-way
holder elects to change to the new rate setting methodology, that
methodology will apply until the end of the right-of-way term.
This final rule bases the capacity fee for solar and wind energy
generation facilities on actual energy generation at each facility
rather than on nameplate capacity. The BLM believes this change more
accurately reflects 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 a
particular site. This change to the capacity fee indexes the required
payment to the projects' energy generation, being greater when the
project generates more energy and less when it generates less.
This rule improves payment predictability for grant and
leaseholders by revising 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 right-of-way is
issued. In doing so, the per-acre and MWh rates are set for the term of
the right-of-way and only adjusted by the annual adjustment factor and,
in the case of the capacity fee, by the holder's actual annual energy
production. See preamble Sec. Sec. 2806.50 and 2805.52 for a more
detailed discussion of the BLM's proposed methodology for determining
the acreage rent and capacity fee.
Solar and Wind Energy Applications Inside Designated Leasing Areas
In this final rule, the BLM clarifies that it will review and
process applications, including on a non-
[[Page 35636]]
competitive basis, for proposed solar and energy generation rights-of-
way inside DLAs, which are defined at 43 CFR 2801.5(b). The BLM retains
discretion to conduct competitive processes, either inside or outside
of DLAs, where the authorized officer decides to do so. In the proposed
rule, the BLM used the terms ``competitive offer'' and ``competitive
process'' interchangeably. To provide clarity and minimize confusion,
the final rule uses only the term ``competitive process'' to describe
the method by with the BLM will offer parcels in a competitive bidding
process. To learn more about BLM's DLAs, see 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
(i.e., DLAs) 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 energy 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, wind, and geothermal energy in Arizona through the 2017
Restoration Design Energy Project. Currently, the BLM is in the process
of updating its 2012 Western Solar Plan to, among other things, make
programmatic planning decisions for solar development on BLM-
administered lands in 11 western states, including Arizona, California
(exclusive of the area covered by the Desert Renewable Energy
Conservation Plan), Colorado, Idaho, Montana, Nevada, New Mexico, Utah,
Oregon, Washington, and Wyoming (See <a href="https://eplanning.blm.gov/eplanning-ui/project/2022371/510">https://eplanning.blm.gov/eplanning-ui/project/2022371/510</a>).
Under this final rule, if no competitive interest exists for a
particular parcel, the BLM may issue leases without a competitive
process. This change to the rule provides the BLM with increased
flexibility and discretion to issue grants and leases through either
competitive or non-competitive processes across all public lands inside
and outside of DLAs, which is expected to maximize interest in
renewable energy leasing and accelerate the deployment of solar and
wind energy on the public lands. See subpart 2809 for a discussion of
the competitive process for solar and wind energy.
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'' on Federal lands. 43 U.S.C.
3004. Current information regarding the BLM's approved energy
development projects and number of gigawatts is available on its
website.\2\ The Energy Act of 2020 also provides 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 has determined that reduced
rates and fees are necessary to promote the greatest use of wind and
solar energy resources, and this rule seeks to implement such
reductions consistent with the direction in the Energy Act of 2020.
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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 DOI ``to increase renewable energy
production on (public) lands.''
The changes in this rulemaking will 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 rights-of-way on public lands; to issue regulations governing
such rights-of-way and charge rent for such rights-of-way; and to
impose terms and conditions on rights-of-way 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
right-of-way applicants or holders to reimburse the agency for its
costs incurred while working on a proposed or authorized right-of-way.
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 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 Public Comments on the Proposed Rule
This section of the preamble briefly summarizes broad and general
comments on the proposed rule and the BLM's responses. Comment
responses within this section of the preamble have been grouped and
summarized by category that would apply to one or more sections of this
final rule. You will find additional comments that are more specific to
sections of this final rule, and their responses, in Section IV
(Section-by-Section Discussion) of this preamble.
Solar and Wind Energy Rents and Fees--Part 2806
Summary of Comments: While several commenters supported the
proposal for reduced rents and fees, other commenters questioned the
need for reduced rents and fees and requested more research and
discussion to determine if current costs exceed fair market value,
impose economic hardships, limit commercial interest, are not
competitively priced, or
[[Page 35637]]
disincentivize the greatest use of wind and solar energy resources.
Response: Under the Energy Act of 2020 (43 U.S.C. 3003(b)),
Congress recognized the need to promote wind and solar energy projects
on Federal lands, giving the Secretary the authority to reduce acreage
rental rates, capacity fees, or both if she determines that ``the
existing rates (A) exceed fair market value; (B) impose economic
hardships; (C) limit commercial interest in a competitive lease sale or
right-of-way grant; or (D) are not competitively priced compared to
other available land;'' or that a reduction is ``necessary to promote
the greatest use of wind and solar energy resources.'' 43 U.S.C.
3003(b)(1)-(2). The BLM considered whether capacity fee reductions are
necessary to promote the greatest use of wind and solar energy
resources and has determined reductions are necessary. This final rule
describes how the capacity fee reductions will increase interest in and
incentivize wind and solar energy development on public lands and
thereby accelerate deployment of renewable energy resources in the
United States. This final rule also includes changes to the BLM's rate-
setting methodology that improve future rate predictability (see
Regulatory Impact Analysis) and reduce potential for economic
hardships.
Summary of Comments: Commenters suggested that the BLM should not
speculate on the economic impacts of the proposed rule or requested
additional analysis and use of additional sources to back up statements
made.
Response: The BLM prepared an economic analysis for the proposed
rule and then completed a Regulatory Impact Analysis for this final
rule that provides a transparent analysis of the anticipated economic
consequences for this rulemaking. This analysis informs the agency
decision, including whether this rulemaking would accomplish its goals.
For further information on the economic impacts of this rule, please
see the Regulatory Impact Analysis that is available with a search at
<a href="http://regulations.gov">regulations.gov</a> of this Regulatory Identifying Number ``1004-AE78.''
Summary of Comments: Commenters suggested rents and fees should be
increased rather than decreased due to the environmental impacts of
solar and wind energy development, as well as their incompatibility
with other uses. Some further suggested that reducing fees on projects
that are on the margins of being profitable creates the risk of
projects failing and not being properly removed and rehabilitated.
Response: The BLM disagrees with the commenters' suggestion that
rents and fees should be increased rather than decreased. As explained
in more detail in the previous section on Solar and Wind Energy Rents
and Fees, the Energy Act of 2020 (43 U.S.C. 3003) provides the BLM with
authority to reduce acreage rents and capacity fees, including for the
purpose of promoting the greatest use of wind and solar resources. The
BLM has determined that reductions in acreage rents and capacity fees
will promote wind and solar resources and is within the BLM's
discretion under the Energy Act of 2020. Further, the BLM has carefully
considered its final rule and concluded that decreasing rents and fees
is necessary to accomplish the goals set forth by Congress in the
Energy Act of 2020, by the President in E.O. 14008, and by the
Secretary in Secretary's Order 3399. Congress set a national goal for
renewable energy production on Federal land, directing the Secretary to
seek to issue permits authorizing production of not less than 25
gigawatts of electricity from wind, solar, and geothermal energy
projects on Federal land by not later than 2025. 43 U.S.C. 3004.
Congress further provided the Secretary with discretion to reduce the
acreage rental rates and capacity fees, including where necessary to
promote the greatest use of solar and wind energy resources on BLM-
administered public lands, which would advance the goals set by the
Energy Act of 2020, as well as those in E.O. 13990, ``Protecting Public
Health and the Environment and Restoring Science to Tackle the Climate
Crisis,'' 86 FR 7037; E.O. 14008, ``Tackling the Climate Crisis at Home
and Abroad,'' 86 FR 7619; and Secretary's Order 3399, ``Department-Wide
Approach to the Climate Crisis and Restoring Transparency and Integrity
to the Decision-Making Process.'' The use of public lands for energy
generation systems is specifically contemplated in the FLPMA and the
Energy Act of 2020. The BLM considers the potential environmental
effects of solar or wind energy development when conducting land use
planning and evaluating project applications, not when identifying
appropriate rental rates and fees for development projects. The BLM
considers and analyzes environmental impacts of proposed energy
development, including appropriate mitigation measures, before
authorizing any such project. Additionally, the BLM does not believe
there is any correlation between reductions in capacity fees and the
ability of project proponents to properly remove and remediate
facilities. Any applicable fee reductions contemplated in this rule
would not alter a project proponent's obligations to provide for
adequate bonding associated with construction and remediation
associated with terminated or abandoned facilities, as required by 43
CFR 2805.12(b), 2805.20, and 2809.18(e).
Summary of Comments: Commenters noted that reducing rents and fees
for renewable energy projects on public lands would economically impact
the developers of similar projects on private or Tribal lands and could
impact property values.
Response: This final rule changes the BLM's administrative
processes and rates for solar and wind energy development projects on
public lands. While the final rule is intended to encourage solar and
wind energy development on the public lands, it would be speculative
for the BLM to attempt to analyze whether and to what extent there may
be secondary impacts to solar and wind energy development on private or
Tribal property. This is particularly the case due to the wide variety
of factors that influence developers' decisions about whether and where
to pursue solar and wind energy projects, including, but not limited
to, state, Tribal, and local permitting requirements, the ability to
enter into power purchase or offtake agreements, the availability of
existing or proposed transmission, and project-specific financing
considerations. Notwithstanding these different factors, the final rule
will generally decrease costs for developers on public lands, which may
permit them to pursue additional opportunities for development on
Tribal, state, and private lands and thereby further promote the
greatest use of solar and wind energy.
Summary of Comments: Some comments asked about rate changes that
would occur after 2036. Commenters raised four specific issues that the
2036 rate change causes. First, some commenters asserted that rates
after 2036 would run higher than fair market value and are therefore a
violation of FLPMA's requirement that the BLM charge no more than fair
market value. Second, some commenters asserted that the Secretary's
authority to reduce rates under the Energy Act extends beyond 2035, and
America's need for renewable energy, set by Congressional and
Presidential goals, would require incentives beyond 2036. Third, some
commenters asserted that the 2036 rate increase would discourage right-
of-way renewals after that year. Last, some commenters asserted that
the BLM has
[[Page 35638]]
not adequately explained why it is choosing to phase out the final
rule's rate reductions in 2036.
Response: This final rule helps lead the way to accomplishing the
national goal of a carbon pollution-free electricity sector by 2035, as
highlighted in Executive Orders 14008 and 14057. Based on its review of
comments, the BLM has modified the sunset provision in the final rule.
Instead of immediately transitioning the capacity fee reduction from 80
percent to 20 percent, the final rule will lower the reduction by 20
percentage points per year over a period of three years starting in
2036. Instituting a phased sunset period to the 80 percent reduction in
the capacity fee is appropriate as the renewable energy industry may no
longer need this reduction to achieve the greatest use of wind and
solar on public lands, and progress toward our national goal of a
carbon-pollution free electricity sector may indicate that a reduction
is no longer warranted. After the sunset period ends, this final rule
will continue to provide a 20 percent reduction for solar and wind
energy development projects. The BLM will evaluate progress towards
reaching national goals and the benefit of the reduction before 2036
and could reinitiate rulemaking to adjust incentives, including
extending them beyond 2036.
The BLM believes that knowing beforehand what the rates are for a
facility and the increased predictability of those rates in the future
will improve the economic certainty for project development and support
a developer's or operator's decisions in power purchasing, financing,
and other agreements that are necessary for a successful renewable
energy project. This would be the same for existing authorization
holders who choose to change to this new rate setting methodology, as
well as for authorization renewals. Lastly, the BLM believes that the
economics for renewable energy will continue to improve over time, and
that the magnitude of such a reduction in 2036 is uncertain.
Lands Available for Solar and Wind Energy Applications
Summary of Comments: Some commenters recommended that the BLM
further restrict renewable energy development outside of solar energy
zones and prohibit such development close to sensitive habitats or
recreation areas. Commenters stated that competitive offers should not
be allowed outside of designated zones.
Response: Through the National Environmental Policy Act (NEPA)
process, the BLM considers the environmental impacts of proposed uses
on the public lands, including solar and wind energy development, to
inform the BLM decisions to deny, approve, or approve with modification
the proposed use. The BLM will include terms and conditions as
appropriate to address resource and environmental impacts of the
project. The BLM also performs broader analysis to inform whether
certain lands may be made available for that use through the land use
planning process required by FLPMA, 43 U.S.C. 1712. As described
further below, the BLM's ongoing planning process to update to its 2012
Western Solar Plan \3\ will amend BLM land use plans in 11 Western
States (Arizona, California, Colorado, Idaho, Montana, Nevada, New
Mexico, Oregon, Utah, Washington, and Wyoming), or portions thereof, to
identify new priority areas for solar energy development, variance
areas, and public lands that are excluded from solar energy
development, and to update requirements that holders must comply with,
including for sensitive resources and uses that the BLM has previously
authorized. This rulemaking does not make land use planning decisions--
including determining whether areas should be excluded from solar and
wind energy development because they would impact sensitive habitats or
recreation areas--which are completed under a separate BLM process.
This rulemaking does not change the competitive process outside of
designated zones, but rather aligns the competitive process for solar
and wind applications across all areas within and outside of designated
areas. The BLM believes that where competitive interest exists--for
example, in the form of multiple overlapping applications or a high
level of interest in a general area--competitive processes should be
used, regardless of whether the lands are in a DLA, to advance the
projects that are most likely to proceed to development.
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\3\ <a href="https://www.federalregister.gov/documents/2022/12/08/2022-26659/notice-of-intent-to-prepare-a-programmatic-environmental-impact-statement-to-evaluate-utility-scale">https://www.federalregister.gov/documents/2022/12/08/2022-26659/notice-of-intent-to-prepare-a-programmatic-environmental-impact-statement-to-evaluate-utility-scale</a>.
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Summary of Comments: Commenters noted that the BLM references solar
energy zones from the 2012 Western Solar Plan in the proposed rule
without discussing that the 2012 Plan is now under revision and will
include an additional 5 states (Idaho, Montana, Oregon, Washington, and
Wyoming). Commenters requested that the BLM coordinate the rulemaking
process with the land use planning effort accompanying the Western
Solar Programmatic Environmental Impact Statement (Western Solar PEIS),
recognizing the various alternatives being considered and the impacts
that each (Western Solar PEIS vs. proposed rule) have on the other.
Commenters believed many of the changes in this rule that refer to
decisions or processes that occur prior to project approval are
currently being considered as part of the Western Solar PEIS plan
amendment process and may be better suited for the PEIS.
Response: This rulemaking effort and the Western Solar PEIS are two
separate actions that complement one another, but they have different
goals, are subject to different authorities, and will address different
aspects of the ROW authorization process. This final rule sets out how
the BLM will process applications and calculate rents, in order to
implement new authorities and meet National goals established in the
Energy Act and directed by Executive Order 14008 for both wind and
solar energy development. This rulemaking does not make land use
planning decisions. In contrast, the plan amendment process associated
with the Western Solar PEIS focuses exclusively on solar development on
public lands through a separate process governed by Section 202 of
FLPMA (43 U.S.C. 1712) and the BLM resource management planning
regulations at 43 CFR 1610, et seq. to update the BLM's Western Solar
Plan. That programmatic land use planning process will consider
updating the BLM's Western Solar Plan, with a primary focus on
identifying the best locations for utility-scale solar energy
development, as well as restrictions and mitigation applicable to such
development, on BLM-managed public lands in 11 Western States. The
BLM's land use planning decisions, including any amendments to plans,
will comply with applicable laws and regulations.
Comment Summary: The BLM understands from comments it has received
that some believe that the proposed rule has insufficient analysis
under E.O. 12866. These comments suggest that the BLM must coordinate
more closely with local governments to collect economic data.
Response: The BLM appreciates the interest and engagement from
partners across the multiple landscapes in the United States, however
the BLM disagrees with comments that additional coordination must be
performed with local governments for this rulemaking. This rule governs
the BLM's administration of applications and authorizations for solar
and wind energy development projects on public lands. While the rule
does have some financial
[[Page 35639]]
implications with adjustments to the BLM's rates, these are transfer
payments as explained more fully in the Regulatory Impact Analysis
accompanying this final rule and would not materially affect the
resources available to the American economy. The BLM will continue to
engage with the public it serves, and its many partners through BLM's
public processes, including project-specific analysis and programmatic
and land use planning analysis through NEPA. No change made based on
these comments.
