Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and Wind Energy Development and Technical Changes and Corrections, 92122-92230 [2016-27551]

Download as PDF 92122 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1– 800–877–8339, to contact the above individuals. SUPPLEMENTARY INFORMATION: DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Parts 2800 and 2880 [LLWO301000.L13400000] RIN 1004–AE24 Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and Wind Energy Development and Technical Changes and Corrections Bureau of Land Management, Department of the Interior. ACTION: Final rule. AGENCY: Through this final rule the Bureau of Land Management (BLM) is amending its regulations governing rights-of-way issued under the Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing Act (MLA). The principal purposes of these amendments are to facilitate responsible solar and wind energy development on BLM-managed public lands and to ensure that the American taxpayer receives fair market value for such development. This final rule includes provisions to promote the use of preferred areas for solar and wind energy development, called ‘‘designated leasing areas’’ (DLAs). It builds upon existing regulations and policies to expand BLM’s ability to utilize competitive processes to offer authorizations for development inside or outside of DLAs. It also addresses the appropriate terms and conditions (including payment and bonding requirements) for solar and wind energy development rights-of-way issued under the regulations. Finally, the rule makes technical changes, corrections, and clarifications to the existing rights-ofway regulations. Some of these changes affect all rights-of-way, while some provisions affect only specific rights-ofway, such as those for transmission lines with a capacity of 100 kilovolts (kV) or more. DATES: Effective Date: This final rule is effective January 18, 2017. FOR FURTHER INFORMATION CONTACT: John Kalish, Bureau of Land Management, at 202–912–7312, for information relating to the BLM’s solar and wind renewable energy programs, or the substance of the final rule. For information pertaining to the changes made for any transmission line with a capacity of 100 kV or more you may contact Stephen Fusilier at 202–912–7426. For information on procedural matters or the rulemaking process you may contact Charles Yudson at 202–912–7437. Persons who sradovich on DSK3GMQ082PROD with RULES3 SUMMARY: VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 I. Executive Summary II. Background III. Final Rule as Adopted and Responses to Comments IV. Section-by-Section Analysis for Part 2800 V. Section-by-Section Analysis for Part 2880 VI. Procedural Matters I. Executive Summary The BLM initiated this rulemaking in 2011 through publication of an Advance Notice of Proposed Rulemaking (ANPR) seeking public comment on a potential regulatory framework for competitive solar and wind energy rights-of-way. A proposed rule was published in the Federal Register on September 30, 2014, summarizing and discussing the comments that the BLM received on the ANPR. The proposed rule set forth a framework for the competitive leasing of solar and wind energy rights-of-way both inside and outside of designated leasing areas. It also proposed codifying existing solar and wind energy policies in 43 CFR part 2800, establishing a new acreage rent for wind energy projects, and updating the methods used to set acreage rents and megawatt (MW) capacity fees for existing and future solar and wind energy projects. In addition to the changes related to solar and wind energy development, the rule also proposed related updates to other provisions of the rights-of-way regulations, including those applicable to transmission lines with a capacity of 100 kV or more and pipelines 10 inches or more in diameter. Based on comments on the proposed rule and consideration of other factors, the BLM prepared this final rule. Statutory and Regulatory Authority Facilities for the generation, transmission, and distribution of electric energy 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) requires that the BLM generally receive fair market value for a right-of-way. Under Title V, the BLM can issue easements, leases, licenses, and permits to occupy, use or traverse public lands for particular purposes. The BLM generally refers to all such rights-of-way as ‘‘grants.’’ The final rule continues to refer to solar and wind energy development rights-of-way issued noncompetitively or outside a DLA as ‘‘grants,’’ but designates solar and wind energy development rights-of-way PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 issued competitively and within a DLA under revised subpart 2809 as ‘‘leases,’’ to which specific requirements and benefits are attached, as explained below. Rights-of-way for oil and gas pipelines are authorized under Section 28 of the MLA (30 U.S.C. 185), Sections 302, 303, and 310 of FLPMA (43 U.S.C. 1732, 1733, and 1740), and the applicable implementing regulations at 43 CFR part 2880. The BLM processes applications for these categories of rights-of-way in accordance with section 2884.11. Policies The BLM released a Draft Solar Energy Programmatic Environmental Impact Statement (EIS) on December 17, 2010 and released a Supplement to the Draft EIS on October 28, 2011. The Supplement to the Draft EIS contemplated a process to identify and offer public lands in solar energy zones (SEZs) through a competitive leasing process. The Supplement to the Draft EIS described how the BLM intended to pursue a rulemaking process to implement a competitive leasing program within SEZs. The BLM released the Final Solar EIS on July 27, 2012, and the Secretary of the Interior (Secretary) signed the Record of Decision (ROD) on October 12, 2012. The Solar Programmatic EIS ROD, or Western Solar Plan, likewise described the BLM’s intent to establish a competitive leasing program within the SEZs. The Western Solar Plan provides the foundation for a Bureau-initiated competitive process for offering lands for solar energy development within the SEZs. Similar comprehensive or regional land use planning efforts could be initiated by the BLM in the future to designate additional renewable energy development areas, such as for wind development. For example, the recently completed Desert Renewable Energy Conservation Plan (DRECP) identified Development Focus Areas (DFAs) in Southern California that were designed to support wind, solar, and geothermal development. As explained elsewhere in this preamble, in the Western Solar Plan and in the DRECP Record of Decision (ROD), SEZs and DFAs, like all DLAs, represent areas that have been prescreened by the BLM and identified as having high energy generation potential, access to transmission (either existing or proposed), and low potential for conflicts with other resources. The rule supports the establishment of these areas through procedures to inform their identification and establishment. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Competitive Leasing Process Existing regulations authorize the BLM to determine whether competition exists among right-of-way applications filed for the same facility or system; however, they do not allow the BLM to offer such lands competitively absent such a finding. The existing regulations allow the BLM to resolve any such competition using competitive bidding procedures. All such grants are issued subject to valid existing rights in accordance with 43 CFR 2805.14. Building on recommendations and analysis in the Western Solar Plan, this final rule expands the existing regulations to allow the BLM to offer lands competitively on its own initiative, both inside and outside DLAs, even in the absence of identified competition. Within DLAs, the rule will require competitive leasing procedures except in certain circumstances, when applications could be considered outside the competitive process. Outside DLAs, the BLM will have discretion whether to utilize competitive leasing procedures. This rule identifies what constitutes a DLA, and outlines the competitive process for solar and wind energy leasing inside DLAs, including the nomination process for areas inside DLAs, the process for reviewing nominations, the competitive bidding procedures to be deployed, and the rules governing administration of solar or wind energy leases issued through the competitive process. sradovich on DSK3GMQ082PROD with RULES3 Incentives This rule includes various provisions to incentivize development inside rather than outside of DLAs. For example, the rule establishes a new $15 per acre application filing fee for right-of-way applications outside of DLAs to discourage speculative applications and encourage development in DLAs. In addition, a winning bidder outside a DLA will be deemed the ‘‘preferred applicant’’ and eligible to apply for a grant, while a winning bidder within a DLA will be offered a lease. A primary reason for this distinction is that the prescreening done by the BLM as part of the identification of DLAs enables it to issue a lease prior to the conclusion of the project-specific reviews (such project-specific reviews would, however, have to be completed prior to the commencement of construction). Further, this final rule establishes a mechanism whereby bidders inside DLAs may qualify for variable offsets (a form of bidding credit) that will give them a financial advantage in the competitive bidding process. Specifically, a bidder that meets the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 qualifications set forth in the Notice of Competitive Offer for a particular offset will have an opportunity to pre-qualify for a reduction to their bid amount, up to 20 percent of the bid. Suppose, for example, a bidder pre-qualified for a 20 percent offset and then won the auction with a high bid of $100. The bidder would only be obligated to pay the BLM $80 for the lease. These reductions would be sale-specific and would be based on factors identified in the initial sale notice. The final rule gives the BLM the flexibility to vary the factors that could enable a bidder to obtain a variable offset from one competitive offer to another, but possible factors include having an approved Power Purchase Agreement (PPA) or Interconnect Agreement, or employing a less water-intensive technology. Each of the factors will be identified in the Notice of Competitive Offer, which will also specify the pre-determined reduction (e.g., 5 percent) associated with any individual factor. The total aggregate reduction across all factors cannot exceed 20 percent. Additional provisions that incentivize development within DLAs include a reduced nomination fee of $5 per acre, which is electively paid by a potential bidder, compared to $15 per acre nonelective application filing fee for competitive parcels outside of DLAs; a 10-year phase-in of the MW capacity fee inside a DLA as opposed to a 3-year phase-in of the fee outside of a DLA; and more favorable bonding requirements inside DLAs. Specifically, outside DLAs, bonding must be determined based on reclamation cost estimates, whereas inside DLAs, the final rule requires a standard bond in the amount of $10,000 per acre for solar energy development and either $10,000 or $20,000 per wind energy turbine for wind energy development, depending on the nameplate capacity of the turbine. Finally, successful competitive processes within DLAs will result in the issuance of a 30-year fixed-term lease, whereas a successful competitive process outside of a DLA will result in a preferred applicant status for the winner. The 30-year fixed term lease issued to the high bidder for a parcel offered competitively within a DLA will increase the certainty for developers and, in turn, make it easier to secure financing or reach terms on other agreements. Specifically, the lease will provide developers with evidence of site control, and they will obtain it much earlier in the review process than they would under existing regulations (notably, before project-specific NEPA reviews have been concluded). PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 92123 Rents and Fees The rule updates the payments currently established by BLM policies to ensure that the BLM obtains fair market value for the use of the public lands. Specifically, it updates and codifies the acreage rent for both solar and wind energy authorizations. The acreage rent will be based on the acreage of the authorization, using a 10 percent encumbrance value for wind energy authorizations and a 100 percent encumbrance value for solar energy authorizations. This compares to the 50 percent encumbrance value that is used for determining rent for linear rights-ofway on the public lands. The acreage rent for linear rights-ofway and solar and wind energy rightsof-way will vary by individual counties and is based on agricultural land values determined from data published by the National Agricultural Statistics Service (NASS). The BLM may also determine on a project-specific or regional basis that a different rate should be utilized. The ‘‘acreage rent’’ component captures the value of unimproved rural land encumbered by a project. In addition to acreage rent, the rule also updates and codifies the MW capacity fee that the BLM already charges under existing policies. As under existing policy, that fee is designed to capture the difference between a particular project area’s unimproved land value and the higher value associated with the area’s solar or wind energy development potential. The BLM uses a MW capacity fee as a proxy for the area’s electrical generation development potential. That fee is calculated using a formula that includes the nameplate capacity of the approved project, a capacity factor or efficiency factor that varies based on the average potential electric generation of different solar and wind technologies, the average wholesale prices of electricity, and a Federal rate of return based on a 20-year Treasury bond. In this final rule, the capacity factors used for calculating the MW capacity fee are 20 percent for solar photovoltaic (PV), 25 percent for concentrated solar power (CSP), 30 percent for CSP with storage capacity of 3 hours or more, and 35 percent for wind. Additionally, the final rule allows the BLM to determine, on a projectspecific or regional basis, that a different net capacity factor is more appropriate, such as if a project takes advantage of a new technology (e.g., energy storage) or project design considerations (e.g., solar array layout). The final rule increases the MW capacity fee currently established by BLM policy from $4,155 per MW to E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92124 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations $5,010 per MW for wind energy authorizations, and reduces the MW capacity fee from $5,256 to $2,863 per MW for PV solar, from $6,570 to $3,578 per MW for concentrated photovoltaic (CPV) or CSP solar, and from $7,884 to $4,294 per MW for CSP with storage capacity of 3 hours or more. The rule provides for a three-year phase-in of the MW capacity fee for right-of-way grants outside DLAs (25 percent in year one, 50 percent in year two, and 100 percent for subsequent years) and for a longer, ten-year phase-in for right-of-way leases inside DLAs (50 percent for the first 10 years and 100 percent for subsequent years). As explained elsewhere in this preamble, both the acreage rent and MW capacity fees adjust periodically based on identified factors, including changes in NASS survey values and wholesale power prices. In addition, based on comments received on the proposed rule, this final rule includes provisions that allow grant or lease holders the option to select fixed, scheduled rate adjustments to the applicable per acre zone rate (or rent) and MW rate over the term of the right-of-way grant or lease. This scheduled rate adjustment method would be used in lieu of the rule’s standard rate adjustment method, under which those rates could increase or decrease by irregular amounts depending on changes to NASS survey values or wholesale power prices. The rule includes requirements to hold preliminary application review meetings after the submission of an application for a solar or wind energy project, including authorizing the BLM to collect cost recovery fees for those meetings. Through this final rule the BLM is also extending the preliminary application review meeting requirement to any transmission line having a capacity of 100 kV or more. This change is appropriate because both solar or wind energy projects and transmission lines with a capacity greater than 100 kV are generally large-scale facilities with greater potential for impacts and resource conflicts. Based on experience with existing solar and wind energy projects, the BLM has found that those preliminary application meetings provide both the applicant and the BLM with an opportunity to identify and discuss resource conflicts early on in the process. In addition, the rule provides for additional cost reimbursement measures, consistent with Sections 304(b) and 504(g) of FLPMA. Changes to 43 CFR Part 2880 In addition to the changes to 43 CFR part 2800, this final rule also revises VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 several subparts of part 2880. These revisions are necessary to ensure consistency of policies, processes, and procedures, where possible, between rights-of-way applied for and administered under part 2800 and rights-of-way applied for and administered under part 2880. These changes are discussed in more detail in Section II of this preamble. However, a proposal to require preliminary application review meetings for right-ofway applications for pipelines exceeding 10 inches in diameter was dropped from this final rule in response to comments. II. Background A. Rule Overview The BLM published the proposed rule in the Federal Register on September 30, 2014 (79 FR 59022) for a 60-day comment period ending on December 1, 2014. In response to public requests for extensions of the public comment period the BLM extended the period for an additional 15 days on November 29, 2014, through December 16, 2014. We received 36 comment letters on the proposed rule. We also received similar feedback through stakeholder engagement meetings held as part of BLM’s regular course of business. This final rule addresses the comments received during the comment period and during stakeholder engagement meetings in the section-by-section discussion in section III. of this preamble. As explained above, the primary purpose of this rule is to facilitate the responsible development of solar and wind energy development on the public lands, with a specific focus on incentivizing development on lands identified as DLAs. To that end, this rule, in an amendment of section 2801.5, defines the term ‘‘designated leasing area’’ as a parcel of land with specific boundaries identified by the BLM land use planning process as being a preferred location for solar or wind energy that can be leased competitively for energy development. In this rule, the BLM amends its regulations implementing FLPMA to provide for two competitive processes for solar and wind energy rights-of-way on public lands. One of the processes is for lands inside DLAs. The other process is for lands outside of DLAs. For lands outside DLAs, the BLM amends section 2804.23 to provide for a competitive bidding process designed specifically for solar or wind energy development. Prior to this final rule, section 2804.23 authorized a competitive process to resolve PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 competing right-of-way applications for the same facility or system. Under amended section 2804.23, the BLM can now competitively offer lands on its own initiative. The competitive process for solar and wind energy development on lands outside of DLAs is outlined in new section 2804.30. The competitive process for lands inside DLAs is outlined in revised 43 CFR subpart 2809, which provides for a parcel nomination and competitive offer, instead of an application process. This rule includes not only these competitive processes, but also a number of amendments to other provisions of the right-of-way regulations found at 43 CFR parts 2800 and 2880. The BLM determined that it is necessary to first articulate the general requirements for rights-of-way in order to set the solar and wind requirements apart. For example, the final rule has mandatory bonding requirements for solar and wind energy, including a minimum bond amount. The BLM determined that bonding is necessary for all solar and wind energy rights-ofway because of the intensity and duration of the impacts of such authorizations. For other right-of-way authorizations, the BLM will continue to require bonding at its discretion under this final rule. Other amendments to the regulations include changes in right-of-way application submission and processing requirements, rents and fees, and alternative requirement requests. In addition, this final rule makes several technical corrections as explained in the section-by-section analysis below. B. Statutory and Regulatory Background FLPMA provides 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’’ (43 U.S.C. 1701(a)(7) and 1732(a)). As defined by FLPMA, the term ‘‘right-ofway’’ includes an easement, lease, permit, or license to occupy, use, or traverse public lands (43 U.S.C. 1702(f)). Title V of FLPMA (43 U.S.C. 1761–1771) authorizes the BLM to issue rights-ofway on the public lands for electric generation systems, including solar and wind energy generation systems. FLPMA also 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. 1701(a)(9) and 1764(g)). Section 28 of the MLA (30 U.S.C. 185) and FLPMA provide similar authority for authorizing rights-of-way E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations for oil and gas pipelines. The BLM has authority to issue regulations under both FLPMA (43 U.S.C. 1732, 1733, and 1740) and the MLA (30 U.S.C. 185 and 189). The Energy Policy Act of 2005 (codified at 42 U.S.C. 15801 et seq.) (EPAct) includes provisions authorizing and encouraging the Federal Government to develop energy producing facilities. Title II of the EPAct includes a provision encouraging the Secretary to approve non-hydropower renewable energy projects (solar, wind, and geothermal) on public lands with a total combined generation capacity of at least 10,000 MWs of electricity by 2015. See Section 211, Public Law 109–58, 119 Stat. 660 (2005). Since passage of the EPAct, the Secretary has issued several orders that emphasize the importance of renewable energy development on public lands and the Department of the Interior’s (Department’s) efforts to achieve the goal that Congress established in Section 211 of the EPAct. Secretarial Order No. 3283, ‘‘Enhancing Renewable Energy Development on the Public Lands,’’ signed by Secretary Kempthorne on January 16, 2009, facilitates the Department’s efforts to achieve the goal established by Congress in Section 211 of the EPAct. On March 11, 2009, Secretary Salazar signed Secretarial Order No. 3285, ‘‘Renewable Energy Development by the Department of the Interior,’’ which describes the need for strategic planning and a balanced approach to domestic resource development. This order was amended by Secretarial Order 3285A1 in February 2010. Amended Order 3285A1 establishes the development of renewable energy on public lands as one of the Department’s highest priorities. While the BLM has already met the goal established by Congress by approving over 12,000 MWs of renewable energy by the end of 2012, the development of renewable energy resources on the public lands remains a national priority. To advance that goal, President Obama included in the administration’s Climate Action Plan to reduce carbon pollution, released on June 25, 2013, a new goal for the Department to approve at least 20,000 MWs of new renewable energy capacity on federal lands by 2020. As of the end of fiscal year 2015, the BLM has reviewed and approved 60 projects capable of generating over 15,000 MWs of power. The BLM has issued several instruction memoranda (IMs) that identify policies and procedures related to processing solar and wind energy right-of-way applications. The BLM is VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 incorporating some of these existing policies and procedures into its right-ofway regulations. The IMs can be found at: https://www.blm.gov/wo/st/en/prog/ energy/renewable_energy.html. Briefly, the IMs are as follows: 1. IM 2009–043, Wind Energy Development Policy. This IM provides guidance on processing right-of-way applications for wind energy projects on public lands; 2. IM 2011–003, Solar Energy Development Policy. This IM provides guidance on the processing of right-ofway applications and the administration of authorized solar energy projects on public lands; 3. IM 2011–059, National Environmental Policy Act (NEPA) Compliance for Utility-Scale Renewable Energy Right-of-Way Authorizations. This IM clarifies NEPA policy for evaluating solar and wind energy project right-of-way applications; 4. IM 2011–060, Solar and Wind Energy Applications—Due Diligence. This IM provides guidance on the due diligence requirements for solar and wind energy development right-of-way applications; and 5. IM 2011–061, Solar and Wind Energy Applications—Pre-Application and Screening. This IM provides guidance on the review of right-of-way applications for solar and wind energy development projects on public lands; and 6. IM 2016–122, Policy Guidance for Federal Land Policy and Management Act Right-of-Way Rent Exemptions for Electric or Telephone Facilities Financed or Eligible for Financing under the Rural Electrification Act of 1936, as amended (IM 2016–122). This IM provides guidance for processing requests for FLPMA right-of-way rent exemptions for electric and telephone facilities financed or eligible for financing by the United States Department of Agriculture, Rural Utilities Service (RUS) under the Rural Electrification Act of 1936, as amended (Rural Electrification Act), 7 U.S.C.901 et seq. In particular, this IM makes clear that wind and solar entities that qualify under the Rural Electrification Act pay the MW capacity fees but not acreage rent. In addition, in 2005 and 2012 the BLM issued landscape-level land use plan amendment decisions supported by programmatic EISs to facilitate wind and solar energy development. These land use plan amendments guide future BLM management actions by identifying desired outcomes and allowable uses on public lands. On June 24, 2005, the BLM published the Final Programmatic Environmental PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 92125 Impact Statement on Wind Energy Development on BLM-Administered Lands in the Western United States (Wind Programmatic EIS) (70 FR 36651), which analyzed the environmental impact of the development of wind energy projects on public lands in the West and identified approximately 20.6 million acres of public lands with wind energy development potential (https:// windeis.anl.gov). Following the publication of the Wind Programmatic EIS, the BLM issued the ROD for Implementation of a Wind Energy Development Program and Associated Land Use Plan Amendments (Wind Programmatic EIS ROD) (71 FR 1768), which amended 48 BLM land use plans. The Wind Programmatic EIS ROD did not identify specific wind energy development leasing areas, but rather identified areas that have potential for the development of wind energy production facilities, along with areas excluded from consideration for wind energy facility development because of other resource values that are incompatible with that use. On July 27, 2012, the BLM and the Department of Energy published the Notice of Availability of the Final Programmatic Environmental Impact Statement for Solar Energy Development in Six Southwestern States (Solar Programmatic EIS) (77 FR 44267). The Solar Programmatic EIS assessed the environmental, social, and economic impacts associated with utility-scale solar energy development on public lands in Arizona, California, Colorado, Nevada, New Mexico, and Utah (https:// solareis.anl.gov). On October 12, 2012, the Department and the BLM issued the Western Solar Plan, which amended 89 BLM land use plans to identify 17 solar energy zones (SEZs) and identify mandatory design features applicable to utility-scale solar development on BLM managed lands. The Western Solar Plan also described the BLM’s intent to use a competitive offer process to facilitate solar energy development projects in SEZs. SEZs, including those identified in the Western Solar plan, will be considered DLAs under this final rule. This final rule is one of the steps being taken by the Department and the BLM to promote renewable energy development on the public lands. It implements one of the Western Solar Plan’s key recommendations, namely that the BLM institute a process whereby it can competitively offer lands within DLAs. In addition to addressing recommendations in the Western Solar Plan, the final rule also implements suggestions for improving the renewable energy program made by the Department of the Interior’s Office of E:\FR\FM\19DER3.SGM 19DER3 92126 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Inspector General for the Department, initially in a draft report and carried over to the final report (Report No. CR– EV–BLM–0004–2010), and by the Government Accountability Office (GAO) (Audit No. 361373), both of which address the use of competitive leasing for solar and wind development authorizations. The Inspector General (OIG) reviewed the BLM’s renewable energy activities to assess the effectiveness of the BLM’s development and management of its renewable energy program. The IG also made recommendations on other aspects of the BLM’s right-of-way program. The OIG report discusses only wind energy projects, as the solar energy program was not at a stage where it had been fully implemented. However, based on experience gained from its authorization of solar projects, the BLM believes that recommendations made for the wind energy program would also benefit the solar energy program. Other OIG recommendations pertained to the amounts and collection procedures for bonds for wind energy projects. These recommendations included: 1. Requiring a bond for all wind energy projects and reassessing the minimum bond requirements; 2. Tracking and managing bond information; 3. Developing and implementing procedures to ensure that when a project is transferred from one entity to another, the BLM would return the first bond to the company that obtained it and request a new bond from the newly assigned company; and 4. Developing and implementing Bureau-wide guidance for using competitive bidding on wind and solar energy rights-of-way. The BLM concurred with all of the OIG’s recommendations. The last recommendation is one of the principal reasons for developing this rule. The other recommendations form the basis for other changes being made as part of the BLM’s operating procedures that are also addressed through this rulemaking. Through this rulemaking, the BLM amends regulations in 43 CFR parts 2800 and 2880, and in particular: 1. Section 2804.12, to establish preliminary application review requirements for solar and wind energy development, and for development of any transmission line with a capacity of 100 kV or more; 2. Section 2804.25, to establish application processing and evaluation requirements for solar and wind energy development; 3. Section 2804.30, to establish a competitive process for public lands outside of DLAs for solar and wind energy development; 4. Section 2804.31, to establish a twostep process for solar or wind energy testing and conversion of testing areas to DLAs; 5. Section 2804.35, to establish screening criteria to prioritize applications for solar or wind energy development; 6. Section 2804.40, to establish a requirement to propose alternative requirements with a showing of good cause; 7. Section 2805.11(b), to establish a term for granting rights-of-way for solar or wind energy development; 8. Section 2805.12(c), to establish terms and conditions for a solar or wind energy development grant or lease; 9. Section 2805.20, to provide more detail on bonding requirements; 10. Sections 2806.50, 2806.52, 2806.54, 2806.56, and 2806.58, to provide information on rents for solar energy development rights-of-way; 11. Sections 2806.60, 2806.62, 2806.64, 2806.66, and 2806.68, to provide information on rents for wind energy development rights-of-way; 12. Subpart 2809, to establish a competitive process for leasing public lands inside DLAs for solar and wind energy development; and 13. Provisions in 43 CFR part 2800 pertaining to transmission lines with a capacity of 100 kV or more. In addition to these amendments, this rule also makes several technical changes, corrections, and clarifications to the regulations at 43 CFR parts 2800 and 2880. The following table provides a summary of the principal changes made in this final rulemaking. The table shows: A description and CFR reference to the existing rule, a description of the changes in the proposed rule, and a description of the changes made in this final rule. The BLM made minor revisions throughout the final rule to improve its readability, which are not noted in this table but are discussed in the section- by- section analysis of this preamble. TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE Changes between proposed rule and existing regulations 2801.5(b)—Acronyms and terms. Adds definitions for 10 items and revises definitions for 3 items, mostly pertaining to solar and wind energy development. 2801.6—Scope ...... sradovich on DSK3GMQ082PROD with RULES3 43 CFR reference and description Clarifies that the regulations in this part apply to all systems and facilities identified under section 2801.9(a). Revises language in paragraph (a)(7) to include solar and wind development facilities. Adds paragraph (d) that references solar and wind energy projects. Adds a process for designating leasing areas for solar and wind energy projects. 2801.9—When do I need a grant?. 2802.11—Designation of right-ofway corridors and leasing areas. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00006 Changes between final rule and proposed rule Additional comments This final rule adopts the definitions in Changes made in this section were the proposed rule, except that under based on comments received from the final rule the definitions allow the the public to account for the applicaBLM to determine a more approtion filing fee, energy storage, and priate Net Capacity Factor for rightsMW rate. of-way with storage on a case-bycase basis. No other substantive changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule for this section. The testing provisions at new paragraphs (d)(1) and (2) are revised to include both solar and wind facilities, as opposed to just wind. Changes made in this section were based on comments received from the public requesting that the testing provisions account for solar facilities as well as wind facilities. No changes were made from the proposed to the final rule. Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92127 TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued Changes between proposed rule and existing regulations Changes between final rule and proposed rule Additional comments 2804.10—Actions to be taken before filing a rightof-way application. Discusses pre-application requirements and specifically addresses solar and wind filing requirements. Removes all discussion or requirements for pre-application meetings. Now the only change from the existing regulation is to include designated leasing areas in paragraph (a)(2). 2804.12—Right-ofway application requirements. Discusses additional filing fees required for solar and wind energy applications. Gives the BLM discretion to collect the estimated reasonable costs incurred by other Federal agencies. Adds information on cost reimbursement requirements for work performed by other Federal agencies. This section has been retitled to improve clarity. This section also removes requirements for pre-application meetings and substitutes preliminary application review meetings that will occur after rather than before an application is filed. This section is also revised to clarify how the BLM will use the IPD–GDP to update fees. No changes were made from the proposed to the final rule for this section. Requirements of this section are also applicable to transmission lines with a capacity of 100 kV or more. Based on comments received, the final rule removes the provision in the proposed rule that would have applied certain application requirements to pipelines greater than 10 inches in diameter. Changes made in this section were based on comments received from the public. The paragraphs formerly located in section 2804.10(b) and (c) are now found in section 2804.12(b) and (c). 2804.14—Processing fees for grant applications. 2804.18 and 2804.19—Master agreements and major projects. 2804.20—Determining reasonable costs for work on major (Category 6) rights-of-ways. 2804.23—Competitive process for applications. 2804.24—Use of Standard Form 299 for submitting a right-ofway application. 2804.25—BLM actions in processing a right-ofway application. Updates the circumstances when an No changes were made from the proapplication is not required to account posed to the final rule for this section. for competitive offers under both section 2804.23(c) and subpart 2809. 2804.26—Circumstances when the BLM may deny your application. sradovich on DSK3GMQ082PROD with RULES3 43 CFR reference and description Adds additional situations where the BLM may deny your application, including specific examples for solar and wind energy applications. 2804.27—What fees are owed if an application is not completed?. Revises this section to include any preapplication costs that must be paid if an application is withdrawn or rejected. VerDate Sep<11>2014 No changes were made from the proposed to the final rule. Section title revised for clarity. Adds discussions on right-of-way work performed by other Federal agencies and pre-application requirements for major rights-of-way. Any reference to ‘‘pre-application’’ requirements was removed to be consistent with other changes made to this final rule to reference preliminary application meetings. Changes made in this section were based on comments received from the public in regards to collecting cost recovery with the submission of an application. Adds provisions for competition for solar and wind energy rights-of-way, both inside and outside of designated leasing areas. Minor changes were made from the proposed to the final rule. The latter clarifies that the BLM will not competitively offer lands where a plan of development (POD) has been accepted and cost recovery established. The requirement to publish in a newspaper is now optional instead of required. Changes made in this section were based on comments received from the public requesting that the BLM provide assurance that it will not competitively offer lands if a developer has committed considerable time and resources to a project, as evidenced by the existence of a complete POD and executed cost recovery agreement. Describes POD requirements and adds additional other requirements for solar and wind energy applications. Covers instances where a right-ofway is authorized to resolve a trespass. 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00007 Changes were made from the proposed to the final rule to reflect the shift from ‘‘pre-application meetings’’ to ‘‘preliminary application review meetings’’ as described in section 2804.12. The requirement to publish in a newspaper is now optional instead of required. Adds language to correspond to the due diligence requirements found in sections 2804.12 and 2804.25. Additional language added to provide consideration when the BLM may deny an application when circumstances are outside of an applicant’s control. Removes the term pre-application costs and substitutes preliminary application review costs. Changes were made in the final rule for clarity, especially a description of what constitutes ‘‘unpaid debts.’’ Other changes were made to accommodate new requirements for solar and wind rights-of-way and to clarify when the time clock begins for a due diligence request. This change was made to be consistent with other changes in this final rule. Fmt 4701 19DER3 Sfmt 4700 E:\FR\FM\19DER3.SGM This change was made to be consistent with other changes in this final rule with respect to the pre-application meeting identified in the proposed rule. 92128 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued 43 CFR reference and description Changes between proposed rule and existing regulations Changes between final rule and proposed rule Additional comments 2804.30—Description of the competitive process for solar or wind energy development. Adds section 2804.30, which describes the competitive process for solar or wind energy development outside of DLAs. The final rule changes were made principally for clarification. The change in notification requirements is consistent with other changes in this final rule. 2804.31—Site testing for solar and wind energy. No section 2804.31 in proposed rule ... Several minor changes were made from the proposed to the final rule, including removing a reference to mitigation costs, a statement that filing fees will be refunded to unsuccessful bidders, and that a successful bidder will have site control over applications from other developers (by virtue of being identified as the preferred applicant following completion of the sale process). Additionally, the requirement to publish in a newspaper is now optional instead of required. Adds section 2804.31. This new section describes how the BLM will inform the public that site-testing applications will be accepted for lands within a DLA. 2804.35— Prioritizing solar and wind energy applications. Adds section 2804.35 which describes a process for prioritizing solar and wind energy applications. 2804.40—Alternative requirements. No section 2804.40 in proposed rule ... 2805.10—Approving or denying a grant. Includes right-of-way leases in addition to grants, and adds specific items to be included within a solar or wind energy grant or lease. Adds specific terms for solar and wind energy grants and leases. sradovich on DSK3GMQ082PROD with RULES3 2805.11– What does a grant contain? The rule clarifies that the BLM will generally prioritize the processing of solar and wind energy leases issued under subpart 2809 over applications for solar and wind energy grants issued under subpart 2804. Other minor revisions were made in response to comments and discussed further in the section-by-section analysis. Adds a provision that allows an applicant to submit an alternate requirement if it is believed that the original requirements cannot be met. 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00008 This section was added in response to comments about the BLM need for a process for applicants to demonstrate, based on a showing of good cause, the reasons for its failure to meet the rule requirements and demonstrate why alternative requirements should be put in place in their stead. No changes were made from the proposed to the final rule. Removed specific references to ‘‘wind’’ so that section would apply to project testing for either solar or wind. 2805.12—Terms Revises this section in its entirety and Adds new section 2805.12(e) stating and conditions in adds specific terms and conditions that good cause must be shown for a right-of-way aufor solar and wind energy grants and extension of time requests. This secthorization. leases. tion now includes solar in addition to wind energy development processes. Other revisions in this section are discussed in the section-by-section analysis. 2805.14—Rights Adds section 2805.14(g) allowing for Removed specific references to ‘‘wind’’ conveyed by a renewal applications for wind so that section would apply to right-of-way grant. projects and section 2805.14(h) alproject testing for either solar or lowing renewal for site testing grants. wind. 2805.15—Rights re- Adds a provision requiring common No changes were made from the protained by the use of your right-of-way for compatposed to the final rule. United States. ible uses. 2805.16—Payment Adds a provision to allow the BLM to Adds the word ‘‘inspecting’’ in addition of monitoring collect monitoring fees for expenses to the existing word ‘‘monitoring.’’. fees. incurred by other Federal agencies. VerDate Sep<11>2014 This new section is a result of public comments on the proposed rule requesting clarification on site testing procedures. This new section does not make any changes to existing policies or procedures. The changes were made to clarify how the BLM will prioritize leases and applications. Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM This change was made to be consistent with other changes in this final rule. Changes made in this section were based on comments received from the public, concerning a holder’s inability to meet BLM requirements in some circumstances. This change was made to be consistent with other changes in this final rule. This change was made to be consistent with other changes in this final rule. 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92129 TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued 43 CFR reference and description Changes between proposed rule and existing regulations 2805.20—Bonding requirements. Adds new section 2805.20 describing bonding requirements. 2806.12—Payment of rents. Adds provisions for the payment of rents for non-linear rights-of-way, including solar and wind grants and leases. Adds penalties for non-payment of rents and removes the $500 limit for late payment fees. Describes where you may obtain a copy of the current rent schedule. 2806.13—Late payment of rents. 2806.20—Rents for linear right-of-way grants. 2806.22—Changes in the Per Acre Rent Schedule. 2806.24—Making payment for a linear grant. Corrects a reference to the IPD–GDP sradovich on DSK3GMQ082PROD with RULES3 Requires making a payment for the initial partial year, along with the first year’s rent. Also, provides for multiple year payments. 2806.30—CommuThe communication site rent schedule nication site rents. is removed. Several other minor changes made for clarification. 2806.34—CalculaCorrects an existing citation to read tion of rent for a section 2806.14(a)(4). multiple-use communication facility. 2806.43—CalculaChanges a former reference to new tion of rents for section 2806.70. passive reflectors and local exchange networks. 2806.44—CalculaChanges a former reference to new tion of rents for a section 2806.70. facility owners that authorizes communication uses. 2806.50—Rents Existing section 2806.50 (provisions for and fees for solar determining rents where the linear energy rights-ofright-of-way schedule or the commuway. nication rent schedule do not apply) is redesignated as section 2806.70. New section 2806.50 introduces rents and fees for solar energy rights-of-way. 2806.51—SchedNot in the proposed rule; added to the uled Rate Adjustfinal rule in response to comments ment. received. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00009 Changes between final rule and proposed rule Additional comments The final rule adds a requirement to Changes made in this section were have periodic reviews of project based on comments received from bonds for adequacy. Also, the bond the public. amounts for wind turbines are changed to be based on the nameplate capacity. The final rule also explains that the BLM may consider factors in addition to the reclamation cost estimate (RCE), such as the salvage value of project components, when determining bond amounts. No changes were made from the proposed to the final rule for this section. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No substantive changes were made to the final rule. This section gives solar project proponents the option of selecting scheduled rate adjustments to the per acre zone rate and MW rate for an individual grant or lease, instead of following the process in the rule for periodic adjustments in response to changes in NASS values and wholesale market prices. Parallel revisions were made to section 2806.52 for grants and section 2806.54 for leases. These changes were made in response to comments received from the public and were designed to provide project proponents with the option to choose greater payment certainty over the life of a right-of-way grant or lease. Fmt 4701 19DER3 Sfmt 4700 E:\FR\FM\19DER3.SGM 92130 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued 43 CFR reference and description Changes between proposed rule and existing regulations Changes between final rule and proposed rule Additional comments 2806.52 through 2806.58 Provide data for rents and fees for solar energy projects. Sections 2806.50, 2806.52, 2806.54, 2806.56, and 2806.58 describe rents and fees for solar energy authorizations. 2806.60 through 2806.68 Provide data for rents and fees for wind energy projects. 2806.61—Scheduled Rate Adjustment. Sections 2806.60, 2806.62, 2806.64, 2806.66 and 2806.68 describe rents and fees for wind energy authorizations. The rule now allows for solar energy site testing. The calculation of the acreage rent has been expanded to explain the process more thoroughly. Acreage rent reductions are now adjusted to show greater rent reductions in certain States for solar energy rights-of-way. The changes to these sections parallel the changes in sections 2806.50 through 2806.58. The methodology of determining rents and fees for wind is the same as solar, except where noted in the preamble. Changes made in this section were based on comments received from the public and to be consistent with other changes in this final rule. Changes made in this section were made to be consistent with other changes in this final rule. These changes were made in response to comments received from the public and were designed to provide project proponents with an option to choose greater payment certainty over the life of a right-of-way grant or lease. 2806.70—Rent determinations for other rights-ofway. 2807.11—Contacting the BLM during operations. 2807.17—Grant suspensions or terminations. 2807.21—Assigning a grant or lease. Adds redesignated section 2806.70, which contains the text formerly found at section 2806.50, with minor modifications. Specifies requirements when a change in a right-of-way grant is warranted. Similar to the provisions of section 2806.51. This section gives wind project proponents the option of selecting scheduled rate adjustments to the per acre zone rate and MW rate for an individual grant or lease, instead of following the process in the rule for periodic adjustments in response to changes in NASS values and wholesale market prices. Parallel revisions were made to section 2806.62 for grants and section 2806.64 for leases. No changes were made from the proposed to the final rule. 2807.22—Renewing a grant. Revises the title to include leases and clarifies that if you apply for a renewal before it expires, your grant will not expire until a decision has been made on your renewal request. Existing language in this subpart redesignated as new paragraph (d) of section 2807.17. The title is changed to reflect that it now pertains to competitive leasing for solar or wind energy rights-of-way. This subpart is divided into several added sections as described below. Section 2809.10 provides for solar and wind energy leasing inside designated leasing areas. sradovich on DSK3GMQ082PROD with RULES3 Subpart 2809— Grants for Federal agencies. 