BLM Proposes Renewable Energy Leasing and Rights-of-Way Regulations

On December 16, 2014, the BLM closed a comment process on wind and solar competitive leasing regulations. What is equally of interest is that BLM is also using this rulemaking to turn their 2011 renewable energy policies into binding regulation. Wind and solar projects are permitted under Federal Land Policy Management Act (“FLPMA”) right-of-way (“ROW”) regulations (43 CFR 2800), but until now there were no specific wind and solar permitting regulations. The rulemaking wraps up key components of the Obama administration’s approach to renewable energy development on public lands.

In 2009, Secretary Salazar signed Secretarial Order No. 3285, “Renewable Energy Development by the Department of the Interior.” A year later, in early 2010, the Order was amended and identified renewable energy as a “top priority” of the Department. Early on, BLM was concerned about speculation and desired more control over where wind and solar projects were located. To address these issues, in 2011, BLM issued a series of new and amended Instruction Memoranda (“IM”) that provided guidance to the BLM on how to permit wind and solar projects. In the IM’s, the BLM added requirements for due diligence, Plans of Development, pre-application meetings and addressed the term of the grant, bonding, rental formulas and its “screening authority.”

In this proposed rule, BLM intends to make these policies binding rules on the regulated public. See § 2804.25, screening criteria; § 2805.11(b), ROW grant term of 30 years; § 2805.12(c), “terms and conditions” for renewable grants; § 2805.20 detailed bonding requirements; and §§ 2805.50 and .60 solar and wind rent formulas which include a “megawatt capacity fee” in addition to an area land rent.
The “smart from the start” siting policy was announced by Secretary Salazar in 2010. The new direction began with solar energy zones (“SEZs”), designated areas for development, in the Solar Programmatic Environmental Impact Statement completed in 2012. In 2011, BLM published an Announcement of Proposed Rulemaking, the first step in this proposed rule, to develop a competitive leasing program for wind and solar. To inform that process, BLM conducted a competitive auction in the Dry Lake SEZ in Nevada in 2014.

The proposed rule builds on this siting approach by creating a leasing process for wind and solar in designated leasing areas (“DLAs”) and provides incentives (reduction in rental fees, predictable bonds) for leases in DLAs. If competitive interest is shown in an area outside a DLA, BLM can create a competitive leasing process. Otherwise, applicants would continue to use the FLPMA ROW grant process. BLM expects to finalize the rule by October 2015.

The text of the rule may be found at: http://blmsolar.anl.gov/documents/docs/FR_Competitive_Leasing_Sep_30_2014.pdf.

See Related Post: BLM Buries Change to MLA Rights of Way in Wind and Solar Leasing Change

For more information of permitting renewable energy on federal lands, contact Rebecca W. Watson at rwatson@wsmtlaw.com.