Need for the Rule
Summary of Comments: Commenters requested the BLM include a more
meaningful explanation of the necessity of this rulemaking, including
technical data that supports a need for increased preferences and
favorable treatment for lease terms. Commenters stated that solar
development is not in line with FLPMA and does not allow for multiple
use on public lands.
Response: The BLM received new authority and guidance from Congress
(Energy Act of 2020) and direction from the President (Executive Order
14008, among others) to promote renewable energy generation on public
lands. This rule implements the new authority and direction for
management of the public lands. The BLM disagrees with the comments
suggesting that solar energy development is inconsistent with FLPMA's
multiple use mandate. In managing the public lands, the BLM is not
required to make every parcel of land available for all purposes.
Consistent with FLPMA's multiple use mandate, the BLM has discretion
through land use planning to identify areas that are available for, or
excluded from, solar or wind energy development and to evaluate each
proposed solar or wind energy development through a site-specific
environmental analysis, including the need for environmental
mitigation, as part of the decision-making process prior to issuing a
grant or lease.
Summary of Comments: Other commenters stated that they believe the
BLM must improve its approach to facilitating renewable energy
development to meet congressional goals. Other commenters expressed a
belief that the free market would provide better solutions to
greenhouse gas emissions and the climate crisis without authorizing
projects on public land or providing additional incentives to site
projects on public land.
Response: The BLM does not agree that the free market alone would
provide better solutions to greenhouse gas emissions and the climate
crisis. Additionally, the approach suggested by commenters would be
inconsistent with direction from Congress and the President to promote
renewable energy generation on public lands. Particularly, the Energy
Act of 2020, which is aimed at facilitating and promoting further
development of wind and solar energy on Federal lands, specifically
directs the BLM to ``issue permits that, in total, authorize production
of not less than 25 gigawatts of electricity from wind, solar, and
geothermal energy projects by not later than 2025, through management
of public lands and administration of Federal laws,'' 43 U.S.C. 3004(b)
(emphasis added). Additionally, as described above, on January 27,
2021, President Biden issued 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 DOI ``to
increase renewable energy production on [public] lands.'' This final
rule updates and improves the BLM's approach to facilitating renewable
energy development on public lands based on lessons learned from
implementation of the 2016 rule as well as changes in National
renewable energy goals and the maturation of energy market over the
past eight years. This update to the BLM's rules improves the BLM's
orderly administration of public lands and helps reach the goals set by
Congress and at the direction of the President. The BLM expects to
continue working with the public to provide better solutions to
resource concerns, such as greenhouse gas emissions and climate change,
to best manage the public lands and its resources. Addressing such
resource solutions are not part of this rulemaking.
Summary of Comments: Commenters stated that the current market
conditions, state and Federal mandates and regulations, and demand for
green energy makes reducing fees unnecessary and that the BLM has
failed to explain why the reductions are necessary.
Response: The changes in this rule clarify how the BLM will process
renewable energy right-of-way applications on public lands while
supporting the goals of the Energy Act of 2020 and direction from the
President (E.O. 14008 and 14057). Through the BLM's experience
administering solar and wind energy development rights-of-way, the BLM
understands the importance of stable and predictable rates for the term
of an authorization. The BLM expects that the rule will help to meet
national renewable goals more expeditiously. The BLM expects that the
rule will not only increase interest among renewable energy developers
to use BLM-administered public lands, but will decrease the cost for
developers such that they may be able to invest in additional wind and
solar projects on Tribal, State, or private lands. The BLM explains
more fully the need for the rule and its reductions in the section-by-
section discussion portion of this rule under subpart 2806.
Summary of Comments: A commenter stated that section 3003(b) of the
Energy Act does not explicitly authorize the Secretary of the Interior
to reduce right-of-way rents and fees below fair market value and that
Congress did not explicitly repeal, amend, or supersede FLPMA's
unequivocal fair market value requirement. They questioned if the
Energy Act supersedes FLPMA's fair market value requirement for rights-
of-way.
Response: The BLM disagrees with the comments suggesting that the
Energy Act of 2020 does not authorize the Secretary to reduce right-of-
way rents and fees below fair market value. First, a plain reading of
the Energy Act authorizes the Secretary to reduce rental rates and
capacity fees below fair market value. Specifically, it authorizes the
Secretary to reduce ``acreage rental rates, capacity fees, and other
recurring annual fees in total'' for solar and wind energy generation
projects on BLM-managed public lands under a broad set of
circumstances. Additionally, Congress presumably understood the fair
market value requirement in FLPMA, and the discretion in the Energy Act
to reduce rental rates and capacity fees is as a modification of that
existing requirement. The reductions authorized in Section 3003 of the
Energy Act would be meaningless if Congress intended the reductions to
be limited by FLPMA's general requirement to collect fair market value
for rights-of-way.
Statutory Authority
Summary of Comments: One commenter expressed concern that this
proposed rule will set precedent for a similar issue DOI is trying to
address under the Fluid Mineral Leases and Leasing process.
Response: This final rule modifies procedures that are specific to
identifying rental rates and capacity fees for wind and solar
authorizations; it does not apply to or set a precedent for other BLM
authorizations or processes, including those under the Mineral Leasing
Act (MLA).
Summary of Comments: Another commenter requested information about
how this final rule interacts with other BLM rules and administration
[[Page 35640]]
directives, including the Conservation and Landscape Health Rule,
Secretary's Order 3362, Improving Habitat Quality in Western Big-Game
Winter Range and Migration Corridors (Feb. 9, 2018), and BLM
Instruction Memorandum 2023-005 Change 1, Habitat Connectivity on
Public Lands (Nov. 18, 2022).
Response: This final rule updates the processes used in the BLM's
orderly administration of the public lands. Any decisions made in
connection with right-of-way grants following the procedures laid out
in this rule will also be subject to all other applicable legal
requirements and administrative directives, including the Conservation
and Landscape Health Rule, Secretary's Order 3362, and BLM policies and
guidance.
National Environmental Policy Act (NEPA)
Comment Summary: Commenters requested the BLM prepare a NEPA
analysis to evaluate the environmental effects of the final rule,
including because extraordinary circumstances (43 CFR 46.215) apply and
therefore reliance on a Categorical Exclusion is not appropriate.
Response: The BLM disagrees with comments that an environmental
assessment or environmental impact statement analysis under NEPA is
required, or that extraordinary circumstances apply to this rulemaking.
The BLM has determined that the categorical exclusion at 43 CFR
46.210(i), which excludes, ``regulations . . . that are of an
administrative, financial, legal, technical, or procedural nature; or
whose environmental effects are too broad, speculative, or conjectural
to lend themselves to meaningful analysis and will later be subject to
the NEPA process, either collectively or case-by-case,'' applies to
this final rule. The BLM has reviewed the extraordinary circumstances
listed in 43 CFR 46.215 and determined that none applies. This
categorical exclusion documentation is provided on the BLM's ePlanning
web page at the following URL: <a href="https://eplanning.blm.gov/eplanning-ui/project/2016102/510">https://eplanning.blm.gov/eplanning-ui/project/2016102/510</a>. As such, the final rule fits within the
categorical exclusion for rules, regulations, or policies to establish
bureau-wide administrative procedures, program processes, or
instructions. This final rule does not authorize any project or other
on-the-ground activity and therefore would have no significant
individual or cumulative effect on the quality of the human
environment. At such time that specific solar or wind energy
development projects are proposed, the BLM will consider those proposed
actions in compliance with NEPA.
Comment Summary: Some commenters suggested that there should not be
a requirement of a published environmental assessment (EA) or
environmental impact statement (EIS) before foreclosing the opportunity
to hold a competitive offer. Some commenters believed the BLM should
require analysis of a competitive offer through an EIS to identify and
disclose the impacts of such an action.
Response: The BLM is not required to perform environmental analyses
on whether to hold a competitive process; nonetheless, in Sec.
2809.12(b) the BLM reserves the right to complete a NEPA analysis
before holding a competitive process. The BLM does not typically
complete a NEPA analysis for a competitive leasing process, but at
least one NEPA analysis will be completed before authorizing solar or
wind energy development. Determining that there may be competitive
interest and utilizing a competitive process is administrative and
procedural only, does not trigger the need to prepare an environmental
analysis under NEPA or have any significant effect on the human
environment, and is simply based on whether there is adequate interest
from more than one applicant. The BLM would complete a land use
planning and NEPA analysis were it to change allocations in a current
land use plan to allocate areas of public lands to either allow or
exclude solar or wind energy development--a process the BLM is
currently undertaking regarding solar energy for 11 western states by
updating the 2012 Western Solar Plan through a PEIS.
For example, in the case of solar or wind energy development
leasing, the BLM must first identify public lands as a designated
leasing area for solar or wind energy development through a land use
planning process with an associated NEPA analysis. If the BLM receives
competitive interest in those lands, the BLM would hold a competitive
process to determine the presumptive leaseholder. Alternatively, the
BLM may determine that the NEPA analysis for a designated leasing area
should be updated to reflect new or changing circumstances and in turn
may offer such lands competitively to determine a preferred applicant.
Upon determining the presumptive leaseholder or preferred applicant,
the BLM would then complete a NEPA analysis before determining whether
to authorize the wind or solar energy generation project proposed. For
either the presumptive leaseholder or preferred applicant, even if the
BLM does not complete a NEPA analysis to consider whether to hold a
competitive process, the resulting project will be subject to multiple
NEPA analyses before it is approved.
Additional comments: Additional comments and their responses are
found in Section IV (Section-by-Section Discussion) of this preamble.
The BLM is a multiple-use agency, and solar and wind energy
development is one of the many uses for which the BLM manages the
public lands. While all comments that the BLM received are important,
this final rule does not respond to those that are out of scope for the
action the BLM is taking. Comments that are out of scope for this
rulemaking include those regarding project-specific considerations,
state laws and authorities, national energy policies and priorities
that do not affect solar and wind energy or the public lands, engaging
in specific partnerships, general statements of support or opposition
to the rule which do not require a detailed response, and availability
and distribution of financial resources, among others that are not
specific to the BLM's administration of solar and wind energy
development applications and rights-of-way and rate-setting.
The BLM will continue to engage with the public and Tribal,
Federal, State, and local government partners on the BLM's management
of its public lands, as appropriate. Subsequent actions that the BLM
may take will be subject to the policies, laws, and regulations in
place at that time, including those for consultation, environmental
review, and entering into agreements or partnerships with others.
IV. Section-by-Section Discussion
43 CFR Part 2800 Rights-of-Way Authorized Under FLPMA
Part 2800 of the CFR describes requirements for rights-of-way
issued under Title V of FLPMA. This final rule revises the per acre
rent and per MWh capacity fee schedules for solar and wind energy
development rights-of-way. It updates the application process for
public lands and focuses the BLM's competitive processes to places
where there is competitive interest. This final rule also includes the
principles for prioritizing solar and wind energy applications,
establishing criteria for a ``complete application,'' and corrects or
clarifies existing regulations.
The BLM conducted extensive public and Tribal outreach on this rule
both prior to its publication as a proposed rule and during the public
comment period on the proposed rule. Prior to the
[[Page 35641]]
publication of the proposed rule, the BLM notified Tribes in August
2021 of its upcoming rule and requested any comments and concerns that
Tribes may have on such a rule. The BLM then held three public
listening sessions in September 2021 on its potential use of the Energy
Act of 2020 authority. The BLM also requested and received feedback
from the public on preferred alternatives to use of the Energy Act of
2020 authority in its Manual 2806.60, ``Rent,'' which was later
published in May 2022 after three public listening sessions and public
review and comment on the draft Manual. The BLM published its proposed
rule in June 2023, receiving nearly 900 comments after holding three
virtual public meetings. The BLM also sent Tribes another notice about
the rulemaking in July 2023, requesting Tribal input and whether there
was any interest to consult on the rule. No Tribes responded with
interest to consult on the BLM's rulemaking.
Section 2801.5 What acronyms and terms are used in the regulations in
this part?
The existing Sec. 2801.5 contains the acronyms and defines the
terms used in this part of the regulations. The BLM proposed to remove,
revise, and add acronyms and terms to this section. Section 2801.5 of
this final rule has some revisions in response to comments that are
discussed further in this section for each respective revision.
Under this section, several commenters recommended the BLM engage
relevant stakeholders and industry experts to ensure definitions
accurately reflect industry practices and standards. The BLM regularly
engages, and will continue to engage with, industry; Tribal, Federal,
State and local authorities; and resource experts to supplement its
knowledge about renewable energy and market advancements. The BLM
sought public comment on the proposed rule and will seek public comment
on any changes to its acronyms and terms in future rulemakings.
The BLM received comments requesting the BLM consider the full life
cycle of materials, energy inputs and technology types, and resource
and land use footprints, and suggesting that labeling all wind and
solar energy as renewable energy is misleading. The BLM agrees that it
should analyze land use footprints and resource impacts of proposed
projects on public lands. However, analyzing the full life cycle of
materials, energy inputs, and technology types are addressed by other
parts of the Federal government where such analysis is within their
expertise. The BLM also believes that for purposes of this final rule,
all solar and wind energy generation projects are renewable energy
development projects insofar as they use a natural resource on public
lands that is not depleted to produce power.
One comment suggested that the BLM should include a definition for
``current land use plan'' to mean ``a document developed through a
formal planning process to guide the management of activities and uses
of public lands that has been approved, amended, or recertified within
the past ten years.'' The BLM has separate rules governing its land use
planning processes found at 43 CFR Chapter V, Subchapter A, that
provides definitions related to the BLM's land use planning.
Accordingly, the BLM did not make changes in response to that comment
since they are out of scope for this rule under 43 CFR part 2800.
Commenters suggested that the term ``economic hardship'' under 43
U.S.C. 3003 should be defined in this final rule and that the BLM
should require proof of economic hardship for rent and fee reductions.
The BLM does not define economic hardship in this rule as suggested.
Each instance of hardship is unique to a holder and their circumstances
and will be assessed on a case-by-case basis. The BLM does not intend
to define hardship (economically, financially, or otherwise) so as not
to unintentionally preclude reasonable requests to consider hardship.
Commenters stated that the proposed rule uses unclear language and
is inconsistent with underlying resource management plans, agency
guidance, and regulatory frameworks, and requested the BLM use more
specific language such as pastureland, rangeland, habitat, or other
terminology to denote the uses of the landscape. The BLM disagrees with
the commenters' suggestion that the proposed rule uses unclear language
and that the rule should include other definitions in this final rule.
The BLM's use of ``pastureland rents'' comes from the name of the
survey data used as the basis in determining the acreage rent in this
final rule: The NASS Survey of Pastureland Rents. This is a newer
source of data from NASS that was not available in the original 2012
Western Solar Plan or when the BLM promulgated its 2016 rule for solar
and wind energy and has not yet carried through to other guidance
materials from the BLM. It is appropriate for the BLM to use this
terminology in describing the data used and its source in the
regulations. Future BLM guidance and actions would include this
terminology as appropriate.
Commenters requested the BLM settle on one standard term
(``preferred renewable energy development areas'') for the preferred
renewable energy project locations to avoid conflicts with other
resources and uses. Commenters also suggested that the definitions for
``variance areas'' and ``exclusion areas'' should be added to the rule.
The BLM understands the interest in defining such terms and has already
done so in its land use planning efforts, such as the ongoing Solar
Energy PEIS effort to update the 2012 Western Solar Plan. The BLM
believes these terms are best identified and defined as part of the
land use planning process and is not making any changes to this rule
due to comments.
Paragraph (a) of this final rule provides for the acronyms and
paragraph (b) provides for the terms used in this part. The final rule
would remove, revise, and add certain terms to the BLM's acronyms and
definitions found in part 2800.
This final rule adds the acronym ``FLPMA'' to paragraph (a) meaning
the Federal Land Policy and Management Act of 1976, as amended (43
U.S.C. 1701 et seq.). This acronym replaces the term ``Act'' from
paragraph (b), providing clarity as to which act the BLM is
referencing.
The BLM received no substantive comments on replacing the term
``Act'' with ``FLPMA,'' and therefore this final rule makes no changes
to the proposed rule.
This final rule removes definitions of ``Megawatt (MW) capacity
fee,'' ``Net capacity factor,'' ``Megawatt hour (MWh) price,'' ``Rate
of return,'' and ``Hours per year.'' The BLM no longer charges a
megawatt capacity fee based on solar and wind energy generation
facility nameplate capacity; definitions related to the nameplate
capacity fee are removed. The BLM did not make changes to the
definitions in the final rule.