2809.10—Competitive process for leasing public lands for solar and wind energy projects. 2809.11—Solicitation of nominations. VerDate Sep<11>2014 Not in the proposed rule; added to the final rule in response to comments received. This section is applicable to all rightsof-way that are not subject to rent schedules. No changes were made from the proposed to the final rule. This provision contains the regulation formerly located at section 2809.10. No changes were made from the proposed to the final rule. Revises the title to include leases and clarifies when an assignment is or is not required. Adds two events that may require an assignment. Clarifies that changing only a holder’s name does not constitute an assignment and explains how the BLM will process a change only to a holder’s name for a grant or lease. It also clarifies that ownership changes within the same corporate family do not constitute an assignment. No changes were made from the proposed to the final rule. Section 2809.11 describes how the BLM will solicit nominations for solar or wind energy development. 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00010 Changes made in this section were based on comments received from the public requesting clarity on assignments and name changes No changes were made from the proposed to the final rule. Clarifies that leases under this section generally have processing priority over grant applications to the extent they require the same BLM resources. No other changes were made from the proposed to the final rule. The requirement to publish in a newspaper is now optional instead of required. Changes made in this section were made to be consistent with other changes in this final rule. Fmt 4701 19DER3 Sfmt 4700 E:\FR\FM\19DER3.SGM This change is consistent with other notification requirements in the final rule. Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92131 TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued 43 CFR reference and description Changes between proposed rule and existing regulations Changes between final rule and proposed rule 2809.12—Parcel selection. 2809.13—Competitive offers for solar and wind energy development. 2809.14—Acceptable bids. Section 2809.12 describes how the BLM will select and prepare parcels. Section 2809.13 describes how the BLM will conduct a competitive offer for solar or wind energy development. No changes were made from the proposed to the final rule. A reference to lease mitigation requirements is added. The requirement to publish in a newspaper is now optional instead of required. Section 2809.14 describes the types of bids that the BLM will accept. 2809.15—How will BLM select the successful bidder?. 2809.16—Variable offsets. Section 2809.15 describes how the BLM will select a successful bidder. The words ‘‘and mitigation costs’’ were removed to be consistent with section 2804.30. No changes were made from the proposed to the final rule. Section 2809.16 identifies when variable offsets will be applied. Added a new offset factor for preparing draft biological strategies and plans. 2809.17—Rejection of bids. Section 2809.17 describes conditions when the BLM may reject bids or reconduct a competitive offer. Section 2809.18 identifies terms and conditions that will apply to leases. No changes were made from the proposed to the final rule. 2809.18—Lease terms and conditions. sradovich on DSK3GMQ082PROD with RULES3 2809.19—Applications made inside designated leasing areas. 2884.10—What needs to be done before filing an application for an oil or gas pipeline right-of-way?. 2884.11—Information submitted with application. 2884.12—Processing fees for an application or permit. 2884.16—Master Agreements. 2884.17—Processing Category 6 right-of-way applications. 2884.18—Competing applications for the same pipeline. 2884.20—Public notification requirements for an application. 2884.21—Application processing by the BLM. 2884.22—Additional information requirements. VerDate Sep<11>2014 Section 2809.19 describes situations when an application may be accepted inside a DLA. Paragraph (e)(2) of this section is changed so bond amounts for wind turbines reflect their nameplate capacity. Paragraph (e)(3) is added to this section to account for testing. This section is revised to clarify how the BLM will handle applications submitted inside DLAs. Additional comments The reference to mitigation was added in response to comments received from the public. The notification change is consistent with other notification requirements in the final rule Changes made in this section were made to be consistent with other changes in this final rule. Changes made in this section were based on comments received from the public on variable offset factors. These changes are consistent with changes to section 2805.20. The changes made in the final rule were made in response to comments and are intended to clarify the final rule. See the discussion in section 2804.10 of this preamble for additional information on changes made in response to comment. Adds a provision to this section that describes several additional steps, including pre-application meetings, to be taken if an application is for a pipeline 10 inches or more in diameter. Adds provision to be consistent with POD template development schedule and other requirements. Adds information on cost reimbursement requirements for work performed by other Federal agencies. The reference to pre-application meetings and additional requirements for pipelines greater than 10 inches were removed, resulting in no changes being made from the existing regulation. No changes were made from the proposed to the final rule. Adds information on cost reimbursement requirements for work performed by other Federal agencies. Adds discussions on right-of-way costs for work performed by other Federal agencies to this section. No changes were made from the proposed to the final rule. Adds discussions on right-of-way costs for work performed by other Federal agencies to this section. The requirement to publish in a newspaper is now optional instead of required. This change is consistent with other notification requirements of this final rule. Adds a provision to this section that we may put a notice on the Internet or use other forms of notification as deemed appropriate. The BLM will not process your application if you are in trespass. Several other minor changes were made to be consistent with other changes made in these regulations. No change was proposed for this section. The requirements to publish in a newspaper are now optional instead of required. This change is consistent with other notification requirements of this final rule. Changes are made to section 2884.21 consistent with those made to section 2807.21. Changes made in this section were made to be consistent with other changes in this final rule. This section was revised by changing the reference found in paragraph (a) from section 2804.25(b) to section 2804.25(c). This change was not proposed, but is made to be consistent with other changes in this final rule. No other changes were made to this section. Fmt 4701 19DER3 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00011 No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. Sfmt 4700 E:\FR\FM\19DER3.SGM 92132 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations TABLE 1—ABBREVIATED DESCRIPTIONS OF THE MAJOR CHANGES MADE TO 43 CFR PARTS 2800 AND 2880 BY THIS RULE—Continued 43 CFR reference and description 2884.23—When can my application be denied?. 2884.24—Fees owed if application is withdrawn or denied. Changes between proposed rule and existing regulations Changes between final rule and proposed rule To be consistent with section 2804.27, section 2884.23 was changed to state that the BLM may deny an application if the required POD fails to meet the development schedule and other requirements for oil and gas pipelines. Changes made to be consistent with section 2804.27, would require an applicant to pay any pre-application costs submitted under section 2884.10(b)(4). No changes were made from the proposed to the final rule. 2884.30—Showing of good cause. There was no section 2884.30 in proposed rule. 2885.11—Terms and conditions. This section makes reference to section 2805.12(b) (bond requirements for FLPMA authorizations) and makes those bonding requirements applicable to MLA rights-of-way. Also, the regulation will be clarified by providing guidance on terms of MLA grants. Clarifies that there is no reduction in rents for grants or TUPs, except as provided in section 2885.20(b). Requires making a payment for the initial partial year, along with the first years rent. Also, provides for multiple year payments. New paragraph (e) explains the circumstances under which the BLM would retroactively collect rents or fees. Provides information about where you may obtain a copy of the current rental schedule. Would remove an obsolete provision (existing paragraph (b)(1)) that provided for a 25 percent reduction in rent for calendar year 2009. Provides an updated table describing monitoring categories, but without the cost schedule. Paragraph (b) provides information about where to obtain a copy of the current monitoring cost schedule. Adds to this section, contact requirements for when there is a need for changes to a right-of-way grant and to correct discrepancies. Clarifies this section to show when an assignment is or is not required. 2885.15—Rental charges. 2885.16—When is rent paid?. 2885.17—Consequences for not paying or paying rent late. 2885.19—Rents for linear right-of-way grants. 2885.20—Per Acre Rent Schedule calculations. 2885.24—Monitoring fees. 2886.12—When you must contact the BLM during operations. 2887.11—Assigning a right-of-way grant or TUP. sradovich on DSK3GMQ082PROD with RULES3 2887.12—Renewing a grant. VerDate Sep<11>2014 Clarifies that if you apply for a renewal before it expires, your grant will not expire until a decision has been made on your renewal request. 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00012 Since pre-application meetings are no longer required in this final rule and additional requirements for pipelines greater than 10 inches were removed, the final rule does not make any changes to this existing provision. This section was added to be consistent with section 2804.40. Additional comments The revisions to this section suggested by the proposed rule are not included in the final rule based on comments received from the public on BLM’s criteria for large-scale pipeline projects. This section was added to be consistent with other changes in this final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. No changes were made from the proposed to the final rule. Minor revisions were made consistent with changes to section 2805.16. Changes made in this section were made to be consistent with other changes in this final rule. No changes were made from the proposed to the final rule. Adds two events that may require an assignment. Clarifies that a change in a holder’s name only does not constitute an assignment. No changes were made from the proposed to the final rule. These changes are made to be consistent with section 2807.21. Fmt 4701 19DER3 Sfmt 4700 E:\FR\FM\19DER3.SGM Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations III. Final Rule as Adopted and Responses to Comments General Comments by Topic sradovich on DSK3GMQ082PROD with RULES3 Competitive Process Comments A number of comments agreed with the BLM’s proposals to create a competitive process for solar and wind development. One comment stated that the proposed rule, if made final, would be a positive first step in improving the existing processes for solar and wind energy development by incentivizing development in appropriate areas, helping developers estimate costs, and providing a fair return to the taxpayer for the use of public lands. The BLM did not make any changes in response to this comment. Another comment, on the other hand, recommended that the BLM maintain its current pre-application and application processes rather than adding untested or unproven administrative processes to promote competition inside and outside of DLAs. The BLM notes that it has already successfully used competitive processes when authorizing renewable energy development and it continues to gain experience with competitive auctions. The BLM also intends to continue improving its solar and wind energy policies, including by building upon the provisions codified in this final rule, to reduce administrative timeframes and costs in order to support reasonable and responsible project development, such as those policies designed to further streamline application review and processing. Several comments provided statements on the use of a competitive process for issuing grants. One comment stated that we should clarify that the competitive bid process applies only to renewable energy authorizations. The BLM only agrees with this comment in part. In this final rule, the BLM has codified competitive processes inside of DLAs that relate only to solar and wind energy rights-ofway. However, the final rule modifies existing regulations so that those same competitive processes may also be used outside of DLAs and for other types of rights-of-way in the future, such as when they are necessary to resolve other situations where there are competing right-of-way and other land use authorization requests or when the BLM otherwise determines it is appropriate to initiate a competitive process for a particular use in a given area. Specifically, the final rule expands the BLM’s ability to initiate a competitive process for other rights-of-way relative to existing regulations. Should the BLM VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 hold a competitive offer for another type of right-of-way, it would be appropriate for the BLM to use processes similar to those developed for this rule because those policies were developed based on sound competitive principles. Therefore, utilizing them as a model in other areas would promote consistency across the agency. One comment stated that competitive leasing would both lengthen and complicate project siting, using the recent Dry Lake competitive offering in Nevada as an example, noting that the preparations for competition took years. The BLM believes that much of the work required for competitive leasing has already been completed for solar energy in the SEZs identified in the Western Solar Plan and other DLAs established by other planning efforts. The upfront work done when identifying these areas provides a basis for them to be offered under the most favorable competitive process provisions of this rule. That analysis also increases the certainty that the BLM will approve a project in those areas, which ultimately reduces the overall project review timeframes. The work done in establishing a DLA through the land use planning process, including completion of a NEPA analysis, provides a framework from which future project-specific analyses can tier, which should save time and money for both the BLM and project developers. Additionally, by expanding the circumstances under which the BLM can utilize competitive procedures the final rules provides a more direct path than was available to the BLM when setting up the Dry Lake SEZ sale in Nevada. To further support development in these areas, the BLM is also developing regional mitigation strategies for many of the identified SEZs. While the existence of a regional mitigation strategy is not a prerequisite for holding a competitive sale, the BLM believes that such strategies further clarify development requirements in a given area allowing auction participants to more carefully evaluate potential costs and requirements when formulating a project or a bid in advance of competitive sale. Collectively, these efforts and the provisions of this rule are consistent with existing policies to encourage the timely and responsible development of renewable energy while protecting the public land and its resources. One comment suggested that competition should be used only where there are multiple applications for use of the same land. While the BLM intends to use competition in those PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 92133 circumstances, it does not believe that is the only circumstances where such processes are appropriate. The existence of competition is not only indicated by competing application; in some situations competition would be determined where other evidence of competitive interests becomes known through emails, letters, and other contact with the public. As a result, the BLM does not believe it is appropriate to limit the use of competitive leasing regulations to just instances of competing applications. Instead, the provisions of this rule have been designed to provide more flexibility. The BLM is able to hold competitive offers inside DLAs, outside DLA, in response to competing applications, and on its own initiative, in order to encourage development in areas where it determines those processes to be appropriate, such as when it determines that fewer resource conflicts are present. In total, the BLM believes that the competitive processes established by this final rule will enable the BLM to encourage solar and wind energy development on public lands, while also protecting the sensitive resources found on those lands. Summary of Key Changes Between the Proposed and Final Rule One comment suggested that we use a table to identify technical changes, corrections, and clarifications being made to the right-of-way regulations by this rule, similar to the table we included in the preamble of the proposed rule. We agree and have included a similar table in this preamble. Pipeline and Transmission Line Comments Some comments questioned the BLM’s description of pipelines 10 inches or greater in diameter as a measure for large-scale pipeline projects and recommended the removal of additional processes such as mandatory pre-application meetings to facilitate Federal and State reviews of the project. Alternatives for the description of a large-scale project were suggested, such as using a total acreage of disturbance. In light of these comments, the BLM has decided to remove the description of large-scale pipelines and additional processes required for such projects from the final rule. While some comments included recommendations for alternative ways of determining a threshold for large-scale pipelines, the BLM decided that it must further analyze how it will identify large-scale pipelines before including requirements for such projects in its regulations. If the E:\FR\FM\19DER3.SGM 19DER3 92134 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 BLM were to take such action in the future it would coordinate with other Federal agencies, as appropriate, to identify an appropriate threshold for large-scale pipeline projects and establish consistent, non-duplicative requirements. The removal of the pipeline threshold from the final rule requires deletion of the requirements in the proposed rule that were specifically applicable to large-scale pipeline projects. A more detailed discussion of these revisions can be found in the relevant portions of the section-bysection analysis in this preamble (see sections 2804.10, 2884.10, and 2885.11 of this preamble). Some comments also questioned the BLM’s description of transmission lines with capacities of 100 kV or more as constituting large-scale transmission projects. Those commenters recommended the removal of that threshold and the associated requirements. Some comments suggested that there are no readily identifiable 100 kV transmission projects by which to determine if the proposed threshold is a fair representation of a large-scale project. The BLM does not agree with these comments and believes that the description is appropriate since there is a clear separation between lower voltage transmission lines, generally 69 kV or less, and high voltage transmission lines, beginning at 115 kV of capacity or more. For example, the North American Electric Reliability Corporation established the 100 kV threshold as a bright line criterion to determine which transmission lines are included in the Bulk Electric System, a system that is used by the Regional Reliability Organization for electric system reliability. The BLM is maintaining the description of transmission lines with capacity of 100 kV or the rule as a suitable description to determine largescale transmission projects. Megawatt Capacity Fee Comments Some comments argued that the BLM lacks authority to collect a MW capacity fee because the Federal Government does not own the sunlight or the wind, which are inexhaustible resources. While the BLM agrees that sunlight and wind are renewable resources present on the public lands, it does not agree that it lacks the authority to collect a fee for the use of such resources. Under FLPMA, the BLM is generally required to obtain fair market value for the use of the public lands and its resources, including for rights-of-way. In accordance with the BLM’s FLPMA authority and existing policies, the BLM has determined that the most VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 appropriate way to obtain fair market value is through the collection of multicomponent fee that comprises an acreage rent, a MW capacity fee, and, where applicable, a minimum and a bonus bid for lands offered competitively. The BLM determined that the collection of this multicomponent fee will ensure that the BLM obtains fair market value for the BLMauthorized uses of the public lands, including for solar and wind energy generation. The BLM notes that the MW capacity payments are best characterized as ‘‘fees’’ rather than ‘‘rent’’ because they reflect the commercial utilization value of the public’s resource, above and beyond the rural or agricultural value of the land in its unimproved state. In the BLM’s experience, and in accordance with generally accepted appraisal and valuation standards, the value of the public lands for solar or wind energy generation use depends on factors other than the acreage of the occupied land and that land’s unimproved value. Other key elements that add value include the solar insolation level, wind speed and density, proximity to demand for electricity, proximity to transmission lines, and the relative degree of resource conflicts that could inhibit solar or wind energy development. To account for these elements of land use value that are not intrinsic to the rural value of the lands in their unimproved state, the solar and wind right-of-way payments in this final rule incorporate ‘‘MW capacity fees’’ in addition to ‘‘acreage rent.’’ The use of a multi-component fee that comprises both an acreage rent and a MW capacity fee, and in some cases also a minimum and a bonus bid, achieves four important BLM objectives. First, the approach allows BLM to ensure that it is capturing the full fair market value of the land being encumbered by these projects. Second, the approach is consistent with the approach employed by the BLM for other uses of the public land (i.e., it ensures that our approach to acreage rent is consistent across various categories of public land uses, while mirroring the multi-component payments received from activities like oil and gas development where both rent and royalties are charged), ensuring consistency across users. Third, the approach encourages the efficient use of the public lands by reducing relative costs for comparable projects that take up less acreage. That is, for a project with a given MW capacity, the overall payments to the BLM will be lower if the project employs a more efficient technology that produces more MW per acre and thus encumbers fewer acres. PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 Fourth, the approach is consistent with existing policies governing the BLM’s renewable energy program, which have been in place since 2008. As explained in the section-by-section analysis in Section IV of this preamble, this final rule refines the calculation of the fee components (e.g., the MW capacity fee for solar is reduced relative to existing policies) but does not alter the basic multi-component fee structure for solar and wind projects on the public lands. The BLM’s multi-component fee structure also bears similarities to one of the more common structures for solar and wind energy development on private lands, where projects pay a rent for the use of an area of land at the outset and, and then a royalty on the power produced once generation commences. (The BLM recognizes that private-land projects use a variety of fee structures. For example, some projects rely solely on an acreage rent—but in those cases, the BLM believes that the increased value of the land due to project development is captured in other ways, such as by charging a higher base rent that reflects more than the land’s unimproved value.) The acreage rent charged by the BLM is analogous to the rent charged in most private land leases. With respect to the MW capacity fee, the BLM uses the approved electrical generation capacity as a component of the value of the use of the public lands for renewable energy development instead of relying on a royalty like private landowners do. On private lands, such royalties are typically assessed after-the-fact, as a percentage of the value of power actually produced, and the rate can range from 2 to 12 percent. The BLM has determined instead to charge a fee based on the installed nameplate MW capacity of an authorized wind or solar project. This approach is consistent with the BLM’s legal authority, including the direction in FLPMA that right-of-way holders ‘‘pay in advance’’ the fair market value for the use of the lands. The BLM considered charging a royalty, assessed as a percentage of power generated, but the FLPMA directive that right-of-way holders must ‘‘pay in advance’’ would require the BLM to collect any such royalty payments in advance of the corresponding power generation and then ‘‘true up’’ at the end of each calendar year. The BLM determined that the MW capacity fee approach in the final rule presents fewer administrative burdens and costs for both the BLM and right-of-way holders than an approach based on in-advance royalty payments followed by annual ‘‘true-ups.’’ The BLM worked with the Office of E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Valuation Services to compare its combined acreage rent and MW capacity fee against the total stream of payments from a similarly situated private land project to ensure the total payments collected by the BLM are comparable to those collected on private land. Finally, the BLM notes that in retaining the multi-component payment structure for solar or wind developments as separate ‘‘rent’’ and ‘‘fee’’ components as established under existing policy, the BLM is retaining its existing interpretation of how that multicomponent structure interfaces with the Rural Electrification Act (IM 2016–122). Under the final rule, consistent with existing policy, the acreage payment remains classified as ‘‘rent,’’ as it is directly tied to the area of public lands encumbered by the project and the constraints that the project imposes on other uses of the public lands. As noted, however, the MW capacity fee is more properly characterized as a ‘‘fee’’ because it reflects the commercial utilization value of the public’s resource, independent of the acreage encumbered. As specified under FLPMA, facilities that qualify for financing under the Rural Electrification Act may be exempt from paying ‘‘rental fees.’’ As explained in IM 2016–122, however, the BLM has determined that such facilities are not exempt from paying other components of the fair market value of the land, such as the MW capacity fee, minimum bid, bonus bid, or other administrative costs, as none of those costs are related to the rental value of the unimproved land. sradovich on DSK3GMQ082PROD with RULES3 Designated Leasing Areas Comments Several comments requested clarification about the differences between the competitive processes for lands inside and outside of a DLA. Other comments expressed confusion over whether certain requirements of the proposed rule would apply to both ‘‘grants’’ (authorizations issued under subpart 2804 for solar and wind energy development) and ‘‘leases’’ (authorizations issued under subpart 2809). The BLM has expanded multiple provisions in the final rule to clarify the requirements for solar and wind energy development grants and leases, including those relating to competitive processes, rents and fees, bonding, and due diligence. Comments Beyond the Scope of the Proposed Rule In addition to the general comments discussed above and the more specific ones discussed in the section-by-section portion of this preamble below, the BLM received many other comments that VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 92135 suggested revisions to the BLMs rightof-way regulations that were beyond the scope of the proposed rule and/or that are better suited for supplemental policy guidance of the type found in BLM manuals, handbooks, or IMs. The BLM did not make any changes to the proposed rule in light of these comments. However, they are discussed in the relevant portions of the sectionby-section analysis of this preamble. as section 2807.17(d), while revised subpart 2809 is now devoted to solar and wind energy development in DLAs. This rule also amends parts 2800 and 2880 to clarify the BLM’s administrative procedures used to process right-of-way grants and leases. These clarifications ensure uniform application of the BLM’s procedures and requirements. A more in-depth discussion of the comments and changes made is provided below. Additional Comments on the Rule During the preparation of this final rule, the BLM received additional comments from various stakeholders and other interested parties following the close of the comment period and participated in additional stakeholder engagement meetings as part of the BLM’s regular course of business. During those meetings and in those comments, stakeholders provided additional information clarifying the concerns, comments, and questions they had previously raised through written comments on the proposed rule. The BLM considered this additional information during the drafting of this final rule. This additional information is addressed in the relevant section-bysection discussion of this preamble. For example, industry stakeholders provided additional information that was previously unavailable regarding their uncertainty, under the proposed rule, about how both acreage rent and MW capacity fee payments would increase over the life of a lease or grant, and particularly their concern that such rents and fees could increase in an unpredictable manner. These comments and the BLM’s responses are discussed further in sections 2806.51 and 2806.61 of this preamble. Industry stakeholders also raised concern over the factors that the BLM considers when determining a bond amount. This comment and the BLM’s response are discussed further under sections 2805.12(e)(1) and 2805.20(a)(3). Environmental stakeholders also provided additional substantive discussion of their comments. Specifically, they requested additional detail in the final rule explaining the evaluation criteria that the BLM uses when establishing DLAs going forward. The environmental stakeholders’ comment and the BLM’s response are discussed further in section 2802.11 of this preamble. Subpart 2801—General Information IV. Section-by-Section Analysis for Part 2800 This rule makes the following changes in part 2800. The language found at section 2809.10 of the existing regulations is revised and redesignated PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 Section 2801.5 What acronyms and terms are used in these regulations? This section contains the acronyms and defines the terms that are used in these regulations. Several comments suggested changes to the proposed rule. These suggestions and comments are analyzed under the applicable definition contained in the final rule. The following terms are added to the definitions in section 2801.5: ‘‘Acreage rent’’ is a new term that means rent assessed for solar and wind energy development grants and leases that is determined by the number of acres authorized by the grant or lease. The acreage rent is calculated by multiplying the number of acres (rounded up to the nearest tenth of an acre) within the authorized area times the per acre zone rate in effect at the time the authorization is issued. Provisions addressing adjustments in the acreage rent are found in sections 2806.52, 2806.54, 2806.62, and 2806.64. An example of how to calculate acreage rent is discussed in this preamble in the section-by-section analysis of section 2806.52(a). No comments pertaining to this definition were received and no changes are made from the proposed to the final rule. ‘‘Application filing fee’’ is a new term that means a filing fee specific to solar and wind energy right-of-way applications for the initial reasonable costs for processing, inspecting, and monitoring a right-of-way. The fee is $15 per acre for solar and wind energy development applications and $2 per acre for energy project-area testing applications. The BLM will adjust the application filing fee once every 10 years to account for inflation. Further discussion of application filing fees can be found in section 2804.12. This definition is revised for consistency with comments received on sections 2804.12 and 2804.30 on application filing fees. See those respective sections of this preamble for further discussion. No other comments were received and no other change is made from the proposed rule to the final rule concerning this definition. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92136 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations ‘‘Assignment’’ means the transfer, in whole or in part, of any right or interest in a right-of-way grant or lease from the holder (assignor) to a subsequent party (assignee) with the BLM’s written approval. The rule adds this definition to section 2801.5 to help clarify regulations. A more detailed explanation of assignments and the changes made is found under section 2807.21. Although some comments were received pertaining to assignments, as discussed later in this preamble, none of them pertain to the definition. No change is made from the proposed to the final rule concerning this definition. ‘‘Designated leasing area’’ (DLA) is a new term that means a parcel of land with specific boundaries identified by the BLM’s land use planning process as being a preferred location for the leasing of public lands for solar or wind energy development via a competitive offer. Examples of DLAs for solar energy include SEZs designated through the Western Solar Plan; Renewable Energy Development Areas (REDAs) designated through the BLM Arizona Restoration Design Energy Project (REDP) planning process; and Development Focus Areas (DFAs) designated through BLM’s California’s Desert Renewable Energy Conservation Plan (DRECP) planning process. The competitive offer process is discussed in subpart 2809 of this preamble. Further discussion of DLAs can be found under section 2802.11 of this preamble. Comments: Some comments recommended that the definition of DLA should indicate criteria that must be met to designate a DLA, in particular, wind energy-specific DLAs. The comment also suggested the final rule include criteria to identify right-of-way exclusion and avoidance areas. Other comments stated a similar concern, and indicated that land use planning varies by BLM State or field office, so DLA standards should be developed. Response: The BLM considered establishing standard criteria for DLAs as well as for exclusion and avoidance areas, but this approach is not carried forward in the final rule. Doing so could unintentionally limit the BLM’s management of such lands when considering the varied landscapes and resources that the BLM manages. However, the BLM intends to establish guidance, as part of the implementation of this rule, to assist the BLM in establishing DLAs, such as wind energy sites, through its land use planning processes. Further discussion on this issue is found under section 2804.31 of this preamble. Comments: Some comments stated that identifying new DLAs through land VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 use planning was too time consuming, and therefore DLA designation should be a separate process. Response: Many land use planning efforts take several years to complete and consider many resources and uses in addition to solar or wind energy development. These types of land use planning efforts would not consider a specific project, but instead the effect of such developments in the planning area, and inform the BLM if the lands should be an exclusion or avoidance area, or identified as a DLA for solar or wind energy development. Although the BLM’s land use planning process may be time consuming, it is necessary for the BLM in its orderly administration of the public lands to use this process to properly protect and manage the public lands. When amending a resource management plan, the BLM must be consistent with its planning regulations (see 43 CFR part 1600). Absent a larger planning effort underway for the same planning area, the BLM could use a targeted land use plan amendment to identify a designated leasing area. In such cases, the land use planning process may be less time consuming than suggested by commenters. For further discussion, please see section 2804.31 of this preamble. No specific changes were made in response to this comment. In addition to the amendments to section 2804.31, the BLM has begun its Planning 2.0 initiative, which is aimed at improving the BLM’s planning process. This initiative includes targeted revisions to the planning regulations (see 43 CFR part 1600) and land use planning handbook, in order to improve the BLM’s use of Resource Management Plans, which guide the BLM’s administration of the public lands. The Planning 2.0 initiative will help the BLM to conduct effective planning across landscapes at multiple scales, create more dynamic and efficient planning processes that are responsive to change, and provide new and enhanced opportunities for collaboration with the public and partners. You can find further information on the BLM’s Planning 2.0 initiative at the following Web site https://www.blm.gov/wo/st/en/prog/ planning/planning_overview/planning_ 2_0.html. Comment: A comment recommended that the BLM use one consistent definition to ensure that DLAs represent areas of fewer resource conflicts for solar and wind energy development. Response: Because of the many variables that the BLM must consider when designating a DLA, the definition provided is intentionally broad and PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 identifies a DLA as a preferred location for development that may be offered competitively. This definition allows the BLM to identify such areas in land use planning processes using planspecific criteria to best identify the area. However, we are modifying the definition by removing the example of solar energy zones that was cited in the proposed rule in order to eliminate potential confusion about the future identification of additional DLAs, which may not be identified in the same manner as the solar energy zones. No other comments were received concerning this definition. ‘‘Designated right-of-way corridor’’ is a term that is defined in existing regulations. The word ‘‘linear’’ has been added to this definition in the final rule to distinguish between these corridors and DLAs. No comments were received concerning this definition change and no changes are made from the proposed rule to the final rule. ‘‘Management overhead costs’’ is defined in existing regulations as Federal expenditures associated with the BLM. This definition has been expanded in the final rule to include other Federal agencies. This revision is consistent with Secretarial Order 3327 and will help to promote effective cost reimbursement. Under Sections 304(b) and 504(g) of FLPMA, the Secretary may require payments intended to reimburse the United States for its reasonable costs with respect to applications and other documents relating to public lands. Secretarial Order 3327 delegated the Secretary’s authority under FLPMA to receive reimbursable payments to the bureaus and offices of the Department. No comments were received pertaining to this definition change, and no revisions were made from the proposed rule to the final rule. ‘‘Megawatt capacity fee’’ is a new term meaning the fee paid in addition to the acreage rent for solar and wind development grants and leases based on the approved MW capacity of the solar or wind authorization. The MW capacity fee is calculated based on the MW capacity for an approved solar or wind energy project authorized by the BLM. Examples of how MW capacity fees are calculated may be found after the discussion of section 2806.56. While the acreage rent reflects the value of the land itself in its unimproved state, the MW capacity fee reflects the value of the industrial use of the property to generate electricity. Specifically, it captures the additional value of public land used for solar and wind energy generation that are not reflected in the NASS land values. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations The BLM revised the definition of MW capacity fee from the proposed to final rule to clarify that the MW capacity fee is calculated for staged developments by multiplying the MW rate by the approved MW capacity for each stage of development. The proposed rule stated that the MW rate would be multiplied to the approved stage of development, but did not specify that it was the approved MW capacity for the stage of development. The BLM made this revision to help improve the public’s understanding of the MW capacity fee calculation for staged developments. Comment: One comment acknowledged that fair market value can be determined by using a competitive process and agreed with the proposed rule’s approach of using a competitive process to authorize solar and wind energy development on public lands. The comment went on to express a preference for a system that includes the payment of a royalty fee for the use of commercial power facilities on public lands. Response: As explained above, the BLM has established through existing policy, and now by this rule, a multicomponent structure for obtaining fair market value from renewable energy development. Since FLPMA directs right-of-way holders ‘‘to pay in advance the fair market value’’ for the use of the public lands, subject to certain exceptions (43 U.S.C. 1764(g)), the BLM’s existing regulations governing the use of public lands, under Title V of FLPMA, generally require the prepayment of annual rent and fees in amounts determined by the BLM. This requirement is carried forward in existing guidance governing acreage rent and MW capacity fees for wind and solar energy projects and was selected in lieu of other means of obtaining fair market value. Consistent with the BLM’s authority under FLPMA, its existing policies, and the proposed rule, the BLM has determined that it will continue to charge in advance both an acreage rent and a MW capacity fee for solar and wind energy projects, as a means of obtaining fair market value for those projects. Given that FLPMA requires payment in advance, the BLM has determined it is appropriate to base that the MW capacity fee on rated MW capacity as opposed to actual generation. In instances where competitive processes are utilized, any minimum and bonus bids represent an additional component of fair market value on top of the annual acreage rent and MW capacity. No other comments were received on the proposed definition of MW capacity fee, and no VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 changes to the definition were made in this final rule. ‘‘Megawatt rate’’ is a new term that means the price of each MW for various solar and wind energy technologies as determined by the MW rate schedule. The MW rate equals the (1) the net capacity factor multiplied by (2) the MW per hour (MWh) price multiplied by (3) the rate of return multiplied by (4) the total number of hours per year where: 1. The ‘‘net capacity factor’’ means the average operational time divided by the average potential operational time of a solar or wind energy development, multiplied by the current technology efficiency rates. This rule establishes net capacity factors for different technology types, but the BLM may determine a different net capacity factor to be more appropriate, on a case-by-case or regional basis, to reflect changes in technology, such as a solar or wind project that employs energy storage technologies, or if a grant or lease holder or applicant is able to demonstrate that a different net capacity factor is more appropriate for a particular project design, layout, or location. The default net capacity factor for each technology type is: a. Photovoltaic (PV) = 20 percent; b. Concentrated photovoltaic (CVP) and concentrated solar power (CSP) = 25 percent; c. CSP with storage capacity of 3 hours or more = 30 percent; and d. Wind energy = 35 percent. Comments: Several comments were received concerning the definition and description of net capacity factor. One comment stated that the net capacity factors should not be specified in the proposed rule for CSP projects, as they will undoubtedly increase over time with technology improvements and be updated on a regular basis, in a similar manner as rents. CSP can be designed to operate from a range of 10 to 50 percent efficiency depending on the intended use of the facility (e.g., base load or peaker plant). Another comment recommended using an estimate of the capacity factor identified in the POD and the plant’s design as the basis for this calculation. Response: The BLM recognizes that there may be technology improvements over time, and that there are variables which may affect a specific project’s net capacity factor. For example, a CSP project may be designed to operate at lower or higher efficiency rate depending on its intended use. The BLM took this into account in determining the net capacity factor of the technologies for the final rule. Future rulemaking would be required to PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 92137 change the established net capacity factors for each technology. The BLM will not incorporate the recommendation to use the project owner’s estimate of the capacity factor in the POD to calculate its MW capacity fee. The estimated net capacity factor in a POD would be specific to a particular project, but would be a subjective value that could be inaccurate or misleading. Incorporating the methodology suggested by the comment could raise questions as to whether the BLM was truly collecting a reasonable return for use of the public lands. However, the BLM has revised the final rule, consistent with this comment and those comments submitted regarding storage technologies, to allow the BLM to determine another net capacity factor to be more appropriate on a case-by-case basis. The BLM could determine another net capacity factor to be more appropriate when there is a change in technology, such as when a project employs energy storage technologies. Determining another net capacity factor may also be appropriate if a project uses a more current version of a technology. Comment: Another comment agreed with the BLM’s proposal to use an average net capacity factor for wind energy projects. However, the comment recommended using a net capacity factor of 26 percent as identified in the wind capacity factor for Western States (see the Department of Energy’s 2013 Wind Technologies Report) instead of the national average wind capacity factor of 35 percent. Response: While the BLM acknowledges that most solar and wind projects on public lands will be located in the western United States, it nevertheless elected to use the national averages in calculating the net capacity factors for both solar and wind projects, because the BLM believes those values are more representative of the technology that will be deployed on projects developed in the future. The net capacity factor for a given project is greatly influenced by project design, layout, and location. The national average reflects a larger set of projects than the regional average, and is therefore more representative of the full range of older and newer technologies currently sited on public lands. With respect to the wind capacity factor in particular, the BLM reviewed data from the Department of Energy’s 2014 and 2015 Wind Technology Reports (https://emp.lbl.gov/sites/all/ files/lbnl-188167.pdf and https:// emp.lbl.gov/sites/all/files/2015windtechreport.final.pdf, respectively). Based on its review of that data, the E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92138 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations BLM determined that its selection of a 35 percent capacity factor for wind was appropriate for several reasons. First, the geographic scope of the lands included in the ‘‘West Region’’ of the Department of Energy’s reports does not adequately capture the full extent of BLM lands. Using the geographic distribution classifications set by the Department of Energy, BLM lands are located in both the ‘‘West’’ and ‘‘Interior’’ regions, with 7 states in the West and 4 states in the Interior (Colorado, Montana, New Mexico, and Wyoming). It should also be noted that the four BLM states in the Interior region possess significant wind energy development potential. Accordingly, the BLM believes it is reasonable to select a wind capacity factor between the values for the West and Interior. In the Interior Region the Department of Energy reported capacity factors of 41.2 percent and 42.7 percent in 2014 and 2015, respectively. Data from the 2014 report shows that while the average capacity factor in the West was 27 percent, there was considerable spread in the factors by project, from just below 20 percent to over 37 percent. In the Interior, the spread in capacity factors was from 26 percent to 52 percent. Thirty-five percent represents a reasonable average of these very disparate, project-specific capacity factors. In addition to looking at capacity factors regionally, the Department of Energy’s analysis also controlled for wind quality. Notably, the Department of Energy determined that even in low wind quality areas, which predominate in the West, new projects achieve 35 percent capacity factors. As explained in the reports, this analysis was based on wind turbine specific power, which is the ratio of a turbine’s nameplate capacity rating to its rotor-swept area. All else being equal, a decline in specific power leads to an increase in capacity factor according to the analysis presented in the report. In general, since the wind industry is shifting towards deploying lower specific power wind turbines at new wind energy projects across the United States, the BLM believes it is reasonable to select 35 percent as the default capacity factor for a wind project in the final rule. It should also be noted that the BLM considered basing the net capacity factors for these technologies on an average of the annual capacity factors posted by the Energy Information Administration (EIA) on its Web site at: https://www.eia.gov/electricity/monthly/ epm_table_grapher.cfm?t=epmt_6_07_b. However, the BLM is not carrying this approach forward in the final rule VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 because, as discussed earlier in the preamble regarding net capacity factors, we believe that the 35 percent capacity factor better represents the technologies that will be deployed on projects developed in the future. For this reason, the BLM determined that the EIA annual capacity factors are not appropriate for use in this rule. Finally, the BLM notes that if an applicant or a grant or lease holder believes that the BLM’s net capacity factor is set too high for a particular project, the project proponent can request that the BLM use an alternative net capacity factor when setting the MW capacity rate for the project. Such a request would be made as described under section 2804.40 for applicants or section 2805.12(e) for grant or lease holders. See the section-by-section portion of this preamble for further discussion of requests for alternative requirements. No other comments were received, and the definition of ‘‘net capacity factor’’ was not changed from the proposed to the final rule as result of this comment. 