Some commenters noted inconsistencies related to the terms ``Rate
of Return'' and ``Hours per year.'' Commenters pointed out that the
proposed rule stated that these terms would be removed from Sec.
2801.5(b), noting the paragraph numbering for the Federal Register
instructions were confusing whether the terms were removed or not. The
BLM agrees with commenters and has revised the Federal Register
instructions, removing the proposed instruction number vi, ``removing
paragraphs (1) and (2) in the term ``Megawatt rate'' and redesignating
[[Page 35642]]
paragraphs (3) and (4) as paragraphs (1) and (2). There are no
paragraphs for the revised term, and removing the instructions is
consistent with the proposed definition. The BLM did not make any other
changes to this definition in the final rule.
This final rule adds 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 is consistent with the BLM's change
implementing a capacity fee that is based on electricity production.
There were no substantive comments on the term, and the BLM did not
make changes to this definition in the final rule.
The BLM includes in this final rule a new term ``Domestic Content
reduction'' to define the circumstances in which a holder meets the
domestic content criteria and thus qualifies for a fee reduction. This
final rule includes changes to the term for ``domestic content'' to
mean an item or product that qualifies for the Buy America preference
as set forth in Section 70914 of the Build America, Buy American (BABA)
Act, Public Law 117-58, 135 Stat. 429, Sec. Sec. 70901-70927 (Nov. 15,
2021), and implementing guidance at 2 CFR part 184. The final rule
modifies the definition for ``domestic content'' from the definition of
``domestic end product,'' as that term is used in Section 52.225-1 of
the Federal Acquisition Regulations (FAR) (48 CFR 52.225-1) in the
proposed rule, to the criteria for ``domestic content preference''
provided in the BABA Act and 2 CFR part 184. As described below, the
qualifying definition in this final rule offers clarity and consistency
among Federal programs regarding what constitutes domestic content and
therefore is appropriate to apply to determine when a holder may obtain
a fee reduction as identified under Sec. 2806.52(b).
The BLM has determined that offering a Domestic Content reduction
will further promote the greatest use of solar and wind resources
because it will support the development of secure, reliable domestic
supply chains while also reducing economic hardships for developers. As
discussed in the preamble to the proposed rule, uncertainty in global
supply chain dynamics, as seen in recent years, can delay deployment of
solar and wind energy development projects on public lands (88 FR
39726, 39740-39742). By offsetting some of the costs of domestically
sourced parts and materials, the Domestic Content reduction will
insulate developers from global supply chain shocks of all kinds by
reducing the economic dependence of developers on global supply chains
and will also support the efforts of domestic suppliers. In this way,
the proposed Domestic Content reduction supports the transition to more
reliable domestic supply chains that will, in turn, increase interest
in developing solar and wind energy projects throughout the country,
including on public lands (43 U.S.C. 3003(b)(1)(C)), and thereby would
promote the development of solar and wind energy resources on public
lands (43 U.S.C. 3003(b)(2)).
Similar to the BLM's use in the proposed rule of a definition for
Buy American based on section 52.225-1(b) of the FAR, this final rule's
use of the term ``domestic content,'' following the BABA Act and 2 CFR
part 184, identifies the components of projects through categories--
iron or steel products, manufactured products, or construction
material--that must be produced or manufactured in the United States in
order to qualify for the Domestic Content reduction. The BABA Act
applies to Federal financial assistance funds for ``infrastructure
projects,'' which require the use of material produced in the United
States. The Office of Management and Budget (OMB) published its final
guidance implementing the BABA Act on August 23, 2023, under 2 CFR part
184. Generally, under 2 CFR 184.4(e), a ``domestic content'' preference
would apply to three separate product categories: (i) iron or steel
products; (ii) manufactured products; and (iii) construction materials.
The OMB's guidance defines each of these categories and makes clear how
a proponent satisfies the categorical requirements to demonstrate that
the components of an infrastructure project meet the domestic content
standards. This final rule uses the term ``domestic content'' as a
catch-all term to refer to items for which the holder might satisfy the
Domestic Content reduction based on the definitions established 2 CFR
part 184.
Some commenters suggested that the proposed Buy American definition
should be revised to reflect eligibility for the reduction to mimic the
guidance published by the Treasury Department and Internal Revenue
Service for the domestic content bonus credit from section 13701 of the
Inflation Reduction Act (IRA), 117 Public Law 169, 136 Stat. 1818 (Aug.
16, 2022). Other commenters requested the BLM utilize a domestic
content definition that incentivizes the use of domestically
manufactured core solar components, as laid out in Section 13502 of the
Inflation Reduction Act. Commenters also urged the BLM to refine its
approach and apply more robust origin standards to its domestic content
proposal.
The BLM has considered the various comments suggesting different
definitions for what constitutes American-made products for the
purposes of this reduction. In response to this public input, the BLM
has changed from the FAR definition to the BABA Act (and implementing
guidance at 2 CFR part 184) definition for the domestic content
preference. The BLM is aware that the Treasury Department and Internal
Revenue Service have issued guidance about the domestic content bonus
under the Inflation Reduction Act for clean energy projects and
facilities that meet American manufacturing and sourcing requirements.
However, that guidance describes an intent to propose regulations that
have not yet been finalized. This final rule's definition for domestic
content aligns with definitions in other Federal programs with
oversight over domestic products and content. This approach will
promote consistency among these Federal programs, reducing the
potential for unintended consequences resulting from conflicting
definitions. As noted above, the BABA Act definition focuses on
construction materials and components for infrastructure projects and
is closely aligned with the type of projects covered in this final
rule.
The final rule revises the term ``grant'' to reflect that solar or
wind energy leases are not covered under the definition. The change
provides clarity for where the BLM will issue a solar or wind energy
grant and where a solar or wind energy lease will be issued.
Commenters suggested the term ``lease'' is unnecessary and to use
``grants'' instead, as the difference between a lease and a grant under
the proposed rule is the location of a right-of-way either inside or
outside a DLA. As identified in the BLM's 2012 Western Solar Plan,
leases will be issued in areas designated for leasing under the
relevant land use plan. The BLM disagrees with these comments and
retains the distinction between solar and wind energy grants and leases
in this final rule based on location of their issuance. The BLM did not
make any change to this definition in the final rule.
This final rule adds 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 is consistent with the BLM's change
implementing a capacity fee that is based on electricity production.
There were no substantive
[[Page 35643]]
comments on the term, and the BLM did not make changes to this
definition in the final rule.
The final rule revises the definition of the term ``Megawatt hour
(MWh) rate'' to mean the five-calendar-year average of the annual
weighted average wholesale prices per MWh for major trading hubs
serving the 11 western states of the continental United States. This
revision is consistent with the BLM's change to implement a capacity
fee for solar and wind energy development projects.
Some commenters were unclear whether the BLM had revised the
definition of ``Megawatt hour (MWh) rate'' in the existing regulations,
as Sec. 2801.5(b) currently does not define that term. Commenters
presumed that the BLM proposes to revise the existing definition of
``Megawatt rate.'' The BLM understands the confusion raised by these
comments. The BLM revises the term ``Megawatt rate'' to ``Megawatt hour
(MWh) rate'' in this final rule, consistent with the change to
implement a capacity fee for solar and wind energy development
projects. The BLM did not make any other changes to this definition in
the final rule.
This final rule revises the term ``Reasonable costs'' to be
consistent with the rule change replacing the words ``the Act'' with
the acronym ``FLPMA.'' There were no substantive comments on the term,
and the BLM did not make changes to this definition in the final rule.
``Renewable Energy Coordination Office (RECO)'' is added in this
final rule 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. There were no
substantive comments on the term, and the BLM did not make changes to
this definition in the final rule.
This final rule includes the new 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
clarifies that the term ``energy development'' refers to uses of public
lands that directly involve the generation of electricity on public
lands. This definition clarifies which right-of-way grants and leases
are subject to the conditions in Section 50265(b)(1) of the IRA, which
apply to ``a right-of-way for wind or solar energy development on
Federal land.''
Commenters suggested revising the definition of ``solar or wind
energy development'' to include language from the BLM's recent
Instruction Memorandum 2023-036, Inflation Reduction Act Conditions for
Issuing Rights-of-Way for Solar or Wind Energy Development (April 23,
2023), according to which solar or wind energy development ``does not
include site-testing, communication sites, transmission lines, gen-tie
lines, pipelines, roads, installation of batteries and other energy
storage systems, or other uses that might indirectly support energy
production or transmission.'' The BLM does not agree that adding
additional language to the definition is necessary for this final rule.
This rule and the BLM's policies were written to complement each other
in how the BLM administers applications and rights-of-way for such
projects. The BLM did not make a change to this definition in the final
rule.
This final rule adds ``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 DLA. Any right-of-way not issued within an
area identified as a DLA would be a grant. The BLM received comments on
this term, which are discussed with regard to the definition of
``grant'' in this final rule. The BLM did not make changes to this
definition in the final rule.
Section 2801.6 Scope
Section 2801.6 describes the scope of 43 CFR part 2800's
applicability. Paragraph (a)(1) of this final rule includes the
additional language ``or leases'' describing that this part applies to
both authorization types: grants and leases.
A comment requested the following language be added to Sec. 2801.6
Scope: ``Applications for transportation or utility right-of-way
crossing conservation system units, national recreation areas, or
national conservation areas in Alaska are subject to the provisions of
Title XI of the Alaska National Interest Lands Conservation Act and 43
CFR part 36.''
This rule focuses on the BLM's generally applicable process for
administering applications and rights-of-way for solar and wind energy
development projects on the public lands. It does not modify or amend
other applicable statutory or regulatory requirements, and the BLM
would comply with all such requirements during the process set forth in
this rule. The BLM made no changes to this section in the final rule
based upon public comments.
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. Paragraph (d) of this
final rule extends the term for solar or wind energy development
authorizations up to 50 years, and authorizations for other uses that
support solar or wind energy development, to up to 50 years, and make
other technical changes. Paragraph (d)(3) provides that solar or wind
energy development facilities authorized with a grant or lease may be
issued for up to 50 years (plus initial partial year of issuance).
Paragraph (d)(4) provides that energy storage facilities that are
authorized separate from an energy generation facility are authorized
with a right-of-way grant for up to 50 years. Paragraph (d)(6) provides
that electric transmission lines with a capacity of 100 kV or more are
authorized with a right-of-way grant for up to 50 years. The BLM did
not make a change to this section of the final rule.
Commenters raised concerns with a 50-year authorization term for
large development projects because, they suggested, the longer the
public lands are occupied by a wind or solar project the longer it will
likely take for those lands to fully recover after removing the
project. Commenters also suggested that the longer-term authorization
may unreasonably occupy the public lands with a solar or wind energy
development when preferable or newer energy technology could be
deployed there.
The BLM disagrees with comments that assert the increase of the
maximum term of an authorization from 30 years to 50 years is
inappropriate because preferable technology may be desired at that
location in the future. The BLM acknowledges that recovery of impacts
might be greater for a 50-year right-of-way term. However, the BLM will
analyze the environmental impacts of each proposed project, including
the end of project life activities such as reclamation and restoration
of public lands, under NEPA, and will consider the appropriate term for
each proposed right-of-way, before deciding whether to approve for deny
a proposed right-of-way for energy development. Additionally, BLM notes
that most of the ground-disturbing impacts of solar or wind development
come during the construction phase, so the environmental effects of a
50-year authorization are therefore likely to be similar to the effects
of a 30-year authorization with respect to recovery. Any such impacts,
however, will be
[[Page 35644]]
considered on a case-by-case basis, in compliance with NEPA, when the
BLM evaluates each proposed project. Through this process, the BLM will
consider the reasonably foreseeable use of public lands, including the
technology proposed by an applicant and the environmental consequences
of that use, when deciding whether and for what duration to authorize
solar or wind energy development on the public lands.
Some commenters argued against increasing the maximum term length
for a right-of-way and expressed concerns about the economic and
environmental impacts and the lifespan of energy generation equipment.
Commenters suggested that a longer term to an authorization may not be
appropriate due to the shorter lifespans of solar panels and wind
turbines (30 years for solar and 20-25 years for wind), and that a
shorter initial term, like the current 30-year term, instead of 50
years may be more suitable.
The BLM understands the concerns raised by commenters regarding the
proposal to increase the maximum term length for solar and wind energy
development authorizations. In the BLM's experience, the lifespan of
solar and wind energy projects has been increasing over time as the
technologies advance. When the BLM last updated its rules for solar and
wind energy in 2016, the lifespan of a solar or wind project was
approximately 20 years. The 30-year term was appropriate for such a
length, considering the amount of time necessary to construct a project
and then the expected time to decommission and reclaim and restore the
public lands during the authorization term. With increasing lifespans
of solar and wind equipment, a longer-term right-of-way is appropriate.
See recent Berkeley National Laboratory, Results from a Survey of U.S.
Wind Industry Professionals,<SUP>4</SUP> and the Department of
Energy's, Photovoltaics End-of-Life Action Plan,<SUP>5</SUP> for a
discussion of wind and solar energy project lifespans.
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\4\ <a href="https://emp.lbl.gov/publications/benchmarking-anticipated-wind-project">https://emp.lbl.gov/publications/benchmarking-anticipated-wind-project</a>.
\5\ <a href="https://www.energy.gov/sites/default/files/2022-03/Solar-Energy-Technologies-Office-PV-End-of-Life-Action-Plan_0.pdf">https://www.energy.gov/sites/default/files/2022-03/Solar-Energy-Technologies-Office-PV-End-of-Life-Action-Plan_0.pdf</a>.
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However, the BLM has made changes to other parts of the rule to
address the commenters' concerns about dedicating public lands for up
to 50 years to certain projects or uses that, over time, may become
less efficient, see a significant decrease in production, or become
entirely inactive. These changes also address concerns about public
lands being used unlawfully for purposes other than those identified in
the ROW grant (e.g., a former solar or wind generating site being used
for equipment storage). In particular, the changes impose conditions
aimed at ensuring diligent operations on the public lands, see Sec.
2805.12(c)(8). These are in addition to the BLM's existing diligent
development requirements under Sec. 2805.12(c)(7).
Commenters suggested that the BLM evaluate changes to the
environment or technology during the term of an authorization after it
has been approved. The BLM did not adopt this suggestion. Once the BLM
issues a final decision, the BLM would only re-address technological
changes or environmental impacts during the term of an authorization if
the BLM undertakes a new decision-making process, such as in response
to a ROW holder's proposed change in technology. The BLM's original
analysis for a proposed facility considers the environmental effects of
the facility and technology proposed by the applicant for the term of
the proposed authorization, informing the BLM's decision to deny,
approve, or approve with modification the proposed project. Any
subsequent changes in equipment used at the site that would result in
changes to environmental impacts that may occur after the BLM issues
its decision, would be analyzed at the time the BLM considers issuing a
new decision, based on the relevant information available at that time.
The BLM may complete a new decision-making process to adjust the terms
and conditions of the authorization under existing Sec. 2805.15(e)
under certain circumstances, such as a change to legislation or
regulations, when necessary to protect public safety, an environmental
change (e.g., new threatened or endangered species listing), or if
proposed changes to technology may result in additional or different
environmental impacts.
One comment requested clarification on how Sec. 2801.9 may be
modified based on outcomes of the ongoing update to the Western Solar
Plan. The analysis of environmental impacts of energy development and
decisions made in updating the Western Solar Plan do not affect this
final rule, which that provides BLM procedures and requirements when
administering applications and authorizations for solar and wind energy
development projects.
Some comments suggested that proposed energy storage facilities and
proposed energy generation facilities should be reviewed in separate
NEPA documents due to differences in fire risk and toxicity concerns.
While it is beyond the scope of this rulemaking to speculate as to how
the BLM will comply with NEPA when evaluating individual projects, the
BLM agrees that energy storage facilities may have environmental
impacts that are distinct from those posed by energy generation
facilities. Nevertheless, the BLM can prepare a single NEPA document to
evaluate impacts from energy generation facilities and energy storage
facilities and may find it appropriate to do so in certain
circumstances.
Subpart 2802--Lands Available for FLPMA Grants or Leases
The BLM proposed to revise the title of subpart 2802 to include
``or leases'' to clarify for readers that public lands are available
for both grants and leases, consistent with other revisions in this
rule regarding leases. No comments were received on this, and the BLM
did not make changes to the final rule.
Section 2802.11 How does the BLM designate right-of-way corridors and
DLAs?
Section 2802.11 explains how the BLM designates right-of-way
corridors and DLAs through its land use planning process. This section
includes a non-exhaustive list of factors the BLM could consider when
designating such areas under its land use planning process described in
43 CFR part 1600. Other technical changes in Sec. 2802.11(b) improve
readability and consistency between the BLM's regulatory authority
under part 2800 and its statutory authority under FLPMA. The BLM did
make changes to this section of the final rule.
Paragraph (b)(1) is unchanged from the proposed rule and includes
Tribal land use plans that BLM reviews for consistency when it is
developing, amending, or revising a land use plan in accordance with
Section 202(c)(9) of FLPMA (43 U.S.C. 1712(c)(9)).
Paragraphs (b)(10) and (b)(11) add criteria that the BLM may
consider when designating new leasing areas for solar and wind energy.
Paragraph (b)(10) adds ``access to electric transmission,'' and
paragraph (b)(11) provides for consideration of relatively large areas
where energy development is feasible and there is a low potential for
conflict due to environmental, cultural, and other relevant criteria,
including assessing the demand for new or expanded areas; applying
environmental, cultural, and other screening criteria; and analyzing
proposed areas through the land use planning process described in part
1600.
The BLM received comments about whether the BLM's proposal to carry
forward three of the four criteria from
[[Page 35645]]
the 2012 Western Solar Plan is consistent with other BLM planning
actions. The BLM carried these three criteria forward from the 2012
Western Solar Plan, which is consistent with other BLM plans
identifying solar and wind energy development areas.
Some commenters suggested that the BLM redesignate proposed
paragraph (b)(11) as paragraph (b) and redesignate existing paragraphs
(b)-(d) as newly designated paragraphs (c)-(e). The BLM did not change
the rule due to this comment. Reorganizing the paragraphs as suggested
would be confusing to a reader as considerations for solar energy would
no longer be located together in one subparagraph. The BLM did revise
paragraph (b)(11) to clarify that the factors BLM considers include
``whether there are areas'' consistent with revisions under paragraph
(b).
One comment requested that wording be amended to ``clarify that BLM
may require sharing a gen-tie right of way subject to reasonable
terms.'' The term ``gen-tie'' refers to a generation interconnect
transmission line that connects the original source electric generation
(for the purposes of this rule, a wind or solar energy development) to
the transmission system. These gen-tie lines are typically less than 5
miles long and require a right-of-way grant if they cross public lands.
The BLM retains authority under 43 CFR 2805.15(b) to allow or not allow
such common use of the right-of-way.
Commenters suggested that the BLM alter the language of proposed
Sec. 2802.11(b), which identifies factors or criteria that the BLM may
consider when designating an area of public land as a right-of-way
corridor or a DLA. Some commenters recommended replacing the proposed
term ``may'' with ``must.'' Other commenters suggested expressly
incorporating all of the considerations listed in 43 U.S.C. 1712(c),
which governs criteria for consideration by BLM when it prepares land
use plans, to this section. Other commenters suggested that the BLM add
transmission and electric infrastructure to the list of criteria or
factors. Finally, some commenters agreed with the language in the
proposed rule, which provides a non-exclusive list of factors or
criteria that the BLM may consider when designating a corridor or a
DLA.
After considering comments on this section, the BLM did make some
changes to this paragraph in the final rule. While Sec. 2802.11(b)
provides examples of criteria that the BLM may consider, some of the
listed criteria might not be relevant in all cases, and the BLM may
consider additional factors or criteria as appropriate. Further, the
BLM's land use planning regulations, 43 CFR 1600, provide additional
direction for complying with the requirements of Section 202 of FLPMA,
43 U.S.C. 1712. The BLM did not add transmission and electric
infrastructure to the list of criteria or factors because the proposed
rule already included ``access to electric transmission,'' which is
retained as a criterion or factor in the final rule. However, the BLM
revised paragraph (b) to replace ``factors the BLM may consider
include, but are not limited to, the following'' to read as ``the BLM
may consider various factors, including'' to clarify what the BLM
considers when designating such areas.
Commenters suggested that adding three criteria to a list of other
criteria for the BLM to consider may create confusion. Some commenters
supported the BLM adding paragraphs (b)(10) and (b)(11) to provide more
detail of what and how the BLM considers when designating new leasing
areas. Other commenters requested the BLM evaluate criteria for
designating exclusion areas in addition to the criteria for designating
DLAs and right-of-way corridors. The BLM believes that adding the three
additional criteria for consideration when designated corridors and
leasing areas is appropriate and provides for transparency when the BLM
begins its land use planning processes to designate leasing areas. The
BLM does not agree that exclusion criteria are appropriate when
identifying DLAs. However, paragraph (d) of the existing regulations
provides broad discretion for the BLM to identify areas where the BLM
will not allow rights-of-way, which may include criteria to identify
exclusion areas during the land use planning process. During the land
use planning process, the BLM engages Federal, Tribal, State, and local
government partners and the public to inform and clarify the factors
analyzed when considering whether to designate exclusion areas.
Including these criteria in the final rule will minimize the confusion
that may arise in the future.
Some comments requested that the final rule include additional
criteria for designating exclusion and avoidance or variance areas.
Commenters suggested that including these criteria would encourage the
appropriate designation of such areas and thus focus on processing
right-of-way applications only in areas where development is best
suited. The BLM disagrees with commenters that additional criteria for
designating exclusion and avoidance or variance areas should be
included in the final rule. Such criteria do not need to be included in
the final rule and are better suited for policy (e.g., instruction
memoranda), which can be implemented consistent with this rule and
other applicable regulatory authority and environmental analysis, while
also providing appropriate flexibility in the process. Further,
exclusion criteria are based on the environmental impacts of a program
on the public lands, which are identified through a NEPA analysis, such
as the ongoing Western Solar PEIS that is updating the 2012 Western
Solar Plan. Lastly, this final rule updates its prioritization
principles under 2804.35, which were not in place in 2012 with the
Western Solar Plan. The BLM believes that with the robust public
engagement, prioritization principles, and other preliminary
application review meetings, holding a variance process is not
necessary in administering applications for solar and wind energy
development.
Section 2803.10 Who may hold a grant or lease?
Section 2803.10 provides the criteria for who may hold a grant or
lease. In this final rule, the BLM clarifies 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 right-of-way grant
they seek is located. No comments were received on this section, and
the BLM did not make changes to this section of the final rule.
Section 2803.12 What happens to my grant if I die?
In the notice of proposed rulemaking for this rule, the BLM
proposed to add new paragraph (a) and redesignate existing paragraphs
(a) and (b) as paragraphs (b) and (c). This final rule does not carry
forward those proposed revisions because another final rule included
revisions that addressed those concerns. The BLM's final rule ``Update
of the Communications Uses Program, Cost Recovery Fee Schedules, and
Section 512 of FLPMA for Rights-of-Way,'' (89 FR 25922) [April 12,
2024] updated Sec. 2803.12 to remove reference to applications in the
section title and paragraph (a).
This final rule retitles this section and revises paragraphs (a)
and (b) to include ``or lease'' clarifying that this section applies to
both grants and leases.
Paragraph (b) of this final rule replaces the word ``distributee''
with ``receiver'' to improve clarity to readers that when the BLM
distributes a grant or lease, the instrument would be received by the
holder. This final rule also includes the provision that unqualified
receivers of a right-of-way
[[Page 35646]]
must comply with all terms, conditions, and stipulations.
One comment suggested that the BLM clarify paragraph (b) to state
that distribution will take place under state law in the state where
the grant or lease is located. Including this suggested change could be
inaccurate and potentially unenforceable. The BLM's rules should not
dictate distribution of a lease as an inheritable interest in all
instances.
Section 2804.12 What must I do when submitting my application?
Section 2804.12 explains what an applicant must do when submitting
a right-of-way application. The BLM proposed changes to paragraphs (c)
and proposed to add paragraphs (f) and (j). The BLM did make a change
to this section of the final rule.
Paragraph (c) provides for additional requirements for solar and
wind energy development or short-term rights-of-way. Paragraph (c)(1)
requires payment of an application filing fee for solar and wind energy
development and short-term applications as an initial payment toward
cost recovery payments. The BLM will refund the balance of the
application filing fee if it exceeds the processing costs. Paragraph
(c)(1) is revised for readability and now reads ``payment toward cost
recovery'' instead of ``payment towards cost recovery.'' Paragraph
(c)(2) requires payment of additional reasonable costs in addition to
application filing fees. See existing Sec. 2804.14 of this part for
further information on reasonable costs in processing an application.
Payment of category 6 cost recovery fees--which are based on full costs
and are collected if the BLM has determined that processing efforts
will take more than 64 hours to complete--may be reduced by the
application filing fee that is paid when submitting an application.
Some comments requested lower fees for application submittal.
Another comment suggested that the BLM keep the application fee until
all ``reasonable costs'' are paid before any refund is given. Under the
existing regulations, application filing fees are a payment of
reasonable costs for the United States to process an application and
are intended to discourage applicants from unnecessarily applying for
more land than is reasonable for a solar or wind energy development. As
updated by this final rule, these application filing fees continue to
be a payment of reasonable costs and may now clearly be applied to the
processing fees, such as through a cost recovery agreement. Any
overpayment of these costs may be reimbursed to the applicant or
carried to cover the inspection and monitoring of the right-of-way, if
authorized. Entering into a cost recovery agreement requires action by
the BLM and applicant to complete, including the prioritization of an
application under Sec. 2804.35 by the BLM and payment of reasonable
costs identified by the BLM in a cost recovery agreement.
Multiple comments suggested the BLM issue a cost recovery agreement
within a certain timeframe, such as 30 days of receiving the required
information. The BLM agrees that it is important for the BLM to be
responsive to applicants who have provided the required information
under this section. The proposed rule added paragraph (j) providing
that an application is complete when an applicant submits the required
information under this section. Upon receiving a complete application,
the BLM would determine what cost recovery amounts would be necessary,
and whether that should be under a cost recovery agreement. See Sec.
2804.14 for further information. The BLM would notify an applicant
within 30 days pursuant to Sec. 2804.25(d) whether processing their
application will take longer than 60 calendar days and what the
expected processing timeframe is for the application. Section 2804.19
of the BLM's right-of-way regulations provides that the BLM and
applicant work together to establish and issue the cost recovery
agreement; the length of that process can vary widely based on a number
of variables including project complexity, analysis of the needs from a
cost recovery agreement, and needed inputs from the developer. As noted
under the previous comment response, entering into a cost recovery
agreement requires action by the BLM and applicant to complete,
including prioritization under Sec. 2804.35 by the BLM and payment of
reasonable costs identified by the BLM in a cost recovery agreement.
Section 2804.12(f) of this final rule clarifies that the BLM may
require additional information at any time while processing an
application. Additional information may be necessary, such as
environmental resource data. The BLM will issue a deficiency notice
pursuant to existing Sec. 2804.25(c) to inform applicants of
additional information requirements.
Comments requested that the BLM provide clear application
requirements and limit the BLM's ability to request additional
information beyond those requirements. The BLM believes that the
existing rules clearly state what is required for applications under
2804.10, What Should I do before I file my application?; in Sec.
2804.11, Where do I file my grant application?; and as updated by this
final rule, Sec. 2804.12, What must I do when submitting my
application? Paragraph (f) of this final rule provides that BLM may
request additional information while processing an application.
Additional information may be requested under 2804.25(c) after an
application is determined to be complete pursuant to added paragraph
(j) of this final rule.
Paragraph (j) describes that a complete application meets or
addresses the requirements of Sec. 2804.12, as appropriate for the
application submitted. Some comments asked the BLM to clarify the
definition of ``complete application'' in paragraph (j). The BLM
believes that new paragraph (j) clearly describes what a complete
application is. Upon satisfying the requirements of this section, the
BLM will provide the applicant notice in writing that the application
is complete.
Some commenters suggested that the BLM provide a determination of
application completeness within specified timeframes to promote a
timelier application process. The BLM agrees that it is important to
remain diligent in processing an application. However, the BLM did not
propose to implement any timeframes for determining an application is
complete as this section of the rules applies to applications for all
rights-of-way, not just solar or wind energy applications. Reasonable
expectations for timely and diligent application requirements will vary
depending on the complexity of processing a certain type of system or
use on the public lands.
Section 2804.14 What is the processing fee for a grant application?
The BLM recently published its final rule ``Update of the
Communications Uses Program, Cost Recovery Fee Schedules, and Section
512 of FLPMA for Rights-of-Way'' (89 FR 25922) [April 12, 2024]. In
that final rule, the BLM updated its address within this section. The
proposed updates that the BLM included in this rulemaking are no longer
necessary. No comments were received, and the BLM did not make a change
to this section in this final rule.
Section 2804.22 How will the availability of funds affect the timing of
the BLM's processing?
Section 2804.22 of this final rule clarifies how the availability
of funds may affect the BLM's schedule for processing an application.
Paragraph (a) clarifies that when the BLM is processing an application,
it will not continue to process the application until funds become
available or the applicant
[[Page 35647]]
elects to pay full actual costs under Sec. 2804.14(f). Paragraph (b)
provides that the BLM may deny an application after 90 days if it has
requested reasonable costs for processing an application and the
proponent has failed to provide funds for reimbursement. The BLM did
not change this section of the final rule.
One commenter supported denying applications for which fees had not
been paid. Such a procedure, the commenter suggested, would
disincentivize applicants from submitting applications that they do not
intend to diligently process. While the BLM will not deny an
application without cause, as described in more detail under Sec.
2804.26, the BLM agrees that failure to diligently pursue an
application, including unfunded application cost recovery agreements,
and incomplete applications, among other reasons are good cause for
denying an application. Denying applications for these reasons would
deter applicants from submitting applications for projects that they do
not intend to diligently pursue. Paragraph (c) of this final rule
provides that funds paid towards the cost recovery agreement for a
project may not be refundable. Such funds would be those identified in
the cost recovery agreement for hiring additional staff or contractors
and agreed to by the applicant or right-of-way holder.
Some comments supported the idea of cost recovery agreements that
would allow the BLM to hire additional staff or contractors to aid in
application processing and reduce processing times. This requirement
helps ensure that there is available funding to the United States for
reasonable costs of the government, including those BLM hiring and
contracting decisions made to support processing applications.
Section 2804.23 What costs am I responsible for when the BLM decides to
use a competitive process for my application?
Section 2804.23 of the final rule describes what costs an applicant
is responsible for when the BLM decides to use a competitive process.
Paragraph (b) requires, for cost recovery processing categories one
through four, payment of cost recovery processing fees as if the other
applications had not been filed. Paragraph (c) clarifies who is
responsible for processing costs within processing category six.
The BLM did not make a change to this section of the final rule.
One comment suggested the language be changed to read, ``What costs
am I responsible for if the BLM decides to use a competitive process
for my application?'' The BLM considered this change in title to the
section and believes that the proposed naming of this section is clear
with respect to what costs the applicant will be responsible for when
the BLM determines it will use a competitive process.
Section 2804.25 How will the BLM process my application?
In the final rule, the BLM revised Sec. 2804.25(c) to add that, if
an applicant fails to comply with a deficiency notice under this
section, the BLM may deny the application. To ensure that developers
proceed diligently after entering into a cost recovery agreement, Sec.
2804.25(c)(1) requires applicants to ``commence any required resource
surveys or inventories within one year of the request date, unless
otherwise specified by the BLM.'' If the applicant fails to comply with
a deficiency notice under that provision, the BLM may deny the
application. See Sec. 2804.26(a)(9). To clarify that the BLM retains
the discretion to deny an application where the applicant does not
proceed diligently, the final rule adds to Sec. 2804.25(c): ``Failure
to meet requirements under this section may result in the BLM denying
your application pursuant to Sec. 2804.26.''
This added provision clarifies that the BLM retains the discretion
to deny an application where the applicant does not proceed diligently.
This change is consistent with changes made to Sec. 2809.10(e)
regarding when the BLM will no longer hold a competitive process.
Together these amendments give the industry the certainty it needs to
proceed with projects while retaining the BLM's discretion to deny an
application or offer lands competitively if the applicant does not
proceed diligently. In that way, these amendments balance the BLM's
obligations to incentivize renewable energy development on public lands
and to recover a fair return for U.S. taxpayers.
In this section, the BLM proposed removing a mandatory public
meeting that is unique to solar and wind energy rights-of-way
applications and is in addition to other public participation that
would occur as part of the BLM's environmental review process.
Paragraph (e)(2) describes public meeting requirements for solar or
wind energy right-of-way applications. In the final rule, paragraph
(e)(2) provides that the BLM may hold a local public meeting if there
is no other public meeting or opportunity for early engagement. In
other words, the final rule would require the BLM to hold a public
meeting, offering the public opportunity to engage early, though the
BLM could satisfy this requirement by holding a public scoping meeting
or other public meeting that facilitates early engagement by the
public.
Commenters suggested that the BLM provide a website of applications
and authorizations for interested parties so that they could receive
up-to-date information on the applications and authorized projects. The
BLM agrees with comments about maintaining a site that is accessible to
the public on existing and proposed (i.e., applications for) projects
on public lands. The BLM currently maintains an active web page at
<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> where the public may access the most recent
information on applications for solar, wind, and geothermal development
projects, gen-tie-lines, upcoming lease sales, and other relevant
application and development information about these sites.
Some comments supported the removal of the requirement that BLM
hold pre-processing public meetings, noting that solar and wind energy
technologies are better known now than they have been previously and
that these meetings are unnecessary. The BLM also received comments
that did not support removing that requirement. These comments
expressed concerns that by removing this public meeting the BLM would
be excluding the public and should instead increase outreach to the
public in the area affected by these proposed development projects. To
address these concerns, the BLM has changed the regulatory text in
paragraph (e)(2)(i) to ensure that a public meeting is held if there is
no other opportunity for the public's early engagement. The BLM also
would retain discretion to hold additional public meetings under Sec.
2804.25(e).
Paragraph (e)(4) is updated to replace ``the National Environmental
Policy Act (NEPA)'' with ``NEPA,'' consistent with the changes in
paragraph (e)(2) of this section. The BLM updates the reference in this
final rule, consistent with changes that CEQ has made to its
regulations, such that 40 CFR parts 1501 through 1508 are now referred
to as 40 CFR Chapter V, Subchapter A.
Paragraph (e)(5) provides that the BLM will determine whether the
proposed use complies with applicable Federal laws.
Paragraph (f) addresses the segregation of lands within a right-of-
way application. Paragraph (f)(3) now provides that a segregation may
be extended when an application is complete and cost recovery has been
received.
[[Page 35648]]
Some comments suggested that the 2-year segregation limit is
appropriate, that the BLM should begin NEPA within 2 years of
segregating the lands, and that such limitations should be consistent
with the NEPA timeline requirements within the Fiscal Responsibility
Act. The BLM agrees that the agency should be diligent in processing
applications, including initiating NEPA. Because separate legal
authority and policy guidance applies to NEPA compliance procedures,
including applicable timelines to complete the NEPA process, the BLM
did not make a change to this paragraph of the final rule in response
to these comments.
Some comments suggested additional language should be added to
establish timelines and deadlines supporting quick action in processing
applications. Section 2804.25(c) in the existing regulations provides
specific due diligence requirements for applications. Unless another
timeline is specified by the BLM, applicants have one year to complete
certain actions, and the BLM may deny an application for failure to
comply with the one-year requirement or other specified timeframe for
submitting necessary information to the BLM. The BLM believes this
timeline is generally adequate to promote the timely processing of
applications and permitting of solar and wind development projects and
to ensure that developers cannot hold public lands by submitting, but
not diligently pursuing, an application, thus precluding other uses of
such lands. The BLM did not change the final rule in response to these
comments.
The BLM received requests to revise the rule to require automatic
segregation once an applicant has filed a complete application and has
paid the required application fees and grant extensions past the four-
year mark. Changing the method to segregate lands and the timeframes of
those segregations is outside the scope of this rule. The BLM did not
propose to change the method and timing of segregation, but only to
make this paragraph consistent with new provisions in the final rule
for complete applications and cost recovery.
Section 2804.26 Under what circumstances may the BLM deny my
application?
Section 2804.26 of this final rule explains the circumstances under
which the BLM may deny an application.
Paragraph (a)(4), consistent with this final rule replacing the
term ``the Act'' with ``FLPMA'' discussed under Sec. 2801.5, provides
that the BLM may deny your application if issuing the grant would be
inconsistent with applicable law or regulation.
The BLM did not carry forward paragraph (a)(9) of the proposed rule
because the BLM's final rule, ``Update of the Communications Uses
Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for
Rights-of-Way,'' 89 FR 25922 (April 12, 2024) revised the BLM
regulations at Sec. 2804.26(a) to add the same provision allowing the
BLM to deny applications that fail to comply with a deficiency notice .
Thus, the revision in the proposed rule that would have added this
provision is no longer necessary.
Paragraph (10) incorporate requirements of this final rule that are
discussed elsewhere. Paragraph (a)(10) provides that an application may
be denied for failing to pay costs, as noted in Sec. 2804.22(b).
As proposed, paragraph (c) is removed in this final rule. Any
request for an alternative requirement received after an application
has been denied is not a timely request. Requests for an alternative
requirement must be timely. See Sec. 2804.40(c) for further
information on timely requests.
The BLM received a comment recommending that the BLM add another
provision following section (a)(4), suggesting that this new provision
address protection of special conservation areas managed by the BLM or
other federal or state agencies. The BLM believes that including the
suggested change to this section is unnecessary. The BLM's process to
deny an application under this section is addressed in the existing
regulations at Sec. 2804.26. The BLM's management of special
conservation and other sensitive areas is generally determined through
the BLM's resource management planning and NEPA processes. The BLM
retains broad authority to deny an application on the basis that it
would not be in the public interest, which may also address this
concern to deny certain applications.
Section 2804.30 [Removed and Reserved]
Section 2804.30 is removed and reserved in this final rule. No
comments were received on this section and the BLM did not make any
changes to this section in the final rule. Prior Sec. 2804.30
addressed competitive leasing inside of designated areas. The content
of the prior Sec. 2804.30 is now duplicative of this final rule in
Sec. Sec. 2809.13, 2809.14, and 2809.17.
Section 2804.31 [Removed and Reserved]
Section 2804.31 is removed and reserved in this final rule. Prior
Sec. 2804.31 addressed competitive process for site testing. This
portion of the rule was not used since first put in place in 2016 and
is removed. The BLM may still hold competitive processes for site
testing if there is a competitive interest or other reasons as
identified in Sec. 2809.10 of this final rule.
Some comments supported the removal of competitive processes for
site testing grants, and other commenters suggested that the section
may be useful in local field office decision making in the future. The
BLM agrees that retaining requirements for competitive processes
related to solar and wind energy is important. Subpart 2809 of this
final rule provides the requirements for solar and wind energy
competitive processes, which includes the requirements of this section.
Section 2804.35 Application Prioritization for Solar and Wind Energy
Development Rights-of-Way
Section 2804.35 is retitled to ``Application prioritization for
solar and wind energy development rights-of-way.'' This section
provides for the relative importance of different criteria that vary
from location to location, giving weight to local resource issues and
circumstances that are not equally relevant for every application.
Additionally, there are practical concerns for the BLM when processing
solar and wind energy applications. This section provides that the
relevant criteria are to be applied holistically to prioritize
applications in a manner that would facilitate environmentally
responsible projects and ensure that agency workloads are allocated
appropriately. The revised section would also explicitly recognize that
the BLM may identify additional criteria in 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. The
BLM revised this section from the proposed rule to clarify that the
BLM's prioritization of an application is not a decision and is not
subject to appeal under 43 CFR part 4.
One commenter asked whether the BLM's prioritization process might
hinder development of renewable energy and potentially conflict with
national priorities for renewable energy deployment. The BLM is
endeavoring to
[[Page 35649]]
increase the responsible deployment of renewable energy on the public
lands consistent with congressional and presidential direction. In
addition, the BLM must continue to manage public lands under the
principles of multiple use and sustained yield unless otherwise
provided by law (43 U.S.C. 1732(a)). The prioritization criteria
support national renewable energy goals by helping the BLM to consider
applications for the projects that are most likely to succeed and
ensure the BLM's continued stewardship of the public lands.
Paragraph (b) identifies criteria that the BLM may consider when
prioritizing applications. This section provides discretion to the BLM
as to how best to apply the criteria to prioritize processing solar or
wind energy generation applications.
Some comments suggested prioritizing applications for projects
inside DLAs. Other comments suggested other criteria that should be
considered when prioritizing applications, such as the presence of
existing leasing agreements and rights-of-way, whether the application
complies with all state and federal regulations, the size or location
of the project, project features, proximity to transmission, and
protection of natural resources.
The BLM believes that these considerations are important, but no
changes to the regulatory text are warranted since these considerations
were already included in the proposed rule. The six listed criteria in
the rule provide flexibility in how the BLM may apply the criteria for
applications in the BLM's varied landscapes on which a resource may
have different sensitivities in one location as compared to another
location. Prioritizing projects based on siting in designated or
preferred areas is addressed in paragraph (b)(1). The BLM addressed
comments concerning existing leasing agreements or rights-of-way in the
BLM's application processing steps in subpart 2804 of these rules.
Paragraph (b)(4) addresses commenter suggestions regarding prioritizing
applications based on compliance with federal regulation. Paragraphs
(b)(2) and (b)(5) address the size or location, project features,
proximity to electric transmission, and the protection of natural
resources.
Several comments requested clarity on the application of the
prioritization criteria, including a description of the relative
importance of each criterion. Other commenters also suggested that they
believe the BLM should be prohibited from prioritizing applications
based on additional criteria that are not expressly listed in this
section of the rule. In the BLM's experience, 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. The BLM has intentionally not
set specific preferences or weights for the criteria it will apply when
prioritizing applications. This final rule confirms that the BLM will
consider the prioritization criteria holistically when considering
applications, and that the BLM may establish additional criteria
through local or national policy guidance.
In the final rule, the BLM changed paragraph (b) to refer to
``criteria'' instead of ``factors'' as proposed. This change is
consistent with the BLM's use of the term ``criteria'' in paragraph
(b)(6).
The first criterion is whether the proposed project is located
within an area preferred for such development, such as a DLA. The BLM
may reasonably presume that development projects proposed within these
areas are more likely to proceed to approval as they pose less severe
resource conflicts than other lands.
Some comments suggested that wind energy is disadvantaged since
there are no wind energy designated leasing areas or equivalents. The
BLM disagrees with these comments. First, the 2016 Desert Renewable
Energy Conservation Plan (<a href="https://blmsolar.anl.gov/documents/drecp/">https://blmsolar.anl.gov/documents/drecp/</a>)
designated more than 192,000 acres of preferred development locations
for solar, wind, and geothermal energy. Additionally, the criteria are
not given specific preferences or weights when compared with one
another, and, as such, the BLM would take into account the lack of wind
DLAs when prioritizing wind energy development applications.
The second criterion is 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. Under section 2804.12(b)(2), the applicant
must also include specific measures to mitigate impacts or conflicts
with resources and uses. Including this information is necessary for
the BLM to determine that an application is complete. While subsequent
consultation, public comment, and environmental review processes may
reveal unknown resource or use conflicts, based on previous experience
permitting wind and solar projects on public land, the BLM understands
that projects with fewer known conflicts are more likely to proceed to
approval and successful implementation.
The third criterion is whether the proposed project is in
conformance with the governing BLM land use plans. Applications
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 criterion is 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 laws, plans, or priorities, but rather to
promote 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 or rely on existing agreements with State, local, or Tribal
governments.
Some comments suggested that prioritization of an application
should be subject to Tribal consultation. The BLM engages Federally
recognized Tribes early in the application process under Sec.
2804.12(b)(4), which allows Tribes to participate in preliminary
application review meetings with the BLM and provide early information
to the BLM about an application. Additionally, under paragraph (b)(4),
the BLM will consider ``whether the proposed project is consistent with
relevant State, Tribal, and local government laws, plans, or
priorities,'' which may also include consultation with Tribes. Finally,
the BLM acknowledges that E.O. 13175 sets forth criteria for when the
BLM is required to consult with Tribes, and the BLM is committed to
consulting with Tribes whenever such consultation is required
[[Page 35650]]
under the E.O., without regard to whether that requirement is
specifically articulated in this rule.
The fifth criterion is whether the proposed project incorporates
the best management practices set forth in the applicable BLM land use
plans and other BLM plans and policies. This principle ensures that the
BLM takes into account the knowledge and expertise that has gone into
formulating these existing plans and policies. Should an application
require amending a BLM land use or other plan, it is likely to require
more time and effort to process.
The sixth criterion considers any other circumstances or
prioritization criteria identified by the BLM in subsequent policy
guidance or land use planning for an area.
Paragraph (c) provides that the BLM will prioritize applications,
once complete (as described in Sec. 2804.12(j) of this part). The
BLM's prioritization may use any available 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 by other Federal agencies and State, local, or Tribal
governments.
Paragraph (d) clarifies the BLM discretion to re-categorize an
application's priority at any time. Re-categorizing an application may
be based on new information that the BLM has received or on changes the
applicant has made to the application. Re-categorizing an application
may also be based on the BLM's need to adjust its workload, if
circumstances warrant such re-prioritization.
Some comments expressed concern that denying or de-prioritizing an
application prior to any final land use designation, such as those
which may be made in the ongoing update to the 2012 Western Solar Plan,
is inappropriate or pre-decisional. Comments further expressed that
pending applications should not be denied before land use designations
are made. The BLM is not constrained by ongoing or potential future
land use planning processes, but it must manage public lands in
conformance with the land use plans currently in effect. Accordingly,
the BLM generally will not deny or deprioritize an application based on
non-conformance with a future or ongoing land use planning effort. The
criteria in the rule refer to consideration of governing land use
plans. The BLM would deny or de-prioritize an application pursuant to
its broad discretion in considering right-of-way applications based on
existing information and existing land use plans. At the same time, the
BLM retains authority to deny an application based on appropriate
information even if the project would conform to the applicable land
use plan, including, for example, where an application conflicts with
current management policies that have not yet been incorporated into a
land use plan.
Some comments suggested that the BLM should adopt a first-come,
first-served system when processing applications or self-prioritization
by an applicant for multiple applications within a single BLM field
office. While in practice the BLM often processes applications on a
first-come, first-served basis, it retains discretion to prioritize
applications according to other considerations including input from an
applicant about their applications. In practice, the BLM has observed
that the prioritization of projects, particularly in Field and District
Offices with high workloads, provides a number of benefits for the BLM
and applicants. In coordinating with applicants, the BLM discusses
workload capacities and will receive input from developers on the
priority of their applications and whether there is a specific
preferred order. Due to the many factors the BLM considers in this
decision, however, the BLM's determination on a project's priority for
processing may be different than that requested by a particular
developer. Targeting workloads for BLM staff and management facilitates
accelerated decision-making for those solar and wind energy development
proposals with the greatest technical and financial feasibility and the
least anticipated natural and cultural resource conflicts and increases
consistency in processing project applications for the BLM and
applicant. As detailed in the discussion of subpart 2809 in this rule,
the BLM may also determine that there is a competitive interest for a
right-of-way or system and hold a competitive process.
Section 2804.40 Alternative Requirements
Section 2804.40 of this final rule provides for situations when an
applicant requests alternative requirements from the BLM if the
requestor is unable to meet the requirements of this subpart. The final
rule clarifies that this section applies specifically to the BLM's
consideration of alternatives to the application requirements set forth
in subpart 2804. Other requirements related to rights-of-way, such as
the requirement to pay rent as set forth in subpart 2806, cannot be
adjusted under this section. The BLM did not make a change to this
section of the final rule.
Some commenters suggested that state and local governments should
be brought into the decision-making process if an applicant is unable
to meet the application requirements and they request an alternative to
one or more application requirements. It is the BLM's responsibility to
determine whether an alternative requirement for the application
process should be allowed. Through agreements, including with
cooperating agencies, the BLM engages with Tribal, Federal, State, and
local government offices when it considers solar and wind energy
development projects. The BLM would inform such partners of any changes
to its requirements. Additionally, the BLM will consider under this
section only requests for alternatives to modify the alternative
requirements found in part 2804--Applying for FLPMA Grants. Requests to
modify other requirements, including those identified in a decision
authorizing a right-of-way, such as terms and conditions, cannot be
approved under this section. This would include requests for
alternative access.
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 of this final rule clarifies that agency decisions
about whether to approve rights-of-way are generally administratively
appealable while the issuance of a right-of-way grant or lease itself
is not an opportunity for appeal.
Paragraph (c) of this final rule clarifies that ``The BLM will
issue the right-of-way by signing the grant or lease and transmitting
it to you.'' The BLM's act of returning the signed instrument to the
holder constitutes the ``issuance'' of the right-of-way. Identifying
the point in time at which the right-of-way is ``issued'' is important
for calculating when the term of a right-of-way 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 right-of-way is
``issued'' is also important for clarifying which actions are subject
to the conditions in Section 50265(b)(1) of the IRA, which imposes
conditions on when the Secretary may ``issue a right-of-way for wind or
solar energy development on Federal land.'' The BLM did not make a
change to this section of the final rule.
[[Page 35651]]
Section 2805.11 What does a grant or lease contain?
Section 2805.11 of this final rule revises the right-of-way
authorization term length for certain facilities, and the final rule
includes minor updates to the proposed rule to improve technical
clarity. No change was made in this section of the final rule due to
public comment.
The BLM's final rule ``Update of the Communications Uses Program,
Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-
Way,'' 89 FR 25922 (April 12, 2024), updated Sec. 2805.11 to
redesignate paragraph (b) to paragraph (c). Proposed revisions from
this rule under Sec. 2805.11(b) are now finalized under 2805.11(c)
consistent with the redesignation of this paragraph.
Redesignated Sec. 2805.11(c) addresses the duration of rights-of-
way. Section 2805.11(c)(2) provides specific terms for solar and wind
energy grants and leases. Paragraphs (c)(2)(iv), (c)(2)(v), and (c)(4)
now show 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 (c)(2)(iv) is updated for the maximum term for both
grants and leases, for up to 50 years (plus initial partial year of
issuance).
Paragraph (c)(2)(v) is updated for the maximum term for rights-of-
way for energy storage facilities that are separate from energy
generation facilities. Although the BLM generally treats energy storage
facilities as linear rights-of-way, rather than solar or wind energy
development rights-of-way, for purposes such as rent calculation, the
BLM believes that the longer term of ``up to 50 years,'' commensurate
with the maximum term for solar or wind energy development rights-of-
way, will facilitate the transition to cleaner sources of energy in the
United States.
Paragraph (c)(4) would be added to update the term for electric
transmission lines with a capacity of 100 kV or more, for up to 50
years, commensurate with the term for solar and wind energy development
projects and energy storage facilities that are separate from energy
generation facilities.
Some comments sought clarification on whether a presumptive
leaseholder's (which is defined at Sec. 2809.15(b)(1)) control of the
property would preclude other uses, such as grazing or recreation, or
during any period when use is not immediately initiated. Prior to the
competitive process, a prospective bidder would be informed as to
whether they were bidding on a location with existing authorized uses,
such as recreation or grazing or other known casual uses. The BLM's
identification of a presumptive leaseholder or issuance of a lease
would not automatically exclude authorized uses. Rather, the BLM must
follow its existing processes prior to ending existing uses; for
example, in the context of livestock grazing, notice and cancellation
is provided, subject to any required public comment periods.
The BLM understands from comments it has received that there is
some confusion whether solar and wind energy developments may also be
projects. In the final rule, the BLM revised paragraph (b)(2) to add
``projects'' to clarify that solar and wind energy developments may be
projects.
Section 2805.12 What terms and conditions must I comply with?
Section 2805.12 of this final rule lists certain terms and
conditions that apply to all right-of-way grants and leases. The BLM
revised this section to address public comments regarding the term
length authorized for certain facilities. The BLM also included
revisions to prevent a holder's non-use of the public lands for the
authorized energy generation facilities.
Paragraph (c)(8) is added to this final rule addressing concerns
raised in relation to Sec. 2801.9(d) regarding the longer term for
grants and leases. This rule provides diligent operation requirements
wherein the holder of a solar or wind energy development grant or lease
must maintain at least 75 percent of energy generation capacity for the
authorized facility for the grant or lease term. A failure to meet this
operational capacity for two consecutive years may support the
suspension or termination of the grant or lease under Sec. Sec.
2807.17 through 2807.19. The BLM would send notice to the grant or
leaseholder with a reasonable opportunity to correct any noncompliance
with the diligent operation requirement, including resuming use of the
right-of-way.
The BLM believes it is reasonable to establish a requirement that
solar and wind energy generation developments must operate within 75
percent of their generation capacity, allowing a 25 percent operational
change for each year. \6\ This allows a solar or wind operator to
safely accommodate operational changes related to unforeseen
circumstances and maximize their energy production without the need to
coordinate with the BLM for normal operations. A sustained reduction in
output, such as for anomalous storm years or changes to a development's
technology, that reduce the energy generation below 75 percent of the
project's capacity would require coordination with the BLM to update
project information. The energy generation capacity is first
established by the right-of-way holder under section 2806.52(b)(5) in
the first annual certified statement, and then informed by subsequent
years' operational capacities in the annual statement. Since the BLM
bills in advance for a calendar year (see part 2806 for further
information on solar and wind energy capacity fee), the BLM believes
that this operational standard is appropriate for the orderly
administration of the public lands and to ensure appropriate use of its
resources.
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\6\ As demonstrated in a 2018 NREL study, forecast modeling for
solar photovoltaic and wind energy developments is generally within
10 percent of expected capacities over a one-year period. <a href="https://www.nrel.gov/docs/fy23osti/79498.pdf">https://www.nrel.gov/docs/fy23osti/79498.pdf</a>, Solar PV, Wind Generation, and
Load Forecasting Dataset for ERCOT 2018: Performance-Based Energy
Resource Feedback, Optimization, and Risk Management
(P.E.R.F.O.R.M.)
---------------------------------------------------------------------------
In response to the BLM's notice, a holder must provide reasonable
justification for the reductions in energy generation, such as delays
in equipment delivery, legal challenges, or Acts of God. Holders must
also provide the anticipated date when energy generation will resume
and a request for extension under paragraph (e) for an extension of
operations period to satisfy the two-year diligent operation
requirements of paragraph (c)(8). The BLM may deny a request for
extension for failure to comply with this section.
The BLM will use the annual certified statement required under
Sec. 2806.52(b)(5) to determine whether a holder has been meeting the
minimum energy generation capacity for the diligent operation
requirement. Under paragraph 2806.52(b)(5)(vi), the holder must notify
the BLM if they will reduce the amount of energy generated by 25
percent or more for that year. Two consecutive years with reduced
energy generation would support the BLM's notice to the grant or
leaseholder of noncompliance with the diligent operation requirement.
Paragraph (e)(2) of this final rule clarifies 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
[[Page 35652]]
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) (not
revised in this rulemaking), which sets forth a procedure for asking
the BLM State Director to waive or reduce a holder's rent payment, or
Sec. 2806.52(b)(1)(i), which describes certain circumstances under
which the BLM may calculate the capacity fee based on an alternative
MWh rate.
A comment suggested that the fees could be based on third-party
evaluations, such as an appraisal. The BLM considered whether an
appraisal specific to each authorization would be appropriate and
determined that using such a process would be costly and add
considerable time to the processing of an application. The BLM chose
not to use an appraisal, except when it determines under Sec. 2806.70
that its rent schedules do not apply to the underlying right-of-way
use. For example, if the BLM receives a right-of-way application
requesting a permit for a long-term landscape art installation, the
schedules for transmission, solar or wind energy development, or
communications sites would not apply, and the BLM may elect to use an
appraisal to determine the appropriate rent. This final rule also
provides for a specific alternative MWh rate for determining the
capacity fee under Sec. 2805.62(b)(1)(i) for development projects that
use a Power Purchase Agreement (PPA). Such agreements must be provided
to the BLM for review. If the BLM determines the lower rate is
appropriate, it will use such agreements in place of the calculated MWh
rate. The BLM did not make a change in response to this comment.
A comment requested that the BLM require applicants to include PLAs
and add union labor protections as a term and condition of solar and
wind energy rights-of-way. In this final rule, the BLM has elected to
provide an opportunity for holders to receive capacity fee reductions
under certain conditions, including where the holder can show it is
using PLAs for the construction of the planned facility (see Sec.
2806.52(b)), consistent with the reduction authority under the Energy
Act of 2020. However, in administering the public lands, the BLM is
making such compliance voluntary, offering the capacity fee reduction
to incentivize the use of PLAs for solar and wind energy development
projects instead of mandating compliance with such a term. The BLM
believes this voluntary option provides opportunities to a wide variety
of potential holders and recognizes the effort of those who qualify for
such reductions consistent with criteria in Sec. 2806.52(b). No change
was made in the final rule due to this comment.
Section 2805.13 When is a grant or lease effective?
Section 2805.13 of this final rule includes a minor technical
clarification to the title and section, adding ``or lease,'' to build
consistency for authorization term lengths inside and outside of DLAs.
The BLM received comments opposing this section regarding term
length of authorizations. One comment recommended the BLM extend the
maximum term from 30 years to 50 years only for leases inside DLAs.
Another comment opposed extending the maximum term to 50 years for any
authorization. The BLM addressed this and other similar comments under
Sec. 2801.9 of this preamble.
Section 2805.14 What rights does a right-of-way grant or lease convey?
Section 2805.14 of this final rule clarifies that the term ``right-
of-way'' is the category of authorizations that generally are issued as
a grant or a lease under Title V of FLPMA. This clarity has become
increasingly important for the internal and external understanding of
right-of-way authorizations with the passage of new legislation. The
BLM did not receive comments on this section.
The title is revised to ``What rights does a right-of-way grant or
lease convey?'' The title clarifies that this section applies to both
grants and leases.
Paragraph (g) removes the text ``solar or wind energy development''
and adds ``right-of-way'' to now read as ``right-of-way grant or
lease.'' This section provides for when an applicant applies to renew
any right-of-way grant or lease under Sec. 2807.22.
Section 2805.16 If I hold a grant or lease, what monitoring fees must I
pay?
The BLM's final rule ``Update of the Communications Uses Program,
Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-
Way'' 89 FR 25922 (April 12, 2024) updated the BLM Headquarters address
in Sec. 2805.16. Thus, the proposed rule's update to the BLM
Headquarters address is no longer necessary. The BLM did not receive
comments on this section and did not include it in the final rule.
Subpart 2806 Annual Rents and Payments
Subpart 2806 of this final rule clarifies that the term ``right-of-
way'' is the category of authorizations that are generally issued as a
grant or a lease under Title V of FLPMA. This clarity has become
increasingly important for the internal and external understanding of
right-of-way authorizations with the passage of new legislation.
In subpart 2806, the BLM sets the acreage rent and capacity fee
calculation methodologies for solar and wind energy development rights-
of-way. Section 504(g) of FLPMA, 43 U.S.C. 1764(g), requires right-of-
way 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 that reflect the fair market value of the public
lands and their resources. For example, the preamble to the BLM's 2016
Final Rule, Competitive Processes, Terms, and Conditions for Leasing
Public Lands for Solar and Wind Energy Development and Technical
Changes and Corrections, 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, 92134 (Dec. 19, 2016). In
that final rule, the BLM further explained that 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 and capturing fair market value for the use of public land,
providing a consistent approach with other categories of public land
uses, encouraging efficient use of the public lands by reducing
relative costs for comparable projects using fewer acres, and employing
an approach
[[Page 35653]]
consistent with existing policies and regulations governing the BLM's
renewable energy program. See id. The multicomponent fee of this final
rule will continue to advance important objectives that serve the
public interest, including allowing the BLM to capture fair market
value for use of the land (subject to reductions pursuant to Energy Act
of 2020 authority).
In the Energy Act of 2020, 43 U.S.C. 3003, Congress amended the
fair market value requirement of Section 504(g) of FLPMA by providing
the Secretary with discretion to ``consider acreage rental rates,
capacity fees, and other recurring annual fees in total when evaluating
existing rates paid for the use of Federal land'' for solar and wind
energy projects and reduce acreage rental rates and capacity fees if
the Secretary makes certain findings, including ``that a reduced rental
rate or capacity fee is necessary to promote the greatest use of wind
and solar energy resources.'' Consistent with FLPMA and the Energy Act
of 2020, the BLM will continue to charge solar and wind energy rights-
of-way acreage rent and capacity fees. The final rule implements a
methodology that bases rent and fee rates on local land values and
wholesale energy market prices. This methodology also supports the
direction in the Energy Act of 2020, 43 U.S.C. 3004, of meeting
national clean energy objectives, including the congressional goal of
permitting 25 GW of renewable energy by 2025 on Federal lands through
reductions in rental rates and capacity fees. As described in the
section-by-section discussion for subpart 2806, this final rule is
utilizing the authority in 43 U.S.C. 3003 to adjust the fair market
value requirement through reductions in rental rates and capacity fees
for solar and wind energy projects on public lands.
Under the final rule, acreage rent rates for solar and wind energy
rights-of-way are determined using the NASS Cash Rents Survey, which
reflects a nominal value of the land at the time the right-of-way is
issued and prior to commercial use. This per-acre land rental value
will 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 right-of-way 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. The acreage rent
rate reflects a nominal value of the land to continue to maintain site
control after the right-of-way is issued.
Once a solar or wind energy generation facility is utilizing the
solar or wind resources on public land to produce electricity, the BLM
may charge the capacity fee for the right-of-way unless the acreage
rent remains higher than the fee. The capacity fee is determined in
part using the annual MWh production multiplied by either wholesale
power pricing information or pricing figures specific to a project's
PPA to determine the market value of the electricity generated from the
project. The wholesale power pricing information or other pricing basis
variables in the BLM's calculation, like the pastureland rental value
based on the NASS Cash Rents Survey used for calculating acreage rents,
will be fixed at the time the right-of-way is issued and will be
updated using a fixed annual adjustment factor. This market value of
the electricity generated will then be multiplied by a rate of return
based on a percentage of wholesale pricing and by certain qualifying
fee reductions to arrive at a capacity fee for the authorized project.
Some comments suggested that fees should be compared with the fees
associated with other energy sources instead of being based on the per-
acre values for pastureland. Other comments expressed support for the
BLM using the NASS Cash Rents Survey to calculate acreage rent rates.
The BLM manages different energy sources, e.g., oil and gas and
geothermal, consistent with the applicable laws for each. As such, rent
and fee values promulgated in regulations consider differences under
law. Solar and wind energy generation facilities on public lands are
authorized under Title V of the FLPMA (43 U.S.C. 1761-1771) and its
implementing regulations at 43 CFR part 2800. Section 504(g) of FLPMA
generally sets the requirements for how the BLM will collect rents and
fees for use of the public lands and their resources through a right-
of-way. These requirements differ from those in the MLA (30 U.S.C. 181
et seq.) and the Geothermal Steam Act (30 U.S.C. 1001 et seq.), and
thus a comparison of fees for production of these different energy
sources on public lands would be inappropriate and irrelevant. In this
final rule, the BLM updates rents and fees for solar and wind energy
development rights-of-way under the authority provided by FLPMA to
reflect the fair market value for use of the public lands and their
resources by using acreage rental rates that reflect local land values
prior to commercial electricity production through using pastureland
cash rent survey values by NASS. The BLM then applies its authority
under the Energy Act of 2020 to provide reductions that are necessary
to promote the greatest use of wind and solar energy resources.
One comment suggested that the proposed rule should not offer
acreage rent and capacity fee reductions to projects outside DLAs and
instead should implement project-specific reductions and other
incentives to promote responsible development inside DLAs. DLAs are
locations on public lands that the BLM has designated through the land
use planning process as priority areas for solar and/or wind energy
development. Limiting acreage rent and capacity fee reductions to DLAs
would not, however, meet the Energy Act of 2020's direction to promote
the greatest use of wind and solar resources. To date, the BLM has only
allocated DLAs for solar facilities on public lands within six
southwestern states for locations that are predominately favorable for
thermal solar projects (i.e., concentrated solar). The BLM currently
has no DLAs allocated for solar in other states. Furthermore, the BLM
has no DLAs allocated for wind energy development on public lands in
any state. The BLM determined that limiting rent and fee reductions to
only DLAs would be sub-optimal in supporting clean energy goals. As
such, the final rule will provide for rent and fee reductions on public
lands both inside and outside DLAs, which will serve the BLM's purpose
of promoting the greatest use of wind and solar energy resources on
public lands.
One comment suggested that subpart 2806 should not eliminate fair
market value for rental and leases on public lands or the competitive
bid process. The commenter did not support incentivizing renewable
development for a specific project by eliminating the competitive
leasing process. Contrary to the commenter's suggestion, this final
rule does not eliminate the BLM's ability to utilize a competitive bid
process for solar and wind energy development. The final rule adjusts
the competitive process requirements for wind and solar energy
development proposals within DLAs by aligning it to be consistent with
agency discretion for utilizing a competitive process outside DLAs when
the BLM's authorized officer decides to use a competitive process.
Some comments suggested that this rule should generally raise fees
for developers and require more upfront mitigation money to address
long term environmental issues. Related
[[Page 35654]]
comments suggested that the BLM should establish an environmental
mitigation fund in addition to rents and fees to accommodate the high
probability of direct and cumulative impacts. The BLM considered these
comments and is not making these suggested changes. The BLM believes
such changes are unnecessary because the final rule does not limit the
BLM's existing authority and ability to appropriately impose mitigation
requirements as a component of the terms, conditions, and stipulations
for a solar or wind energy development. The BLM will continue to
require appropriate mitigation and conditions of approval to address
environmental impacts for right-of-way grants and leases without
further requirements promulgated under this final rule.
Other commenters stated that the BLM should implement a minimum
efficiency criterion to ensure that consumers receive the necessary
amount of power to keep up with demand. The BLM disagrees with comments
suggesting that the BLM should regulate how efficiently a project must
operate. Developing a project is a complex process that depends on
several factors, including the availability and cost of appropriate
technology. The BLM has included a provision in this final rule that
sets an operational standard requiring a development project to
annually maintain at least 75 percent of its energy generation
capacity. See Sec. 2805.12(c)(8) for further information on the
operational standards for solar and wind energy development projects on
public lands.
Section 2806.10 What rent must I pay for my grant or lease?
Section 2806.10 of this final rule provides a minor technical
clarification described below. The BLM did not receive comments on this
section and has made no changes to it in the final rule.
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 right-of-way 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 under Sec. 2806.70 that its rent schedules do not apply to
the underlying right-of-way use.
Section 2806.12 When and where do I pay rent?
Section 2806.12 of this final rule provides a minor technical
clarification as described below. The BLM did not receive comments on
this section and has made no changes to it in the final rule.
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 right-of-way grants or leases.
Section 2806.20 What is the rent for a linear right-of-way grant?
Section 2806.20 of this final rule clarifies the BLM's mailing
address. Section 2806.20(c) addresses how to obtain a current rent
schedule for linear rights-of-way. This paragraph provides the BLM's
mailing address of record by reference to Sec. 2804.14(c).
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 Sec. Sec. 2806.50 through 58) and wind (see existing
Sec. Sec. 2806.60 through 68) energy rights-of-way. The final rule
revises those sections and undesignated headings to provide a single
set of provisions for all solar and wind energy development rights-of-
way. The rent, fee, and payment requirements under the final rule are
discussed in the following sections and are identical for 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 2806.50 through 2806.58 address solar and wind energy rents
and capacity fees.
The final rule updates the acreage rent and capacity fee
calculation methods to improve predictability of rates for solar and
wind energy development projects on public land. The combined rent and
fee calculation methodologies have the flexibility to meet FLPMA's fair
market value requirement while also applying calculation factors to
reduce rates to promote the greatest use of wind and solar energy
resources on the public lands consistent with the Energy Act of 2020.
The final rule retains flexibility to utilize different data
sources for electricity market values over time. Developers of solar
and wind energy on public lands will have improved rate predictability
over the term of an authorization. This is accomplished by establishing
an acreage rate and capacity fee rate at the beginning of a grant or
lease term with upfront built-in rate adjustments and by indexing the
capacity fee to the annual energy production.
The BLM's acreage rent is the average of the state-wide pastureland
rent from the NASS Cash Rent Survey. The acreage rent is the minimum
payment made to the BLM each year by the developer. See Sec.
2806.52(a) for further information on the acreage rent.
The capacity fee, based on wholesale power prices, serves to
compensate the United States for long-term site control and the
production value of the electricity generated by solar and wind energy
projects on public lands. The capacity fee will be collected annually,
but only when the capacity fee exceeds the acreage rent for the year.
See Sec. 2806.52(b) for further information on the capacity fee.
The final rule includes certain reductions that may be applied
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. Adjustments to the capacity fee
from the MWh rate reduction, The Domestic Content reduction, and PLA
reduction are discussed in greater detail in Sec. 2806.52(b)(1)(ii)
through (iv). The BLM has determined that the rate reductions in this
final rule would help to promote the greatest use of wind and solar
energy resources on public lands.
Section 2806.50 Rents and Fees for Solar and Wind Energy Development
Section 2806.50 of the final rule requires the holder of a solar or
wind energy right-of-way to pay in advance the greater of either an
annual acreage rent or a capacity fee, consistent with Section 504(g)
of FLPMA (43 U.S.C. 1764(g)). There are no provisions in this rule for
a phased-in rent or fee.
The acreage rent or capacity fee, as applicable, is calculated
based on the requirements found in Sec. Sec. 2806.11 and 2806.12. The
acreage rent is calculated according to the formula set forth in Sec.
2806.52(a), while the capacity fee is calculated according to the
formula set forth in Sec. 2806.52(b).
Some comments expressed concern that this rule creates negative
market incentives by keeping acreage rents and capacity fees
artificially low. These
[[Page 35655]]
commenters suggest that the BLM should implement a consistent yearly
increase in acreage rent and capacity fees based on initial rates, with
reductions provided only for projects in specific circumstances, such
as siting within solar zones or on disturbed lands, and with strong
commitments to domestic content. The BLM is cognizant that the rent and
fee rate structure is important for promoting the greatest use of wind
and solar energy resources and is a critical component to providing
short- to medium-term stability for emerging energy markets. There is a
strong public interest in maintaining rate predictability for
electricity generating entities that are subject to long-term
interconnect and PPAs. This final rule sets rates that are also
increased annually, through the annual adjustment factor (see Sec.
2806.52(b)(2)). The annual adjustment continues through the term of the
authorization. Additionally, this final rule provides an opportunity
for rate reductions for all solar and wind energy development projects
that further the goals of the Energy Act of 2020, which is to authorize
25 gigawatts of renewable energy on Federal lands by 2025 and further
national clean energy priorities. The BLM did not make a change to this
section of the final rule.
Section 2806.51 Grant and Lease Rate Adjustments
Section 2806.51's title is changed from the proposed rule to
clarify that this section applies to all grants and leases. This
section provides for right-of-way grant and leaseholders to transition
to the new rate making under this final rule through an affirmative
request to the BLM. Absent a request, they would retain the rate
setting method in effect prior to this final rule.
Paragraph (c) informs holders of existing solar or wind energy
development rights-of-way that they may request the new rate
methodology in this final rule be applied to their existing grant or
lease. Existing holders have two years from the date this final rule
becomes effective to request a change to the new rate making method.
The BLM will continue to apply the grant holder's or lessee's current
rate methodology if a timely request is not received.
The BLM received a comment that does not support any rate reduction
based on an estimation of energy generated because all rates should be
assessed on actual production. The BLM has the administrative
flexibility to collect payment in advance based on estimated energy.
The amount the BLM may collect for the right-of-way may change once the
BLM determines the actual energy production on the right-of-way. The
BLM will reconcile any difference in the amount due and credit any
overpayment, and right-of-way grant holders and lessees are liable for
any underpayment. See Sec. 2806.52(b)(5) of this rule for the BLM's
annual certified statement that provides more information about the
estimated and actual energy generation. The BLM did not change this
section of the final rule in response to this comment.
Some comments recommended that the final rule cap the total amount
of reduction in acreage rents and capacity fees that an individual
leaseholder can claim for a right-of-way. The final rule does not cap
the number or level of reductions an applicant or holder may qualify
for; however, the final rule does require that the BLM collect no less
than the acreage rent for the right-of-way each year, notwithstanding
the number of reductions that apply to the grant per Sec. 2806.52(b).
The BLM did not change this section of the final rule in response to
this comment.
Some comments suggested that rate reductions may be achieved
without any changes to where the BLM sources its market pricing data.
In the final rule, the BLM preserves its discretion to change the
source of market data. In the BLM's experience, access to such
information may change over time. For this final rule, the BLM is using
the Energy Information Administration pricing data that may be found at
<a href="https://www.eia.gov/electricity/wholesale/">https://www.eia.gov/electricity/wholesale/</a>. Energy Information
Administration data is free and open to the public, increasing
transparency into the BLM's rate schedule. The BLM did not change to
this section of the final rule in response to this comment.
Some comments recommended that the BLM seek to increase
domestically sourced products and materials and that the BLM should use
this rule to mandate robust domestic content thresholds for projects
permitted on Federal land. The BLM agrees with these commenters'
interest in increased use of domestic content for solar and wind energy
development projects. This final rule includes a financial incentive in
the form of a ``Domestic Content reduction'' under Sec.
2806.52(b)(1)(iii) to encourage holders to use components made or
manufactured in the United States in the construction of the solar or
wind energy project. This capacity fee reduction is intended to offset
costs associated with using only iron, steel, manufactured products,
and construction materials incorporated into the project that are
produced in the United States consistent with the direction in the
Energy Act of 2020. The BLM anticipates that this proposed capacity fee
reduction would increase economic certainty for renewable energy
projects on BLM-managed public lands. By incentivizing the use of
domestically made parts and materials in exchange for a reduced
capacity fee, the BLM expects to reduce costs for developers that
choose to incorporate domestically produced materials into their
projects. The BLM believes that this reduction will help increase
demand for domestically produced 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,
available at <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>). As seen in
recent years, uncertainty in global supply chain dynamics 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. The BLM
believes that incentivizing the use of parts and materials that qualify
for the Domestic Content 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. This final rule changes the
definition used for domestic content to align with the BABA Act and
implementing guidance at 2 CFR 184. See Sec. 2806.52(b) for further
information on the domestic content reduction.
Some comments suggested that a broad approach to rate reductions
may have revenue implications and fail to guarantee that taxpayers
obtain a fair return for the utilization of our public lands.
Consistent with congressional and presidential direction, the BLM is
endeavoring to increase the responsible deployment of renewable energy
on the public lands and as part of that direction has been authorized
to reduce rents and fees to promote the greatest
[[Page 35656]]
use of wind and solar resources on public lands. As part of this
rulemaking process, the BLM carefully deliberated on how to implement
the directives and new authorities while maintaining a reasonable
return for the use of the public lands and their resources. Following
the BLM's implementation of previous rate reductions in calendar year
2022 for solar and wind energy development projects, the agency
received feedback which generally indicated that overall costs for
permitting, development, and operations on Federal public lands were
still perceived as a barrier to entry and a disincentive to the BLM's
ability to promote solar and wind deployment on public lands. The BLM
believes the fee reductions will assist in removing barriers inhibiting
deployment of solar and wind development on public lands.
Section 2806.52 Annual Rents and Fees for Solar and Wind Energy
Development
Section 2806.52 of this final rule describes the BLM's methodology
to determine the acreage rent and capacity fee for solar and wind
development rights-of-way. Payment is required of the greater of either
an acreage rent, which is calculated in advance of authorization, or a
capacity fee, which is calculated upon the start of energy generation.
This section was revised based on public comments.
Section 2806.52(a) provides that acreage rent would be determined
by multiplying the number of acres authorized for a project (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) identifies ``A'' as the per-acre rate, using
the state-specific per-acre value from the solar or wind energy acreage
rent schedule for the state where a project is located for the year
when the grant or lease is issued. The average per acre value will be
determined using the NASS pastureland rents reported within the
previous 5-year period. The BLM will update the acreage rent schedule
and its per-acre rate every 5 years consistent with the timing of rent
adjustments under Sec. 2806.22 for the linear rents schedule. Based on
the pastureland rent value in the NASS Cash Rents Survey through 2021,
the most recent 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. The next year the BLM will update its rent schedule
will be for calendar year 2026.
Using Nevada as an example for how the BLM will average NASS
pastureland rents, assume that NASS reported values of $10.00, $13.00,
and $10.00 per acre 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. In that case, the BLM would
average the reported values using three years for that 5-year period,
which would equate to $11.00 per acre.
The per-acre rate charged to the right-of-way holder for a grant or
lease will not change once calculated and the authorization is issued.
Rates for an existing authorization will not change with updates to the
acreage rent schedule; instead, the acreage rent will be adjusted by
the annual adjustment factor, ``C'' in the formula above, under
2806.52(a)(1)(iii).
Paragraph (a)(1)(ii) identifies ``B'' in the formula above as the
encumbrance factor. The encumbrance factor is applied to account for
the intensity of the solar or wind development's surface use of the
public lands. In the final rule, solar energy generation facilities are
subject to a 100 percent encumbrance factor and wind energy generation
facilities are subject to a five percent encumbrance factor. The 100
percent encumbrance factor for solar facilities reflects a greater
intensity of development on the surface of public lands and a virtual
exclusion of other uses on the right-of-way. The five percent
encumbrance factor for wind facilities recognizes that a wind energy
facility only partially encumbers the land, allowing other uses to co-
exist.
Some comments suggest that a lower encumbrance value for solar is
appropriate, noting that facilities may incorporate design elements or
construction methods that reduce impacts to resources, such as raised
fences for wildlife passage or vegetation disturbance caps. The BLM
appreciates that projects incorporating such improvements may cause
fewer impacts to public land resources. However, the BLM disagrees that
such improvements reduce the encumbrance factor, which is based on the
occupancy of the land and impact to other uses of the land. Solar
energy developments have a greater occupancy of the land and impact to
other uses because they preclude the majority and sometimes all other
uses. This encumbrance factor for solar energy developments is
appropriate for public lands, and the BLM retains its 100 percent
encumbrance factor for this rule.
One comment asserted that the proposed encumbrance value of five
percent for wind energy is too low and should be set around 50 percent
and that if the BLM decreases the encumbrance factor from 10 percent,
the BLM should a explain its rationale in this rule. Others believed
the encumbrance factor should be lower, asserting that a mid-point
encumbrance factor of 3 percent is appropriate based on the Department
of Energy's Wind Vision analysis. The BLM considered the intensity of
the surface use and exclusion of other uses when setting the
encumbrance factor in this final rule. While the commenters that
advocated for a 50 percent encumbrance factor did not provide data
supporting that figure, the National Renewable Energy Laboratory has
found that generally ``only a small fraction of that area (<1%-4%) is
estimated to be directly impacted or permanently occupied by physical
wind energy infrastructure.'' \7\ In practice, the BLM has found that,
based on geography or project design, and effect on other uses, the
encumbrance may be more or less than that reported by NREL occupied
land percentages and therefore set a five percent encumbrance factor
for wind energy.
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\7\ <a href="https://www.nrel.gov/news/program/2022/nrel-explores-the-dynamic-nature-of-wind-deployment-and-land-use.html">https://www.nrel.gov/news/program/2022/nrel-explores-the-dynamic-nature-of-wind-deployment-and-land-use.html</a>.
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Paragraph (a)(1)(iii) clarifies that ``C'' in the formula above is
the annual adjustment factor, which is three percent, and Paragraph
(a)(1)(iv) clarifies that ``D'' is the year of the grant or lease term,
where the first year (whether partial or a full year) would be 0 (that
is, there is no inflation for the first year of the term). Under the
final rule, the annual adjustment factor would be fixed at three
percent and compounded annually for the term of the authorization.
Paragraph (a)(2) describes where you may obtain a copy of the
current per-acre rates for the solar and wind energy rent schedule.
Paragraph (b) describes 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 Domestic Content
reduction, PLA reduction, the
[[Page 35657]]
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 required to be paid
annually beginning in the first year that generation begins for the
energy generation facility. There will be no capacity fee levied for
the first year or any other year if the acreage rent exceeds the
capacity fee. The formula for calculating the annual capacity fee is A
x B x C x D x [(1 + E) [supcaret]F] x G x H.
Paragraph (b)(1)(i) describes 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 right-of-way was issued, rounded to the nearest
dollar. 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 leaseholder
enters into a PPA 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 will determine if the rate in the PPA is appropriate
to use instead of the MWh rate. For example, an alternative MWh rate
may not be appropriate if a utility issues itself a PPA for its solar
or wind energy development. If the rate in the PPA is appropriate, then
the BLM would set an alternative MWh rate for the grant or lease at the
rate in the PPA.
The BLM received a request to remove the BLM's discretion to use an
alternative MWh rate rather than a MWh rate calculated on the average
wholesale pricing as described under Sec. 2806.52(b)(1)(i). The BLM
provides an opportunity for an alternative MWh rate in this rule in the
event that there is a difference between wholesale pricing (energy
pricing at market) compared to the negotiated pricing that may be
achieved in a PPA. The BLM understands from a recent report from
Lawrence Berkeley National Lab (available at <a href="https://emp.lbl.gov/utility-scale-solar/">https://emp.lbl.gov/utility-scale-solar/</a>) that PPA pricing may be less than wholesale
market pricing. The BLM does not want to disincentivize reasonable
development on public lands or more favorable power purchase rates,
which would be contrary to national goals set by law and directed by
executive order, by disincentivizing such actions. However, the BLM
also wishes to ensure it retains the discretion necessary to ensure
that an alternative MWh rate is appropriate. The BLM did not make
changes in the final rule due to these comments.
In paragraph (b)(1)(ii), ``B'' is the MWh rate reduction. The final
rule sets the capacity fee at 20 percent of the wholesale price per MWh
or alternative MWh rate through calendar year 2035. 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 goal under the Energy Act of 2020 of ``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.
Additionally, implementing this reduction puts the rates the BLM
charges closer to what the BLM charged developers in 2007 and 2008 when
interest in solar and wind energy development on public lands began to
increase. The reduced rates and new rate setting methodology lower the
potential that existing right-of-way holders who agreed to terms and
conditions for using public lands that were later updated based on
market changes will experience economic hardship as a result of those
adjustments. This final rule uses predetermined adjustments instead.
For example, the MWh rate reduction for a newly authorized solar or
wind energy grant or lease in 2035 will be set at 20 percent of the
wholesale price per MWh or alternative MWh rate. This will yield a
continued 80 percent reduction through the end of that authorization's
term consistent with the Energy Act of 2020 authority.
Starting in 2036, the BLM will begin to transition the MWh rate
reduction to 20 percent by 2038. The MWh rate reduction will be reduced
to 60 percent for new projects authorized in 2036, 40 percent for new
projects authorized in 2037, and 20 percent for new projects authorized
in 2038 and beyond. The rates for existing authorizations will not
change with this transition to a 20 percent reduction. For example, an
authorization for solar or wind energy development in 2037 would
receive a 40 percent reduction through the end of the authorization's
term. The BLM would similarly apply this reduction to authorizations it
issues based on the year of issuance.
Some comments suggested the transition from an 80 percent MWh rate
reduction to a 20 percent MWh rate reduction appears arbitrary and
without grounding in economic analysis of market conditions and
suggested instead allowing the 80 percent reduction to continue until a
future rulemaking. The BLM understands the concerns raised by the
commenters regarding the change to the reduction in the proposed rule.
However, the BLM disagrees that the 80 percent MWh rate reduction
should continue until a future rulemaking. Instituting a phased sunset
period to the 80 percent reduction in the capacity fee is appropriate
as the renewable energy industry may no longer need this reduction to
achieve the greatest use of wind and solar on public lands, and
progress toward our national goal of a carbon-pollution free
electricity sector may indicate that a reduction is no longer
warranted. In this final rule, the BLM is revising the transition from
MWh rate reduction from 80 percent to 20 percent over several years.
This transition would lessen the year-over-year rate change until 2038,
when the MWh rate reduction would remain at 20 percent. The BLM will
evaluate progress towards reaching national goals before 2036 and could
reinitiate rulemaking to adjust incentives, including extending them
beyond 2036, if appropriate under the authority in the Energy Act of
2020 or other applicable authority.
In paragraph (b)(1)(iii), ``C'' is the Domestic Content reduction.
This paragraph is revised consistent with the changes discussed under
Sec. 2801.5. As explained previously, the BLM is promoting the
development of solar and wind energy resources on public lands by
offsetting some of the costs of using items and materials produced in
the United States in the construction of solar and wind energy
development facilities. The BABA Act, Public Law 117-58, 135 Stat. 429,
Sec. Sec. 70901 through 70927 (Nov. 15, 2021) and the implementing
regulations at 2 CFR part 184, describe certain categories of items or
products that are eligible for the domestic content preference. As
noted in Sec. 2801.5, the BLM adopts the term ``domestic content'' to
refer to the items and materials associated with the construction of a
solar or wind energy facility on public lands that are eligible for the
domestic content preference. Paragraph (b)(1)(iii) of Sec. 2806.52 of
the BLM's regulation would reduce the
[[Page 35658]]
capacity fee for solar or wind energy generation facilities if the
holder can demonstrate that the construction of the facilities for the
right-of-way--excluding labor costs--qualify as produced in the United
States as described in 2 CFR 184.4. The Domestic Content reduction is
20 percent for facilities qualifying for the domestic content
preference defined in 2 CFR part 184. To qualify for this capacity fee
reduction, the percent of the energy generation facility's total cost
that consists of items qualifying for the domestic content preference
would have to meet or exceed the ``Produced in the United States''
requirements in 2 CFR 184.3. Generally, this would mean that: (1) all
manufacturing processes for iron or steel products used as a component
of the project occurred in the United States; (2) manufactured products
(a) were manufactured in the United States, and (b) the cost of the
components of the manufactured product that are mined, produced, or
manufactured in the United States is greater than 55 percent of the
total cost of the manufactured product, as determined in 2 CFR 184.5;
and (3) all manufacturing processes for construction materials occurred
in the United States, as defined in 2 CFR 184.6. The holder would have
to provide sufficient documentation (e.g., purchase orders for end
products, materials, and supplies of the facility; as-built or
construction plans) to demonstrate that the products used in the energy
generation facility meet the thresholds identified in 2 CFR part 184.
Once an energy generation facility qualifies for a Domestic Content
reduction, the facility will continue to benefit from the reduction for
the term of the grant or lease. The BLM will 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 will apply the criteria defining the
domestic content preference and the components of construction for the
version of 2 CFR part 184 in effect at the time the right-of-way is
issued unless OMB amends that guidance in the future in such a way that
the current definition contemplated in this final rule no longer
provides a clear meaning. In that circumstance, the BLM will apply the
most recent version of 2 CFR part 184 that provides a workable
definition until such time as the BLM is able to amend its rules.
In addition to changing the definition to qualify for a domestic
content reduction from a FAR to a BABA-based definition, this final
rule only provides for a single 20 percent reduction that interested
parties qualify for if they meet the requirements of 2 CFR part 184
instead of the incremental reduction that the BLM had proposed. Under
the BABA definition described above, projects qualify for the domestic
content preference by meeting or exceeding specific materials
requirements. As this is a binary qualification, an incremental
reduction would be untenable. Further, using a single reduction based
on the BABA threshold will provide for simpler implementation of the
regulation and more clarity to applicants.
One comment suggested that the BLM use the Electronic Product
Environmental Assessment Tool (EPEAT) product registry for photovoltaic
module use in development projects and any Domestic Content reduction.
EPEAT is a global label managed by the Global Electronics Council that
identifies environmentally sustainable electronic products. Currently,
however, EPEAT only covers a narrow set of products and construction
material related to solar development facilities (specifically,
photovoltaic modules and inverters) and does not cover any materials
related to wind energy generation facilities. As a result, requiring
applicants to use EPEAT-registered products for renewable energy
facilities on public lands could frustrate the goals of the Domestic
Content reduction. Further, such a requirement would not serve the
purposes Energy Act of 2020 or relevant direction in Executive Orders
because it would limit the technology that could be deployed on public
lands. The BLM may, however, consider such criteria for the Domestic
Content reduction in the future once the EPEAT covers a broader range
of solar and wind energy materials. The BLM made no changes to the
final rule due to this comment.
Some comments suggested that the BLM should require proof of
compliance with the domestic content incentive prior to reducing rates.
The BLM agrees with these comments and will require confirmation that
the holder seeking to obtain this reduction satisfies the qualifying
definitions the BLM is utilizing: the standard in 2 CFR part 184. See
Sec. 2806.52(b)(5) regarding conditional approvals where the BLM makes
it clear that approval will be granted by the BLM once it has been
demonstrated to the satisfaction of the BLM that the facility qualifies
for the reduction.
Some comments suggested that rate reductions in the final rule
should be consistent with the IRA. The BLM considered a reduction based
on the domestic content bonus tax credits in the IRA and its definition
of Buy America bonus tax credits. The BLM is aware that the Treasury
Department has issued guidance about the domestic content bonus under
the IRA for clean energy projects and facilities that meet American
manufacturing and sourcing requirements. However, that guidance
describes an intent to propose regulations that have not yet been
finalized, and this final rule's definition for domestic content aligns
with definitions in other Federal programs with oversight over domestic
products and content. No changes were made due to these comments.
Paragraph (b)(1)(iv) is ``D'', the Project Labor Agreement
reduction. The BLM is promoting the development of solar and wind
energy resources on public lands by offsetting some of the costs when
using a PLA during construction of solar and wind energy development
projects consistent with authority under the Energy Act of 2020. The
BLM's approach also is consistent with the policy direction in
Executive Order 14063 directing Federal agencies to use PLAs in
connection with large-scale construction projects to promote economy
and efficiency in the context of Federal procurement. A PLA is a pre-
hire collective bargaining agreement negotiated between one or more
construction unions and one or more construction employers that
establishes the terms and conditions of employment for a specific
construction project, consistent with 29 U.S.C. 158(f).
The 20 percent reduction of the capacity fee offered in this final
rule to incentivize the use of a PLA is necessary to promote the
greatest use of solar and wind energy resources on public land, as
authorized by the Energy Act of 2020 (43 U.S.C. 3003(b)(2). In
particular, PLAs lead to better and more efficient outcomes in the
construction of solar and wind energy projects in the following ways,
which in turn leads to the greatest use of solar and wind resources.
First, PLAs provide better access to and retention of skilled laborers,
especially in a limited labor market.\8\ Studies and reports
demonstrate that skilled labor provided through PLAs offer a higher
quality of work, increased labor standards, more timely construction,
and fewer
[[Page 35659]]
deviations from construction plans.\9\ Second, PLAs improve workplace
safety by offering more apprentice-trained journey workers, which
studies have shown lead to fewer injuries.\10\ Third, PLAs can ensure
construction administration is streamlined, which minimizes undue
costs, delays, and inefficiencies in construction projects,
particularly complex projects such as wind or solar energy generation
facilities.\11\ Finally, PLAs contain no-strike, no-lockout clauses
that can prevent project construction delays associated with labor
disputes.\12\
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\8\ Greg Lacurci, CNBC: Workers till Quitting At High Rates--And
Getting a Big Bump In Pay (Jan. 4, 2023); Jo Constantz, Bloomberg:
The Great Resignation Worked: Most Job-Swappers Got a Raise (July
29, 2022); Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill.
Econ. Policy Inst.: The Union Advantage During the Construction
Labor Shortage 5 (2022).
\9\ McFadden, Sai Santosh, and Ronit Shetty: Quantifying the
Value of Union Labor in Construction Projects, Independent Project
Analysis, 2 and 8-9 (December 2022): <a href="https://acrobat.adobe.com/link/review?uri=urn%3Aaaid%3Ascds%3AUS%3Ad9e7f15b-9bf9-313f-b4eb-de7a1dc11d9f">https://acrobat.adobe.com/link/review?uri=urn%3Aaaid%3Ascds%3AUS%3Ad9e7f15b-9bf9-313f-b4eb-de7a1dc11d9f</a>; and Fred B. Kotler: Project Labor Agreements in New
York State II: In the Public Interest and of Proven Value, Cornell
University ILR School, 10, 19 and 36 (May 1, 2011), <a href="https://ecommons.cornell.edu/bitstream/handle/1813/74333/LaborAgreementsinNYS_II.pdf?sequence=1">https://ecommons.cornell.edu/bitstream/handle/1813/74333/LaborAgreementsinNYS_II.pdf?sequence=1</a>.
\10\ Emma Waitzman & Peter Philips, UC Berkeley Labor Ctr:
Project Labor Agreements and Bidding Outcomes: The Case of Community
College Construction in California 10, 16 (2017); Bureau of Labor
Statistics, National Census of Occupational Injuries in 2021, USDL-
22-2309 (2022) (construction work is second highest for occupational
deaths).
\11\ Dep't of Labor, Implementation of Project Labor Agreements
in Federal Construction Projects: An Evaluation 20 (2011).
\12\ Dep't of Labor, Implementation of Project Labor Agreements
in Federal Construction Projects: An Evaluation 30 (2011).
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The benefits associated with PLAs, in turn, would have positive
impacts for renewable energy projects on public lands, including
ensuring responsible and productive construction, and minimizing the
potential duration. These improved construction standards will better
meet resource management objectives and ensure authorized uses on
public lands are meeting the goal of the Energy Act of 2020 to promote
the greatest use of solar and wind energy resources. These improved
construction standards also are consistent with the BLM's authority
under FLPMA to incorporate right-of-way terms and conditions that,
among other things, ``protect Federal property and economic
interests,'' ``manage efficiently the lands . . . subject to the right-
of-way,'' and ``protect lives and property.'' (43 U.S.C. 1765(b)).
Further, as demonstrated by the reports and studies cited above, the
use of PLAs leads to higher and more stable wages for workers. These
reductions to the rates will further incentivize the use of PLAs by
developers and will help to offset higher wages for workers, which, in
turn, may help to reduce or eliminate economic hardships for workers
who would otherwise not benefit from the higher standards and
protections in PLAs.
Some comments argued against the use of the labor union incentives
included in the proposed rule and questioned the BLM's authority to
offer these incentives. Other comments requested additional provisions
be added to ensure responsible use of labor. As described above, the
BLM has concluded that, under the authority provided in the Energy Act
of 2020 and FLPMA, it has discretion to include reductions for the use
of PLAs. These reductions will incentivize the use of PLAs, providing
for increased assurances of timely, efficient construction; improved
worker safety; and higher and more stable wages for workers. The BLM
expects to publish additional policy guidance, such as through
instruction memoranda, to clarify how qualifying PLAs will be
identified, among other things. In providing this reduction in the
final rule, the BLM is promoting responsible use of labor and the
greatest use of solar and wind energy resources, as authorized by the
Energy Act of 2020, by encouraging solar and wind energy development on
public lands.
Some comments suggested that the rule should apply a tiered
incentive for developers based on the percentage of local labor they
commit to hire, which could be implemented by certified payroll reports
that include employee permanent addresses and in consultation with
local officials. Several comments supported the inclusion of a
reduction for Union Labor or PLAs. In the proposed rule, the BLM
described the potential of adding a 20 percent capacity fee reduction
for a holder's use of Union Labor or on the contingency of a PLA. In
this final rule, the BLM has decided to include a reduction for holders
who have entered into, or expect to enter into, a PLA for the
construction of a project, based on comments and additional support for
the benefits of using PLAs to advance infrastructure projects such as
renewable energy projects. This additional reduction parallels the
domestic content reduction in this rule in how it is applied in the
calculation. This reduction is based on the use of a PLA in project
construction and would offset some developer costs. The BLM does not
include in this final rule the suggested local labor reduction, but the
BLM believes the reduction for a PLA may also support the use of local
labor.
Paragraph (b)(1)(v) explains how the BLM applies the alternative
MWh rate and the Domestic Content and PLA reductions from paragraphs
(b)(1)(ii), (iii), and (iv) of this section. By default, the BLM will
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, the domestic content reduction, or the
PLA reduction will 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 will
not be able to determine definitively in advance whether the proponent
qualifies for these reductions. The BLM may then conditionally approve
the requested reductions, but the reductions will not go into effect
until the proponent adequately demonstrates that the facility qualifies
for the relevant reduction. If energy generation begins before the
holder has demonstrated that the facility qualifies, the BLM will
charge the holder the capacity fee absent the reduction. The capacity
fee could be updated for subsequent calendar years after the holder
demonstrates that the facility qualifies, but the BLM will not refund
past payments made before the holder demonstrates that they qualify and
rate reductions go into effect.
For example, an applicant or presumptive leaseholder (see
Sec. Sec. 2809.13 and 2809.15, below) migh
[…truncated; see source link]Indexed from Federal Register on May 1, 2024.
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.