2. The ‘‘MWh price’’ equals the 5 calendar-year 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 (see sections 2806.52(b) and 2806.62(b)). Comment: One comment believed that rent and fee calculations may be inaccurate based on inaccurate determinations of the capacity factor and the wholesale price of electricity used in the formula. In the proposed rule, the BLM specified the Intercontinental Exchange (ICE) as the source of data for the wholesale price data. Response: As discussed under section 2806.52 for MW capacity fee, ICE was removed as the only vendor for the wholesale data. We revised this definition to account for appropriate wholesale data without limiting it by source. This will allow the BLM to use the best information available, should a company that tracks trading hubs fail to maintain accurate or reliable trade information. No other comments were received concerning this definition. 3. The ‘‘rate of return’’ is the relationship of income to the property owner (or, in this case, the United States) to the revenue generated from authorized solar and wind energy development facilities, based on the 10year average of the 20-year U.S. Treasury bond yield, rounded to the nearest one-tenth percent. Comment: One comment believed that the BLM should use a 5-year average, PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 not a 10-year average, eliminate the 4 percent minimum, and consider rounding down or not at all. Response: The BLM disagrees with the suggestion to use a 5-year average. A 10-year average of the 20-year Treasury bond rate provides a more stable rate of return and will benefit the holder when interest rates rise. Under the same concept, this would benefit the BLM when interest rates decline, as is the case in the current cycle. The BLM also disagrees that it should eliminate a 4 percent minimum rate of return, considering the risk of energy development projects and the fluctuation of energy commodity prices. It is not uncommon for private parties to insist on a minimum return. The 4 percent minimum rate of return recognizes a grant or lease holder’s risk of projects that have other financial safeguards in place, such as performance bonds. The minimum is at the lower end of similar rates in the private sector. The 4 percent minimum rate of return is established for solar energy in section 2806.52(b)(3)(ii) and for wind energy in section 2806.62(b)(3)(ii). The minimum is not included in the definitions section of this final rule because setting the minimum is a substantive regulatory provision. This is not a change from the proposed rule. No changes are made in this final rule from the proposed rule regarding the rate of return in the definitions section (section 2801.5) or in the specific solar (section 2806.52(b)(3)(ii)) or wind (section 2806.62(b)(3)(ii)) provisions. With respect to rounding, the BLM did agree that it should revisit the proposed rule’s approach. While it does not agree with the commenter’s suggestion that it should always round down, the BLM did determine upon further review that it should round bond yields to the nearest tenth of a percent to avoid a rounding-based surcharge. 4. The number of hours per year is a fixed number (i.e., 8,760 hours, the total number of hours in a 365-day year). No comments were received on the definition of this term and no changes are made to this definition from the proposed rule to the final rule. ‘‘Performance and reclamation bond’’ is a new term that means the document provided by the holder of a right-of-way grant or lease that provides the appropriate financial guarantees, including cash, to cover potential liabilities or specific requirements identified by the BLM. This term is defined here to clarify the expectations of what a bond accomplishes. The definition also explains which instruments are or are not acceptable. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Acceptable bond instruments include cash, cashiers or certified checks, certificate or book entry deposits, negotiable U.S. Treasury securities, surety bonds from the approved list of sureties, and irrevocable letters of credit. The BLM will not accept a corporate guarantee. These provisions codify the BLM’s existing procedures and practices. Comment: A comment suggested adding the words ‘‘certificate of insurance or other acceptable security’’ to each of these paragraphs in appropriate places. Response: The BLM believes that adding the comment’s suggestion to the text of the rule is unnecessary, as the definition of acceptable bond instruments includes insurance policies and does not need to be expanded to include a specific form of insurance. Furthermore, the list of bond instruments that are acceptable is not an all-inclusive list. There may be other forms of bond instruments, but they are not specified in the rule as they are not as common a form of bond as those identified. If we had intended the bond list to be an all-inclusive list we may have unintentionally excluded an acceptable bond instrument. No other comments were received and no changes to this definition were made from the proposed rule to the final rule. ‘‘Reclamation cost estimate (RCE)’’ is a new term that means the report used by the BLM to estimate the costs to restore the intensive land uses on the right-of-way to a condition that would support pre-disturbance land uses. The BLM revised this definition from the proposed to final rule to clarify that the reclamation work described must meet the BLM’s requirements. This change is important because the BLM is required to protect the public lands and must determine if the reclamation work done by the holder is acceptable. No comments were received on the definition of this term and no other changes are made from the proposed to the final rule. ‘‘Right-of-way’’ is defined in existing regulations as the public lands the BLM authorizes a holder to use or occupy under a grant. The revised definition describes the authorizing instrument for use of the public lands as ‘‘a particular grant or lease.’’ No comments were received on the definition of this term and no changes are made from the proposed to the final rule. ‘‘Screening criteria for solar and wind energy development’’ is a term referring to the policies and procedures that the BLM uses to prioritize how it processes solar and wind energy development right-of-way applications outside of VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 DLAs. Some examples of screening criteria are: 1. Applications filed for areas specifically identified for solar or wind energy development, other than DLAs; 2. Previously disturbed areas or areas located adjacent to previously disturbed areas; 3. Lands currently designated as Visual Resource Management (VRM) Class IV; and 4. Lands identified for disposal in a BLM land use plan. Screening criteria for solar and wind energy development were previously established by policy through IM 2011– 61, and are further discussed in section 2804.25(d)(2) and section 2804.35 of this rule. The IM may be found at: https://www.blm.gov/wo/st/en/prog/ energy/renewable_energy.html. No changes were made from the proposed rule to the final rule, nor were any comments received pertaining to this definition. However, there are several comments made on the specific screening criteria proposed that are addressed later in the section-by-section analysis of these criteria. ‘‘Short term right-of-way grant’’ is a new term meaning any grant issued for a term of 3 years or less for such uses as storage sites, construction sites, and short-term site testing and monitoring activities. The holder may find the area unsuitable for development or the BLM may determine that a resource conflict exists in the area. No comments were received and no changes are made from the proposed rule to the final rule. Section 2801.6 Scope The scope in 43 CFR part 2800 clarifies that the regulations in this part apply to all systems and facilities identified under section 2801.9(a). No comments were received and no changes are made from the proposed rule to the final rule on this provision. Section 2801.9 grant? When do I need a Section 2801.9 explains when a grant or lease is required for systems or facilities located on public lands. In section 2801.9(a)(4), the term ‘‘systems for generation, transmission, and distribution of electricity’’ is expanded to include solar and wind energy development facilities and associated short-term authorizations. Language is also added to section 2801.9(a)(7) to allow any temporary or short-term surface-disturbing activities associated with any of the systems described in this section. A new paragraph (d) is added to specifically describe the types of authorizations required for various PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 92139 components of solar and wind energy development projects. These are: 1. Short term authorizations (term to not exceed 3 years); 2. Long term right-of-way grants (up to 30 years); and 3. Solar and wind energy development leases (30 years). This paragraph also identifies the type of authorizations issued for solar and wind projects depending on whether they are located inside or outside of DLAs. Authorizations for solar or wind energy development outside a DLA, or authorizations issued non-competitively within a DLA, will be issued under subpart 2804 as right-of-way grants for a term of up to 30 years. Authorizations within a DLA will be issued under subpart 2809 as right-of-way leases for a term of 30 years. Comments: Some comments were received requesting that the site-specific and project-area testing authorizations be made available for solar energy. A comment further suggested that section 2801.9 be revised so that the authorization types would be listed in the order in which actions are taken to develop a project. Response: The BLM revised this section, in response to the comment, by removing the specific references to ‘‘wind.’’ As a result, the testing provisions apply to both solar and wind energy. The BLM also revised this section to reflect the order in which actions are taken to develop a project. The ‘‘other appropriate actions’’ listed under paragraph (d)(3) of this section in the proposed rule are moved to paragraph (d)(5) of this section in the final rule. Paragraphs (d)(4) and (5) of this section in the proposed rule are now paragraphs (d)(3) and (4) of this section, respectively. Subpart 2802—Lands Available for FLPMA Grants Section 2802.11 How does the BLM designate right-of-way corridors and designated leasing areas? Section 2802.11, which explains how the BLM designates right-of-way corridors, is revised to include DLAs. Under this rule, the BLM will identify DLAs as preferred areas for solar or wind energy development, based on a high potential for energy development and lesser resource impacts. This section provides the factors the BLM considers when determining which lands may be suitable for right-of-way corridors or DLAs. These factors are unchanged from the existing regulations. This final rule amends paragraphs (a), (b) introductory text, E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92140 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (b)(3), (4), (6), and (7) and (d) of section 2802.11 to include references to DLAs. Comment: One recommendation was made suggesting that the BLM make it clear that we will not accept applications in areas that are closed to development by means of land use plans or other mechanisms. Response: The comment’s recommendation is addressed in the existing rule at section 2802.10(a). This section clarifies that some lands are not available for a right-of-way grant, which includes those lands that the BLM identifies through the land use planning process as inappropriate for rights-ofway, as well as public land orders, statutes, and regulations that exclude rights-of-way, and lands segregated from application. Comment: One comment stated that DLAs are created through the BLM’s resource management planning process, but that such plans are changed only every 15 to 20 years. Also, many plans are undergoing or have recently undergone such changes, especially in areas having sage-grouse habitat, but those plans do not designate any DLAs. Response: Due to the timing of the comment submission and the BLM’s response, the plans noted in this comment have been finalized and the BLM decisions are issued. The Greater Sage-Grouse Plan Amendments and Revisions did not designate any DLAs. These plans are focused on conservation of the Greater Sage-Grouse and its habitat. The decisions issued in these plans safeguard primary and general habitat from the impacts of development, including solar and wind energy. However, the BLM may have an opportunity to designate some areas for wind energy development using recent analyses or information that identifies areas suitable for energy development on public lands. Examples of such areas may be those identified as not having significant resource and use siting concerns, as identified in the BLM’s wind mapper. The wind mapper is a BLM web-based geographic data viewer, found at https://wwmp.anl.gov, that has up-to-date geographic information representing the BLM’s land use planning decisions for administering public lands and other pertinent regulatory information, specific to wind energy resources. Using information on the wind mapper, a targeted land use plan amendment may be completed more expeditiously than the 15 to 20 years discussed in this comment. Comment: Another comment suggested that we consider developing a generic EIS process suitable to all prospective solar and wind leases, VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 coupled with a specific discussion of variations between areas. Also, the comment suggested that we should automate the EIS process to leverage existing GIS and satellite data whenever possible. Response: Although worth considering, this concept is outside the scope of this rule, which is focused on the administrative process of solar and wind energy rights-of-way and competitive processes. However, the BLM plans to evaluate its NEPA process and promote automation of the process where possible. Until that time, the BLM will designate such areas through its existing land use planning process. Comment: Another comment states that the designation of DLAs will waste taxpayers’ money and impede development. The cost to the public for the BLM to designate a DLA will not be fully recaptured and the DLA will not provide any additional value to the public through the competitive process. Response: Costs for the preparation of DLAs will be recaptured at the competitive bidding stage as the administrative costs will be paid by the successful bidder. As demonstrated by the BLM’s recent competitive actions for solar energy, there is a monetary return to the public for auctions of parcels within renewable energy development areas. Comment: During stakeholder engagement meetings, environmental stakeholders expanded on their comment on the definition of ‘‘designated leasing area.’’ The stakeholders suggested that the BLM should not only revise the definition of DLA to include additional specific criteria, but also make changes to section 2802.11 to specify that the BLM consider those criteria when designating DLAs. The stakeholders also recommended that the BLM consider sensitive environmental resources when evaluating potential DLAs. Response: The BLM considered adding additional criteria to section 2802.11 that would be considered when the BLM evaluates an area for inclusion in a DLA, but it ultimately made no changes in the final rule. The existing regulations in section 2802.11(b) already explain in great detail what the BLM considers when making a DLA designation. Adding an undefined term, ‘‘sensitive environmental resources,’’ could unintentionally limit the BLM’s management of public lands when considering the varied landscapes and resources that are found there. Furthermore, consideration of sensitive resources is already addressed in section 2802.11(b)(2), which requires the BLM to consider ‘‘environmental PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 impacts on cultural resources and natural resources, including air, water, soil, fish, wildlife, and vegetation.’’ While the BLM did not make any changes to the final rule in response to this comment, it should be noted that the BLM intends to establish guidance, as part of the implementation of this rule, to assist the BLM in establishing DLAs through its land use planning processes. The implementing guidance will allow the BLM to be more specific for these areas without unintentionally limiting itself, and maintain the BLM’s flexibility to make any necessary adjustments to the process for evaluating potential DLAs across the varied landscapes that it manages. Subpart 2804—Applying for FLPMA Grants Section 2804.10 What should I do before I file my application? Existing section 2804.10 encourages prospective applicants for a right-of-way grant to schedule and hold a preapplication meeting. Under this final rule, section 2804.10 continues to encourage such meetings regarding some right-of-way grants, and under paragraph (a)(2), would now identify DLAs along with right-of-way corridors as a point of discussion for these meetings if held. Under existing section 2804.10(a)(2), the BLM determines if your application is on BLM land within a right-of-way corridor. This revised paragraph now includes ‘‘or a designated leasing area.’’ The BLM generally will not accept applications for grants on lands inside DLAs. The BLM will offer lands inside DLAs competitively through the process described in subpart 2809, which does not involve submitting an application. The BLM will only accept applications on lands inside DLAs in limited circumstances (see section 2809.19(c) and (d)). The BLM proposed amending paragraphs (a) introductory text and (a)(2) and (4), and also adding two new paragraphs that would apply to any solar or wind energy project, transmission line with a capacity of 100 kV or more, or pipeline 10 inches or more in diameter. For these types of projects, the BLM proposed mandatory pre-application meetings. Proposed amendments for paragraphs (a) introductory text and (a)(4) are not included in the final rule, since preapplication meetings will not be required and specific requirements associated with them are no longer necessary. Paragraph (b) of the existing regulations will not be redesignated and there will be no new paragraphs (b) and E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 (c) in this final rule. The only changes to section 2804.10 in the final rule are found in paragraph (a)(2). Under this final rule, pre-application meetings will not be required for solar and wind energy developments, or any transmission line with a capacity of 100 kV or more. Instead, the BLM will require what we term ‘‘preliminary application review meetings’’ that will be held after an application for a rightof-way has been filed with the BLM. These meetings will fall under the BLM’s cost recovery authority for processing applications and are discussed in greater detail under section 2804.12. Based on comments received, no requirements for pipelines 10 inches or more in diameter are carried forward into the final rule. Section 2804.12 What must I do when submitting my application? In this final rule, section 2804.12 has been retitled from ‘‘What information must I submit in my application?’’ to ‘‘What must I do when submitting my application?’’. Relocation of the early coordination meeting requirements to this section has resulted in revisions to this section that would make the previous title misleading. As revised, section 2804.12 requires that an applicant must provide specific information, and in the case of solar or wind energy development projects and transmission line projects with a capacity of 100 kV or more, must also complete certain actions when initially submitting an application. The last sentence in section 2804.12(a) is revised to show that a completed application must include all of the items identified in section 2804.12(a)(1) through (8). The text of paragraphs (a)(1) through (7) are republished without amendment, and new paragraph (a)(8) is added. Comments: Several comments were submitted regarding the BLM’s proposed pre-application requirements for solar and wind energy development and transmission lines with a capacity of 100 kV or more. Comments suggested that the BLM could not place requirements on a developer prior to an application being submitted to the BLM. This general comment was focused on two aspects of the BLM’s proposed requirement for pre-application meetings. The first aspect was that the BLM was requiring that two preapplication meetings be completed prior to a developer submitting an application for a solar or wind energy development project or transmission line with a capacity of 100 kV or more. The second aspect of concern was that the BLM would require the developer to pay cost VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 recovery for the required preapplication meetings. Under the proposed rule, the BLM would have required both of these prior to submission of an application for use of the public lands. Response: The intent of the premeeting requirements is to ensure early coordination with the developer and other Federal, State, and tribal governments to gather information to better inform the developer of different considerations to be made if pursuing their project on BLM-administered lands. Considerations would include existing uses, environmental resources, and cultural or tribal values in the area of the proposed project. Pre-application meetings are currently required by the BLM’s policy. Discussing a proposed project with a developer early on has demonstrated an improvement in project siting and design, avoiding and minimizing impacts the project would have to the public land, and reducing the BLM’s processing timeframes. This final rule has been revised and now requires early coordination, not through pre-application meetings, but through preliminary application review meetings, which are to be held after an application is submitted to the BLM. These requirements for early coordination with developer and other Federal, State, and tribal governments are found under section 2804.12(b). Additional discussion of the preliminary application review meetings is found under section 2804.12(b) of this preamble. Section 2804.12(a)(8) states that if the BLM requires you to submit a POD, you must include a schedule for its submittal in your application. This requirement was in the proposed rule’s section 2804.10(c)(4), but is now moved to section 2804.12(a)(8) in the final rule. This provision was proposed in section 2804.10 because the early coordination with BLM was done under preapplication meetings. It is moved to section 2804.12 of this final rule to coincide with the timing of the preliminary application review meetings. Section 2804.12(b) explains requirements for submitting an application for solar or wind energy development (outside of DLAs), or any transmission line with a capacity of 100 kV or more. Requirements under section 2804.12(b) were found at section 2804.10(b) in the proposed rule, but have been moved to this section instead as application processing requirements. This includes the BLM’s requirement for preliminary application review meetings. This provision provides clear instructions to the public about what PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 92141 they should expect when filing an application for such developments. The BLM commonly refers to the first filing of an application as an ‘‘initial’’ application due to the BLM’s experience with such projects. In most cases, a project POD goes through several iterations during the BLM’s application review process and may require additional submissions or revisions of the application to accompany the revised plans. Additional applications are not always necessary when revising a project POD, but could be required. Section 2804.12(b) also contains provisions from section 2804.10(b) and (c) of the proposed rule. These provisions are moved in the final rule in response to comments. An additional provision is added to paragraph (b) of this section to reiterate that the requirements for submitting a solar or wind application are in addition to those described in paragraph (a) of this section for all rights-of-way. Comments: Several comments questioned the requirement to hold preapplication meetings, as well as the BLM’s authority to require conditions for project processing, prior to the submission of an application to the BLM and collecting cost recovery fees for that time period. Response: The early coordination that resulted from the pre-application meetings required by existing BLM policy has been essential to the timely review and approval of solar and wind energy projects on the public lands. However, this final rule moves these meetings and requirements so that they occur after the submission of an application in response to comments received. The changes retain BLM’s intent to ensure earlier coordination on such applications with other Federal, State, local, and tribal governments. Under the final rule, such meetings would be subject to cost recovery requirements. Section 2804.12(b) also states that your application for a solar or wind energy project, or a transmission line project with a capacity of 100 kV or more, must include a general description of the proposed project and a schedule for submittal of a POD, address all known resource conflicts, and initiate early discussions with any grazing permittees that may be affected by the proposed project. Further, section 2804.12(b) requires that you hold two preliminary application review meetings, within 6 months from the date on which the BLM receives the cost recovery fee payment required under section 2804.14. Section 2804.12(b)(4), as previously described, is relocated from section E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92142 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 2804.10(c) of the proposed rule. Under this paragraph, the BLM will process an application only if the application addresses the following items: (1) Known potential resource conflicts with sensitive resources; (2) Values that are the basis for special designations or protections; and (3) Applicant-proposed measures to avoid, minimize, and compensate for such resource conflicts. For example, some applicant-proposed measures could utilize a landscape-level approach as conceptualized by Secretarial Order 3330 and subsequent reports, and be consistent with the BLM’s IM 2013–142, interim policy guidance. Due to the intense use of the land from the projects covered in this section, the BLM will require applicants to identify potential conflicts and how they may be avoided, minimized, or mitigated. The BLM will work with applicants throughout the application process to ensure the most efficient use of public land and to minimize possible resource conflicts. This provision will require an applicant to consider these concerns before submitting an application and, therefore, provide the BLM with potential plans to minimize and mitigate conflicts. Comments: Some comments stated that the BLM should ensure that meetings are structured so that participants are provided all the project information necessary so they can meaningfully assist the BLM to make an appropriate determination about the proposed project. Response: The BLM agrees with these comments and has modified the regulation to have meetings occur after an application is filed, rather than hold the meetings beforehand. The intent of these meetings will be to bring all Federal, State, local, and tribal governments together and provide them with the best available information to have an informed discussion on the right-of-way application. Authorizations for solar and wind energy projects, and transmission lines with a capacity of 100 kV or more, are generally larger and more complex than the average right-ofway authorization, and this extra step will help protect the public lands and make application processing more efficient. Furthermore, the BLM will not proceed with an application until all appropriate meetings are held and the BLM has notified appropriate grazing permittees (see 43 CFR 4110.4–2(b)). Applicants must pay reasonable or actual costs associated with the requirements identified in section 2804.12(b). Payment for reasonable costs associated with an application must be received by the BLM after the initial VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 filing of the application and prior to the first meeting, consistent with section 2804.14. After enactment of the Energy Policy Act of 2005, the BLM received an influx of solar and wind energy development applications. Many of these applications were unlikely to be approved due to issues such as siting, environmental impacts, and lack of involvement with other interested parties. As the BLM gained more experience with these applications, it developed policies and procedures to process applications more efficiently. These policies and procedures required pre-application meetings and use of application screening criteria (see section 2804.35 of this preamble) in order to help BLM and the proponent address siting concerns early on in the process. Pre-application meetings have helped both the BLM and prospective applicants to identify necessary resource studies, and other interests and concerns associated with a project. Further, the meetings have provided an opportunity to direct development away from lands with high conflict or sensitive resource values. As a result of these meetings, the applications submitted were more appropriately sited and had fewer resource issues than those submitted where no preapplication meetings were held. Holding these meetings early in the application process made the applications more likely to be approved by the BLM. This saved the applicant the time and money spent on doing resource studies and developing projects that may not have been accepted or approved by the BLM. Some prospective applicants chose not to pursue development after these meetings, once they had a better understanding of the potential issues and resource conflicts with the project as proposed. The BLM found that applicants who participated in these meetings saved money that would have been spent planning a project that the BLM would not have approved. This also saved the BLM time by reducing the number of applications it would need to process and the time spent reviewing resource studies and project plans. A January 2013 Government Accountability Office report (GAO–13– 189) found that the average BLM permitting timeframes have decreased since implementation of BLM’s solar and wind energy policies, which include the early inter-agency coordination meeting requirements in this rule. The GAO concluded that applications submitted in 2006 averaged about 4 years to process, while PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 applications submitted in 2009 and later averaged about 1.5 years to process. At the time of the GAO review, these meetings were pre-application meetings. In the final rule, the timing of these early meetings has been changed until after the submission of an application to the BLM. Based on its experience, the BLM believes that holding inter-agency and government coordination meetings early in the review of a proposed largescale development will continue to save both the BLM and applicant time and money during the BLM’s review and processing of the application. Based on a review of its records, the BLM identified a range of costs and time estimated associated with the processing of each type of application for a use of the public lands. These cost and time estimates varied between the solar and wind energy and transmission line projects. For solar and wind energy rights-of-way a range of costs was identified between $40,000 and $4 million, including up to approximately 40,000 BLM staff labor hours and other non-labor costs per project. For transmission lines 100 kV or larger a range of costs was identified between $260,000 and $2.1 million, including up to approximately 21,000 BLM staff labor hours and other non-labor costs per project. Based on this review, the BLM observed that projects with early coordination generally had lower costs relative to similarly situated projects. Based on the BLM’s experience, two meetings are usually sufficient to address all known potential concerns with a project, which is why the final rule calls for two meetings. However, the BLM understands that additional meetings may be beneficial to a project before an application is submitted. The BLM does not want to limit its ability to hold additional meetings should a project be particularly complex and, therefore, the final rule allows for additional preliminary application review meetings to be held when mutually agreed upon. For example, a project that crosses State lines could require additional coordination with local governments and other interested parties. Comments: Some comments noted concern over the BLM’s existing and proposed pre-application process and its open-ended timeframe. Comments were concerned that this would be a deterrent for pursuing development on the public land, even if the project itself was well sited and designed. A developer would need assurances that a project would proceed expeditiously. Suggested timeframes included 30 days between meetings and application submittal. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Response: New paragraph (b)(4) specifies that within 6 months from the time the BLM receives the cost recovery fee, you must hold at least two preliminary application review meetings. The first meeting will be held with the BLM to discuss the proposal, the right-of-way application process, the status of BLM land use planning for the lands involved, potential siting and environmental issues, and alternative site locations. The second meeting will be held with appropriate Federal and State agencies and tribal and local governments to discuss concerns as identified above. If you do not believe you need to schedule the first or second meeting described above, you can ask the BLM for an exemption. The process of requesting an exemption is discussed further in section 2804.12(i), under the newly added paragraph labeled ‘‘Interagency Coordination.’’ Section 2804.12(c) contains requirements for submitting an application for solar and wind energy development. These requirements, located in section 2804.10(a)(8) and (c)(2) in the proposed rule, have been relocated to section 2804.12(c)(1) and (2) in this final rule. Under section 2804.12(c)(1), the BLM specifies that an application for solar or wind energy development must be submitted for lands outside of DLAs, except as provided for by section 2809.19. Lands inside DLAs will be offered competitively under subpart 2809. See section 2809.19 of this preamble for further discussion. No comments were received and the only changes made to this paragraph are those identified for relocating the requirement to this section and putting it in the context of a requirement for submitting an application. Section 2804.12(c)(2) requires that an applicant submit an application filing fee with any initial solar or wind energy right-of-way application. Section 304 of FLPMA authorizes the BLM to establish filing and service fees. A per acre application filing fee may discourage applicants from applying for more land than is necessary for a proposed project. Under this final rule, application filing fees will be retained by the BLM as a cost recovery fee, instead of being sent to the General Fund of the Treasury as collected revenue as proposed. A similarly structured nomination fee is established following the same criteria and is described in section 2809.11(b)(1). Paragraph (c)(2) of this section is revised to replace ‘‘by the average annual change in the Implicit Price Deflator, Gross Domestic Product (IPD– GDP)’’ to read as ’’using the change in VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 the Implicit Price Deflator, Gross Domestic Product (IPD–GDP)’’. As proposed, this provision may have been interpreted as limiting how the BLM would use the IPD–GDP when updating this fee. It is appropriate for adjustments that occur annually, such as acreage rent, to refer to the average annual change in the IPD–GDP. However, the application filing fee may be adjusted once every ten years and this adjustment would be based on the cumulative change to the IPD–GDP over the 10-year period. The application filing fee is the initial fee paid to the BLM for the reasonable costs of processing, inspecting, and monitoring a right-of-way. The BLM will use these funds towards processing your application. The balance of these funds, if any, will be allocated towards a cost reimbursement agreement that is later established between the BLM and the applicant or refunded if the application is denied or otherwise terminated. A cost reimbursement agreement is established under the authority of FLPMA section 304(b) and 504(g). This change is made in conformance with those changes made under section 2804.30(e)(4) in response to comments. The application filing fee is based on the appraisal consultation report performed by the Department’s Office of Valuation Services. The appraisal consultation report compared similar costs on private lands, and provided a range between $10 and $25 per acre per year. The nominal range or median was reported as between $15 and $17 per acre per year. The appraisal consultation report is available for review by contacting individuals listed under the FOR FURTHER INFORMATION CONTACT section of this preamble. The BLM is adopting a single filing fee at the time of filing an application, as opposed to a yearly payment. Based on the appraisal consultation report, fees are $15 per acre for solar and wind energy applications and $2 per acre for wind energy project-area and sitespecific testing applications. Comments: Several comments were made concerning the fees identified in the description of requirements for section 2804.12(c)(2). One comment suggested that the $15 per acre filing fee should be made a part of a cost recovery fee and used to reimburse the BLM for its expenses. In addition, the comment suggested that the fee should be refundable if the lands are later made subject to competition. Response: The BLM has revised this rule, including this section, to make application filing fees part of cost reimbursement paid to the BLM. PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 92143 Payment of cost reimbursement to the BLM is under Sections 304(b) and 504(g) of FLPMA. Application filing fees and other costs associated with the BLM’s processing of applications can be recovered because the BLM’s application review and other work facilitates, and will generally be essential for, the BLM’s processing, inspecting, and monitoring of a right-ofway. Consistent with FLPMA, application filing fees are retained by the BLM as cost reimbursement and will not be sent to the General Fund of the U.S. Treasury as originally proposed. If lands are later subject to a competitive offer for the use for which application filing fees were provided, (e.g., competition for a site development when development application filing fees are paid), then these fees would be refunded to the unsuccessful bidders who had already paid them, except for the reasonable costs incurred. Comment: One comment opposes the proposed $15 per acre filing fee for wind energy applications and $2 per acre fee for wind energy site-specific testing applications as this would increase processing costs. The comment suggested that fees should be as low as possible to encourage wind energy development on public lands. Response: The BLM has removed the application filing fee from site-specific testing applications to address concerns of increasing costs for development on the public lands. Site-specific testing generally takes up less than an acre, so it would not be necessary to encourage a smaller area of use. Project area testing and developments can each encompass thousands of acres and a per acre filing fee is appropriate. This final rule retains a $2 per acre filing fee for project area testing applications and a $15 per acre filing fee for development applications to encourage thoughtful development on public lands. Fees for solar and wind energy development applications will be adjusted for inflation once every 10 years, using the Implicit Price Deflator for Gross Domestic Product (IPD–GDP). Section 2804.12(d) references an applicant’s option to request an alternative requirement if the applicant is unable to meet one of the requirements outlined for submitting an application. Requests for an alternative requirement are submitted under section 2804.40. This provision applies to all right-of-way applications submitted to the BLM and is added to the final rule in response to comments submitted on the proposed rule. Further discussion on requesting an alternative requirement is found under section 2804.40. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92144 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Comments: Some comments stated that the mandatory pre-application meetings included in the proposed rule would discourage a developer from pursuing public lands for development, since the process and costs associated with development on BLM lands are greater than those on private lands. These comments expressed concern that these requirements are overly burdensome and duplicative of the NEPA process. Response: Although costs to develop a project may end up being higher on public lands, the BLM has a different scope of authority and responsibility than agencies and offices that administer developments that occur on private land. The BLM is charged with managing the public lands under principles of multiple use and sustained yield. The BLM must take into account resources and use of the public land, and balance those with each additional proposed use and its impacts to resources for current and future generations. Based on the BLM’s experience, these early coordination meetings help reduce the overall time and costs associated with the BLM’s application process. The pre-application meetings described in the proposed rule, which are existing policy, are changed in this final rule to ‘‘preliminary application review meetings,’’ which take place after an application is submitted. The BLM believes these meetings will facilitate a more efficient application process and will not discourage development on public lands. The BLM is required, under NEPA, to consider the environmental impacts of a significant action on the public lands. These early coordination meetings help the BLM and proponent determine the best possible approach for developing a proposed project that would avoid, minimize, reduce or otherwise compensate for its environmental impacts. Based on the BLM’s experience, these meetings have reduced the overall time of the NEPA analysis necessary for projects on the public lands. The GAO’s report (GAO– 13–189) found that the average BLM permitting timeframes have decreased since implementation of BLM’s solar and wind energy policies, which include the early inter-agency coordination meeting requirements in this rule. The BLM added section 2804.12(i), ‘‘Inter-agency Coordination,’’ in response to these comments. This paragraph provides that an applicant may request an exemption from some of the requirements of this section, should they participate in an inter-agency VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 coordination process with another Federal, State, local, or tribal authority. This final rule allows a developer to formally request an exemption to the requirements under section 2804.12, pertaining to application filings and other requirements that may be duplicative of other activities that a developer is completing. In order for a developer to qualify for an exemption from these requirements, the other activities must meet the same criteria as required by the BLM. An example of such a situation would be if a developer had already met with the Department of Energy for purposes similar to what is required under the BLM’s first preliminary application review meeting. No other comments were received and no additional changes made to this section. Sections 2804.12(e) through (h) are redesignated in the final rule from paragraphs (b) through (e) of the existing regulations and no other changes were made to these paragraphs. Section 2804.14 What is the processing fee for a grant application? Under section 2804.14, applicants must pay for reasonable costs for processing an application as defined by FLPMA. Under section 2804.14(a), the BLM may collect the estimated reasonable costs incurred by other Federal agencies. Applicants may pay those costs to other affected agencies directly instead of paying them to the BLM. Section 2804.14(b) includes a table of the application processing categories. The specific outdated values for cost recovery categories 1 through 4 have been removed from this table, while the explanations of the categories and the methodology of calculating the costs remain. These numbers are available in writing upon request or may be found on the BLM’s Web site at https:// www.blm.gov/. These cost figures were removed from the regulations because they are outdated after the first year, since the BLM updates these costs annually and has done so since this section of the regulations was originally published. The revision allows the BLM to update these numbers without modifying the CFR and prevents confusion to potential applicants who would see incorrect information. The explanation of how these costs are calculated, formerly found in section 2804.14(c), is moved up to paragraph (b) to provide better context for the amended table. Redundant language is removed from the Category 1 processing fee. Comments: Some comments were received stating that the BLM does not PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 have authority to collect cost recovery on behalf of other Federal, State, and non-regulatory offices, such as tribal governments and interested public stakeholders. These comments stated that the authority delegated by the Secretarial Order was by the Secretary, and, therefore, delegation of the authority could not apply to any agency or office outside of the Department. Response: Secretarial Order 3327 delegating cost recovery authority applies only to agencies and offices of the Department of the Interior. Sections 304(b) and 504(g) of FLPMA, however, give the Secretary authority to collect payments intended to reimburse the United States, not just the Department of the Interior. Under Section 304(b) of FLPMA, the Secretary may charge for reasonable costs of the United States concerning ‘‘applications and other documents relating to [the public] lands.’’ Section 504(g) of FLPMA provides that the Secretary may charge for ‘‘all reasonable administrative and other costs incurred in processing’’ a right-of-way application and costs associated with the inspection and monitoring of right-of-way facilities. The revision under section 2804.14 and other cost recovery provisions of this rule clarify that the BLM’s cost recovery authority is consistent with FLPMA, in that it seeks reimbursement to the United States—i.e., it can seek reimbursement of its own costs as well as those of other Federal agencies. This does not include reimbursement of costs for State and non-regulatory offices. The BLM intends that collecting such reasonable costs for other Federal agencies would primarily arise in situations where the BLM’s decision to approve or deny a right-of-way application depends on another Federal agency’s issuance of a decision or other determination before or in conjunction with the BLM’s right-of-way decision. An example of this can been seen in the BLM’s May 2013 Memorandum of Understanding with the Fish and Wildlife Service (FWS), where the BLM and FWS have established a protocol for the BLM to collect and then provide cost recovery funds to the FWS for Endangered Species Act and other work that the BLM determines is necessary for it to process right-of-way applications. A copy of the Secretarial Order and Memorandum of Understanding can be found at the following Web site: https://www.blm.gov/ wo/st/en/info/regulations/Instruction_ Memos_and_Bulletins/national_ information/2013/IB_2013-074.html. No other comments were received, and no changes were made to this section of the final rule. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Section 2804.18 What provisions do Master Agreements contain and what are their limitations? As defined in section 2804.18, a Master Agreement is a written agreement covering processing and monitoring fees negotiated between the BLM and a right-of-way applicant that involves multiple BLM rights-of-way for projects within a defined geographic area. New section 2804.18(a)(6) requires that a Master Agreement also describe existing agreements between the BLM and other Federal agencies for cost reimbursement. With the recent authority delegated by Secretarial Order 3327 to collect costs for other Federal agencies, it is important for the applicant, the BLM, and other Federal agencies to coordinate and maintain consistency for cost reimbursement. No additional comments were received, except for those discussed under section 2804.14, and no changes were made to this section in the final rule. Section 2804.19 How will BLM process my processing Category 6 application? sradovich on DSK3GMQ082PROD with RULES3 Under section 2804.19(a), an applicant for a Category 6 application must enter into a written agreement with the BLM identifying how such applications will be processed. Under this final rule, the final agreement includes a description of any existing agreements the applicant has with other Federal agencies for cost reimbursement associated with the application. No comments were received for this section, and no changes were made from the proposed rule to this section of the final rule. Under section 2804.19(e), the BLM may collect reimbursement to the United States for its reasonable costs for processing applications and preparation of other documents under this part relating to the public lands. Adding this language to these regulations clarifies the BLM’s authority when collecting for other agencies. No additional comments were received, except for those discussed under section 2804.14 and no changes were made to this section of the final rule. Section 2804.20 How does BLM determine reasonable costs for processing Category 6 or monitoring Category 6 applications? Section 2804.20 is revised to clarify the scope of the BLM’s cost recovery and how the BLM will determine reasonable costs of the United States when processing and monitoring Category 6 applications. In paragraph (a)(1) of this section, ‘‘BLM’’ is changed VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 to ‘‘the Federal Government,’’ to make it clear that the BLM may collect cost recovery for other Federal agencies as well. Processing costs include reasonable costs for processing a rightof-way application, while monitoring costs include reasonable costs for those actions the Federal Government performs to ensure compliance with the terms, conditions, and stipulations of the right-of-way grant. As preapplication requirements are not included in this final rule, section 2804.20(a)(7) was deleted. No additional comments were received, except for those discussed under section 2804.14, and no other changes were made to this section of the final rule. Section 2804.23 When will the BLM use a competitive process? Section 2804.23 was previously titled ‘‘What if there are two or more competing applications for the same facility or system?’’ but is revised to read, ‘‘When will the BLM use a competitive process?’’ This change is necessary because, under the final rule, the BLM may use a competitive process even when there are not two competing applications. Paragraph (a)(1) of this section now requires applicants to reimburse the Federal Government, as opposed to just the BLM, for processing costs, consistent with the cost recovery authority in Sections 304(b) and 504(g) of FLPMA. This means that the BLM could require applicants to reimburse the BLM for the costs incurred by other agencies, such as the U.S. Fish and Wildlife Service, in processing the application. A new sentence in section 2804.23(c) gives the BLM authority to offer lands through a competitive process on its own initiative. Under the existing regulations, the BLM can use a competitive process only when there were two or more competing applications for a single right-of-way system. This change gives the BLM more flexibility to offer lands competitively, and applies to all potential rights-of-way, not just solar and wind energy development projects. Throughout the proposed rule, the BLM required publication of a notice in the Federal Register as well as in a newspaper in general circulation in the area affected by the potential right-ofway. Publication in a newspaper is included in the final rule as one of the ‘‘other methods’’ of public notification that the BLM may use, but is no longer a requirement. The potential area affected by a proposed BLM action may not be covered by a single newspaper. As the BLM considers issues at a PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 92145 broader scale, such as multi-state transmission lines, several communities may be affected by a single BLM action. The Federal Register is a national publication that is available to all interested parties. In addition, the BLM will make available a copy of all Federal Register notices on its Web site at www.blm.gov. The BLM may use a newspaper to notify the public on a case-by-case basis, as appropriate. The public notification methods throughout this final rule are revised consistent with this section. Comments: Some comments expressed concern that the BLM may determine to hold a competitive offer after an applicant has substantially progressed in the processing of their non-competitive application for a rightof-way grant. These comments argued that this possibility would discourage developers from submitting a solar or wind energy right-of-way application. Response: Proposed paragraph (c) of this section has been revised to state that a competitive process will not be held for public lands where a right-ofway application for solar or wind development has been accepted, including the POD and cost recovery agreement. Adding this criterion provides assurances to prospective applicants that the BLM will not competitively offer lands after considerable time and resources have been committed to processing a particular application. Under section 2804.23(d), lands outside of DLAs are made available for solar or wind energy applications through the competitive process outlined in section 2804.30. This provision directs the reader to new section 2804.30, which explains the competitive process for solar and wind energy development outside of DLAs. This paragraph is necessary to differentiate between development inside and development outside of a DLA. No comments were received on this paragraph, and no changes are made from the proposed rule to the final rule. Under section 2804.23(e), lands inside a DLA will now be offered competitively through the process described in subpart 2809. This new paragraph directs the reader to revised subpart 2809, which explains the competitive process for solar and wind energy development inside of DLAs. This paragraph is necessary to differentiate between development inside and outside of a DLA. No additional comments were received for this section, except for those discussed under paragraph (c), and no other E:\FR\FM\19DER3.SGM 19DER3 92146 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations changes were made from the proposed to the final rule. Section 2804.24 Do I always have to submit an application for a grant using Standard Form 299? Section 2804.24, which is unchanged from the proposed rule, explains when you do not have to use Standard Form 299 (SF–299) to apply for a right-of-way. Under the existing rule, you do not have to use SF–299 if the BLM determines competition exists under section 2804.23(c). The BLM only determines competition exists when there are two or more competing applications for the same right-of-way facility or system. Due to the changes made to section 2804.23, section 2804.24 specifies when an SF–299 is required. Under both the existing regulations and this final rule, the BLM will implement a competitive process if there are two or more competing applications. Under section 2804.24(a), you do not have to submit a SF–299 if the BLM offers lands competitively and you have already submitted an application for that facility or system. Under paragraph (a) of this section, if you have not submitted an application for that facility or system, you must submit an SF–299, as specified by the BLM. Under the competitive process for solar or wind energy in section 2804.30, for example, the successful bidder becomes the preferred applicant, and may apply for a grant. The preferred applicant will be required to submit an SF–299, but unsuccessful bidders will not. Paragraph (b) explains that an applicant does not have to use an SF– 299 when the BLM is offering lands competitively under subpart 2809. Under subpart 2809, the BLM will offer lands competitively for solar and wind energy development inside DLAs. The successful bidder will be offered a lease if the requirements described in section 2809.15(d) are met. The successful bidder will not have to submit an application using SF–299. The following chart explains when the filing of an SF–299 is or is not required under this final rule: WHEN A SF–299 IS REQUIRED Would have to submit a SF 299? Type of solar or wind right-of-way Have two or more competing applications for the same area, outside of DLAs ................................................................................. Lands are offered competitively outside of a DLA and you have already submitted an application for the parcel before the Notice of Competitive Offer. Lands are being offered competitively outside of a DLA and you have not submitted an application ................................................ You are the successful bidder in a competitive offer outside of a DLA and have been declared the preferred applicant and may apply for a grant. Lands are being offered competitively within a DLA under subpart 2809 ........................................................................................... sradovich on DSK3GMQ082PROD with RULES3 No comments were received and, no were other changes are made to this section of the final rule. Section 2804.25 How will BLM process my application? This section of the final rule has been modified from the proposed rule to reflect the shift of early BLM coordination from pre-application meetings, under section 2804.10, to preliminary application review meetings, under section 2804.12. These preliminary application review meetings are now required after the initial filing of a right-of-way application for solar or wind projects, or for electric transmission lines with a capacity of 100 kV or more. Section 2804.25(a) of this final rule has been modified from the proposed rule to include a provision from current section 2804.25(b) that states the BLM will inform you of any other grant applications that involve any of the lands for which you have applied. This new provision has been added as paragraph (a)(2). Paragraph (a) has been reformatted providing an introductory statement and putting the existing requirement for identifying the processing fee as paragraph (a)(1). This is an existing provision of the regulations and is only added to this paragraph as part of formatting revisions VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 that are made in response to comments submitted concerning confusion with existing requirements of section 2804.25(b). Comments: Some comments were received noting confusion over the proposed section 2804.25(b) and its requirements. Response: This paragraph has been reformatted into two new separate paragraphs, (b) and (c). New section 2804.25(b) contains existing regulatory requirements that were part of proposed section 2804.25(b). This paragraph helps explain the existing requirements found in section 2808.12 of the regulations. In paragraph (b), the BLM will not process your application if you have any trespass action pending for any activity on BLM-administered lands or have any unpaid debts owed to the Federal Government. If you have an outstanding trespass action, the BLM will only process your application, under part 2800 or part 2920, if it will resolve the underlying trespass. Similarly, if you have any debts outstanding, the BLM will only process your application after those outstanding debts are paid. The requirement in section 2808.12 is often overlooked by potential right-of-way applicants and this addition to the regulations would insert the requirement into the application process PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 Yes. No. Yes. Yes. No. and improve applicant understanding of the BLM’s process under subpart 2804. Comments: Some comments expressed concern with the clarity of this proposed section and were also unsure whether using an application for a right-of-way to resolve trespass was appropriate. Further, concern was raised over what constituted an unpaid debt to the Federal Government. Response: In response to the comment about clarity, the BLM revised the language in paragraph (b) of this section, by adding paragraphs (b)(1) and (2), discussing when the BLM will not process an application. Section 2804.25(b)(1) clarifies that the BLM will not process your application if you have an outstanding debt to the Federal Government and then describes what constitutes an outstanding debt to the government. An additional sentence was added to paragraph (b)(1) of this section, explaining that unpaid debts are what are owed to the Federal Government after all administrative collection actions have occurred, including administrative appeal proceedings under applicable Federal regulations and review under the Administrative Procedure Act (APA). Adding this provision to the regulations makes it clear to right-of-way holders and trespassers that the BLM will evaluate applications in this manner. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Paragraph (b)(2) of this section clarifies that if you are in trespass, the BLM will only process an application that would resolve that particular trespass. Reformatting this paragraph in this manner separates the concepts of unpaid debts and existing trespass situations as they pertain to new applications. Under this final rule, the BLM will not always issue a right-ofway to resolve a trespass. The BLM will consider the situation on a case-by-case basis and will evaluate whether the trespass was knowing and willful. The BLM will also consider whether issuing a right-of-way to resolve the trespass is appropriate. If a right-of-way is not an appropriate way to resolve a trespass, the BLM will consider other options for resolving a trespass, such as requiring its removal from public lands. Section 2804.25(c) contains the requirements from section 2804.25(b) of the existing regulations, under which the BLM may require the submittal of a POD. The POD or other plans must be submitted to the BLM within the period specified by the BLM. Under paragraph (c)(1) of this section, the BLM requires an applicant to commence resource surveys or studies within 1 year of receiving a request from the BLM. This requirement was identified in the preamble of the proposed rule and carried forward in this final rule. The requirement to begin the surveys or studies within 1 year of the request establishes a default period, which will apply if the BLM does not specify a different time period within which the survey or study must begin. The BLM may identify a different time period through written correspondence with applicants, or by other means, as appropriate. Generally, these surveys or studies will not require a permit from the BLM or any other agency. Proponents need only coordinate the work with the applicable agencies as appropriate. However, for some surveys or studies, there may be a permit that is necessary, such as when performing pedestrian archaeological surveys. In those instances, the BLM will work with applicants to ensure that the applicable permitting requirements are understood by all parties. Under paragraph (c)(2) of this section, an applicant could request an alternative requirement to one of the requirements of this section, such as the period of time described in paragraph (c)(1) of this section. However, the applicant must show good cause why it is unable to meet the requirement. This new paragraph directs the reader to new section 2804.40, consistent with revisions made from comments received as discussed under section 2804.40, if VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 the applicant is unable to meet the requirements of this section. Failure to meet the 1 year requirement for application due diligence may result in denial of the application, unless an alternative compliance period has been requested and agreed to by the BLM. Paragraph (c)(2) of this section gives applicants the ability to address circumstances outside of their control with respect to time periods. Comments: Some comments were received regarding due diligence requirements for applicants to begin resource studies or provide other such survey work to the BLM. Comments recommended varying timeframes for application due diligence ranging from 1 to 3 years after the BLM’s approval of survey protocols or other identified study requirements. Comments generally agreed with implementing such requirements for applications. Response: In consideration of the comments received on application due diligence requirements, the BLM determined that a longer timeframe would not be appropriate. Under this final rule, an applicant would be required to begin surveys or inventories within a year of the BLM’s request date, unless otherwise specified by the BLM. The BLM determined that a one year default timeframe was adequate to commence surveys and inventories. This rule does, however, leave the BLM with the discretion to establish a different timeframe where appropriate. Section 2804.25(c) of the existing regulations is redesignated as paragraph (d) of this section. It remains unchanged and is relocated to make room for the reformatting of this section in response to comments submitted on the proposed rule. The introductory text of section 2804.25(e), which is redesignated from existing paragraph (d), is revised by replacing the words ‘‘before issuing a grant’’ with ‘‘in processing an application.’’ This change is made to account for the situation where the BLM would issue a grant without accepting applications. For example, lands leased inside DLAs will be offered through a competitive bidding process under subpart 2809 in situations where no applications for those lands are received. The provisions in section 2804.25 do not apply to the leases issued under subpart 2809. However, they will apply to all other rights-ofway, including solar and wind energy development grants outside of DLAs. The process for issuing leases inside DLAs is discussed in subpart 2809. This revision clarifies that the requirements of this section apply to applications. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 92147 Section 2804.25(e) is further revised to incorporate new provisions for all rights-of-way as well as specific provisions for solar and wind energy development. Existing section 2804.25(d)(5), which provides the requirement to hold a public meeting if there is sufficient public interest, is moved to section 2804.25(e)(1). Revisions are made in this final rule, consistent with those made in section 2804.23(c). Language is added specifying that a public notice may also be provided by other methods, such as publication in a newspaper in the area affected by the potential right-of-way or the Internet. Section 2804.25(e)(2) contains three separate requirements for solar and wind energy development applications. Under section 2804.25(e)(2)(i), the BLM will hold a public meeting in the vicinity of the lands affected by the potential right-of-way for all solar or wind energy development applications. Based on the BLM’s experience, most solar and wind energy development projects are large-scale projects that draw a high level of public interest. This requirement is added to provide an opportunity for public involvement early in the process. Under paragraph (e)(2)(ii), the BLM will apply screening criteria when processing an application outside of DLAs. These screening criteria are explained further in section 2804.35. The BLM removed the word ‘‘priority’’ from this requirement to improve reader understanding that the screening criteria are used to determine the priority of applications, not ‘‘resource priorities.’’ Under section 2804.25(e)(2)(iii), the BLM will evaluate an application, based on the input it has received from other government and tribal entities, as well as information received in the application, public meetings, and preliminary application review meetings. The BLM may consider information it has received outside of these meetings when evaluating an application. This paragraph is revised in the final rule to remove reference to preapplication meetings and add preliminary application review meeting requirements, consistent with other changes in this final rule. The BLM has also added more detail to this paragraph explaining why it may deny an application at this point in the process. For example, the BLM may deny an application if you fail to address known resource values raised during preliminary application review (see section 2804.12(c)(4)), or during public meetings (see section 2804.25(e)(2)(i)), or if you improperly site the project. The BLM made this revision to help E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92148 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations improve the public’s understanding of this process. Based on its evaluation of an application, the BLM will either deny or continue processing it. The BLM’s denial of an application will be in writing and is an appealable decision under section 2801.10. The denial or approval of all grant applications is at the BLM’s discretion. As noted previously under section 2804.12, you must submit an application for a solar or wind energy development. Requirements for submitting this application are noted in section 2804.25(b) and (c), and these must be fulfilled before an application is ready to be evaluated by the BLM. Section 2804.25(e)(2)(iii) has been revised to explain what criteria must be met in order for the BLM to continue processing your application. These criteria are: Whether the development application is appropriately sited on the public lands (e.g. outside of DLAs— where leasing must proceed under Section 2809 rather than 2804—and outside of exclusion areas), and whether you address known resource values that were discussed in the preliminary application review meetings. Known resource values must also be addressed in general project descriptions and in further detail in a project’s POD. Under section 2804.25(e)(3), the BLM will determine whether the POD schedule submitted with an application meets the applicable development schedule and other requirements or whether an applicant must provide additional information. This is a necessary step that allows the BLM to evaluate the application requirements under section 2804.12. Those requirements can be found in section 2804.12(b) and (c). The BLM determines if the development schedule and other requirements of the POD templates have been met. The POD templates can be found at https://www.blm.gov. Under the proposed rule, paragraph (e)(3) of this section applied to applications for solar and wind energy development, transmission lines with a capacity of 100 kV or more, and pipelines 10 inches or greater in diameter. Under this final rule, this paragraph would apply to all applications for which a POD is required. Although a POD is mandatory for some types of projects, the BLM may require an applicant to submit a POD with any type of right-of-way application under section 2804.25(c) of this final rule (section 2804.25(b) of the existing regulations). Should the BLM require an applicant to submit a POD, the application would be evaluated under this paragraph based on the POD VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 schedule submitted with the application. Section 2804.25(e)(4) of this final rule is revised from the proposed rule to include a cross-reference to the Department’s NEPA implementation regulations at 43 CFR part 46. The Departmental regulations reinforce the CEQ’s regulations and the requirements to comply with NEPA. This crossreference is made to increase the public’s awareness of these requirements and where they may be found, but does not impose any additional requirements on the public. Redesignated paragraphs (e)(5), (6), (7), and (8) of this section are existing provisions that were formerly found in paragraph (d) of this section. Former paragraph (e) is redesignated as new paragraph (f). No other comments were received or other changes made to the final rule, except that references to the ‘‘U.S.’’ were changed to read ‘‘United States.’’ Section 2804.26 Under what circumstances may BLM deny my application? Section 2804.26 explains the circumstances in which the BLM may deny an application. The BLM considers the criteria outlined in this section during its decision-making process, which for right-of-way authorizations ends with the issuance of a decision— either a ROD or a Decision Record (DR), or in the absence of a ROD or DR, the perfection of a right-of-way instrument or the issuance of a written decision denying the right-of-way application. Once the BLM issues a ROD or DR to approve a right-of-way, any subsequent BLM determination that is inconsistent with that ROD or DR, including any decision to suspend or terminate the right-of-way, is a separate action that requires the BLM to complete a separate decision-making process. Section 2804.26(a)(5) explains one such circumstance. This provision of the existing regulations is revised to include ‘‘or operation of facilities’’ and now reads, ‘‘when an applicant does not have or cannot demonstrate the technical or financial capability to construct the project or operate facilities in the proposed right-of-way.’’ The rule adds text to clarify this requirement, which applies to all rights-of-way. The added paragraphs explain how an applicant could provide evidence of the financial and technical capability to be able to construct, operate, maintain, and decommission a solar or wind energy development project. The applicant may provide documented evidence showing prior successful experience in developing similar projects, provide PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 information of sufficient capitalization to carry out development, or provide documentation of loan guarantees, a confirmed PPA, or contracts for the manufacture and/or supply of key components for solar or wind energy project facilities. Paragraphs (a)(6), (7), and (8) are added to section 2804.26 to reiterate the new requirements of the final rule and explain that the BLM may deny an application should an applicant not comply with these provisions. Under section 2804.26(a)(6), the BLM may deny your application if you do not meet the POD submittal requirements under section 2804.12(a)(8) and (c)(1) and 2804.25(e)(3). The final rule is updated to ensure that the citations match the reformatted rule, after changes were made based upon comments received. Paragraph (a)(7) of section 2804.26 is a new paragraph added to the final rule that corresponds to the provisions by which the BLM will require surveys under section 2804.25(c). Under section 2804.26(a)(7), the BLM may deny your application if you fail to meet its requirements to commence surveys and studies, or provide plans for permit processing as required by section 2804.25(c). This paragraph is new in the final rule and is added to be consistent with the new requirements in section 2804.25(c), which are added based upon public comment. Section 2804.26(a)(8) references the possible application denial based on the screening criteria established in section 2804.25(e)(2)(iii). Comments: Some comments expressed concern regarding the BLM exercising its authority to deny an application without accounting for the fact that some circumstances may be outside an applicant’s control. Response: In response to this generalized concern, the BLM added section 2804.40 to this final rule. Under this new section, an applicant may request an alternative requirement in place of a requirement that they are unable to meet. References are made to this new section in specific parts of the application processing requirements found under subpart 2804. No other changes were made to this section and no other comments were received. Section 2804.27 What fees must I pay if BLM denies my application or if I withdraw my application? The heading of section 2804.27, ‘‘What fees do I owe if BLM denies my application or if I withdraw my application?’’ is revised to read, ‘‘What fees must I pay if BLM denies my E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 application or if I withdraw my application?’’. With the addition of application filing fees, the revised title more clearly describes the requirements of the final rule. A new provision in this paragraph provides that if the BLM denies your application, or if you withdraw it, you must still pay any application filing fees submitted or due under section 2804.12(c)(2), and the processing fee set forth at section 2804.14. Sections 304(b) and 504(g) of FLPMA provide for the deposit of payments to reimburse the United States for reasonable costs with respect to right-of-way applications and other documents relating to the public lands. In the case of preliminary application review meetings, the expense could be considerable, depending on the complexity of the project. The BLM will refund any part of the application filing fees received that is not used for processing the application. This paragraph is revised by removing references to pre-application meetings that were originally proposed for the rule, but not carried forward in the final rule. These revisions are consistent with other changes made in the final rule under section 2804.12 regarding the change from pre-application to preliminary application review meetings. No other comments were received on this section, and no other changes were made to the final rule. Section 2804.30 What is the competitive process for solar or wind development for lands outside of designated leasing areas? Section 2804.30 explains the process for the BLM to competitively offer lands outside of DLAs. This bidding process is similar to that established in subpart 2809 (competitive offers inside DLAs), except that the end result of the bidding is different. Under paragraph (f) of this section, the successful bidder will become the preferred right-of-way applicant. Under this section, the high bidder is not guaranteed a grant, but is identified as the ‘‘preferred applicant.’’ As explained under paragraph (g) of this section, the preferred applicant is the only party that may submit an application for the parcel identified by the BLM, but the BLM must still review and accept the application. This is different from subpart 2809, which provides that the successful bidder for a lease inside a DLA may be offered a lease upon successfully meeting all requirements of section 2809.15. Comments: Three general comments were received on this section. The first comment requested that language be added to encourage additional consultation with members of the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 public, such as developers, nongovernmental organizations, and stakeholders, during the competitive process outside of DLAs. Response: Many opportunities for public engagement are provided throughout the competitive process for right-of-way applications filed on public lands outside of DLAs. As part of the competitive processes outside of DLAs, the BLM may engage the public through a notice seeking competitive interest in a particular area, which would provide the public and interested stakeholders with an opportunity to comment on the potential development of a particular parcel. If the BLM decides to move forward with a competitive offer for a parcel, a Notice will be published in the Federal Register and may also be announced through other means. Upon the completion of the competitive process, the BLM will process an application for the solar or wind energy development, following the requirements of this final rule, which include a mandatory public meeting before the BLM determines whether to deny the application or continue processing it. If the BLM continues to review an application, there may be additional opportunities for public involvement through the NEPA process, including during the notice and comment period. As a result of these measures, the BLM believes that there is adequate opportunity for the public to be fully engaged throughout the competitive process, application review, and NEPA processes for projects outside of DLAs. Comments: The second comment on this section stated that only developers are capable of making a determination of whether development in a particular area will be economically sound and, therefore, a worthwhile pursuit for public land use. The comment contended that developers will not expend the effort necessary to determine the economic suitability for projects before a competitive process is held (either inside or outside areas such as DLAs). Response: While the BLM agrees that only a developer can determine whether a particular project in a particular area makes sense for them, that determination does not necessarily apply to all developers, nor is it the only consideration relevant to the BLM. Each developer may follow a different business model and may consider different funding, financing, and procurement opportunities when assessing a potential project site. In identifying DLAs, the BLM has to consider the environmental and other resource impacts of a potential PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 92149 development, in addition to the known solar or wind potential for the area. For these reasons, the BLM does not make an economic evaluation when identifying an area for a competitive process. The BLM will rely on developer interest, among other indications of competitive interest in an area, to determine whether utilization of a competitive process is appropriate. Recognizing that determining economic viability for a particular area may involve site-specific testing information, the final rule contains provisions allowing for such activities. For wind or solar energy projects outside of a DLA, interested developers can apply for testing authorizations as described in section 2804.31 of this rule, or apply for a testing authorization inside DLAs prior to a competitive action as described in section 2809.19(d) of this rule. Comments: The third comment on this section suggested that the leasing process should be restructured from a local ‘‘electric-centric’’ focus to a macrolevel objective to provide the greatest benefit to ‘‘We the People.’’ This comment suggests that the BLM should explicitly recognize that the available solar and wind resources could be used to provide most of, and potentially all of, the United States’ fuel, electricity, transportation, and natural resource needs. Response: FLPMA directs the BLM to generally receive fair market value for the use of public lands and to utilize and protect public land resources while balancing the use of the public lands for current and future generations. The BLM intends for this rule to promote the development of solar and wind energy on public lands, while also ensuring a fair return to the Federal Government. Paragraph (a) of section 2804.30 identifies lands available for competitive lease; paragraph (b) of this section explains the variety of competitive procedure options available; and paragraph (c) explains how the BLM identifies parcels for competitive offers. Under this final rule, the BLM may identify a parcel for competitive offer if competition exists or the BLM elects to offer a parcel on its own initiative. The BLM may include lands in a competitive offer in response to interest from the public or industry, or to facilitate an individual State’s renewable energy goals. This is a change from existing regulations, which only allow the BLM to use a competitive process when there are two competing applications; however, the changes made to section 2804.23(c) in this rule give the BLM more flexibility. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92150 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Paragraph (d) of this section, ‘‘Notice of competitive offer,’’ establishes the content of the materials of a notice of competitive offer that include the date, time, and location (if any) of the competitive offer, bidding procedures, qualifications of potential bidders, and the minimum bid required. The notice also explains that the successful bidder becomes the preferred applicant, which can then apply for a grant under this subpart. This is different from the competitive offers held under subpart 2809, where the successful bidder is offered a lease. Paragraph (d)(4) of this section requires that the notice identify the minimum bid amount, explain how the authorized officer determined the minimum bid amount, and describe the administrative costs borne by the Federal agencies involved. As indicated in the general discussion section of this preamble, administrative costs are not a component of fair market value, but instead are a cost reimbursement paid to the Federal Government for its expenses. The BLM will publish a notice containing all of the identified elements in the Federal Register, and may also use other notification methods, including newspapers in the affected area or the internet. Consistent with sections 2804.23(c), this section’s public notice requirements were revised, establishing notice through a newspaper or internet as an additional optional form of notice. This change in the final rule is discussed further in section 2804.23(c) of this preamble. No comments were received on section 2804.30(a) through (d). However, a cross-reference has been updated in section 2804.30(d)(6) to include section 2804.12, due to revisions made to that section based upon comments received. Under paragraph (e) of this section, the BLM requires that bid submissions include both the minimum bid amount and at least 20 percent of the bonus bid. The minimum bid consists of administrative costs and an amount determined by the authorized officer. Included in the administrative costs are those expenses pertaining to the development of environmental analyses and those costs to the Federal Government associated with holding the competitive offer. The authorized officer may specifically identify a second component for the minimum bid(s) submitted for each competitive offer. This amount will be based on the known or potential values of the offered parcel. The authorized officer may consider values that include, but are not limited to, the acreage rent, the MW capacity fee, or other known or potential VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 values of the parcel. For example, the BLM may use a percentage of the acreage rent value for the parcel competitively offered. An explanation of the minimum bid amount and how the BLM derived it will be provided in the notice of competitive offer. Comments: Several comments were received pertaining to bidding under section 2804.30(e). One comment suggested that the BLM: (1) Establish global objectives to evaluate bids based on the constitutional greater good for the ‘‘People’’ to meet many objectives of the renewable energy bidding process; (2) Ensure that successful bidders use energy to meet public objectives; (3) Ensure that appropriate values are received for the right to develop energy; (4) Ensure that evaluations of electrical supply include the full costs and benefits to the public; (5) Ensure that effects from manmade impacts on global warming shall be based on transient climate sensitivity; and (6) Focus on ‘‘We the People’’ instead of creating processes that incur higher costs for developments. Response: The comments submitted are suggesting revisions to the final rule that are outside of the BLM’s authority to consider. FLPMA directs the BLM to generally receive fair market value for the use of public lands and to utilize and protect public land resources while balancing the use of the public lands for current and future generations. The provisions of this final rule will ensure that the BLM is receiving fair market value for the uses of the public lands that it authorizes. The second comment suggested that the BLM direct where or how renewable energy that is generated on public lands is deployed. The BLM could place a requirement on the use of the electricity generated, through a term or condition of a right-of-way, but the BLM expects that it would do so only in limited circumstances, if at all, as it is a land management agency charged with managing the public lands under principles of multiple use and sustained yield. The BLM evaluates proposed projects before issuing a decision to approve, approve with modifications, or deny a project. In general, the BLM will analyze a project using reasonable scientific or other methods, to understand the impacts to the public lands and other lands, uses, resources and other systems outside of its authority to control. These other lands, uses, resources, and other systems outside of the BLM’s authority to control could include electrical transmission systems that may be owned or controlled by an Independent System Operator, or the energy needs of PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 a State or local community as identified by the State government offices, or lands administered by a Federal, State, or private entity. When evaluating prospective projects, the BLM considers their reasonably foreseeable direct, indirect, and cumulative impact on climate change on a local, regional, and national scale, as appropriate. Comment: Another comment suggested that administrative costs discussed under section 2804.30(e)(2)(i) should not be included as part of the minimum bid. The initial costs of preparing for and holding a competitive offer are completed at the volition of the BLM, not an applicant. The comment suggested that including administrative costs as part of the minimum bid will discourage development inside and outside of DLAs. The comment suggested that a successful bidder should essentially pay for the same administrative and NEPA costs as noncompetitive applicants for right-ofways outside of DLAs. Response: Under the final rule, reimbursement for the reasonable administrative and other costs is generally required from any successful bidder. Consistent with Sections 304(b) and 504(g) of FLPMA, the BLM may recover reasonable administrative and other costs incurred in processing an application for a right-of-way. Administrative and other costs associated with the use of a competitive process to identify a preferred applicant can be recovered because this work facilitates, and will generally be essential to, the BLM’s review of a rightof-way application. These costs would be paid only by the preferred applicant. Bidders will be given notice of the administrative costs portion of the minimum bid prior to their bidding at a competitive offer. The BLM believes that it is preferable for a prospective bidder to know these costs, which are required to prepare and hold a competitive auction, before submitting a bid in a competitive offer. Prospective applicants would not otherwise be able to submit an application to the BLM for development of that area without first being the successful bidder. The BLM considers the competitive process described in subpart 2809 for lands inside a DLA to be even more preferable to prospective developers, as a successful bidder would be issued a lease immediately upon paying the full amount of their winning bid. Comments: Comments stated that the mitigation costs identified in section 2804.30(e)(2)(ii) should not be factored into the minimum bid because the successful bidder should have to pay separately for mitigation if and when E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations construction commences and not at the time of bidding. A successful bidder cannot pay twice for the same mitigation. Several other comments also addressed what should or should not be included as acceptable factors. Response: The BLM has removed the reference to mitigation costs found in proposed section 2804.30(e)(2)(ii), as this may be misleading and open to interpretation. However, the BLM has maintained the acreage rent and the megawatt capacity fee as considerations when determining a minimum bid amount. These factors which are used only to determine the amount above the administrative costs where bidding will start (see section 2804.30(e)(2)(ii)). Their inclusion as a potential consideration in the development of the minimum bid does not count towards other obligations. For example, if the BLM arrives at a minimum bid amount using the annual acreage rent for a lease area, a successful bidder will still be required to pay the first year’s acreage rent, as identified in this rule, before being awarded a grant or lease. No offset or discount toward future acreage rent will be provided. Comments: A number of comments expressed concern that requiring unsuccessful bidders to pay application filing fees would discourage prospective developers. They suggested that application filing fees should be refundable if a bidder is not successful. Response: New section 2804.30(e)(4) has been revised based on these comments to refund application filing fees for unsuccessful bidders, except for the reasonable costs incurred by the United States. This change is consistent with the revisions under section 2804.12(c)(2) and discussed further under that section of this preamble. Under section 2804.30(f), the successful bidder is determined by their submission of the highest total bid for a parcel at a competitive offer. The successful bidder must fulfill the payment requirements of the successful bid in order to become the preferred right-of-way applicant. The preferred applicant must submit the balance of the bid to the BLM within 15 calendar days after the end of the competitive offer. No comments were received pertaining to section 2804.30(f), and no other changes are made from the proposed rule to the final rule. Under section 2804.30(g), a preferred applicant is the only party who may submit an application for the parcel that is offered. Unlike the process under subpart 2809, the approval of a grant under this paragraph is not guaranteed to a successful bidder. Approval of a grant is solely at the BLM’s discretion. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 The preferred applicant may also apply for an energy project-area or site-specific testing grant. Comments: A comment suggested adding a new provision to the rule stating that upon making a winning bid, the preferred applicant also secures site control. Adding such a condition would provide more certainty to the process for prospective developers, further incentivizing the competitive bidding. Response: The BLM agrees with this comment and has revised paragraph (g) to make it clear that the BLM will not accept applications on lands where a preferred applicant has been identified, unless submitted or allowed by the preferred applicant in order to provide additional certainty with respect to site control. If ancillary facilities for projects or facilities on adjacent parcels, such as roads or transmission lines, need to be constructed on the parcel where a preferred applicant’s project would be sited, the companies constructing the ancillary facilities would need to apply to the BLM for a right-of-way, and the BLM would consult with the preferred applicant before processing any such application. This is intended to provide certainty to the preferred applicant when applying for renewable energy developments on the public lands that applications from other entities will not be accepted for the competitively gained application area unless they are allowed by the preferred applicant. Section 2804.30(h) describes how the BLM will address certain situations that could arise from a competitive offer. Under paragraph (h)(1) of this section, the BLM retains discretion to reject bids, regardless of the amount offered. For example, the BLM may reject a bid if there is evidence of conflicts of interest or collusion among bidders or if there is new information regarding potential environmental conflicts. The BLM will notify the bidder of the reason for the rejection and what refunds are available. If the BLM rejects a bid, the bidder may administratively appeal that decision (see 43 CFR part 4 for details). Under paragraph (h)(2) of this section, the BLM may make the next highest bidder the preferred applicant if the first successful bidder does not satisfy the requirements under section 2804.30(f). This allows the BLM to determine a preferred applicant without reoffering the land and could save time and money for the BLM and potential applicants. The BLM may reoffer lands competitively under section 2804.30(h)(3) if the BLM cannot identify a successful bidder. If there is a tie, this re-offer could either be limited to tied bidders or include all bidders. This provides the BLM with flexibility to PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 92151 resolve ties and other issues that could arise during a competitive offer process. Under section 2804.30(h)(4), if the BLM receives no bids, the BLM may reoffer the lands through the competitive process provided for in section 2804.30. The BLM may also make the lands available through the non-competitive process described in subparts 2803, 2804, and 2805, if doing so is determined to be in the public interest. No other comments were received, and no additional changes were made to final paragraph (h) of this section, except those discussed above. Section 2804.31 How will the BLM call for site testing for solar or wind energy applications? This section, which was not in the proposed rule, is added to this final rule to describe how the BLM will call for site testing for solar and wind energy. This section also explains how the BLM may create a new DLA, through the land use planning process described in new section 2802.11, in response to public interest. Under new paragraph (a) of this section, the BLM may call for site testing in a DLA by publishing a notice in the Federal Register and may also use other notification methods, such as a local newspaper or the Internet. Paragraph (a) also specifies what information will be included in any public notice issued under the section, including the following information: (1) The date, time, and location where site testing applications may be sent; (2) The date by which applicants will be notified of the BLM’s decision on timely submitted site testing applications; (3) The legal land description of the area for which site testing applications are being requested; and (4) Qualification requirements for applicants. The BLM is limiting the testing authorizations that would be offered under a call for site testing applications under this section to site-specific grants identified under section 2801.9(d)(1). This limitation is established to reduce the potential for multiple interested parties having overlapping applications. The BLM does not intend to use a competitive process for the site testing. Rather, the BLM intends to determine whether there is competitive interest for solar and wind energy development for these public lands. Should there be overlapping testing applications, the BLM will notify those applicants of the overlap and may hold a competitive offer for that site testing location to determine a preferred applicant. Paragraph (b) of this section explains that any interested parties may request that the BLM hold a call for site testing E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92152 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations for certain public lands. However, how the BLM responds to those requests is at its sole discretion. The ‘‘call for site testing’’ may be used as a step in the process for lands either inside or outside of DLAs. A subsequent step would be the competitive offer for an application for a development grant under section 2804.30, or for a development lease under subpart 2809, if the area is designated as a leasing area, as described in section 2804.31(c). Under paragraph (c) of this section, the BLM may determine that areas receiving interest from the public may be appropriate to establish as a DLA. The BLM may turn an area surrounding the site testing into a DLA as described under section 2802.11. Following the designation of an area for competitive leasing, the rules described under subpart 2809 would be used for any subsequent competitive processes in the area. Establishing such an area would be performed by following the land use planning process described in the revised section 2802.11. This process would be completed during the time that testing is being undertaken, which is typically a 3 year process. Designating such an area would allow interested developers to benefit from the incentives provided by development in a DLA. This approach also provides a mechanism for public interest to drive the establishment of DLAs. Comments: Some comments suggested that the BLM retain the discretion to structure the DLA leasing process for wind in accordance with a two-phased development approach. The first phase of this approach would be a competitive process for site testing. The winner of this offer would receive exclusive rights to the parcel offered. The BLM would then create a DLA in the area where this competitive offer was held. The second phase would be a competitive offer for a lease in this newly established DLA. Response: The BLM recognizes that potential developers should have a clear avenue for helping the BLM identify new DLAs. The BLM added the new section 2804.31 to this final rule in direct response to these comments. This new section provides another way for developers to identify and benefit from the competitive process and DLA incentives established in subpart 2809 of this final rule. Providing a mechanism for site testing while DLA designation is ongoing will allow developers to benefit from the specific data they obtain during testing as they evaluate whether a competitive offer or further development of the lands is in their interest. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Section 2804.35 How will the BLM prioritize my solar or wind energy application? Section 2804.35 explains how the BLM will prioritize review of an application for a solar or wind energy development right-of-way based on the screening criteria for projects outside of DLAs. The BLM will evaluate such applications based on the screening criteria in that section and categorize the application as high, medium, or low priority. Through existing guidance, the BLM has established screening criteria (see Instruction Memorandum (IM) 2011– 061), which identify and prioritize land use for solar and wind energy development rights-of-way. In order to facilitate environmentally responsible development the IM directs BLM to consider resource conflicts, applicable land use plans, and other statutory and regulatory criteria pertinent to the applications and the lands in question. Applications with lesser resource conflicts are anticipated to be less costly and time-consuming for the BLM to process, and the IM directs that these applications be prioritized over those with greater resource conflicts. IM 2011–061 may be found at https:// www.blm.gov/wo/st/en/prog/energy/ renewable_energy.html. This rule includes criteria similar to those in the IM. The codification of these criteria gives certainty to applicants that such criteria will not change, and therefore provides more certainty as to how an application might be categorized. By specifying these criteria, applications could be tailored to fit them in order to streamline the processing of an application. Comment: One comment indicated that the BLM should clarify the proposed rule’s application prioritization concept. This comment indicated that the proposed rule left several questions unanswered, including: (1) How the BLM’s staff time will be allocated within field staff among projects based on priority and time of submission; (2) Whether BLM staff working on a medium-conflict priority project will shift focus if a highpriority application is submitted; and (3) Whether BLM staff workload will be shifted across different field offices if certain field offices have a disproportionate number of highpriority applications as compared to others, which may have more mediumor low-priority applications. Response. This final rule provides the criteria that the BLM will use to prioritize applications it receives. This allows potential applicants to PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 understand not only how these applications will be prioritized, but also how they can submit an application that is more likely to become a high priority for the BLM. The BLM’s internal management and workload processes are not addressed as that is not appropriate for a rulemaking. The criteria for determining how workload priorities are addressed are more appropriately handled by the policy guidance for implementing this final rule. Such guidance will elaborate on these points. It should be noted that the BLM will continue to process all applications received, but will prioritize staff workload based upon these priority categorizations. Comments: Comments were received requesting clarity over whether leases awarded under subpart 2809 would be given priority over applications made outside of DLAs. Response: New language has been added to the introductory paragraph of this section to clarify that the BLM generally prioritizes the processing of leases awarded under subpart 2809 over applications submitted under subpart 2804. There are some instances where the BLM may determine that it is in the public interest to prioritize the processing of an application over the processing of a lease. However, the BLM generally intends to prioritize the processing of leases first. Comments: Comments were received requesting that the BLM expand on the criteria used in the rule and better define and describe the resource areas and potential conflicts. Some specific recommendations were made by the commenters. Each comment provided a greater level of specificity or detail than the proposed rule regarding how the BLM should prioritize resource conflicts. Response: The descriptions of the resource conflicts in the final rule are mostly unchanged, except where noted in this section’s discussion. The BLM determined that the level of specificity and detail recommended by commenters is not appropriate for this final rule. Screening applications to prioritize them has only been done by the BLM recently. Based upon the BLM’s experience, it is better to establish broader criteria in this final rule that can then be further refined in its internal guidance. National priorities change and BLM continues to learn more about the resource conflicts associated with solar and wind energy projects. Therefore, the BLM believes that the specific internal guidance, rather than regulatory criteria, is more appropriate to provide a greater level of specificity and detail as recommended E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations by commenters. This approach gives the BLM flexibility to make changes as workload or conditions on the ground or in the wind and solar industry change. Guidance may need to be updated as national priorities change and the BLM better understands these resource conflicts with solar and wind energy projects. As part of the rule’s implementation, the BLM will issue guidance aimed at better describing the BLM’s considerations and prioritization of applications. This guidance is expected to be issued after this final rule is published. Section 2804.35(a) identifies criteria for high-priority applications, which are given processing priority over mediumand low-priority applications. These criteria include: 1. Lands specifically identified as appropriate for solar or wind energy development outside DLAs; 2. Previously disturbed sites or areas adjacent to previously disturbed or developed sites; 3. Lands currently designated as Visual Resource Management (VRM) Class IV; and 4. Lands identified as suitable for disposal in the BLM’s land use plans. The BLM may have identified lands that are appropriate for solar or wind energy development, but are not inside DLAs. These lands may include areas approved for solar or wind area development for which a right-of-way was never issued or an existing right-ofway was relinquished. The VRM inventory process is a means to determine visual resource values. The VRM inventory consists of a scenic quality evaluation, sensitivity level analysis, and a delineation of distance zones. Based on these three factors, BLM-administered lands are placed into one of four VRM classes, with Classes I and II being the most valued, Class III representing a moderate value, and Class IV being of least value. The BLM assigns VRM classes through the land use planning process, and these values can range from areas having few scenic qualities to areas with exceptional scenic quality. Section 2804.35(b) identifies criteria for medium-priority applications, which will be considered before low-priority applications. These criteria include: 1. BLM special management areas that provide for limited development or where a project may adversely affect lands having value for conservation purposes, such as historical, cultural, or other similar values; 2. Areas where a project may adversely affect conservation lands to include lands with wilderness characteristics that have been identified VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 in an updated wilderness characteristics inventory; 3. Right-of-way avoidance areas; 4. Areas where a project may adversely affect resources listed nationally; 5. Sensitive plant or animal habitat areas; 6. Lands designated as VRM Class III; 7. Department of Defense (DOD) operating areas with land use or operational mission conflicts; and 8. Projects with proposed groundwater uses within groundwater basins that have been allocated by State water resource agencies. Comment: One comment suggested for Criterion 5, that BLM’s designated priority sage-grouse areas be a low priority and not a medium priority. Response: The BLM removed the reference to sage-grouse habitat in this final rule. In September 2015, the BLM issued the Greater Sage-Grouse Plan Amendments and Revisions (80 FR 57633, 80 FR 57639). Those plans generally excluded priority habitat areas from major right-of-way developments, including wind energy. General sagegrouse habitat management areas generally fall into the medium-priority application category under Criterion 5. With the removal of priority sagegrouse habitat from this final rule in criterion 5, the BLM also revised the specificity of ‘‘important eagle use areas’’ to read as ‘‘important species use areas.’’ This revision makes the criterion more broad and applicable to all important species areas, and does not unintentionally exclude other identified important species areas that are not specifically identified for eagles. Comments: Several comments were made concerning the above factors. For Criterion 2, a comment recommended revising the description of ‘‘conservation lands’’ and excluding Alaska from this requirement. Response: The final rule does not revise the section 2804.35(b)(2) as recommended in the comment. This final rule does not define ‘‘conservation lands,’’ which include areas of critical environmental concern and lands inventoried and managed for wilderness characteristics. These lands are often identified for their unique characteristics by the BLM to protect scenic, historic, cultural, and other natural values. The status of conservation lands is considered by the BLM when processing solar and wind energy applications. When the BLM considers such lands for wind or solar use, it evaluates the impacts and effects to the resources, including those resources for which conservation lands are designated. Depending on the PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 92153 proposed development, the impacts to the resources for which the lands were designated for conservation purposes may be very small. Applications, such as those submitted for lands in Alaska, will be reviewed on a case-by-case basis. Comment: Another comment suggested that Criterion 7 be moved to low priority and changed to read ‘‘Areas where the Department of Defense has testing, training, or operational mission impacts.’’ Response: The BLM considered the suggestion, but did not revise the rule as suggested. The BLM kept this requirement largely unchanged because the DOD has overlapping interest in some locations with the BLM lands— e.g., withdrawn lands that are transferred to the DOD or have an aerial easement—where solar and wind energy development does not pose significant adverse impacts to the DOD operations. However, we did revise criterion number 7 to read as follows ‘‘Department of Defense operating areas with land use or operational mission conflicts.’’ The BLM will coordinate with the DOD on solar and wind energy applications submitted to the BLM that may affect DOD operations. Section 2804.35(c) identifies criteria for low priority applications, which may not be feasible to authorize due to a high potential for conflict. Examples of applications that may be assigned low priority would involve: 1. Lands near or adjacent to areas specifically designated by the Congress, the President, or the Secretary for the conservation of resource values; 2. Lands near or adjacent to wild, scenic, and recreational river and river segments determined as suitable for wild or scenic river status, if project development may have significant adverse effects on sensitive viewsheds, resources, and values; 3. Lands designated as critical habitat for federally designated threatened or endangered species under the ESA; 4. Lands currently designated as VRM Class I or II; 5. Right-of-way exclusion areas; 6. Lands currently designated as no surface occupancy areas; and Comment: One comment recommended that applications within lands under Criterion 2 not be considered a low priority. This comment further suggested that an additional criterion be added that would read as ‘‘Nothing in this section creates a protective perimeter or buffer zone around the special status conservation lands specified in Sections 2804.35(c)(1) and 2804.35(c)(2). The fact that a proposed activity or use on BLMadministered lands outside such special E:\FR\FM\19DER3.SGM 19DER3 92154 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 status conservation lands can be seen or heard within such special status conservation lands shall not accord an application low-priority status even if the use or activity is prohibited within the special status conservation lands.’’ Response: Nothing in this criterion creates a protective perimeter or buffer zone around the areas described in this section and, therefore, precludes the BLM’s approval of an application that is near or adjacent to such areas. In the BLM’s experience, solar and wind energy development applications are complex and difficult to analyze. If a proposed right-of-way would affect such areas, the BLM will consider effects when processing the application. Potential impacts to these areas and their resources may prove unacceptable, even after mitigation. The BLM also revised criterion 3 of this section from the proposed to final rule, from ‘‘is likely to’’ to ‘‘may’’ ‘‘. . . result in the destruction or adverse modification of that critical habitat.’’ This revision is necessary because it is difficult to determine based on an application what impacts are ‘‘likely.’’ However, it is the BLM’s responsibility to protect critical habitat. Therefore, any application that may destroy or adversely affect critical habitat will be a categorized as low priority under this final rule. The low priority status of applications meeting these criteria relates only to the BLM’s management of its workload in processing applications; it is not a proxy for the BLM’s final decision. No other comments were received, nor were any changes made to section 2804.35. Section 2804.40 Alternative Requirements Section 2804.40 is added to this final rule in response to comments received on the proposed rule. Comments: Several comments expressed concern that the BLM’s proposed requirements were too strict and would be difficult to meet, resulting in applications being denied or a holder’s authorization being terminated. They supported the BLM’s reference to a showing of good cause to support why a developer was unable to meet the BLM’s requirement. Response: The BLM has added this section to the final rule due to the number of comments received discussing the BLM’s requirements that had no specific provision allowing a developer to show good cause why an alternative to a regulatory requirement should be approved. Section 2804.40 expands on the BLM’s show of good cause provision that was in the proposed rule with VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 several different new requirements. This new provision replaces the specific provisions originally proposed and now applies to all rights-of-way and to all requirements the BLM has established under this subpart. An applicant may request an alternative requirement from the BLM by following the process outlined in this section. A similar provision is added in section 2805.12(e). That provision is discussed in that section’s preamble discussion. Paragraph (a) of this section notes that the requester must show good cause for its inability to meet a particular requirement. An applicant may request an alternative requirement for any requirement in this subpart. Requirements include surveys or studies to be completed, timeframes in which to provide information, development and reclamation plans, fees, and other appropriate requirements. Paragraph (b) of this section states that you must suggest an alternative requirement to the BLM and explain why the alternative requirement is appropriate. The BLM will not approve an alternative requirement without an explanation from the right-of-way holder as to why the current requirement is inappropriate. When implementing this final rule, the BLM intends to issue guidance on what constitutes an ‘‘appropriate’’ alternative requirement. Paragraph (c) of this section states that a request for an alternative requirement must be in writing and be received by the BLM in a timely manner. In order for the request to be timely, the BLM must have received it prior to the deadline originally given for the relevant requirement. As explained in the final rule, any such request is not approved until you receive BLM approval in writing. The BLM may provide written approval through a letter, email or other written means. Subpart 2805—Terms and Conditions of Grants 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? The heading for section 2805.10 is revised to read as stated above. This section is updated to reflect the new competitive process for lands inside DLAs (see subpart 2809) by stating that a successful bidder for a solar or wind development lease on such lands will not have to submit a SF–299 application. Instead, in these circumstances, the successful bidder PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 will have the option to sign the lease offered by the BLM. Paragraph (a) of this section contains the language from the existing regulations explaining how the BLM will notify you about your application. This paragraph is revised to add a new provision requiring that the BLM send the successful bidder a written response, including an unsigned lease for review and signature. The BLM will notify unsuccessful bidders, and any unused funds submitted with their bids will be returned. If an application is rejected, the applicant must pay any processing costs (see section 2804.14). In paragraph (a) of this section of the final rule, the BLM changed ‘‘will send you an unsigned lease’’ to ‘‘may send you an unsigned lease,’’ for consistency with revisions to section 2809.15(a). See the preamble for that section for more discussion. Paragraphs (b) introductory text and (b)(1) and (2) of this section parallel paragraphs (a)(1) and (2) of the existing regulations, and describe the unsigned grant or lease that the BLM will send to you for approval and signature. Paragraph (b)(3) of this section specifies that in accordance with section 2805.15(e), the BLM may make changes to any grant or lease, including to leases issued under subpart 2809, as a result of the periodic review required by this section. This provision is necessary because it makes clear why the BLM would amend a lease issued under subpart 2809. The terms and conditions of a right-of-way grant or lease may be changed in accordance with section 2805.15(e) as a result of changes in legislation or regulation, or as otherwise necessary to protect public health or safety or the environment. Because any changes to the terms and conditions of a right-of-way grant or lease would occur after the completion of the agency action (the BLM’s decision to approve the right-of-way), the BLM generally anticipates making the change through a separate action, generally initiated at the BLM’s discretion and requiring its own decision-making process. Sections 2805.10(c), (d) introductory text, and (d)(1) and (2) and 2805.20(d)(3) contain the language from existing sections 2805.10(b), (c) introductory text, and (c)(1) and (2) and 2805.20(c)(3). These provisions remain unchanged from existing regulations. No comments were received and no changes were made from the proposed rule to the final rule. Section 2805.11 What does a grant contain? Existing section 2805.11(b) explains how the duration of each potential right- E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations of-way is determined. This paragraph is revised to include specific terms for solar and wind energy authorizations, because they are unique and different from other right-of-way authorizations. Where the proposed rule discussed only wind energy testing in some portions, the final rule is changed to include both solar and wind for each type of authorization. This revision is made in connection with changes made under section 2801.9(d), where comments requested that site- and project-area testing authorizations include solar energy, and not be exclusive to wind. Section 2805.11(b)(2)(i) limits the term for a site-specific grant for testing and monitoring of wind energy potential to 3 years. Under this rule, this type of grant will be issued only for a single meteorological tower or study facility and will include any access necessary to reach the site. This authorization cannot be renewed. If a holder of a grant wishes to keep its site for additional time, it must reapply. These authorizations are intended for testing, not energy generation, and are limited to an area large enough for only a single tower or study facility. If a developer wishes for a larger study area, it can apply for a project-area testing grant under paragraph (b)(2)(ii) of this section. Section 2805.11(b)(2)(ii) provides for an initial term of 3 years for project-area energy testing. Such grants may include any number of meteorological towers or study facilities inside the right-of-way. Any renewal application must be submitted before the end of the third year if a proponent wishes to continue the grant. For the BLM to be able to renew such an authorization, the project-area testing grant holder must submit two applications, one for renewal of the project-area testing grant and one for a solar or wind energy development grant, plus a POD for the facility covered by the development application. Renewals for project-area testing grants may be authorized for one additional 3-year term. Section 2805.11(b)(2)(iii) provides for a short-term grant for all other associated actions, such as geotechnical testing and other temporary landdisturbing activities, with a term of 3 years or less. A renewal of this grant may be issued for an additional 3-year term. Section 2805.11(b)(2)(iv) provides for an initial grant term of up to 30 years for solar and wind energy grants outside of DLAs, with a possibility of renewal in accordance with section 2805.14(g). A holder must apply for renewal before the end of the authorization term. Section 2805.11(b)(2)(v) provides for a 30-year term for solar and wind energy VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 development leases issued under subpart 2809. A holder may apply for renewal for this term and any subsequent terms of the lease before the end of the authorization. Comment: A comment suggested that the standard term be 40 years for both solar and wind energy grants (outside of DLAs) and up to 100 years for leases (inside of DLAs), with a condition of the grant or lease providing for renegotiation every 10 years. Other comments suggested longer terms for grants and leases. Response: The final rule remains as proposed. The comment did not provide any justification for adding the additional years to the term of the grant or lease or explain why the additional time is necessary. Generally, it takes 1 year to secure a PPA after a project is authorized and an additional 2 to 3 years to construct. Since the term of a PPA is generally 20 to 25 years, the BLM believes that a 30 year period is sufficient to cover the developer’s needs for constructing and operating a facility, while protecting the public lands from unnecessary burdens. If a longer term is suitable or desired by a developer, an application to renew the grant or lease may be submitted to the BLM pursuant to the applicable requirements. For all grants and leases under this section with terms greater than 3 years, the actual term will include the number of full years specified, plus the initial partial year, if any. This provision differs from the grant term for rights-ofway authorized under the MLA (see the discussion of section 2885.11 later in this preamble) as FLPMA rights-of-way may be issued for terms greater than 30 years, while an MLA right-of-way may be issued for a maximum term of 30 years and a partial year would count as the first year of a grant. Section 2805.11(b)(3) contains the language from section 2805.11(b)(2) of the existing regulations, but further requires that grants and leases with terms greater than 3 years include the number of full years specified, plus the partial year, if any. A grant that is issued for a term of 3 years will expire on its anniversary date, 3 years after it was first issued. This change affects the duration of all FLPMA right-of-way grants that are issued or amended after the final rule becomes effective. This change provides specific direction for consistently calculating the term of a right-of-way grant or lease. No other comments were received, nor were any changes made to this section. PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 92155 Section 2805.12 What terms and conditions must I comply with? Section 2805.12 lists terms and conditions with which all right-of-way holders must comply. This section is reorganized to better present a large amount of information. Paragraph (a) of this section carries forward, without adjustment, most of the requirements from the existing regulations found at section 2805.12. Paragraph (b) of this section refers the reader to new section 2805.20, which explains bonding requirements for right-of-way holders. Paragraph (c) of this section contains specific terms and conditions for solar or wind energy right-of-way authorizations. Paragraph (d) describes specific requirements for energy site or project testing grants. Paragraph (e) is a show of good cause condition that is added to the final rule consistent with the provisions added as new section 2804.40. All requirements of paragraph (a) are part of the existing regulations and are not discussed in this preamble unless we received a substantive comment. Comments: Two general comments were received concerning this section. One comment stated that terms and conditions for leasing public lands for power generation should be the same regardless of the power source. The second comment suggested that the free market should drive success, not government policy on the terms and conditions of an authorization. Response: The BLM processes each development proposal for use of public lands on a project-by-project basis. All of the terms and conditions in section 2805.12 would apply to power generation authorizations, regardless of the technology used. However, based on the BLM’s experience with solar and wind energy developments, additional terms and conditions are required for such authorizations on public lands because the different types of technology may have varying impacts on the public lands and the resources they contain. For example, a string of wind turbines or an array of solar panels will have a different footprint, and accordingly will have a different impact on the lands and resources than other energy generation types. Separately, the free market alone (a market without oversight), cannot determine the use of the public lands, as those lands are managed by the BLM on behalf of the American public. The terms and conditions of each BLM authorization address the protection of the public lands and resources, consistent with the BLM’s responsibility to manage the public lands under E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92156 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations FLPMA’s multiple use and sustained yield mandate. Without regulations that ensure the necessary terms and conditions are put in place, development of the public lands could result in the unacceptable loss of the public lands and the resources they contain. The BLM regularly engages the public, including private businesses, to seek comments and input on the BLM’s administration of the public lands. The BLM will continue to do so through this rulemaking and its other decisionmaking processes. Section 2805.12(a)(5) contains language from existing section 2805.12(e) with two small changes. The word ‘‘phase’’ was changed to ‘‘stage’’ to prevent confusion with the use of ‘‘phase-in of the MW capacity fee’’ and similar phrases in this rule. This paragraph also prohibits discrimination based on sexual orientation. Adding sexual orientation as a protected class in this regulation is consistent with the policy of the Department that no employee or applicant for employment be subjected to discrimination or harassment because of his or her sexual orientation. See 373 Departmental Manual 7 (June 5, 2013). Several comments were received either for or against modifying this paragraph. Comments: One comment recommended that additional language be added to identify ‘‘pregnancy and gender relations’’ as protected classes, while another recommended deleting ‘‘sexual orientation’’ from the rule. Response: We did not revise the rule as a result of these comments. This paragraph refers to existing Federal law prohibiting discrimination and does not add or expand upon requirements under existing law. Comments: Some comments suggested that the BLM include greater connection between the rule and landscape-level mitigation as described in Secretarial Order 3330 and subsequent reports, and be consistent with the BLM’s IM 2013–142, interim policy guidance for offsite mitigation. Response: Developing landscape-level mitigation policy for use of the public lands is an ongoing BLM effort. Examples of landscape mitigation plans are the solar regional mitigation strategies. The BLM is currently developing regional mitigation strategies for many of the SEZs established as part of the Western Solar Plan. For an example of a complete mitigation plan, see the BLM’s Dry Lake regional mitigation strategy known as Technical Note 444, which may be found on the BLM’s Web site at: https://www.blm.gov/ style/medialib/blm/wo/blm_library/ VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 tech_notes.Par.29872.File.dat/TN_ 444.pdf. Since more detailed requirements and guidance will be addressed in the BLM’s policies, handbooks, and other forms of guidance that are currently under development, the BLM did not make any changes in response to this comment. Section 2805.12(a)(8)(iv) is added to the final rule based upon comments on the proposed rule to incorporate clear measures that are consistent with landscape-level mitigation and the BLM’s IM 2013–142 for offsite mitigation. The added provision clarifies that the BLM can require offsite mitigation to address residual impacts associated with a right-of-way. Any compensatory mitigation requirements would be established through a land use planning decision or implementation decision, possibly relying on a previously developed strategy, such as a solar regional mitigation strategy. Section 2805.12(a)(8)(vi) requires compliance with project-specific terms, conditions, and stipulations, including proper maintenance and repair of equipment during the operation of a grant. This is an existing policy requirement affecting all rights-of-way and in this rule is expanded to include leases offered under revised subpart 2809. In addition, this provision requires a holder to comply with the terms and conditions in the POD. This may include project-specific conditions to maintain the project in a manner that will not unnecessarily harm the public land by poor maintenance and operational practices. Any holder that does not comply with the POD approved by the BLM would be subject to remedial actions under section 2807.17, which may include the suspension or termination of the grant or lease Comment: Another comment suggested adding language that the BLM implement a condition to begin early coordination with State fish and wildlife offices. Response: In the proposed rule, the BLM identified two pre-application meetings under section 2804.10. One meeting was focused on early coordination among the BLM, applicant, and other Federal, State, and tribal authorities. This early coordination requirement has been carried forward in the final rule under section 2804.12 as part of a preliminary application review meeting for proposed solar and wind energy projects and transmission lines with a capacity of 100 kV or more. No other change has been made in the final rule. Early coordination among Federal and State wildlife offices has been carried forward into the final rule. PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 Paragraph (a)(8)(vii) of this section discusses the use of State standards and requires the right-of-way holder to comply with such standards when they are more stringent than Federal standards. Comment: A comment suggested that we add the word ‘‘environmental’’ so that the paragraph would now read, ‘‘When the State [environmental] standards are more stringent than Federal standards, comply with State standards for public health and safety, environmental protection, and siting, constructing, operating, and maintaining any facilities and improvements on the right-of-way.’’ Response: Under FLPMA, the BLM considers an array of State standards, including those relating to public health and safety. Under the existing regulations, the BLM may apply State standards when those standards do not conflict with Federal law or policy for the administration of the public lands. No revision was made to the text of this paragraph in response to this comment. Paragraph (a)(8)(viii) of this section requires that a grantee or lessee grant the BLM an equivalent authorization for an access road across the applicant’s land if the BLM determines that a reciprocal authorization is needed in the public interest and the authorization the BLM issues to you is also for road access. Comment: One comment was concerned that the BLM was proposing to revise section 2804.25 rule to read, ‘‘If your application is for a road, BLM will determine if it is in the public interest to require you to grant the U.S. an equivalent authorization across land you own.’’ The comment raised concern that section 2805.12(a)(8) appeared to be directed at landowners and not utility companies. The comment expressed concern about waiving rental payments and who would be responsible for maintenance and repair of damage caused to the road. Response: The BLM did not propose to revise section 2804.25 to read as noted. The quoted text from the comment is from regulations that were formerly found at existing section 2804.25(d)(3) and are now identified as section 2804.25(e)(6) of this final rule. The paragraph was redesignated in this final rule after the rest of the section was revised. In section 2805.12, the requirement regarding reciprocal rightsof-way has also been redesignated as section 2805.12(a)(8)(viii). This text in the final rule, which remains unchanged from the text in the existing regulation, is used by the BLM for administration of the public lands. Where there are inter-mixed or E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations adjoining private and public lands, the issuance of reciprocal right-of-way authorizations would allow the BLM to cross your land to inspect and administer the public lands as well as grant you access across the public lands for purposes of ingress and egress to your property. The reciprocal authorization may include use for the public to access your land, but does not require such an authorization as the intended use is for the BLM to utilize the right-of-way. A reciprocal right-ofway is not intended as a public use access, such as those issued by a State’s Department of Transportation or the Federal Highway Administration. Each reciprocal authorization is evaluated on a case-by-case basis, and additional questions may be addressed at that time. Comment: A comment raised further concerns about the proposed requirements of section 2805.12(a)(3), which read ‘‘Build and maintain suitable crossings for existing roads and significant trails that intersect the project,’’ noting that this should only be applicable if the roads or trails are used by the grant holder. The comment also noted that the grant holder should not be responsible for repairing or maintaining these roads or trails if they have not caused or contributed to damages. Response: The BLM did not propose to revise the terms and conditions found at section 2805.12 to read as noted in the comment. The quoted text is from section 2805.12(c) of the existing regulations, now identified as section 2805.12(a)(3) of this final rule. The paragraph is redesignated in the final rule for readability, and is not amended further. This condition is retained from the existing regulations as the BLM must allow for multiple-use of the public lands. Should a right-of-way be granted, it does not displace other uses of the public land, including use of existing trails and other crossing that may intersect the project. The BLM will require that such trails and accesses are maintained by the right-of-way grant holder only to the extent that they have impacted it. If there is damage to the trail or access that is not the fault of the grant holder, then they will not be required to repair or fix it. Comment: A comment raised concerns over the proposed requirements of section 2805.12(a)(4), ‘‘Do everything reasonable to prevent and suppress wildfires on or in the immediate vicinity of the right-of-way area.’’ The comment noted that utilities frequently perform fire prevention activities as part of regular maintenance, which are frequently delayed by the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 BLM. The comment further noted that the grant holder should not be responsible for performing activities outside of the right-of-way, and that the fighting of fires should be the responsibility of the BLM, not the grant holder. Response: The BLM did not propose to revise the terms and conditions found at section 2805.12 to read as noted by the comment. The quoted text is from regulations that were formerly found at 2805.12(d) and are now identified as section 2805.12(a)(4) of this final rule. The paragraph is redesignated in the final rule for readability. This condition is retained from the existing regulations in this final rule without amendment. The condition requires the holder of an authorization to do everything that is reasonable to prevent or suppress wildfires. This condition is not intended to require a grant holder to perform actions outside of a right-of-way, unless the actions are related to the right-ofway, such as trimming trees as a component of BLM-authorized regular maintenance on an overhead transmission line. Other actions outside of the right-of-way, which are not related to the right-of-way, would not be the holder’s responsibility. Additionally, this condition does not delay actions that are already permitted in the right-of-way grant, which would be completed by a grant holder to prevent or suppress wildfires. However, actions proposed to be taken by a grant holder may be delayed if they are outside the permission granted by the BLM. Comment: One comment raised concerns over the BLM proposing to revise the terms and conditions to read, ‘‘Assume full liability if third parties are injured or damages occur on or near the right-of-way.’’ The comment raised concerns that this appeared to be an unreasonable requirement since a grantholder does not generally have authority to enforce laws. The comment also said that grant holders could be responsible for damages related to faulty equipment, but should not be responsible for actions outside of lands they are authorized to use, and for actions that are not their own, such as those by vandals or even the BLM. Response: The BLM did not propose to revise the terms and conditions found at section 2805.12 to read as noted. The quoted text is from regulations that were formerly found at section 2805.12(h) and are now identified as section 2804.12(a)(7) of this final rule. The paragraph is redesignated in the final rule for readability. The condition is retained from existing regulations in this final rule PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 92157 without amendment. The condition does not require that a holder should enforce the laws and regulations on public lands. However, the condition provides notice that, when agreeing to be a right-of-way holder on the public lands, the grant holder assumes responsibility for the permitted use. A holder assumes the responsibility for any injury or damages caused that are associated with their right-of-way. Injury or damages could be those that are directly caused by the grant holder, such as by electrocution or collision with a permitted use, or indirectly, such as those from flood events which can carry objects outside of the permitted right-of-way, but are still the responsibility of the grant holder. Section 2805.12(a)(15) requires that a grant holder or lessee provide, or make available upon the BLM’s direction, any pertinent environmental, technical, and financial records for inspection and review. Any confidential or proprietary information will be kept confidential to the extent allowed by law. Review of the requested records facilitates the BLM’s monitoring and inspection activities related to the development it authorizes. The records will also be used to determine if the holder is complying with the requirements for holding a grant under section 2803.10(b). Comments: Several comments stated that: (1) The BLM does not have authority to make such requirements; (2) In the case of a PPA or other similar type agreements, the BLM has no need to see such documents; and (3) These documents relate to private party transactions and are subject to confidentiality provisions. Response: The BLM does not need all of the documents described in this paragraph for every right-of-way. However, in some circumstances the BLM might need these documents when processing an application or where the BLM may need verification that such an agreement has been put in place, such as if a variable offset is to be awarded under the competitive leasing process inside a DLA. Information that is proprietary or confidential that is submitted to the BLM will be treated as such to the extent allowed by law. The BLM will require information under this provision, including PPAs, only if it is necessary for the BLM’s administration of an authorization. Section 2805.12(b) requires that grant holders and lessees comply with the bonding requirements of added section 2805.20. The former bonding requirements were lacking in detail and this new section will help clarify the requirements of a grant or lease. This paragraph is revised in this final rule to E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92158 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations state that the BLM will not issue a Notice to Proceed or give written approval until the grant holder complies with the bonding requirements of section 2805.20. This revision clarifies that when required by the BLM, a bond must be obtained before beginning ground-disturbing activities. No comments were received and no other changes made from the proposed rule to the final rule. Section 2805.12(c) identifies specific terms and conditions for grants and leases issued for solar or wind energy development, including those issued under subpart 2809. Several comments were received on this paragraph and these are discussed at the end of section 2805.12(c)(6). Minor revisions are made from the proposed to the final rule to improve readability, but any significant changes are discussed in detail in this preamble. Section 2805.12(c)(1) prohibits ground-disturbing activities until either a notice to proceed is issued under section 2807.10 or the BLM states in writing that all requirements have been met to allow construction to begin. Requirements may include the payment of rents, fees, or monitoring costs, and securing a performance and reclamation bond. The BLM will generally apply this requirement to all solar and wind rightsof-way due to the large scale of most of these projects. Section 2805.12(c)(2) requires that construction be completed within the timeframes provided in the approved POD. Construction must begin within 24 months of the effective date of the grant authorization or within 12 months, if approved as a staged development. This section is revised from the proposed to final rule to include a ‘‘or as otherwise authorized by the BLM.’’ This revision is consistent with other sections of this final rule where the BLM retains discretion to approve or authorize different timeframes or requirements. The BLM may approve a request for an alternative requirement (see section 2805.12(e)), but the BLM may also authorize a different timeframe in the approved POD. The BLM made similar revisions to the requirements described in section 2805.12(c)(3)(ii) and (iii). Further discussion of a staged development is found under section 2806.50. Section 2805.12(c)(3) describes the requirements for projects that include staged development in the POD, unless other agreements have been made between the developer and the BLM. Minor revisions are made from the proposed to the final rule to improve readability, but any significant changes are discussed in detail in this preamble. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Under paragraph (c)(3)(i) of this section, a developer must begin construction of the initial phase of development within 12 months after issuance of the Notice to Proceed, but no later than 24 months after the effective date of the right-of-way authorization. Paragraph (c)(3)(ii) of this section requires that each stage of construction after the first begin within 3 years after construction began for the previous stage of development. Construction must be completed no later than 24 months after the start of construction for that stage of development, unless otherwise authorized by the BLM. These time periods were selected after evaluating the timing of other completed energy development projects. These timeframes will help ensure that the public land is not unreasonably encumbered by these large authorizations, which are exclusive to other rights during the construction period of the project. Section 2805.12(c)(3)(iii) limits the number of development stages to three, unless the BLM specifically approves additional stages. The BLM will generally approve up to three stages for solar and wind energy development. An applicant may request approval of additional stages with a showing of good cause under section 2804.40. This request must be accompanied by a supporting discussion showing good cause for your inability to meet the conditions of the right-of-way. A grant holder may request alternative stipulations, terms, or conditions under section 2805.12(e). The BLM revised paragraph (c)(3)(iii) of this section, from the proposed to final rule by removing ‘‘in advance’’ when referring to the BLM’s approval. The requirement in this section is unchanged from the proposed rule but is rephrased for consistency with other sections of the final rule. The addition of 2805.12(e) provides additional information about the requests for alternative requirements. Paragraphs (c)(4), (5), and (6) of this section contain specific requirements for diligent development and the potential consequences of not complying with these requirements. Section 2805.12(c)(4) requires the holder to maintain all onsite electrical generation equipment and facilities in accordance with the design standards of the approved POD. This paragraph reiterates the requirement to comply with the POD that must be submitted as scheduled under section 2804.12(c)(1). Section 2805.12(c)(5) provides requirements for repairing or removing damaged or abandoned equipment and PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 facilities within 30 days of receipt of a notice from the BLM. The BLM will issue a notice of noncompliance under this provision only after identifying damaged or abandoned facilities that present an unnecessary hazard to the public health or safety or the environment for a continuous period of 3 months. Upon receipt of a notice of noncompliance under this provision, an operator must take appropriate remedial action within 30 days, or show good cause for any delays. Failure to comply with these requirements may result in suspension or termination of a grant or lease. Under section 2805.12(c)(6), the BLM may suspend or terminate a grant if the holder does not comply with the diligent development requirements of the authorization. The citation in this section is revised in the final rule from section 2807.17 to sections 2807.17 through 2807.19. Sections 2807.18 and 2807.19 are existing sections of the regulations, which are not a part of this final rule, that describe the BLM’s processes for suspending or terminating rights-of-way. This revision does not represent a change in meaning, but provides more information for the reader. Comments: Comments disagreed with the proposed rule and suggested that it would require arbitrary and disparate terms and conditions between rights-ofway issued under subpart 2804 and those issued under subpart 2809. The comments stated that the authority granted by FLPMA does not authorize the BLM to penalize developers who submit an application for and obtain BLM approval for rights-of-way on other BLM managed lands (i.e., non-DLAs). Response: The BLM disagrees. A focus of the proposed and final rule is to encourage solar and wind energy development inside DLAs. Encouraging DLA developments is meant to locate large scale developments in areas with lesser impacts to resources and uses of the public lands. Incentivizing the use of DLAs is achieved by increasing certainty, longevity, and reducing some costs in a DLA relative to other areas. The proposed rule does not increase costs and uncertainty outside of the DLAs. In areas outside of DLAs, the BLM is simply incorporating its processes established by policy for solar and wind energy. The BLM believes that the final rule will reduce costs and increase certainty inside of DLAs and maintain the streamlined application process for lands outside of DLAs. Comments: Some comments stated that a CFR reference cited in 2805.12(c)(6)(iii) was incorrect. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Response: The comment is correct and this reference is revised to paragraph (c)(7) of this section. Furthermore, another citation was updated in this paragraph, referring to submitting a written request for an extension for a timeline in a POD. The updated reference now cites paragraph (e) of this section where a right-of-way holder may request an alternative requirement. Comment: Some comments opposed the requirement in section 2805.12(c)(7) that a bond include Indian cultural resource identification, protection, and mitigation. The comments assert this is in error because there are no distinguishing factors that can justify requiring cultural resource bonding for non-DLA authorizations, but not for DLA authorizations. Response: Paragraph (c) applies to all solar and wind energy rights-of-way, both leases issued under subpart 2809 and grants issued under subpart 2804. This requirement does not distinguish between requirements for grants and leases. However, the BLM recognizes that these costs are difficult to determine and revised this section to specifically include ‘‘the estimated costs of cultural resource and Indian cultural resource identification, protection, and mitigation for project impacts.’’ This revision helps tie the required costs to the impacts of the project. Comment: One comment suggested that bonding for cultural, scenic, and wildlife impacts adds unnecessary risk to a project. The comment stated that bonding for such impacts is unnecessary for solar activities, as the majority of mitigation expenses are incurred during construction, and operation expenses are minimal and easily covered by fixed PPA revenues in excess of low operational costs. Response: The bond instrument required by the BLM is necessary to protect public lands and their resources. A minimum bond and standard bond amount are provided in sections 2805.20 and 2809.18 of this final rule. Including these amounts in the rule provide the opportunity for a developer to incorporate these costs in their project plan, reducing unexpected and unnecessary risk to a project that may keep it from proceeding. The bonding requirement for cultural, scenic, and wildlife impacts protects the public land resources when developing the land for various uses. For example, possible damages to the public land that would need to be covered by a bond could include surface disturbing activities, recontouring of soils to alter the flow of water, and the removal of VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 vegetation. Other damages could be those to resources outside the right-ofway that are diminished, such as water supply or biological resources. No revision to this paragraph is made as a result of this comment. Comment: One comment suggested that the BLM’s timeframes are too restrictive and would be a disincentive to the development of solar and wind energy on public lands. Response: No changes were made to this provision; however, the addition of section 2805.12(e) allows adjustments of the timeframes, provided that a good cause rationale is submitted by the project proponent and the BLM approves the request. No other comments were received or changes made to the paragraphs under section 2805.12(c). Section 2805.12(d) describes specific requirements for energy site or project testing grants. Because these are short term grants, for three years or less, the BLM believes it is appropriate to require facilities to be installed within 12 months of the effective date of the grant. All equipment must be maintained and failure to comply with any terms may result in termination of the authorization. No comments were received on this paragraph. However, two revisions have been made as follows. The word ‘‘wind’’ has been removed from the text of the paragraph describing the energy siteand project-area testing grants, to make it clear that these grants are not limited to wind project proponents, but are also available to solar project proponents. This change is consistent with other parts of the final rule where commenters requested that the BLM make the siteand project-area testing grants available for both solar and wind energy. Additionally, the language from the proposed rule that required a showing of good cause for an extension of project timelines has been revised to direct the reader to paragraph (e) of this section in the final rule, which governs reporting requirements for instances of noncompliance and requests for alternative stipulations, terms, or conditions. No other comments were received and no additional changes were made to this section. Section 2805.12(e) addresses reporting requirements for instances of noncompliance, and requests by project proponents for alternative stipulations, terms, or conditions of the approved right-of-way grant or lease. This provision was added to the final rule based on comments received. This section is similar to section 2804.40 of the final rule, but that section applies to subpart 2804 of the final rule and the PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 92159 application process for a grant, whereas this section applies to grant and lease holders and applies to the terms, conditions, and stipulations of all approved authorizations. Under this section, a holder must notify the BLM of noncompliance, and may request an alternative requirement during project operation. Paragraph (e)(1) of this section provides that a holder of a right-of-way must notify the BLM as soon as the holder either anticipates noncompliance or learns of its noncompliance with any stipulation, term, or condition of the approved right-of-way grant or lease. Notification to the BLM must be in writing and show good cause for the noncompliance, including an explanation of the reasons for failure. Comments: As noted previously in the preamble of this final rule, the BLM participated in stakeholder engagement meetings as part of the BLM’s regular course of business. During some such meetings, stakeholders clarified the concerns they had previously raised through written comments on the proposed rule. Specifically, industry representatives expressed concern that the rule did not include provisions giving the BLM flexibility to respond to project-specific or regional circumstances by, for example, adjusting capacity factors based on technical considerations or adjusting county zone assignments using land value assessments, which could be more accurate than NASS land values in a given area. Industry also provided additional information regarding its concern that the proposed rule’s bonding requirements were too rigorous. Commenters suggested that the BLM add provisions to the rule that authorize it to consider other factors when determining a bond amount, instead of only the reclamation cost estimate. Response: The BLM agrees that it may be reasonable to set alternative terms, conditions, and stipulations, and to consider other factors in setting bond amounts on a project-specific or regional basis. After considering this comment, the BLM included a new provision in the final rule, section 2805.12(e)(2), under which a grant or lease holder may request an alternative to the terms, conditions, and stipulations of their authorization, including requesting an alternative bonding requirement. The requested alternative requirement could include those identified in a project’s POD, the right-of-way’s terms and conditions, or other such requirements, such as a request for an extension of time. A request for an alternative payment E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92160 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations requirement may include a request for an alternative net capacity factor or per acre zone rate consideration. Requests may be submitted after notification has been provided as required in paragraph (e)(1) of this section or at the holder’s request. However, this section specifically notes that any request for an alternative must comply with applicable law in order to be considered. The BLM recognizes that some requests, such as those related to acreage rent, may be appropriately considered on a larger, regional scale. Under the authority in section 2806.70 of this final rule, therefore, the BLM may adjust the acreage rent schedule or MW capacity fee applicable to a particular project or in a given area, so long as the BLM determines such changes are based on reasonable methods for determining appropriate values for the use of public land resources. With respect to bonding requirements, the BLM recognizes it may be appropriate to consider other factors in addition to the reclamation cost estimate, such as the salvage value of project components. The BLM amended both sections 2805.12(e)(2) and 2805.20(a)(3) to accommodate that possibility, as discussed further in the section of this preamble that discusses section 2805.20(a)(3). Any proposed alternative to bonding must provide the United States with adequate financial security for the potential liabilities associated with any particular grant or lease. For example, a request for an alternative bonding requirement may include a holder’s request for consideration of project salvage values, but must also include the cost for processing and handling salvage actions. No alternative requirements request is approved unless and until you receive BLM approval in writing. Comments: As discussed in section 2804.40, several comments on various rule provisions expressed concern that a developer may not be able to meet BLM requirements. Comments said that failure to meet such requirements may be due to delays or environmental changes outside a developer’s control, statutory or policy changes, or other unanticipated situations. Response: The BLM believes that new paragraph (e) of this section addresses these concerns. The BLM intends to issue policies to address how it will implement these provisions following the issuance of this final rule. Consistent use of the final rule’s requirements and clear expectations will be outlined in these policies, to VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 include the provisions of this paragraph and those of section 2804.40. Section 2805.14 What rights does a grant convey? The BLM has added two new paragraphs to section 2805.14, both addressing applications for renewal of existing grants or leases. Paragraph (g) states that a holder of a solar or wind energy development grant or lease may apply for renewal under section 2807.22. Paragraph (h) of this section states that a holder of an energy projectarea testing grant may apply for a renewal of such a grant for up to an additional 3 years, provided that the renewal application also includes an energy development application. Paragraph (g) is added to this rule to explain how one may apply for a solar or wind energy development grant or lease renewal. The BLM added paragraph (h) to recognize that projectarea testing may be necessary for longer than an initial 3-year term, even after an applicant believes that energy development at a proposed project site is feasible. Revisions in this final rule were made consistent with those made in section 2801.9 for project-area grants. The proposed rule stated that specific project-area grants were for only wind energy, but based upon comments received, project-area grants have been expanded to include project-area testing grants for solar energy as well. No other comments were received or additional changes made to this section. Section 2805.15 What rights does the United States retain? In section 2805.15, the word ‘‘facilities’’ and a reference to section 2805.14(b) are added to the first sentence of paragraph (b) to clarify that the BLM may require common use of right-of-way facilities. The sentence now makes clear that the BLM retains the right to ‘‘require common use of your right-of-way, including facilities (see section 2805.14(b)), subsurface, and air space, and authorize use of the rightof-way for compatible uses.’’ The term ‘‘facility’’ is defined in the BLM’s existing regulations at section 2801.5 and means an improvement or structure owned and controlled by the grant holder or lessee. Common use of a rightof-way occurs when more than one entity uses the same area for their authorization. This revision facilitates the cooperation and coordination between users of the public lands managed by the BLM so that resources are not unnecessarily impacted. An example of common use of a facility is authorization for a roadway and an adjacent transmission line. In this case, PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 maintenance of the transmission line would include use of the adjacent roadway. Under existing section 2805.14(b), the BLM may authorize or require common use of a facility as a term of the grant and a grant holder may charge for the use of its facility. Section 2805.15(b) is revised to include a reference to section 2805.14(b). Comment: Two comments were received on this proposed change. One comment suggested clarifying that the change in section 2805.15(b) is intended to harmonize this paragraph with section 2805.14(b). The comment made special note that they do not protest this amendment to include ‘‘facilities,’’ so long as this was the only intent of the requirement. Response: The BLM agrees with the comment, and believes that the proposed adjustments to this rule would make the regulations consistent and not open to interpretation. The intent of this revision is not to go beyond what is discussed in the preamble for this paragraph. No changes to the proposed rule are necessary in response to this comment. Comment: The second comment stated that the rule deletes language from the existing section that prohibits charges for the common use of rights-ofway. The comment recommended modifying the section, but not deleting it, suggesting that the modification should prohibit charges except for prorata, fair-share cost allocations for the shared construction and/or operation and maintenance of facilities authorized under a grant or lease. The comment expressed concern that if this section is not modified, the first holder could intentionally charge a prohibitively expensive fee for common use. Response: The proposed rule did not delete this requirement from the existing regulations. Instead, it added the two words ‘‘including facilities.’’ Requiring a pro-rata, fair-share cost allocation agreement between private parties is outside BLM’s role of administering the public lands. The BLM believes that two private parties should reach an agreement without the BLM dictating its conditions. The BLM did not make any change in response to this comment since dictating third party contracts is beyond the scope of this rule. No other comments were received, nor were any additional changes made to this section. Section 2805.16 If I hold a grant, what monitoring fees must I pay? The table of monitoring categories in section 2805.16 no longer has the outdated dollar amounts for the category E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations fees. Paragraph (b) explains that the current year’s monitoring cost schedule is available from any BLM State, district, or field office, or by writing, and is adjusted annually for inflation using the same methodology as the table in section 2804.14(b). The table now includes only the definition of the monitoring categories in terms of hours worked, instead of providing specific dollar amounts. Also, the word ‘‘application’’ found in each category is changed to ‘‘inspecting and monitoring’’ to clarify that the inspecting and monitoring does not apply to right-ofway applications. This change was made to avoid either adjusting the table each year through a rulemaking or relying on outdated material. The current monitoring fee schedule may be found at https://www.blm.gov. 92161 This paragraph also provides that you may pay directly to another Federal agency their incurred costs in monitoring your grant instead of paying the fee to the BLM. As the regulations will no longer identify the costs by category, the current cost information is provided in the following table. The monitoring fees and work hours for FY 2015 are as follows: MONITORING CATEGORIES AND FEES FOR FY 2016 Monitoring category Federal work hours (1) Inspecting and monitoring of new grants, renewals, and amendments to existing grants. (2) Inspecting and monitoring of new grants, renewals, and amendments to existing grants. (3) Inspecting and monitoring of new grants, renewals, and amendments to existing grants. (4) Monitoring of new grants, renewals, and amendments to existing grants. (5) Master Agreements ........................................................................... (6) Inspecting and monitoring of new grants, renewals, and amendments to existing grants. Estimated Federal Work are >1 ≤8 $122. Estimated Federal Work are >>8 ≤24. Estimated Federal Work are ><24 ≤36. Estimated Federal Work are >36 ≤50. Varies ............................................. Estimated Federal Work are >50 .. 428. sradovich on DSK3GMQ082PROD with RULES3 Consistent with revisions made under monitoring fees table in 2805.16(a), the BLM is adding the words ‘‘inspecting and’’ to section 2805.16(a). This additional language is not a change from current BLM practice or policy and will allow the BLM to inspect and monitor the right-of-way to ensure project compliance with the terms and conditions of an authorization. Under this provision, if a project is out of compliance, the BLM could inspect the project to ensure that the required actions are completed to the satisfaction of the BLM, such as continued maintenance of the required activity or efficacy of the requirement. The BLM added a new sentence to paragraph (a) of this section that directs the reader to section 2805.17(c), which is an existing section of the regulations that describes category 6 monitoring fees. The two sentences preceding this revision describe when the other monitoring categories are updated, but there was no reference for category 6 monitoring fees. This revision is made for consistency with how the other monitoring categories are described in this section. No comments were received and no other changes are made from the proposed rule to the final rule. Section 2805.20 Bonding Requirements Section 2805.20 provides bonding requirements for all grant holders or lessees. These provisions are moved from existing section 2805.12. Under the existing regulations, bonds are required only at the BLM’s discretion. This VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 expanded section explains the details of when a bond is required and what the bond must cover. This is not a change from existing practice and is intended to provide clarity to the public. Specific bonding requirements for solar and wind energy development are outlined in paragraphs (b) and (c) of this section. This final rule explains requires are for the performance of the terms and conditions of a grant or lease and reclamation of a right-of-way grant or lease area. Comments: One comment indicated that solar facilities should not be subject to the same bonding framework as surface mining. The proposed bonding imposes unnecessary costs on the solar industry without providing any additional land protection. Surface mining operations may be abandoned and there is often significant surface disturbance, which is not the case with solar developments. Some comments said that acceptable bonding instruments should include corporate guarantees backed by financial tests. Bonding costs could be expensive, even doubling annual operating costs. The use of letters of credit could significantly reduce the bond amounts. Also, the BLM could have an initial lower bond amount until decommissioning is near and at that time the bond could be increased. Response: The framework used by surface mining development was a starting point for the solar and wind energy development process on what to consider when completing a RCE and determining the bond amount. However, PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 Fees for FY 2016 806. 1,156. As specified in the agreement. As specified in the agreement. this framework has been adapted to address circumstances specific to solar and wind energy development as well as all other right-of-way developments on the public lands. The bond amounts, as determined by an RCE or those using a standard bond, are necessary to ensure the protection of the public lands. Corporate guarantees are not an acceptable form of bond for the BLM. They are too risky to accept, even when financial tests are used, because they require continual confirmation of the quality of the corporate guarantee. However, irrevocable letters of credit are accepted by the BLM. Furthermore, the BLM cannot accept a lesser bond amount until the decommissioning of a grant or lease, because the BLM cannot be responsible for the financial stability of any company, nor can it bear the risk that a company may default or go bankrupt during the term of a grant, before decommissioning. To secure an increased bond at that time would be difficult if not impossible and having such a regulatory provision would place the public lands at unnecessary risk from the impacts of unreclaimed developments. Section 2805.20(a) provides that, if required by the BLM, you must obtain or certify that you have obtained a performance and reclamation bond or other acceptable bond instrument to cover any losses, damages, or injury to human health or damages to property or the environment in connection with your use of an authorized right-of-way. This paragraph also includes the language from existing section E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92162 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 2805.12(g), which details bonding requirements. Consistent with other revisions made in the final rule for better understanding of the rule, section 2805.20(a) is revised to add ‘‘costs associated with’’ when discussing what a bond will cover when terminating a grant. This added language makes it clear that the bond covers costs associated with terminating a grant. Comments: Some comments suggested expanding the language of this and subsequent bonding paragraphs to include ‘‘certificate of insurance or other acceptable security’’ in appropriate places. Response: Adding the language ‘‘certificate of insurance or other acceptable security’’ is unnecessary in the text of the regulation as the definition of acceptable bond instruments includes insurance policies, and therefore a specific form of insurance does not need to be included in the text of the regulation. Furthermore, the list of bond instruments that are acceptable is not an all-inclusive list. There are other forms of bond instruments, but they are not specified in the text of the rule because they are not as common as the ones identified. If the bond instrument list were to be considered as ‘‘all inclusive’’ it could unintentionally exclude acceptable bond instruments. As a result, the recommended addition to the rule text is not incorporated in the final rule. Section 2805.20(a)(1) requires that bonds list the BLM as an additionally covered party if a State regulatory authority requires a bond to cover some portion of environmental liabilities. If the BLM were not named as an additionally covered party for such bonds, the BLM would not be covered by the instrument. This provision allows the BLM to accept a State bond to satisfy a portion of the BLM’s bonding requirement, thus, limiting double bonding. Comment: One comment was received pertaining to this paragraph. The comment stated that bond requirements are unnecessary for ‘‘regulated entities’’ and that additional bonding requirements are duplicative and pose additional costs on a public utility’s customers. Response: The BLM disagrees, because regulated utilities present the same risks as unregulated utilities. Under section 2805.20(a), a bond is not required for all authorizations. Requirement of a bond for an authorization is at the discretion of the BLM and is dependent on the scale of the development and potential for risk VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 to the public lands. Also, the BLM may accept a bonding instrument submitted to the State if it meets the criteria identified in paragraphs (i) through (iii) of section 2805.20(a)(1). The intent of the bonding provisions in section 2805.20(a)(1)(iii) is to mitigate the potential for duplicative costs to rightof-way holders using the public lands. An additional requirement is added to paragraph (a) in this final rule that requires periodic review of bonds for adequacy. This provision is added to ensure consistency with the provisions added in response to comments on section 2805.20(c). This additional requirement includes bonds held by a State and accepted by the BLM and applies to all bonds held by the BLM, regardless of the size or complexity of an authorized project. The frequency of the bond adequacy reviews will be described in greater detail within BLM guidance issued as part of implementation of this rule. Review frequency, as described in the recently issued instruction memorandum 2015– 138, will be no less than once every 5 years, giving review priority to those that pose a greater risk to the public lands. Under section 2805.20(a)(1)(i), a State bond must be redeemable by the BLM. If such instrument is provided to the BLM and it is not redeemable, the BLM would be unable to use the bond for its intended purpose(s). Under section 2805.20(a)(1)(ii), a State bond must be held or approved by a State agency for the same reclamation requirements as the BLM requires. Under section 2805.20(a)(1)(iii), a State bond must provide the same or greater financial guarantee than the BLM requires for the portion of environmental liabilities covered by the State’s bond. Comment: One comment concerning this paragraph stated that section 2805.20(a)(3) makes clear that a bond will not be required for solar energy projects developed inside DLAs, and bonds will be required for solar projects outside DLAs. Response: This comment is not correct. Section 2809.18(e) requires a specific performance bond for leases authorized under subpart 2809, identified as a standard bond. Standard bonds are not determined by a RCE, but rather are set as specified in the regulations. Under section 2805.20(a)(2) a bond must be approved by the BLM’s authorized officer. This approval ensures that the bond meets the BLM’s standards. Under section 2805.20(a)(3), the bond amount is determined by the BLM based on a RCE, and must also PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 include the BLM’s costs for administering a reclamation contract. As defined in section 2801.5, a RCE identifies an appropriate amount for financial guarantees for uses of the public lands. An additional requirement is included in paragraph (a)(3) requiring periodic review of bonds for adequacy. This requirement was added to ensure consistency with the provisions added to section 2805.20(c). Both paragraphs (c)(3) and (4) of this section contain a stipulation that they do not apply to leases issued under subpart 2809. Bonds issued under subpart 2809 for leases inside DLAs have standard amounts. Bond acceptance and amounts for solar and wind energy facilities outside of DLAs are discussed in paragraphs (b) and (c) of this section. Paragraph (a)(3) of this section is revised from the proposed to final rule to improve readability. Specifically, the BLM removed the second sentence of the paragraph that stated the BLM may require you to prepare an acceptable RCE. The first sentence of this paragraph is revised to include ‘‘, which the BLM may require you to prepare and submit.’’ This revision is intended to improve the reader’s understanding of the final rule and its requirements by streamlining the text of the rule. In addition to the changes made for readability, this paragraph is revised by adding, ‘‘The BLM may also consider other factors, such as salvage values, when determining the bond amount.’’ This revision responds to concerns raised in stakeholder engagement meetings and is consistent with section 2805.12(e)(2) of this final rule, which specifies that a developer may request an alternative requirement for bonding. A request for an alternative bonding requirement may include a holder’s request for consideration of project component salvage values. Such a request may reduce the BLM’s bond determination amount, even to an amount below the minimum or standard bond amount. However, the request must be fully supported by documentation from the requestor that includes the costs for processing and handling salvage materials, such as information about distribution centers for such materials and other reasonable considerations. Further, as noted under paragraph 2805.12(e)(2), requests for an alternative bonding requirement must comply with applicable law in order to be considered, and must provide the United States with adequate financial security for potential liabilities. Regardless of the nature of the request, any such request is not approved until you receive BLM approval in writing. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Section 2805.20(a)(4) requires that a bond be submitted on or before the deadline provided by the BLM. Current regulations have no such provision, and this revision makes it clear what the BLM expects when it requires a bond instrument. The BLM believes this provision will improve the timely collection of bonds. The timely submittal of a bond promotes efficient stewardship of the public lands and ensures that the bond amount provided is acceptable to the BLM and available prior to beginning ground-disturbing activities. Section 2805.20(a)(5) outlines the components to be addressed when determining a RCE. They include environmental liabilities, maintenance of equipment and facilities, and reclamation of the right-of-way. This paragraph consolidates and presents what liabilities the bond must cover. Under section 2805.20(a)(6), a holder of a grant or lease may ask the BLM to accept a replacement bond. The BLM must review and approve the replacement bond before accepting it. If a replacement bond is accepted, the surety company for the old bond is not released from obligations that accrued while the old bond was in effect, unless the new bond covers such obligations to the BLM’s satisfaction. This gives the grant holder flexibility to find a new bond, potentially reducing their costs, while ensuring that the right-of-way is adequately bonded. Under section 2805.20(a)(7), a holder of a grant or lease is required to notify the BLM that reclamation has occurred. If the BLM determines reclamation is complete, the BLM may release all or part of the bond that covers these liabilities. However, section 2805.20(a)(8) reiterates that a grant holder is still liable in certain circumstances under section 2807.12. Despite the bonding requirements of this section, grant holders are still liable for damage done during the term of the grant or lease even if: The BLM releases all or part of your bond, the bond amount does not cover the cost of reclamation, or no bond remains in place. Section 2805.20(b) and (c) identify specific bond requirements for solar and wind energy development respectively outside of DLAs. A holder of a solar or wind energy grant outside of a DLA will be required to submit a RCE to help the BLM determine the bond amount. For solar energy development grants outside of DLAs, the bond amount will be no less than $10,000 per acre. For wind energy development grants outside of DLAs, the bond amount will be no less than $10,000 per authorized turbine VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 with a nameplate generating capacity of less than one MW, and no less than $20,000 per authorized turbine with a nameplate generating capacity of one MW or greater. Section 2805.20(d) is new to the final rule. This paragraph separates site- and project-area testing authorization bond requirements from section 2805.20(c). This change is consistent with other provisions that have been modified to expand the wind energy site- and project-area testing authorizations in the proposed rule to include solar energy. With this adjustment, meteorological and other instrumentation facilities are required to be bonded at no less than $2,000 per location. These bond amounts are the same as standard bond amounts for leases required under section 2809.18(e)(3). The BLM recently completed a review of bonded solar and wind energy projects and based the bond amounts provided in this final rule on the information found during the review. When determining these bond amounts, the BLM considered potential liabilities associated with the lands affected by the rights-of-way, such as potential impacts to cultural values, wildlife habitat, and scenic values. The range of costs included in the review represented the cost differences in performing reclamation activities for solar and wind energy developments throughout the various geographic regions the BLM manages. The BLM used the review to determine an appropriate bond amount to cover potential liabilities associated with solar and wind energy projects. Minimum bond amounts are set for solar development for each acre of authorization because solar energy development encumbers 100 percent of the lands and excludes them from other uses. The recent review of bonds showed a range of bond amounts for solar energy development of approximately $10,000 to $18,000 per acre of the rights-of-way on public lands. Minimum bond amounts for wind energy development are set for each wind turbine authorized on public land, rather than per acre, because the encumbrance is factored at 10 percent and is not exclusive to other uses. The review showed that the bond amounts for recently authorized wind energy development ranged between $22,000 and $60,000 per wind turbine. Recently bonded wind energy projects use wind turbines that are one MW or larger in nameplate capacity, whereas older projects generally use turbines that are less than one MW. Comment: Some comments suggested that bonds should not be required for solar facilities on the public lands PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 92163 because they pose low environmental risk and that some solar energy generation technologies have less potential impacts than others and, therefore, less risk. Response: The BLM agrees that generally, solar facilities do not pose the same environmental hazards as other energy development facilities. However, the BLM’s requirement for bonding is not only for the potential environmental risks that a development poses on the public lands. Rather, a bond is required to cover direct impacts to the resources and their reclamation to a condition as near as possible to what they were before development occurred. This comment is specific to solar energy, but raises the question of lesser risk for certain developments, which is an issue that arises with respect to wind energy as well. In the BLM’s review of recently bonded solar and wind energy projects, for example, the range of bond amounts identified was for newer wind energy turbines, with a nameplate capacity of one MW or greater. These wind energy turbines are larger, have a greater footprint, and require larger and more equipment and materials to install and remove than wind turbines that have a smaller nameplate capacity. In order to accommodate developments that employ smaller wind turbines that pose lesser risk to resources, the BLM is including in the final rule the existing policy requirement of a $10,000 minimum bond amount for projects utilizing smaller turbines. Turbines with a nameplate capacity of one MW or greater will have a minimum bond amount of $20,000, consistent with the proposed rule. A reclamation cost estimate will still be required for each project on lands outside of designated leasing areas, as described in section 2805.20(a)(3) of this rule. The BLM’s bond amount determination for wind energy projects using turbines with lesser nameplate capacities could exceed the minimum bond amount based upon site-specific risks. Subpart 2806—Annual Rents and Payments Existing subpart 2806, has been retitled to more clearly and consistently identify the content of and revisions to this subpart of the final rule. The content and revisions to this subpart of the final rule include those requiring a payment of an acreage rent and MW capacity fee for rights-of-way. Retitling this subpart makes it clear that the BLM may require payments that are not specifically a rent. E:\FR\FM\19DER3.SGM 19DER3 92164 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Section 2806.12 pay rents? When and where do I sradovich on DSK3GMQ082PROD with RULES3 The heading of section 2806.12 is revised by adding the words ‘‘and where.’’ This revision is not a change in the BLM’s practice or policy, but is intended to help clarify where rental payments should be made. Section 2806.12(a) describes the proration of rent for the first year of a grant. Specific dates are used for proration to prevent any confusion to grant holders and promote consistent implementation by the BLM. Rent is prorated for the first partial year of a grant, since the use of public lands in such situations is for only a partial year. Paragraph (a)(2) of this section explains that if you have a short-term grant, you may request that the BLM bill you for the entire duration of the grant in the first payment. Some short term grant holders may wish to pay this amount up front. Consistent with other sections of the final rule, a revision to paragraph (a)(2) has been made to delete the reference to wind energy in connection with site-specific testing. Paragraph (b) of this section is revised by removing the word ‘‘other’’ from the first sentence. This revision is intended to clarify that all rental payments must be made in accordance with the payment plan described in section 2806.24. This revision is made to improve readability, but does not constitute a change from existing requirements. Section 2806.12(d) directs right-ofway grant holders to make rental payments as instructed by the BLM or as otherwise provided for by Secretarial Order or legislative authority. This provision acknowledges that either the Secretary or Congress may take action that could affect rents and fees. The BLM will provide payment instructions for grant holders that will include where payments may be made. The word ‘‘must’’ is added into the first sentence of this paragraph to improve readability and for consistency with the phrasing of other requirements in this final rule. This revision does not constitute a change from existing requirements. No comments were received on this section, and no other changes were made from the proposed rule to the final rule. Section 2806.13 What happens if I do not pay rents and fees or if I pay the rents and fees late? Section 2806.13 is revised from ‘‘What happens if I pay the rent late?’’ to read ‘‘What happens if I do not pay rents and fees or if I pay the rents and fees late?’’ This change addresses the addition of paragraph (e) to this section, VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 which specifies that the BLM may retroactively bill for uncollected or under-collected rents and fees. The BLM will collect rent retroactively if: (1) A clerical error is identified; (2) A rental schedule adjustment is not applied; or (3) An omission or error in complying with the terms and conditions of the authorized right-of-way is identified. Paragraph (a) of this section is amended by removing language from the existing rule that stated a fee for a late rental payment may not exceed $500 per authorization. The BLM determined that the current $500 limit is not a sufficient financial incentive to ensure the timely payment of rent. Therefore, under this final rule, late fees will now be proportional to late rental amounts, to provide more incentive for the timely payment of rents to the BLM. The BLM also added the term ‘‘fees’’ so the MW capacity fees for solar and wind energy development grants and leases may be collected consistently with any rent due. New paragraph (g) of this section allows the BLM to condition any further activities associated with the right-ofway on the payment of outstanding payments. The BLM believes that this consequence imposed for outstanding payments is further incentive to timely pay rents and fees to the BLM. Comment: A comment suggested that the BLM should be responsible for clerical and other possible errors, and that the holder should not be responsible for payment of rents, fees, or late payments if such an error occurs due to the BLM. Further, the comment suggested a 6 month time limit for enforcing such corrections that would be retroactive, and that a late payment fee would be no more than 5 percent of the total rents and fees. Response: The BLM considered the 6month and 5 percent limits suggested by the comment and decided to not include these limits in the final rule. When entering into a right-of-way agreement with the BLM, a holder agrees to the terms and conditions for the use of the public lands. Included as part of these terms and conditions is the requirement that a holder pay, in advance, the appropriate amount for the use of the public lands. Generally, the BLM sends a bill or other notice to a holder that is a notice of payment due to the BLM, as agreed to in the right-of-way grant. Even if the BLM were to make a clerical or administrative error when transmitting a notice of payment obligations, such an error in a notice would not permanently relieve a right-of-way grant holder from its independent requirement to pay the appropriate amount for the use of the public lands as specified in the grant. PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 No other comments were received for this section, and no changes were made to the final rule. Section 2806.20 What is the rent for a linear right-of-way grant? In section 2806.20, the address to obtain a current rent schedule for linear rights-of-way is updated. Also, district offices are added to State and field offices as a location where you may request a rent schedule. These minor corrections are made to provide current information to the public. No comments were received on this provision, and no changes are made from the proposed rule to it in the final rule. Section 2806.22 When and how does the per acre rent change? A technical change in section 2806.22 corrects the acronym IPD–GDP, referring to the Implicit Price Deflator for Gross Domestic Product. No comments were received and no changes are made from the proposed rule to the final rule. Section 2806.23 How will the BLM calculate my rent for linear rights-ofway the Per Acre Rent Schedule covers? In the existing regulations, paragraph (b) of this section provides for phasing in the initial implementation of the Per Acre Rent Schedule by allowing a onetime reduction of 25 percent of the 2009 acreage rent for grant holders. This paragraph was flagged for removal in the proposed rule and is being removed by this final rule because the phase-in for the updated rent schedule referenced in that provision ended in 2011 and thus is no longer applicable. No comments were received and no other changes are made from the proposed rule to the final rule. Section 2806.24 How must I make payments for a linear grant? Section 2806.24(c) explains how the BLM prorates the first year rental amount. The rule adds an option to pay rent for multiple year periods. The new language requires payment for the remaining partial year along with the first year, or multiples thereof, if proration applies. No comments were received and no other changes are made from the proposed rule to the final rule. Section 2806.30 What are the rents for communication site rights-of-way? Section 2806.30 is amended by removing paragraph (b), which contained the communications site rent schedule table. Paragraph (c) is redesignated as new paragraph (b). Section 2806.30(a) is revised to remove redundant language referring to the BLM communication site rights-of-way E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations rent schedule. Section 2806.30(a)(1) is revised to update the mailing address. Section 2806.30(a)(2) is revised by removing references to the table that has been removed. This paragraph still describes the methodology for updating the schedule, but directs the reader to the BLM’s Web site or BLM offices instead. No comments were received, and no other changes are made inform the proposed rule to the final rule. Section 2806.34 How will BLM calculate the rent for a grant or lease authorizing a multiple-use communication facility? Section 2806.34(b)(4) is revised to fix a citation in the existing regulations that was incorrect. No comments were received, and no other changes are made from the proposed rule to the final rule. sradovich on DSK3GMQ082PROD with RULES3 Section 2806.43 How does BLM calculate rent for passive reflectors and local exchange networks? and Section 2806.44 How will BLM calculate rent for a facility owner’s or facility manager’s grant or lease which authorizes communication uses? Sections 2806.43(a) and 2806.44(a) are each revised by changing the crossreference from section 2806.50 to section 2806.70. Section 2806.50 is redesignated as section 2806.70, and these citations are updated to reflect this change. Section 2806.44 is retitled from ‘‘How will BLM calculate rent for a facility owner’s or facility manager’s grant or lease which authorizes communication uses subject to the communication use rent schedule and communication uses whose rent BLM determines by other means?’’ to read as above. This section has been retitled to more clearly identify the content and additions made. The addition is a new introductory paragraph describing that this section applies to grants or leases. Such authorizations may include a mixture of communication uses, some of which are subject to the BLM’s communication rent schedule. Such rent determinations will be made under the provisions of this section. No comments were received, and no other changes are made from the proposed rule to the final rule. Sections 2806.50 Through 2806.68 Rents and Fees for Solar Energy Rightsof-Way and Wind Energy Rights-of-Way Sections 2806.50 through 2806.58 and sections 2806.60 through 2806.68 provide new rules for the rents and fees for solar and wind energy development, respectively. The rents and fees described in these sections, along with the bidding process, will help the BLM generally receive fair market value for VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 the use of public lands. There are similarities between the provisions governing solar and wind energy grants and leases. For example, each type of project and authorization instrument is subject to acreage rent and MW capacity fee obligations. However, there are differences in the final rule with respect to wind and solar projects (e.g., solar energy projects assume 100% encumbrance within the project footprint, whereas wind energy projects assume 10% encumbrance). There are also differences in the way acreage rent and MW capacity fees are applied to solar energy grants versus leases. These differences are discussed in sections 2806.52 and 2806.54; wind energy grants and leases are discussed in sections 2806.62 and 2806.64, respectively. Section 2806.50 is retitled ‘‘Rents and fees for solar energy rightsof-way.’’ The former regulation at section 2806.50 has been redesignated as section 2806.70. Section 2806.51 is added to this final rule in response to comments received regarding potential payment uncertainty. Revised section 2806.50 requires a holder of a solar energy right-of-way authorization to pay annual rents and fees for right-of-way authorizations issued under subparts 2804 and 2809. Those right-of-way holders with authorizations issued under subpart 2804 will pay rent for a grant and those right-of-way holders with authorizations issued under subpart 2809 will pay rent for a lease. Payment obligations for both types of right-of-way authorizations now consist of an acreage rent and MW capacity fee. The acreage rent must be paid in advance, prior to the issuance of an authorization, and the MW capacity fee will be phased-in after the start of energy generation. Both the acreage rent and MW capacity fee must be paid in advance annually during the term of the authorization. The initial acreage rent and MW capacity fee are calculated, charged, and prorated consistently with the requirements found in sections 2806.11 and 2806.12. Rent for solar authorizations vary depending on the number of acres, technology of the solar development, and whether the right-ofway authorization is a grant or lease. The BLM received some comments that generally applied to its rental provisions of the final rule. The BLM also revised sections 2806.50 through 2806.68 to improve the readability of these sections. Comment: One comment on the rental provisions stated that the proposed rule requires full payment immediately upon the award of an authorization. The comment suggested that payment should begin at the time infrastructure PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 92165 is placed in service instead at the time of award. Response: The BLM does not require full payment immediately upon award of an authorization. Both an acreage rent and MW capacity fee are charged for solar and wind energy authorizations, but only the acreage rent is paid at the time a right-of-way is authorized. Acreage rent is charged upon the authorization of such developments as the public lands are being encumbered. The MW capacity fee may be phased-in during the term of the right-of-way as approved in the POD. This meets the concerns of the comment because the rules do not require full payment of rents and fees immediately upon authorization of a right-of-way. Comments: Some comments stated that the BLM does not have authority to levy a MW capacity fee. These comments argued that because the Federal Government lacks an ownership interest in sunlight or the wind, it cannot sell the rights to use them for profit (unlike the sale of Federal mineral interests at fair market value), charge a royalty against sale proceeds (unlike Federal oil and gas rights), or charge rent for the use of sunlight (unlike Federal land surface occupancy rights). Aside from the ownership issue, these commenters argued that the MW capacity fee is an inappropriate element of fair market value because it is based on the value of electricity generated and sold, rather than the value of the underlying land itself. For example, the comments pointed out, if two facilities occupy the same amount of land, but one has more efficient technology, the more efficient facility would pay more because of the additional electricity generated, not because of land rental values. The comments recommended that, for solar and wind energy generation rights-of-way, the BLM should exclusively charge rent, through a per acre rent schedule informed only by the NASS. Response: FLPMA generally requires the BLM to obtain fair market value for the use of the public lands, including for rights-of-way. In accordance with the BLM’s authority, and similar to valuation practices for solar and wind energy development on private lands, the BLM uses electrical generation capacity as a component of the value it assigns to the use of the lands by the projects. From information the BLM has been provided by industry or has otherwise collected, the BLM determined that private land owners customarily charge a ‘‘royalty,’’ typically a percentage of the value of actual production, for the use of private land. As explained above, the BLM has E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92166 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations elected in this final rule to charge a fee based on installed MW capacity rather than a royalty. This fee, when added to the applicable acreage rent and any minimum and bonus bids received, ensures that the BLM will obtain an appropriate value for the use of the public lands by solar and wind energy projects. The BLM classifies MW capacity payments as ‘‘fees’’ rather than ‘‘rent,’’ because they reflect the commercial utilization value of the public’s resource, above and beyond the rural or agricultural value of the land in its unimproved state. In the BLM’s experience and consistent with generally accepted valuation methods, the value of the public lands for solar or wind energy generation use depends on factors other than the acreage occupied and the underlying land’s unimproved value. Other key factors include the solar insolation value or wind speed and density, proximity to demand for electricity, proximity to transmission lines, and the relative absence of resource conflicts that tend to inhibit solar and wind energy development. To account for these elements of land use value that are not intrinsic to the rural value of the lands in their unimproved state, under this final rule, solar and wind right-of-way payments include ‘‘MW capacity fees’’ in addition to the ‘‘acreage rent’’ as a component of fair market value for these authorizations. The acreage payment remains classified as ‘‘rent’’ under the final rule, as it is directly tied to the area of public lands encumbered by the project and the constraints the project imposes on other uses of the public lands. Electric or telephone facilities that qualify for financing under the Rural Electrification Act may be exempt from paying a ‘‘rental fee,’’ which includes the solar or wind energy acreage rents. However, as explained in IM 2016–122, and consistent with the BLM’s current practice, any such facilities must pay other costs associated with the fair market value of the land, such as the MW capacity fee, minimum bid, or bonus bid, because these other payments are independent of the land acreage and value of the unimproved land, and therefore are not appropriately termed ‘‘rental fees.’’ The use of an acreage rent and MW capacity fee is also intended to encourage a developer to more efficiently use the public lands encumbered by a project. In the situation where two parcels with the same MW capacity for projects have differing technologies, the more efficient technology (and therefore the higher approved MW capacity) would be VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 paying more in fees, but less in acreage rent for the same generation capacity as the more efficient technology would allow a developer to pay less in acreage rent to achieve the same approved MW capacity. The BLM intends to evaluate the adequacy and impact of the provisions of this final rule after it has had an opportunity to observe how the payment requirements and rate adjustment methods put in place affect the BLM’s ability to support renewable energy development and simultaneously collect fair market value from the projects it authorizes. Section 2806.50 Rents and Fees for Solar Energy Rights-of-Way The BLM revised section 2806.50 to include site- and project-area testing. In the proposed rule, rights-of-way for sitespecific and project-area testing were allowed only for wind energy. The final rule deletes the word ‘‘wind’’, to make the provision generally applicable to wind or solar energy testing. This change is made in response to a comment, which will be discussed under section 2806.58 of this preamble. No other comments were received, and no other changes made to the final rule. Section 2806.51 Scheduled Rate Adjustment Comments: After the comment period of the proposed rule closed, the BLM continued to hold general meetings with stakeholders about the BLM’s renewable energy program. In some of those meetings, stakeholders asked questions about the proposed rulemaking and clarified concerns they had raised through their written comments. Industry representatives shared additional information regarding their concerns with the proposed rule’s approach to calculating annual payment requirements, including uncertainty about potential future payment requirements over the life of the rightof-way authorization. Specifically, commenters expressed concerns about the potential for NASS values in certain areas to jump significantly between surveys, resulting in unexpected and unsustainable changes in the per acre zone rates for those lands. The BLM understands that when financing a project, developers must predict project costs, including for the construction, operation, and maintenance phases of the project. Included with these costs are expenses for land use, such as annual payment requirements of a BLM grant or lease. The BLM also understands that in some areas there is the potential for NASS land values to change significantly from PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 one 5-year period to the next in a manner that is unpredictable, and that can result in significant acreage rent increases or decreases. For lands that experience those large changes in NASS land values, the standard rate adjustment method’s periodic update to rates may create financial uncertainty. This may, in turn, complicate project financing and require a developer to pay a higher cost of capital. Response: The BLM agrees with these comments and recognizes that increasing payment certainty over the term of the grant or lease may help facilitate project financing and even reduce financing costs. To respond to these comments and concerns, the BLM added section 2806.51 to the final rule. This section allows a grant or lease holder to choose one of two rate adjustment methods, the ‘‘standard’’ rate adjustment method, or the scheduled rate adjustment method. Under the standard rate adjustment method, which was described in the proposed rule and is now named in the final rule, the BLM will periodically reassess the rates it charges for use of the public lands and resources based on the latest NASS survey data and the applicable western hub energy prices, as well as other data discussed in greater detail in connection with section 2806.52 of this final rule. By contrast, if the grant or lease holder chooses the scheduled rate adjustment method, the BLM will implement scheduled, predictable rate increases over the term of the grant. Under this approach, annual project costs are easily modeled, which increases the certainty as to future costs. By selecting the scheduled adjustment method a proponent would trade the potential upsides of rate adjustments pegged to a fluctuating national indicator (which may only increase slightly in a given period, or may even go down) for greater payment certainty. Based on historical trends, the BLM expects that in some areas, the rates under the standard rate adjustment method will increase by more than they would under the scheduled rate adjustment method. However, the opposite is also true: in other areas, rates under the standard method may increase by very little, or even decrease, while rates under the scheduled rate adjustment method will increase by a fixed amount at fixed intervals. The BLM determined that it is appropriate to allow developers to choose between these rate adjustment methods, as some grant or lease holders may want to take advantage of the possibility that NASS values could stay nearly constant or E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations even go down, while other holders may want to increase payment certainty. The adjustments contemplated under the scheduled rate increase are similar to the terms found in many power purchase agreements, which build in fixed annual increases. The BLM based the scheduled adjustment approach on an evaluation of market trends over the last 10 years. The trend over that period is consistent with a longer term trend showing power pricing has increased generally. The BLM believes that the scheduled rate adjustment method provides certainty for prospective developers while also ensuring that the BLM will obtain fair market value for the use of the public lands. Paragraph (a) of this section provides that a holder may choose the standard rate adjustments for a right-of-way, which are detailed in section 2806.52(a)(5) and (b)(3) for grants, or section 2806.54(a)(4) and (c) for leases, or the scheduled rate adjustments for a right-of-way, which are detailed in section 2806.52(d) for grants, or section 2806.54(d) for leases. If a holder selects the standard adjustment method, the BLM will increase or decrease the per acre zone rate and MW rate for the authorization, as dictated by the specified calculation method, at fixed intervals over the term of a grant or lease. If a holder selects the scheduled rate adjustment method, the BLM will increase the per acre zone rate and MW rate by a fixed amount, described in section 2806.52(d) or 2806.54(d), respectively, at those same intervals. The BLM created the scheduled rate adjustment method using percentages and values that reflect current market conditions and trends; if, in the future, the BLM considers it necessary to revise the applicable rates in the scheduled rate adjustment provisions, it will do so via rulemaking. Once a holder selects a rate adjustment method, the holder will not be able to change the rate adjustment method until the grant or lease is renewed. This rule clearly articulates the differences between these methods. As such, a holder will not be able to change its selection in the future, if one method proves more favorable than another during the term of the authorization. The rates paid by grant or lease holders that chose the standard adjustment approach may, in some cases, diverge from the rates paid by grant or lease holders that chose the scheduled adjustment approach. The BLM believes, however, that over the length of the grant or lease both methods will provide fair market value for the underlying authorization to use the public lands and resources. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Paragraph (b) of this section requires that a holder provide written notice to the BLM, before a grant or lease is issued, if the holder wishes to select the scheduled rate adjustment. In the absence of such a notice, the BLM will continue to use the standard rate adjustment method for the authorization. The BLM will generally not consider a request for an alternative rate structure or terms from holders that select the scheduled rate adjustment method. The holder knows what their rates will be when selecting the scheduled rate adjustment method and is committing to those rates, understanding that they cannot change this selection. Paragraph (c) of this section explains how the final rule will affect existing grant holders. Like new grant holders, existing grant holders also have the option to choose between standard or scheduled rate adjustments. The holder of a solar or wind energy grant that is in effect prior to the effective date of this final rule may request that the BLM apply the scheduled rate adjustment to their grant, rather than the standard rate adjustment. Any such request must be received by the BLM in writing within 2 years of this rule’s publication in the Federal Register. The BLM determined that 2 years was a reasonable amount of time for grant holders to consider the benefits of the different rate adjustment methods. For existing grant holders that choose the scheduled rate adjustment method, the BLM will apply the scheduled rate adjustment in section 2806.52(d) to the rates in effect prior to the publication of this final rule. For existing grant holders that choose the scheduled rate adjustment method, however, the BLM will first adjust the rates in existing grants and leases upward by 20%, to account for the fact that the BLM elected not to undertake the most recent adjustment under its existing guidance because of the pendency of this rulemaking process. The scheduled rate adjustment method will then apply, resulting in fixed rate increases at set intervals thereafter. The BLM will continue to apply the standard rate adjustments to the rates for existing grant holders unless and until written notice is received requesting the scheduled rate adjustment method. As previously mentioned, the standard rate adjustment is BLM’s default method and current practice, as outlined in existing policy. Section 2806.52 Rents and Fees for Solar Energy Development Grants Section 2806.52 requires a grant holder to make annual payments that PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 92167 include the acreage rent and MW capacity fee. Comments: Some comments expressed confusion over whether certain costs in the proposed rule were a ‘‘rent’’ or a ‘‘fee.’’ Response: The introductory paragraph for section 2806.52 in the final rule has been revised to clarify what is a ‘‘rent’’ and what is a ‘‘fee.’’ ‘‘Rent’’ is now described as an ‘‘acreage rent,’’ and ‘‘fee’’ has been clarified as a ‘‘MW capacity fee.’’ Paragraph (a) of this section describes the acreage rent requirements and calculation methodology, and paragraph (b) of this section describes the MW capacity fee requirements and calculation methodology. Section 2806.52(a), ‘‘Acreage rent,’’ describes the acreage rent payment for solar energy grants. ‘‘Acreage rent,’’ as defined in section 2801.5, means rents assessed for solar energy development grants and leases that are determined by the number of acres authorized for the grant or lease times the per acre zone rate. Under existing policy, entities that qualify for financing under the Rural Electrification Act may be exempted from paying solar acreage rent (IM 2016–122). Comments: Several comments were concerned about using the values set for NASS and believed that they would not apply to vacant BLM land. Comments suggested that solar and wind energy development should be appraised or assessed differently than other authorization types, such as linear rights-of-way. To determine the acreage rent for such developments following the same criteria as linear facilities would make development cost prohibitive on the public lands due to unfairly applying a linear acreage rent. Response: In response to these comments, both sections 2806.52 and 2806.62 are revised to incorporate Statespecific reductions from the baseline NASS values in the calculation of acreage rents. The proposed rule used the linear rent schedule as the basis for determining acreage rent values by proposing solar and wind acreage rent as a percentage factor of the linear rent schedule. Using a percentage factor for acreage rent allows the BLM to adopt the linear rent calculation and effectively change the encumbrance factor to be specific for solar or wind energy. For the final rule, the BLM has further modified the calculation used to determine acreage rent for solar and wind energy authorizations. The BLM recognizes that the NASS agricultural values may not always be a fair representation of public lands because E:\FR\FM\19DER3.SGM 19DER3 92168 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations they include the agricultural improvements (e.g., buildings, ditches, irrigation) to the land. To account for this possibility, the final rule uses the NASS agricultural values as a baseline for the determination of acreage rent, then incorporates a 20 percent or greater State-specific reduction that accounts for the extent to which the NASS values reflect agricultural improvements to land in each State. By applying these State-specific reductions to the baseline NASS values when calculating acreage rent, the BLM more accurately identifies the value of unimproved land for a project site. The proposed rule based the acreage rent calculation on the linear rent schedule, which uses a nationwide reduction of 20 percent. In the final rule, the State-specific factors will be no less than the 20 percent reduction initially proposed for the rule, but may be greater. A more detailed discussion on how these values are calculated and a table showing the specific values for each State is found under section 2806.52(a)(2) of this preamble. Paragraph (a)(1) summarizes how the BLM identifies a per acre zone rate using the NASS land values. Paragraph (a)(2) describes how the BLM adjusts the per acre zone rate, by 20 percent or more, to account for agricultural improvements to the lands in each State. A State with a larger calculated reduction than the minimum 20 percent may lower a particular county’s acreage rent. In the case of some States, such as Utah, the State-specific reduction that applies to unimproved agricultural land values is approximately 50 percent. This is discussed in greater detail under section 2806.52(a)(2). Using this methodology, the BLM is able to establish a method for calculating acreage rents for solar and wind energy developments that are appropriate for the location of the development. New section 2806.52(c) is added to this final rule providing the BLM’s implementation of the acreage rent and MW capacity fee for solar energy developments. Under section 2806.52(a)(1), the acreage rent for solar energy rights-ofway is calculated by multiplying the number of acres (rounded up to the nearest tenth of an acre) within the authorized area times the per acre zone rate in effect at the time the authorization is issued. Under section 2806.52(a)(1), the initial per acre zone rate for solar energy authorizations is now established by considering four factors; the per acre zone value multiplied by the encumbrance factor multiplied by the rate of return multiplied by the annual adjustment factor. This calculation is reflected in the following formula ¥ A × B × C × D = E, where: ‘‘A’’ is the per acre zone value, as described in the linear rent schedule in section 2806.20(c); ‘‘B’’ is the encumbrance, equaling 100 percent; ‘‘C’’ is the rate of return, equaling 5.27 percent; ‘‘D’’ is the annual adjustment factor, equaling the average annual change in the IPD–GDP for the 10-year period immediately preceding the year that the NASS census data becomes available; and ‘‘E’’ is the annual per acre zone rate. The BLM will adjust the per acre zone rates each year, based on the average annual change in the IPD–GDP, consistent with section 2806.22(a). Adjusted rates are effective each year on January first. Under new section 2806.52(a)(2), counties (or other geographical areas) are assigned to a Per Acre Zone Value on the solar energy acreage rent schedule, based on the State-specific percent of the average land and building value published in the NASS Census. The BLM currently uses an acreage rent schedule for linear rights-of-way to determine annual payments. The rent schedule separates land values into 15 different zones and establishes values for each zone ranging from $0 to $1,000,000 per acre. These values are based on the published agricultural values of the land, as determined by the NASS. Solar and wind energy acreage rents will be determined using the same zone values as linear rights-of-way. However, the BLM will use a state specific reduction when assigning lands to a zone. The Per Acre Zone Value is a component of calculating the Per Acre Zone Rate under paragraph (a)(1) of this section. The calculation in this paragraph establishes a State-specific percent factor that represents the difference between the improved agricultural land values provided by NASS and the unimproved rangeland values that represent BLM land. This calculation is reflected in the following formula—(A/B)¥(C/D) = E, where: ‘‘A’’ is the NASS Census statewide average per acre value of non-irrigated acres; ‘‘B’’ is the NASS Census statewide average per acre land and building value; ‘‘C’’ is the NASS Census total statewide acres in farmsteads, homes, buildings, livestock facilities, ponds, roads, wasteland, etc.; ‘‘D’’ is the total statewide acres in farms; and ‘‘E’’ is the State-specific percent factor or 20 percent, whichever is greater. The county average per acre land and building values that exceed the 20 percent threshold for solar and wind energy development are as follows for BLM managed lands. TABLE OF STATE-SPECIFIC FACTORS AND OTHER DATA FOR APPLICABLE STATES Existing regulations and proposed rule: Nationwide 20 percent factor (%) sradovich on DSK3GMQ082PROD with RULES3 State Alaska ........................................................................................................................ Arizona ....................................................................................................................... California .................................................................................................................... Colorado .................................................................................................................... Idaho .......................................................................................................................... Montana ..................................................................................................................... Nevada ....................................................................................................................... New Mexico ............................................................................................................... North Dakota .............................................................................................................. South Dakota ............................................................................................................. Oregon ....................................................................................................................... Texas ......................................................................................................................... VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 Final rule state-by-state calculated factor (%) 20 20 20 20 20 20 20 20 20 20 20 20 E:\FR\FM\19DER3.SGM 12 49 51 24 29 12 16 24 5 5 2 ¥1 19DER3 Final rule state-specific factor (%) 20 49 51 24 29 20 20 24 20 20 20 20 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92169 TABLE OF STATE-SPECIFIC FACTORS AND OTHER DATA FOR APPLICABLE STATES—Continued Existing regulations and proposed rule: Nationwide 20 percent factor (%) State sradovich on DSK3GMQ082PROD with RULES3 Utah ........................................................................................................................... Washington ................................................................................................................ Wyoming .................................................................................................................... Average .............................................................................................................. Assignment of counties example: This example uses the zone numbers and values of the acreage rent schedule to assign Clark County, Nevada, to the appropriate zone. Current NASS land values for Clark County are $5,611 per acre. The state-specific factor for Nevada is 16 percent, which is less than the 20 percent minimum established in this rule. Therefore, the BLM applied a 20 percent reduction to the NASS land values, which results in a per acre value of $4,489. Based on this, Clark County is assigned to zone 7 (counties with zone values between $3,394.01 and $4,746 per acre). For the purposes of calculating the acreage rent, the BLM will use the value for zone 7, which is $4,746 per acre. The following paragraph is an acreage rent example describing the acreage rent for solar energy development. Acreage rent example: The 2016 acreage rent for a 4,000 acre solar energy development in Clark County, Nevada (zone 7) would be $1,021,480 (4,000 acres × $255.37 per acre). Please note that the acreage rent calculation rounds the per acre dollar amount for the county to the nearest cent. In this example ($4,746/acre × 100% × 5.27% × 1.021%) is rounded to $255.37 per acre. As specified in new section 2806.52(a)(3), the initial assignment of counties to the zones on the solar energy acreage rent schedule is based upon the NASS Census data from 2012 and is established for year 2016 through 2020. Subsequent reassignments of counties will occur every 5 years following the publication of the NASS Census as is described in section 2806.21. Comment: The BLM received comments expressing concern that the assignment of some counties or regions to zones on the solar acreage rent schedule may not accurately reflect the value of those lands. Response: The BLM recognizes that it may be necessary to adjust the initial assignment of counties to zones on the solar energy acreage rent schedule. Section 2806.52(a)(3) of the final rule is revised to clarify that the BLM may, on VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 20 20 20 20 its own initiative or in response to requests, adjust initial NASS survey data-based county assignments on a regional basis if it determines that assignments based solely on NASS data do not accurately reflect the values of the BLM lands in question. A similar clarification was made to section 2806.62(a)(3). Section 2806.52(a)(4) requires acreage rent payments each year, regardless of the stage of development or status of operations of a grant. Acreage rent must be paid for the public land acreage described in the right-of-way grant prior to issuance of the grant and prior to the start of each subsequent year of the authorized term. There is no phase-in period for acreage rent, which must be paid annually and in full upon issuance of the grant. In the event of undue hardship, a rent payment plan may be requested and approved by a BLM State director, consistent with section 2806.15(c), so long as such a plan is in the public interest. Section 2806.52(a)(5) states that the BLM will adjust the per acre zone rates each year based on the average annual change in the IPD–GDP as determined under section 2806.22(a). The acreage rent also will adjust each year for solar energy development grants issued under subpart 2804. The BLM will use the most current per acre zone rates to calculate the acreage rent for each year of the grant term, unless the holder selects the scheduled rate adjustment method under section 2806.52(d). The acreage rent for a solar energy development lease is adjusted under section 2806.54(a)(4). This paragraph is revised in the final rule by removing ‘‘for authorizations outside of designated leasing areas, the BLM . . .’’ from the first sentence and replacing it with ‘‘We.’’ This edit is consistent with the acreage rent adjustment provision for wind energy (see section 2806.62(b)(5)). It is necessary because the BLM may issue a grant inside a DLA in some situations (see section 2809.19) and the proposed section would have been inaccurate. This paragraph is also revised in the PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 Final rule state-by-state calculated factor (%) Final rule state-specific factor (%) 54 21 16 21 54 21 20 27 final rule by including the reference to the scheduled rate adjustment option, as described in section 2806.51 of this preamble. Section 2806.52(a)(6) explains where you may obtain a copy of the current per acre zone rates for solar energy development (solar energy acreage rent schedule) from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M St SE., Room 2134LM, Attention: Renewable Energy Coordination Office, Washington, DC 20003. This paragraph is added so the public is aware of where to obtain a copy of the solar energy acreage rent schedule described under this section. The BLM also posts the solar energy acreage rent schedule online at https:// www.blm.gov/wo/st/en/prog/energy/ renewable_energy.html. Section 2806.52(b), ‘‘MW capacity fee,’’ describes the components used to calculate this fee. Paragraphs (b)(1), (2), (3), and (4) explain the MW rate, MW rate schedule, adjustments to the MW rate, and the phase-in of the MW rate. As explained in IM 2016–122, electric and telephone facilities that qualify for financing under the Rural Electrification Act must pay the MW capacity fee and other payments required under this rule, except the acreage rent. Comments: Some comments noted uncertainty regarding the meaning or definition of words in the proposed rule, such as ‘‘MW capacity fee’’ and its component parts of the MW rate, MW hour price, net capacity factor, and rate of return. Response: The BLM acknowledges that this rule introduces a number of new terms and concepts. The BLM attempted to clearly define these terms in section 2801.5(b). Some of the terminology is similar as some terms relate to the same general subject matter (e.g., MW capacity fee and MW rate). The BLM has revised the regulations and provided additional discussion in the preamble to help facilitate a better understanding of the rule and its requirements. For example, a more specific citation is provided in section E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92170 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 2806.52(b)(1) and other locations in the final rule to help readers better locate and understand the terms of the final rule. These revisions and terms are discussed in greater detail throughout the preamble for sections 2806.50 through 2806.68. The MW capacity fee, as defined in section 2801.5(b), refers to payment, in addition to the acreage rent, for solar energy development grants and leases based on the approved MW capacity of the solar energy authorization. The MW capacity fee is the total authorized MW capacity approved by the BLM for a project, or an approved stage of development, multiplied by the appropriate MW rate. The MW capacity fee is prorated and must be paid for the first partial calendar year in which generation of electricity starts or when identified within an approved POD. This fee captures the increased value of the right-of-way for the particular solaror wind-project use, above the limited rural or agricultural land value captured by the acreage rent. The MW capacity fee will vary, depending on the size and type of solar project and technology and whether the solar energy right-of-way authorization is a grant (issued under subpart 2804) or a lease (issued under subpart 2809). The MW capacity fee is paid annually either when electricity generation begins, or as otherwise stated in the approved POD, whichever comes first. If electricity generation does not begin on or before the time approved in the POD, the BLM will begin charging a MW capacity fee at the time identified in the POD. The POD submitted to the BLM by the right-of-way applicant must identify the stages of development for the solar or wind energy project’s energy generation, including the time by which energy generation is projected to begin. The BLM will generally allow up to three development stages for a solar energy project. As the facility becomes operational, the approved MW capacity will increase as described in the POD. These stages are part of the approved POD and allow the BLM to enforce the diligence requirements associated with the grant. Comments: Other comments suggested that a bid could include an alternative payment structure to the BLM over the life of the project. This alternative payment structure would replace the acreage rent and MW capacity fee described in this final rule. The comments further suggested that the BLM reduce costs to developers by eliminating the MW capacity fee, conducting regional mitigation planning for DLAs, and performing a majority of the work necessary for the NEPA and VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Section 7 (endangered species) reviews early in the process inside DLAs. Response: As explained elsewhere in this preamble, the BLM has determined that the rule’s multi-component payment structure, involving both an ‘‘acreage rent’’ and ‘‘MW capacity fee’’ constitute the full fair market value for the use of the public lands by a wind and solar energy project. An alternative payment structure may not provide a fair return for the use of the public lands, and therefore, would be inconsistent with the BLM’s obligations under FLPMA. The rule’s structure is consistent with existing policy. That said, the final rule does allow the BLM to establish alternate fiscal terms for an individual project or region upon sufficient showing by an applicant that such alternative terms are justified. These alternative terms, if approved by the BLM, would be used in lieu of the default terms established by the rule inside and outside of designated leasing areas. Under the rule’s multi-component structure, the ‘‘acreage rent’’ represents the value of the raw undeveloped land, while the MW capacity fee represents the value for this particular commercial use of the public lands above and beyond the rural or agricultural value of the land in its unimproved state. Both are necessary components of obtaining the fair market value for the use of the public lands for wind and solar energy development. As explained above, this multi-component structure bears similarities to private land leases, which typically involve a land rent and royalty rate. As suggested by the comments, the BLM does perform a majority of the work up front for the NEPA and Section 7 compliance processes for right-of-way leases inside DLAs. Mitigation work and costs may be identified in some cases before a competitive process occurs, such as in Dry Lake Valley solar energy zone in Nevada. The BLM held a competitive process in 2014 and reached a decision within 10 months of the auction. This was less than half the time it generally takes to process the project applications. The BLM had great success in the Dry Lake Valley solar auction, at least in part, because there was a regional mitigation strategy in place. However, there may be instances in the future where a mitigation strategy is not appropriate or necessary. The BLM will not include a requirement for mitigation strategies in this final rule, but will be consistent with its interim policy guidance for offsite mitigation (IM 2013–142). PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 Comments: Some comments argue that the value of land for purposes of renewable energy development should be determined exclusively by MW capacity fees or by fees based on the number of MWs actually produced and delivered, not by the right-of-way’s acreage value. Response: Under the final rule, the BLM does not calculate annual charges for solar and wind energy development by using only a MW capacity fee, as suggested by the comments. The BLM has determined that requiring an acreage rent and MW capacity fee is the best method, consistent with applicable legal authorities, for determining the appropriate value of a solar or wind energy development right-of-way. The BLM also notes that the MW capacity fee and acreage rent in the final rule have been discounted from comparable costs that are typically charged in the private sector to account for the cost to comply with the terms and conditions of the BLM’s authorization (bonding, due diligence, etc.). Comments: A comment suggested that the BLM treat solar and wind energy technologies the same when setting acreage rents and MW capacity fees. Another comment suggested that the BLM give additional consideration to the use of energy storage technologies when setting acreage rents and MW capacity fees. Response: In the BLM’s examination of the different energy generation technologies it was determined that some technologies, such as CSP, are generally more efficient (i.e., generate more energy using the same amount of sunlight) than other technology types and often require that the site selected for development include certain specific characteristics, such as limited grade. This is evidenced by the average efficiencies of the various solar technologies as reflected in the capacity factors on the EIA’s Web site. Since the efficiencies of PV and CSP technologies are inherent to the technologies and are, in part, related to the particular conditions of the land to be used, the BLM maintained this distinction in the final rule and did not implement the comment’s suggestion on limiting the various solar technology MW capacity fees to a single non-distinct fee. The BLM did reconsider how it considers storage when charging a MW capacity fee. The BLM will maintain the proposed net capacity factor for CSP with storage capacity of 3 hours or more. CSP is a technology which is generally engineered with storage, which increases the efficiency, but decreases overall net capacity. The BLM is confident, based on its experience, E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations that this is the appropriate net capacity factor for this technology based on the technology currently deployed and available information. However, the BLM does recognize that storage could have implications for other technology types as well. Based upon the premise that storage increases the efficiency of a project, the BLM requested that the National Renewable Energy Laboratory (NREL) provide a report on the status of energy storage in the United States. The BLM hoped to use this report to establish in the regulations an appropriate methodology for determining the value of storage for solar and wind projects on public lands. However, NREL’s report noted that energy storage is an emerging and rapidly growing market, so there is not enough empirical data and commercial experience on storage to support an accurate calculation for valuing storage. Therefore, the BLM determined that it would be premature to add energy storage values to the regulations at this time beyond the one provided for CSP with 3 hours of storage. In this final rule, the BLM adds a new sentence under the definition of MW rate to explain that in the future, the BLM may establish a different net capacity factor on a case-by-case basis, such as when a project uses storage, and the BLM determines that the efficiency rating varies from the established net capacity factors in this final rule. For example, if a wind energy project includes storage in its design, the BLM may determine an appropriate net capacity factor for that project. Section 2806.52(b)(1) identifies the ‘‘MW rate’’ as a formula that is the product of four components: The hours per year, multiplied by the net capacity factor, multiplied by the MWh price, multiplied by the rate of return. This can be represented by the following equation: MW Rate = H (8,760 hrs.) × N (net capacity factor) × MWh (Megawatt Hour price) × R (rate of return). The components of this formula are discussed here at greater length. Hours per year. This component of the MW rate formula is the fixed number of hours in a year (8,760). The BLM uses this number of hours per year for both standard and leap years. Net capacity factor. The net capacity factor is the average operational time divided by the average potential operational time of a solar or wind energy development, multiplied by the current technology efficiency rates. A net capacity factor is used to identify the efficiency at which a project operates. The net capacity factor is influenced by several common factors such as geographic location and VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 topography and the technology employed. Other factors can influence a project’s net capacity factor. For example, placement of a solar panel in the direction that captures the most sun may increase the efficiency at which a project operates. These other factors tend to be specifically related to a project and its design and layout. An increase in the net capacity factor is most readily seen when a developer sites a project geographically for the energy source they are seeking and utilizes the best technology for harnessing the power. An example of this is placing wind turbines in a steady wind speed location using a wind turbine designed for optimal performance at those wind speeds. The efficiency rates may vary by location for each specific project, but the BLM will use the national average for each technology. Efficiency rates for solar and wind energy technology can be found in the market reports provided by the Department of Energy through its Lawrence Berkeley National Laboratory. For solar energy see ‘‘Utility-Scale Solar 2012’’ at https://emp.lbl.gov/sites/all/ files/lbnl-6408e_0.pdf and for wind energy, please see ‘‘2012 Wind Technologies Market Report’’ at https:// emp.lbl.gov/sites/all/files/lbnl6356e.pdf. This rule establishes the net capacity factor for each technology as follows: 92171 In the proposed rule, the BLM considered basing the net capacity factors for these technologies on an average of the annual capacity factors listed by the EIA. The EIA posts an average of the capacity factors on its Web site at https://www.eia.gov/ electricity/monthly/epm_table_ grapher.cfm?t=epmt_6_07_b. However, the BLM decided not to go forward with this provision and removed it from the final rule because those annual capacity factors are not reviewed or confirmed by technical experts, such as those at the National Laboratories, and therefore, they are not a sufficiently reliable source of information on which to base the net capacity factor. Further, EIA may not continue to maintain and update this information in the future, and therefore, it may not be a viable source of information in the future. MWh price. This component of the MW rate formula is the full 5 calendaryear average of the annual weighted average wholesale prices of electricity per MWh for the major trading hubs serving the 11 Western States of the continental United States. This wholesale price of the trading hubs is the price paid for energy on the open market between power purchasers and is an indication of current pricing for the purchase of power. Several comments were submitted concerning the MWh price. Comment: One comment suggested that this component not be rounded to Net capacity the nearest half cent. Technology type factor Response: The BLM proposed to (%) round the MWh price to the nearest 5Photovoltaic (PV) .................. 20 dollar increment. In other portions of Concentrated Photovoltaic the regulations the BLM rounds to the (CPV) or Concentrated nearest cent. The proposed rule was Solar Power (CSP) ........... 25 explicit that the MWh price would be CSP w/Storage Capacity of 3 rounded to the nearest 5-dollar Hours or More ................... 30 increment, but the final rule has been Wind Energy ......................... 35 adjusted to round the MWh price to the nearest dollar increment. Rounding to As previously discussed in this the nearest dollar increment is preamble, the BLM has revised the consistent with current BLM practices proposed description of net capacity for calculating annual payments. The factor in this final rule. This final rule BLM declined, however, to adopt the maintains the proposed net capacity commenter’s suggestion and round to factor for CSP with storage capacity of the nearest half cent, because the MWh 3 hours or more at 30 percent. The BLM price is an estimated 5-year average of adds in this final rule a description of wholesale prices. Providing a more the net capacity factor in the definition specific calculated MWh price could recognizing that as technology evolves, give a false precision to the actual rates the BLM may determine a net capacity provided by the BLM. factor for a specific project on a case-byComment: Another comment stated case basis in the future, as appropriate. that we should not rely on the ICE This will better allow the BLM to trading hub as our source for data. receive fair market value payment for Relying on a single vendor for use of the public lands in the rapidly determining the MWh price may lead to changing storage market. inaccurate fees if the vendor’s data is The BLM intends to periodically inaccurate. There are other vendors that review the efficiency factors for the have current data available for the major various solar and wind technologies. trading hubs in the West as well. PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM 19DER3 92172 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Response: The proposed rule identified the ICE as the source of data to be used in calculating the MWh price. However, the final rule is revised to remove ICE as the only source of the major trading hub data in section 2806.52(b)(3)(i). Removing the specific source of data from the final rule is consistent with the proposed rule, in that the BLM has indicated that other sources may be used in the future should ICE stop providing such data. Furthermore, since publication of the proposed rule, the BLM became aware that the ICE no longer provides such market data for free to the public, but now offers these data under a paid subscription. Future updates to the MWh price may use ICE or other similar purveyors of market data to determine the major trading hubs and the wholesale market prices of electricity. Under this final rule, the BLM is using market data from SNL Financial to calculate the 5-year average of the annual weighted average wholesale price per MWh. Comments: Several comments requested an update of the MWh price and stated that any update being made should include language to identify the most recent full calendar year data and to remove the uncertainty of how the BLM will determine the most recent 5year data with future updates. Commenters further indicated that the data used in calculating the MWh price were skewed to numbers higher than the MidColumbia Hub Year Four Corners Hub PaloVerde Hub SP15–EZ CA Hub * Mead Hub governing revisions to that price, the BLM also revised the final rule to require that the MWh price be rounded to the nearest dollar increment, as opposed to the proposed rule’s approach of rounding up to the nearest five-dollar increment. The BLM made this change to avoid imposing a surcharge due solely to rounding. The BLM found that at the current MWh price, rounding to the nearest five-dollar increment could impose a surcharge of up to 5 percent, or $158 per MW of project capacity. Rounding to the nearest dollar increment will limit the surcharge without implying false precision. Note that the current MW rate is $38 per MWh as calculated using wholesale market data from SNL Financial for the major trading hubs in the west. The calculation for the MWh price is described in more detail in following paragraphs with a table provided showing the averages for the trading hubs used in the calculation. When calculating the MWh price, the BLM used the yearly average value for each of the major trading hubs that cover the BLM public lands in the West. The BLM then calculated the overall annual average yearly hub value for each of the years 2010–2014, and then averaged these five annual values to establish the MWh price. The average of the five annual average values for 2010 through 2014 is $38.07, so the BLM set the MWh price at $38.00. CA–OR Border Hub NP15 Hub West US .......................................... .......................................... .......................................... .......................................... .......................................... $35.86 29.48 22.90 37.59 38.67 $38.79 36.43 29.68 37.66 42.42 $40.13 36.66 30.59 .................... .................... $40.07 37.02 30.87 39.84 44.84 $39.86 36.78 34.86 48.34 51.13 $39.81 36.00 32.03 43.97 51.06 $38.80 32.93 27.09 40.19 43.48 $39.05 35.04 29.72 41.27 45.27 2010–2015 Avg. ................. sradovich on DSK3GMQ082PROD with RULES3 2010 2011 2012 2013 2014 true recent market average since market pricing for the year 2008 were much higher than the years preceding or following it. Response: The BLM understands the concern regarding the intent to establish the MWh price using current market data. In the proposed rule, market data from calendar years 2008 through 2012 were used to determine the MWh price. In the final rule section 2806.52(b)(3)(i), the BLM updated the MWh price to reflect the most recent full 5 calendaryear data (that is, data from 2010–2014) from the major trading hubs located in the West. In addition, the BLM adjusted provisions governing revisions to the MWh price to account for the fact that under section 2806.50, the BLM bills customers in advance for the following year. Specifically, the BLM revised the final rule so that the next update to the MWh price will occur for 2021, not 2020. This will allow the BLM to set the new price during 2020 using the most current market data for the previous five full years (2015–2019) without using the 2014 data twice. Market data for 2019 are not expected to be available until early 2020. Once data are available, the BLM will calculate the new, 2021–2025 MW capacity fee using the full five calendar-year average of the market data for 2015–2019, and notify existing rightof-way holders of the new fee. In addition to using years 2010 through 2014 in calculating the MWh price, and adjusting the provisions .................... .................... .................... .................... .................... .................... .................... Avg. 38.07 Rate of return. The rate of return component used in the MW rate schedule reflects the relationship of income (to the property owner) to revenue generated from authorized solar or wind energy development facilities on the encumbered property. A rate of return for the developed land can range from 2 to 12 percent, but is typically around 5 percent, as identified in the appraisal consultation report completed by the Office of Valuation Services. These rates take into account certain risk considerations, i.e., the possibility of not receiving or losing future income benefits, and do not normally include an allowance for inflation. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 An applicant seeking a right-of-way from the BLM must show that it is financially able to construct and operate the facility. In addition, the BLM may require surety or performance bonds from the holder to facilitate compliance with the terms and conditions of the authorization, including any payment obligations. This reduces the BLM’s risk and should allow the BLM to use a ‘‘safe rate’’ of return, i.e., the prevailing rate on guaranteed government securities that includes an allowance for inflation. The BLM has established a rate of return that adjusts every 5 years to reflect the preceding 10-year average of the 20-year U.S. Treasury bond yield, rounded to the nearest one-tenth percent, with a PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 $39.05 35.04 29.72 41.27 45.27 minimum rate of 4 percent. Applying this criterion, the initial rate of return is 4 and 3 tenths percent (the 10-year average of the 20-year U.S. Treasury bond yield (4.32 percent), rounded to the nearest one-tenth percent). This final rule is revised to round the rate of return to the nearest one-tenth percent to address a commenter’s concern that BLM’s usual rounding convention (rounding to the nearest one half percent) could result in rate jumps due only to rounding; rounding to the nearest one-tenth percent will limit the change in BLM’s rates without giving a false impression of precision. As provided under paragraph (b)(2) of this section, the MW rate schedule is E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations made available to the public in the MW rate schedule for Solar and Wind Energy Development. The current MW rate schedule is available to the public at any BLM office, via mail by request, or 92173 at https://www.blm.gov/wo/st/en/prog/ energy/renewable_energy.html. MW RATE SCHEDULE FOR SOLAR AND WIND ENERGY DEVELOPMENT [2016–2020] Type of energy technology Hours per year sradovich on DSK3GMQ082PROD with RULES3 Solar—Photovoltaic (PV) ..................................................... Solar—Concentrated photovoltaic (CPV) and concentrated solar power (CSP) ............................................................ CSP with storage capacity of 3 hours or more ................... Wind—All technologies ........................................................ For lease holders that choose the standard rate adjustment method, the periodic adjustments in the MW rate are discussed in connection with section 2806.52(b)(3). Under that section, adjustments to the MW rate will occur every 5 years, beginning with the 2021 rate, by recalculating the MWh price and rate of return, as provided in section 2806.52(b)(3)(i) and (ii), respectively. Section 2806.52(b)(3)(i) requires that the MW rate be adjusted using the full 5 calendar-year 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. The next update for the MW rate will use years 2015 through 2019, rounded to the nearest dollar increment. Following this methodology, the resulting MWh price will be used to determine the MW rate for each subsequent 5-year interval. The availability of data to establish the MWh price is described in this preamble in the discussion of the definition of MWh price, a component of the MW rate in section 2801.5(b). As noted above, section 2806.52(b)(3)(ii) provides that when adjusting the rate of return, the BLM will use the 10-year average of the 20year U.S. Treasury bond yield for the full 10 calendar-year period preceding the rate of return adjustment. The rate of return is rounded to the nearest onetenth percent, and must be no less than 4 percent. In the final rule, the rate of return was calculated using years 2003 through 2012 of the 20-year U.S. Treasury bond yield (4.32 percent), rounded to the nearest one-tenth percent (4.3 percent). The rate of 4.3 percent will be used for calendar years 2016 through 2020. The rate of return will be recalculated every 5 years beginning in 2020, by determining the 10-year average of the 20-year U.S. Treasury bond yield for the previous ten calendar years (2010 through 2019, for VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Net capacity factor Frm 00053 Rate of return MW rate 2016–2020 8,760 0.20 $38 0.043 $2,863 8,760 8,760 8,760 0.25 0.30 0.35 38 38 38 0.043 0.043 0.043 3,578 4,294 5,010 2020) rounded to the nearest one-tenth percent. The resulting rate of return, if not less than 4 percent, will be used to determine the MW rate for calendar years 2020 through 2024, and so forth. The 20-year U.S. Treasury bond yields are tracked daily and are accessible at https://www.treasury.gov/resourcecenter/data-chart-center/interest-rates/ Pages/ TextView.aspx?data=longtermrateAll. To allow for a reasonable and diligent testing and operational period, under section 2806.52(b)(4)(i), the BLM will provide for a 3-year phase-in of the MW capacity fee for solar energy development grants issued under subpart 2804 of 25 percent for the first year, 50 percent the second year, and 100 percent the third and subsequent years of operations. The first year is the first partial calendar year of operations and the second year is the first full year. For example, if a facility begins producing electricity in June 2016, 25 percent of the capacity fee would be assessed for July through December of 2016 and 50 percent of the capacity fee would be assessed for January through December of 2017. One hundred percent would be assessed thereafter. This BLM will apply the phase-in after electricity generation begins, or is scheduled to begin in the approved POD, whichever comes first. The proposed rule stated that the BLM would apply the phase-in ‘‘. . . after the generation of electricity starts.’’ The BLM revised section 2806.52(b)(4)(i), from the proposed to final rule, for consistency with other sections, including section 2806.52(b). The BLM made a corresponding revision to section 2806.62(b)(4)(i). Under section 2806.52(b)(4)(ii), this rule explains the staged development of a right-of-way. Such staged development, consistent with the rule in section 2805.12(c)(3)(iii), can have no more than three development stages, unless the BLM approves in advance PO 00000 MWh price Fmt 4701 Sfmt 4700 additional development stages. The 3year phase-in of the MW rate applies individually to each stage of the solar development. The MW capacity fee is calculated using the authorized MW capacity approved for that stage multiplied by the MW rate for that year of the phase-in, plus any previously approved stages multiplied by the MW rate. Section 2806.52(b)(5) is added to this final rule to explain that the general payment provisions of subpart 2806, except for section 2804.14(a)(4), apply to the MW capacity fee. For example, section 2806.12 explains when and where a grant holder must pay rent. These requirements would also apply to the MW capacity fee. Although the MW capacity fee is charged to reflect the commercial utilization value of the public’s resource, it is an annual payment required to the BLM and these general payment provisions will apply. The final rule specifies that section 2804.14(a)(4) does not apply to the MW capacity fee. As explained in IM 2016– 122, the MW capacity fee is not a rental fee, and therefore must be paid by electric and telephone facilities that qualify for financing under the Rural Electrification Act. A new section (see section 2806.62(b)(4)) that parallels this requirement is added into the wind energy provisions for consistency. Section 2806.52(c) is included in the final rule in support of revisions the BLM has made to charge fairly for the use of solar and wind energy authorizations. See the comment discussion under section 2806.52(a) for further information. Section 2806.52(c) describes how the BLM will reduce the acreage rent and the MW capacity fee. The BLM will compare the total annual payment of the acreage rent and MW capacity fee for 2017 to the base rent and MW capacity fee currently established by policy for the 2016 billing year. Any net increase in costs to a right-of-way holder will be E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92174 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations reduced by 50 percent for the 2017 billing year. This one-year reduction is intended to ease the transition for grant holders from the current policies to this final rule. If 2017 is the first year for which you make an annual payment, the phase-in described under section 2806.52(b)(4) will apply without the BLM implementation reduction of 50 percent. The rates established by policy will remain in effect until 2017 for rights-of-way that are not issued under subpart 2809 of this final rule in order to provide notice of the adjusted rent and fees to existing holders. Section 2806.52(d) is added to this final rule to establish the method by which the BLM will perform scheduled rate adjustments for solar and wind energy grants. In order for scheduled rate adjustments to be applied to a grant, a grant holder must have selected the scheduled rate adjustment method and notified the BLM, as provided in section 2806.51 of the final rule. Paragraph 2806.52(d)(1) specifies which rates will be used initially for the scheduled rate adjustments. For new grants, the BLM will use the per acre zone rate (see section 2806.52(a)(1)) and MW rate (see section 2806.52(b)(1)) in place when your grant is issued. For existing grants that are in place prior to the publication of this final rule, the BLM will use the per acre zone rate and MW rate in place prior to this rule’s publication, as adjusted in paragraph (d)(6) of this section and discussed further in corresponding section 2806.52(d)(6) of this preamble. Section 2806.52(d)(2) specifies that the per acre zone rate will be adjusted in two ways: Annually, the rate will adjust upward by the current average change in the IPD–GDP, as described in section 2806.22(b); and every five years, the rate will adjust upward by an additional 20 percent. In other words, under the scheduled rate adjustment method, per acre zone rates will be adjusted in years 1 through 5 by the IPD–GDP; in year 6, the BLM will apply a 20 percent increase to the year-5 rate. The same two-part adjustment process will then repeat itself in years 6–10 (IPD–GDP) and year 11 (20%); years 11– 15 (IPD–GDP) and year 16 (20%); years 16–20 (IPD–GDP) and year 21 (20%); years 21–25 (IPD–GDP) and year 26 (20%); and finally, years 26–30 (IPD– GDP). If the grant is renewed, the rates in place at the time of renewal, as identified in section 2806.52(d)(1), will be used to establish the initial rates for the term of the renewed right-of-way. As explained previously in connection with section 2806.51, the BLM developed the scheduled rate adjustment method in response to VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 concerns that NASS values in certain areas have the potential to jump significantly. To address this concern while ensuring the BLM obtains fair market value for these uses of the public lands, the BLM reviewed changes in national per acre land values in NASS and determined that making fixed rate adjustments of 20 percent every 5 years would reflect historical trends. The BLM reached this conclusion as follows. The NASS values are released every 5 years, reflecting the increases and decreases in land values. Over a period of 10 years, land values could change drastically in some counties, but the national and western state average changes in land values over the 10-year period from 2003 and ending 2012 were an 80 percent and a 65 percent increase, respectively. For the BLM lands in the west, the range in land value changes were increases of 33 to 253 percent. The BLM determined from these findings that the scheduled rate adjustment method, including both the annual IPD– GDP adjustment and the every-five-year scheduled adjustment, should target an upwards adjustment of about 60 percent for every 10 year period. To achieve this outcome, over the term of a grant, the BLM will make five 20-percent adjustments to the per acre zone rates, in years 6, 11, 16, 21, and 26. Compounded, these five 20-percent adjustments will result in a 150 percent increase in the per acre zone rate over the 30-year life of the grant (on top of whatever increases are dictated by the annual change in IPD–GDP). This adjustment is within the identified historic range of changes in land values from NASS, which reflect a change between 99 and 759 percent over a 30year period, and is also in line with industry’s recommended rate increase of 4 percent per year (which amounts to 324 percent over a 30 year period, if compounded annually). Section 2806.52(d)(3) specifies that the MW rate will also increase by 20 percent every 5 years. The BLM reviewed national changes in power pricing since 1960 and determined that adjusting the MW rate by 20 percent every 5 years is appropriate. Since 1960, power pricing has increased by over 450 percent, but over the last 30 years, it has increased approximately 90 percent. Pricing trends show that power pricing seldom drops on an annual basis. The BLM will make 5 20-percent adjustments to the MW rate, which amounts to a 150 percent increase when compounded over the 30-year life of the grant. This 150 percent adjustment is in line with the 4 percent annual rate increase indicated by industry PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 representatives. It is also in line with historical changes in power prices. Section 2806.52(d)(4) makes it clear that the scheduled rate adjustment option will enter into effect in year 1 of the rule, for both the acreage rent and MW capacity fee. The phase-in (see section 2806.52(b)(4)) and initial implementation (see section 2806.52(c)) sections apply only for grants to which the standard rate adjustment applies. Grant holders that select the scheduled rate adjustment method choose a defined payment stream over the variable rates that may be applied with the standard rate adjustment method. As such, phase-ins are not included with the scheduled rate adjustment method. Section 2806.52(d)(5) explains that if the approved POD provides for staged development of the project, the BLM will calculate the MW capacity fee in each year using the MW capacity approved for that stage. Section 2806.52(d)(6) specifies that the existing rates for grant holders that select the scheduled rate adjustment method will be adjusted for year 1. The adjustment reflects the fact that, due to this rulemaking process, the BLM did not make the rate adjustments called for under existing policy in either 2008 (for wind energy) or 2010 (for solar energy). If the BLM does not update the rates for existing grant holders as specified in this section, it could be as long as 12 years between rate updates. Accordingly, in year 1 of this rule, the BLM will increase the per acre zone rate for these grant holders by 20 percent plus the annual change in the IPD–GDP, as described in section 2806.22(b), and increase the MW rate by 20 percent. The scheduled rate adjustments will then be based off of these adjusted, year-1 rates. No additional comments were received, nor were other changes made to this section of the final rule, except for minor changes to improve readability. Section 2806.54 Rents and Fees for Solar Energy Development Leases The title of this section is revised by removing ‘‘inside designated leasing areas.’’ In conjunction with a previous comment, the BLM has made various edits to the final rule to improve readability. The difference between grants and leases is explained earlier in this preamble, so this language is unnecessary and potentially confusing. The introductory paragraph to section 2806.54 requires a holder of a solar energy lease obtained through the competitive process under subpart 2809 to pay an annual acreage rent and MW capacity fee. The first-year of acreage rent must be paid in advance, prior to E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations BLM’s issuance of a lease, and the MW capacity fee will be phased-in and calculated based on the total authorized MW capacity of the solar energy development. Rents or fees for solar authorizations will vary depending on the number of acres, technology employed by the solar development, and whether the right-of-way authorization is a grant or lease. There are many similarities in the rent and MW capacity fee for leases and grants for solar development. This section references the rent and MW capacity fee of grants under subpart 2804, as appropriate, and provides further discussion on how the rent MW capacity fee for a lease differs from that of a grant. Unlike grants, leases issued under subpart 2809 will be charged the full amount of the acreage rent and MW capacity fee schedules once this final rule is effective as there are no existing solar energy development leases. Although the BLM held a competitive offer relating to solar energy development in the Dry Lake SEZ, the successful bidders submitted applications and received right-of-way grants. Paragraph (a) of this section identifies the acreage rent for a solar lease, which will be calculated in the same way as acreage rent for solar grants outside a DLA (see section 2806.52(a)). The acreage rent for the first year of a lease must be calculated and paid prior to BLM’s issuance of a lease. Zone rates and payment of the acreage rent are the same for leases as they are for grants. For the per acre zone rates, see section 2806.52(a)(1). For the assignment of counties, see section 2806.52(a)(2) and (3). For the acreage rent payment, see section 2806.52(a)(4). Consistent with other revisions in this final rule, the BLM added ‘‘This acreage rent will be based on the following:’’ at the end of section 2806.54(a). This revision makes it clear that the following paragraphs will be the basis for BLM’s acreage rent for leases in DLAs. Section 2806.54(a)(4) describes the adjustments to the acreage rent that may be made for a lease. Once an acreage rent is determined for a lease under paragraph (a) of this section, any adjustments in the annual acreage rent will be made at 10-year intervals thereafter—the first adjustment would be made in year 11 of the lease term and the next in year 21. During the 10-year periods, the acreage rent for a lease will remain constant and not be adjusted. The BLM will, however, adjust the per acre zone rates of the acreage rent schedule each year based on the average annual change in the IPD–GDP, as VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 described in section 2806.22(a). This annual adjustment will not be applied to the acreage rent payments for a lease until the next 10-year interval, where the payment will be recalculated using the current acreage rent schedule. The BLM will use the most current per acre zone rates to calculate the acreage rent when first determining a new lease’s acreage rent or when recalculating the acreage rent for the next 10-year period of a lease, unless the holder selected the scheduled rate adjustment method under section 2806.54(d). Section 2806.54(b) identifies the MW capacity fee for solar development leases, which will be calculated in the same way as the MW capacity fee for solar grants outside of a DLA. The phase-in of the MW capacity fee is different from grants. For an explanation of when the BLM requires payment of the MW capacity fee, see section 2806.52(b). For the MW rate, see section 2806.52(b)(1). For the MW rate schedule, see section 2806.52(b)(2). For periodic adjustments in the MW rate, see section 2806.52(b)(3). Reference to section 2806.52(b) has been added to the final rule. In conjunction with a previous comment, the BLM has made various edits to the final rule to improve readability. The BLM has explained when and how it will require payment and adding this specific citation will make this section more understandable. Section 2806.54(c) describes the MW rate phase-in for solar energy development leases. Unless the holder selected the scheduled rate adjustment method under section 2806.54(d), the MW rate in effect at the time the lease is issued will be used for the first 20 years of the lease. The MW rate in effect in year 21 of the lease will be used for years 21–30 of the lease. In order to improve readability in this section, the BLM provided a more specific citation to section 2806.52(b)(2). This should help direct the reader to the appropriate section of this final rule. Section 2806.54(c)(1) provides for a 10-year phase-in of the MW capacity fee, plus the initial partial year, if any. For the first ten years of a lease, the MW capacity fee is calculated by multiplying the authorized MW capacity by 50 percent of the MW rate for the applicable type of solar technology employed by the project. The MW rate schedule is provided for under section 2806.52(b)(2). The phase-in applies to the MW rate for either solar or wind energy leases (see section 2806.64(c)). Section 2806.54(c)(2) applies to the MW rate phase-in for years 11 through 20 of a lease. The MW capacity fee for years 11 through 20 will be calculated PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 92175 by multiplying the MW capacity by 100 percent of the MW rate. Section 2806.54(c)(3) applies to the MW rate for years 21 through 30 of a lease. The MW capacity fee for years 21 through 30 will be calculated by multiplying the MW capacity by 100 percent of the MW rate. If the POD requires that electricity generation will begin after year 10 of the lease, the MW capacity fee will be calculated using section 2806.54(c)(2) or (3), as appropriate. Comments: Some comments suggested establishing a low cost payment structure, which is different from that proposed. The suggested payment structure would include a phase-in during the first half of a project’s life and then raise fees to regular (full) rates for all solar and wind leases. The payment structure could require an upfront cost payment, and then full costs only when financial costs are being incurred by the developer. An example would be to reduce payments to 10 percent of the gross lease rate for the first 15 years for a lease within a designated solar energy development leasing area. Response: The BLM did not change the payment structure as suggested by the commenter. FLPMA requires that the BLM generally receive fair market value for the use of the public lands. The suggested low cost payment structure may not provide fair market value. Comments: Some comments suggested removing the distinction between solar or wind technologies and their respective base rent or fees (i.e., wind is 30 percent and solar is 25 percent without differentiation between technologies). The comment also suggested that the BLM incentivize storage for solar facilities, to promote grid stability, by offering a reduced rate. Response: The BLM’s methodology for collecting fair market value through rents and fees is similar to market comparable practices from non-Federal lands. Use of a technology-specific net capacity factor is appropriate for determining the MW rate for solar and wind energy development. Further, the BLM is not responsible for directing a technology’s costs or its success in the energy market. Intentionally setting rates below market values or without market support, such as by establishing a net capacity factor, is not appropriate for this final rule. These suggestions have not been incorporated into the final rule, and the language in the proposed rule is carried forward to the final rule, with some revision as noted in the discussion of section 2806.52(b). E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92176 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Comment: Another comment recommends that if a MW capacity fee is adopted in the final rule for leases (issued under subpart 2809), the MW rate should be phased-in at 50 percent for the life of the lease; for grants (issued under subpart 2804), the MW rate should be phased-in over a 5-year period. The comment also recommends using the MW rate in effect when the lease or grant is issued without adjustment. PPAs are generally fixed for a term, usually 20 years. A developer places a higher premium on certainty and stability of the MW capacity fee over the potential for reduced rates in the future in case of a long-term downward trend in prices. Response: The BLM is aware that certainty and stability are factors to consider when developing and establishing its rules. However, based on the BLM’s experience, most solar and wind energy developments break even with the costs of constructing and operating a facility within 15 to 20 years after the start of generation of electricity. The BLM has taken this into account as part of its formulation of the MW rate updates and phase-in. The MW rate is set when a lease is issued, and not updated until year 21 of the lease. The MW rate is phased-in for the first 10 years at 50 percent of the full rate, after which the MW rate is no longer phased-in. Any updates to the MW rate schedule will not result in an adjustment to leases during the 10-year phase-in or the first 20 years of the lease. Only at year 21 and each following 10–year interval will the MW rate adjust, using the currently established MW rate schedule. A grant’s MW rate, however, is set each year, beginning when a project starts generating electricity. The MW rate is phased-in for the first 3 years at 25/50/100 percent of the MW rate, respectively. The BLM will recalculate the MW rate schedule once every 5 years, at which time the next year’s payment by a developer will adjust consistent with the updated MW rate schedule. Section 2806.54(c)(4) describes the MW capacity fee of the lease if it were to be renewed. The MW capacity fee is calculated using the then-current MW rates at the beginning of the new lease period and remain at that rate through the initial 10-year period of the renewal term. The MW capacity fee will be adjusted using the then-current MW rate at the beginning of each subsequent 10year period of the renewed lease term. Under section 2806.54(c)(5), the rule provides for the staged development of leases. Such staged development, consistent with section VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 2805.12(c)(3)(iii), will have no more than three development stages, unless the BLM approved more development stages in advance. The MW capacity fee is calculated using the authorized MW capacity approved for that stage multiplied by the MW rate for that year of the phase-in, plus any previously approved stages multiplied by the MW rate as described in section 2806.54(c). Section 2806.54(d) is added to this final rule to establish the method by which the BLM will perform scheduled rate adjustments for leases, similar to the scheduled rate adjustments for grants in section 2806.52(d). In order for scheduled rate adjustments to be applied to a lease, a lease holder must have selected the scheduled rate adjustment method, as required in section 2806.51. Section 2806.54(d)(1) specifies which rates will be used initially for the scheduled rate adjustments. The BLM will use the per acre zone rate (see section 2806.52(a)(1)) and MW rate (see § 2806.52(b)(1)) that are in place when your lease is issued. Section 2806.54(d)(2) specifies that the per acre zone rate will be increased every 10 years by the change in the IPD– GDP for the preceding 10-year period. (In contrast, the per acre zone rate for grants is adjusted every 5 years.) The 10year average IPD–GDP change used for this increase is the same that is used to adjust the per acre rent schedule annually for linear rights-of-way under section 2806.22(b), except that it will be adjusted once cumulatively every ten years, rather than annually. For example, the current annual change in IPD–GDP is 2.1 percent, which would result in a roughly 21 percent change in year ten. In addition to the IPD–GDP change, a 40 percent increase every 10 years will be applied as part of the scheduled rate adjustment (in contrast to a 20 percent increase every 5 years for grants). The BLM will continue to apply this adjustment every 10 years (that is, in years 11 and 21 for the 30-year lease). Similar to the approach taken for grants, the BLM reviewed changes in national per acre land values in NASS when establishing the 40 percent adjustment. Over the term of a lease, the BLM would make two adjustments to the per acre zone rates. These two adjustments would compound on each other, for a cumulative increase of 96% over the 30-year life of the lease. This adjustment is within the identified change in land values from NASS and is also in line with industry’s recommendation of an annual change in rates limited to no more than 4 percent. (A 4 percent annual increase, compounded annually over 30 years, PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 amounts to a 324 percent increase over the life of the lease.) For further discussion on this, see the preamble discussion of section 2806.52(d)(2). Section 2806.52(d)(3) specifies that likewise, the MW rate will increase by 40 percent every 10 years. The BLM reviewed national changes in power pricing since 1960 and determined that 40 percent adjustments to the MW rate every 10 years are appropriate. Over the term of the lease, the BLM would make 2 adjustments to the MW rate (in years 11 and 21). These 2 adjustments would compound on each other for a cumulative increase of 96% over the 30year life of the lease. This adjustment is within the identified range of power pricing changes and is also in line with industry’s recommendation of an annual change in rates limited to no more than 4 percent. (A 4 percent annual increase, compounded annually over 30 years, amounts to a 324 percent increase over the life of the lease.) For further discussion on this, see the preamble discussion of section 2806.52(d)(3). Section 2806.54(d)(4) specifies that the phase in of the MW rate for standard rate adjustments in section 2806.54(c) does not apply to authorizations that are using the scheduled rate adjustments. Instead, for years 1 through 5 of a lease, plus any initial partial year, the MW capacity fee is 50 percent of the otherwise applicable solar rate. This reduction is applied only to new leases and only during the initial term; the phase-in will not be applied to leases when renewed. Like the phase-in period under the standard rate adjustment method, the initial MW capacity is also subject to a phase-in; however, it is shorter (a 5-year period instead of a 10-year period). Again, the purpose of the phase-in period is to provide a financial incentive to developers to use the public lands within their grant earlier (since the clock on the phase-in starts running at lease issuance, even though the obligation to pay the MW capacity fee does not attach until power generation commences). The BLM selected a 5-year phase-in under the scheduled rate adjustment method instead of the 10year phase-in from section 2806.54(c) because of the difference in rate structures. Under the standard rate adjustment, the MW capacity fee will not adjust for the first 20 years of a lease term, and that initial rate is phased-in for the first half of that period (10 years). Under the scheduled rate adjustments, the rate adjusts every 10 years and the phase-in is provided for half of the initial rate period (5 years). Both the 10year and 5-year phase-in are consistent with market practices. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Section 2806.54(d)(5) explains that if the approved POD provides for staged development of the project, the BLM will calculate the MW capacity fee using the MW capacity approved for that stage. Only development stages in operation during the first 5 years of a lease will be phased-in. MW capacity fee-example 1: The MW capacity fee for a 400–MW photovoltaic solar energy right-of-way grant would be $1,145,200 per year (400 MWs × $2,863 per MW), implemented over a 3-year period after the start of electricity generation. In the first partial year after start of generation in July for a solar energy right-of-way, the MW capacity fee would be $143,150 (400 MWs × $2,863 per MW × 25 percent × 0.5 year); in the second year after the start of electricity generation, the MW capacity fee would be $572,600 (400 MWs × $2,863 per MW × 50 percent × 1 year); and in the third year after the start of electricity generation, and each year thereafter, the MW capacity fee would be $1,145,200 per year (400 MWs × $2,863 per MW × 1 year). MW capacity fee-example 2: The MW capacity fee for a 400 MW concentrated PV or concentrated solar power right-ofway grant would be $1,431,200 per year (400 MWs × $3,578 per MW), implemented over a 3-year period after the start of electricity generation. In the first partial year assuming the start of electricity generation in January for a solar energy right-of-way, the MW capacity fee would be $357,800 (400 MWs × $3,578 per MW × 25 percent × 1 year); in the second year after the start of electricity generation, the MW capacity fee would be $715,600 (400 MWs × $3,578 per MW × 50 percent × 1 year); and in the third year after start of generation and each year thereafter, the MW capacity fee would be $1,431,200 per year (400 MWs × $3,578 per MW × 1 year). MW capacity fee-example 3: The MW capacity fee for a 400 MW solar power right-of-way grant with a storage capacity of 3 hours or more would be $1,717,600 per year (400 MWs × $4,294 per MW), implemented over a 3-year period after the start of electricity generation. Assuming generation began in January, in the first partial year after the start of electricity generation, the MW capacity fee would be $429,400 for a solar energy right-of-way (400 MWs × $4,294 per MW × 25 percent × 1 year); in the second year after the start of electricity generation, the MW capacity fee would be $858,800 (400 MW × $4,294 per MWs × 50 percent × 1 year); and in the third year after the start of electricity generation, and each year thereafter, the MW capacity fee would VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 be $1,717,600 per year (400 MW × $4,294 per MWs × 1 year). Acreage rent and MW capacity fee example for a solar energy development grant: The annual acreage rent and MW capacity fee for 2016 for a 400 MW photovoltaic solar energy development grant located on 4,000 acres in Clark County, NV after the phase-in period would be approximately $2,231,480. (The acreage rent of $1,021,480 (4,000 acres × $255.37 per acre) plus the MW capacity fee of $1,261,600 (400 MWs × $3,154 per MW) equals $2,283,080). No comments were received and no changes are made from the proposed rule to the final rule. Section 2806.56 Rent for Support Facilities Authorized Under Separate Grant(s) Under this section, support facilities for solar development will be authorized under a grant. Support facilities may include administration buildings, groundwater wells, and construction laydown and staging areas. Rent for support facilities authorized under separate grants is determined using the Per Acre Rent Schedule for linear facilities under existing section 2806.20(c). No comments were received and no changes are made from the proposed rule to the final rule. Section 2806.58 Rent for Energy Development Testing Grant(s) Comments: Several comments suggested that site- and project-area testing should be allowed for both solar and wind energy. Response: The final rule now includes site- and project-area testing authorizations for both solar energy and wind energy. New section 2806.58 has been added in this final rule to incorporate this change. Changes in this section are consistent with section 2806.68, which did not receive any comments, but was modified to remove the word ‘‘wind’’ from the naming of the type of grants to remain consistent with the types of authorizations that the BLM will issue. Section 2806.58(a) describes the rent for any energy site-specific testing grant. A minimum rent is established as $100 per year for each grant issued. Under this paragraph rent is set by incorporating into the final rule the sitespecific rent amount found in the BLM’s IM No. 2009–043, as follows: Sitespecific grants are authorized only for one site and do not allow multiple sites to be authorized under a single grant; however, a single entity may hold more than one site-area testing grant. If a BLM office has an approved small site rental schedule, that office may use the rents, PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 92177 so long as the rent exceeds the $100 minimum. Small site rental schedules are provided to the BLM from the Department’s Office of Valuation Services and reflect accurate determination of market value. In lieu of annual payments for a site-specific testing grant, a grant holder may pay for the entire 3-year term of the grant. See sections 2801.9(d)(1) and 2805.11(b)(2)(i) of this preamble for further discussion of site-specific energy testing grants. Section 2806.58(b) describes the rent for any energy project-area testing grant. A per-year minimum rent is established at $2,000 per authorization or $2 per acre for the lands authorized by the grant, whichever is greater. The appraisal consultation report by the Office of Valuation Services supports the rent established in this final rule. Project-area grants may authorize multiple meteorological or instrumentation testing sites. There is no additional charge or rent for an increased number of sites authorized under such grants. See sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for further discussion of project-area energy testing grants. Section 2806.60 Rents and Fees for Wind Energy Rights-of-Way Section 2806.60 requires a holder of a wind energy right-of-way authorization to pay annual rent and MW capacity fees for right-of-way grants issued under subpart 2804 and leases issued under subpart 2809. As noted earlier in this preamble, there are similarities between rents and MW capacity fees for solar and wind energy, as well as between rents and MW capacity fees for authorizations issued under subparts 2804 and 2809. The BLM intentionally designed the rents and fees for solar and wind energy development projects to match as closely as possible in order to reduce the potential for confusion and misunderstanding of the requirements. The methodology for calculating rents, fees, phase-ins, adjustments, and rate proration is the same for wind as for solar. Many of the terms and conditions of a lease issued under this subpart will also be the same. No comments were received on this section, and no changes were made between the proposed and final versions of this section, other than those discussed in connection with section 2806.50 of this preamble. Section 2806.61 Scheduled Rate Adjustment Section 2806.61 is added to the final rule, consistent with section 2806.51 of this final rule. This section parallels E:\FR\FM\19DER3.SGM 19DER3 92178 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 2806.51 with no substantive differences, except that this section applies to wind energy grants and leases instead of solar energy grants and leases. See section 2806.51 of this preamble for further discussion. Parallel changes are also made in sections 2806.62(d) and 2806.64(d) of this preamble. See sections 2806.52(d) and 2806.54(d) of this preamble for further discussion of those sections. Section 2806.62 Rents and Fees for Wind Energy Development Grants Section 2806.62 parallels section 2806.52, which discusses rents and MW capacity fees for solar energy development grants. The discussion on all components of the wind energy development grants duplicates the provisions for solar rents and fees, except for paragraph (a)(1) of this section which discusses the per acre zone rates and paragraphs (a)(6) and (7) and (b)(4)(iii) of this section, which discuss the BLM implementation of the new acreage rent and MW capacity fee. Revisions have been made to the requirements of this section consistent with comments on the proposed rule. See comments discussed under section 2806.52 for further information and details regarding the revisions made to the final rule. Section 2806.62(a) addresses the acreage rent for wind energy development. See section 2806.52(a) for a discussion of acreage rent. The acreage rent is calculated by multiplying the number of acres (rounded up to the nearest tenth of an acre) within the authorized area times the per acre zone rate in effect at the time the authorization is issued. The annual zone rate is derived from the wind energy acreage rent schedule in effect at the time the authorization is issued. Section 2806.62(a)(1) addresses per acre zone rates for wind energy development grants. The methodology for calculating the acreage rent is the same for wind as it is for solar, but wind and solar energy have different encumbrance factors. Solar energy projects encumber approximately 100 percent of the land, while wind energy projects encumber approximately 10 percent of the land. Therefore, for wind, the per acre zone rate is calculated using a 10 percent encumbrance factor instead of 100 percent encumbrance factor. Under section 2806.62(a)(1), the initial per acre zone rate for wind energy projects is now established by considering four factors: the per acre zone value multiplied by the encumbrance factor multiplied by the rate of return multiplied by the annual adjustment factor. This calculation is reflected in the following formula ¥ A × B × C × D = E, where: ‘‘A’’ is the per acre zone value are the same per acre zone values described in the linear rent schedule in section 2806.20(c); ‘‘B’’ is the encumbrance equaling 10 percent; ‘‘C’’ is the rate of return equaling 5.27 percent; ‘‘D’’ is the annual adjustment factor equaling the average annual change in the IPD–GDP for the 10-year period immediately preceding the year that the NASS census data becomes available; and ‘‘E’’ is the annual per acre zone rate. The BLM will adjust the per acre zone rates each year, based on the average annual change in the IPD–GDP, as described in section 2806.22(a). Adjusted rates are effective each year on January first. Under section 2806.62(a)(2), counties (or other geographical areas) are assigned a Per Acre Zone Value on the wind energy acreage rent schedule, based on the State-specific percent of the average land and building value published in the NASS Census. The Per Acre Zone Value is a component of calculating the Per Acre Zone Rate under paragraph (a)(1) of this section. As specified in new section 2806.62(a)(3), the initial assignment of counties to the zones on the wind energy acreage rent schedule will be based upon the NASS Census data from 2012 and be established for calendar years 2016 through 2020. Subsequent reassignments of counties will occur every 5 years following the publication of the NASS Census, as described in section 2806.21. State-specific percentage factors will be recalculated once every 10 years at the same time the linear rent schedule is updated, as described in section 2806.22(b). Section 2806.62(a)(2) provides the calculation to establish a State-specific percent factor that represents the difference between the improved agricultural land values provided by NASS and the unimproved rangeland values that represent BLM land. The calculation for determining the Statespecific percent factor is (A/B) ¥ (C/D) = E, where: ‘‘A’’ is the NASS Census statewide average per acre value of non-irrigated acres; ‘‘B’’ is the NASS Census statewide average per acre land and building value; ‘‘C’’ is the NASS Census total statewide acres in farmsteads, homes, buildings, livestock facilities, ponds, roads, wasteland, etc.; ‘‘D’’ is the total statewide acres in farms; and ‘‘E’’ is the State-specific percent factor or 20 percent, whichever is greater. The county average per acre land and building values that exceed the 20 percent threshold for solar and wind energy development are as follows for the BLM managed lands: TABLE OF STATE-SPECIFIC FACTORS AND OTHER DATA FOR APPLICABLE STATES Existing regulations and proposed rule: nationwide 20 percent factors (%) sradovich on DSK3GMQ082PROD with RULES3 State Alaska .......................................................................................... Arizona ......................................................................................... California ...................................................................................... Colorado ...................................................................................... Idaho ............................................................................................ Montana ....................................................................................... Nevada ......................................................................................... New Mexico ................................................................................. North Dakota ................................................................................ South Dakota ............................................................................... Oregon ......................................................................................... Texas ........................................................................................... Utah ............................................................................................. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00058 Final rule state-by-state calculated factors (%) 20 20 20 20 20 20 20 20 20 20 20 20 20 Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM 12 49 51 24 29 12 16 24 5 5 2 -1 54 19DER3 Final rule state-specific factors (%) 20 49 51 24 29 20 20 24 20 20 20 20 54 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92179 TABLE OF STATE-SPECIFIC FACTORS AND OTHER DATA FOR APPLICABLE STATES—Continued Existing regulations and proposed rule: nationwide 20 percent factors (%) State Washington .................................................................................. Wyoming ...................................................................................... Average ........................................................................................ The following table lists the paragraphs where the wind energy grant provision parallels the solar energy 20 20 20 provision for the same topic. The discussion for each relevant wind energy provision is found in this Topic sradovich on DSK3GMQ082PROD with RULES3 Section 2806.62(a)(6) is added to this final rule to explain that holders of wind energy development grants must pay acreage rent as described in section 2806.62(a), except that for holders of wind energy development grants, the acreage rent will be phased in as described in section 2806.62(c). Section 2806.62(b)(4)(i) addresses the term of the MW rate phase-in. Paragraphs (b)(4)(i)(A), (B), and (C) of this section address the percentages of the phase-in. See section 2806.52(b)(4)(i) for a discussion of the term of the MW rate phase-in and paragraphs (b)(4)(i)(A), (B), and (C) for the percentages of the phase-in. No change is made to the final rule, other than the change made for consistency with section 2806.52(b)(4)(i). New section 2806.62(b)(4)(ii) addresses the MW rate phase-in for a staged development. Paragraph (b)(4)(ii)(A) of this section addresses the percentages of the phase-in and paragraph (b)(4)(ii)(B) addresses the calculation of the rent for the phase-in of a staged development. See section 2806.52(b)(4)(ii) for a discussion of the 21:41 Dec 16, 2016 Final rule state-specific factors (%) 21 16 21 21 20 27 preamble under the associated solar energy provision. Wind Acreage Rent ................................................................... Per acre Zone Rate .......................................................... Assignment of Counties ................................................... Initial Assignment of Counties .......................................... Acreage Rent Payment .................................................... Acreage Rent Adjustments .............................................. Obtain a Copy of Rent Schedule ..................................... MW Capacity Fee ............................................................. MW Rate .......................................................................... MW Rate Schedule .......................................................... MW Rate Adjustments ..................................................... MW Rate Formula ............................................................ Rate of Return .................................................................. MW Rate Phase-in ........................................................... Scheduled Rate Adjustment ............................................. Initial Rates Used ............................................................. Acreage Rate Adjustment ................................................ MW Rate Adjustment ....................................................... MW Rate Phase-in ........................................................... Stage of Development ...................................................... Existing Grants ................................................................. VerDate Sep<11>2014 Final rule state-by-state calculated factors (%) Jkt 241001 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR 2806.62(a) .......................................................... 2806.62(a)(1) ..................................................... 2806.62(a)(2) ..................................................... 2806.62(a)(3) ..................................................... 2806.62(a)(4) ..................................................... 2806.62(a)(5) ..................................................... 2806.62(a)(7) ..................................................... 2806.62(b) .......................................................... 2806.62(b)(1) ..................................................... 2806.62(b)(2) ..................................................... 2806.62(b)(3) ..................................................... 2806.62(b)(3)(i) .................................................. 2806.62(b(3)(ii) ................................................... 2806.62(b)(4) ..................................................... 2806.62(d) .......................................................... 2806.62(d)(1) ..................................................... 2806.62(d)(2) ..................................................... 2806.62(d)(3) ..................................................... 2806.62(d)(4) ..................................................... 2806.62(d)(5) ..................................................... 2806.62(d)(6) ..................................................... MW rate phase-in for a staged development, paragraph (b)(4)(ii)(A) for the percentages of the phase-in, and paragraph (b)(4)(ii)(B) for the calculation of the rent for the phase-in of a staged development. New section 2806.62(b)(4)(iii) states that the MW rate will be implemented as described in section 2806.62(c). Comment: A comment noted that the BLM has not yet designated any wind energy zones or other preferred wind energy development areas that would become a DLA. Without any such areas designated for wind energy, the BLM’s rule would put wind energy at a disadvantage in comparison to solar energy since wind energy would not be able to benefit from the incentives available for development in such areas. Response: The BLM agrees that there are currently no wind energy development areas and that wind energy developers cannot yet benefit from the incentives provide for DLAs in subpart 2809 of this final rule. The BLM intends to establish wind energy DLAs in the future. However, this would be done through amending or revising a land use PO 00000 Frm 00059 Solar Fmt 4701 Sfmt 4700 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR 2806.52(a). 2806.52(a)(1). 2806.52(a)(2). 2806.52(a)(3). 2806.52(a)(4). 2806.52(a)(5). 2806.52(a)(6). 2806.52(b). 2806.52(b)(1). 2806.52(b)(2). 2806.52(b)(3). 2806.52(b)(3)(i). 2806.52(b)(3)(ii). 2806.52(b)(4). 2806.52(d). 2806.52(d)(1). 2806.52(d)(2). 2806.52(d)(3). 2806.52(d)(4). 2806.52(d)(5). 2806.52(d)(6). plan, which can take several years. Therefore, the BLM has added section 2806.62(c) to this final rule to explain how the BLM will implement the acreage rent and MW capacity fee for wind energy grants. Developers that submitted an application prior to the publication of the proposed rule would not have known the potential incentives for developing inside a DLA. This final rule provides a payment reduction to developers that had committed to a project on the public lands before this rule was proposed. However, developers that submitted applications after the publication of the proposed rule were aware of the BLM’s proposed rule and incentives and knew that they did not qualify for these incentives. Section 2806.62(c) implements this payment reduction. Specifically, section 2806.62(c) applies to all wind energy development grants that have made a payment for billing year 2016, or for which an application to the BLM was filed before September 30, 2014. This is explained in the following paragraphs. E:\FR\FM\19DER3.SGM 19DER3 92180 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Under paragraph 2806.62(c)(1) of this section, the BLM will reduce the acreage rent and the MW capacity fee. The BLM will compare the total annual payment of the acreage rent and MW capacity fee for 2017 to the total annual payment currently required by policy for the 2016 billing year. Any net increase in costs to a right-of-way holder will be reduced by 50 percent for 2017 billing year. This one-year reduction is intended to ease the transition for grant holders from the current policies to this final rule. If 2017 is the first year for which you make an annual payment, the phase-in described under section 2806.52(b)(4) will apply without an implementation reduction of 50 percent. The rates established by policy will remain in effect until 2017 for rights-ofway that are not issued under subpart 2809 of this final rule in order to provide notice to existing holders of the adjusted rent and fees. Section 2806.62(c)(2) explains how the BLM will implement the acreage rent and MW capacity fee for wind energy grants for which an application to the BLM was filed before September 30, 2014. In addition to the timely filing requirement, a grant holder must also have an accepted POD and cost recovery agreement established before September 30, 2014. The BLM intends for this section to apply to applications that were filed before the BLM issued the proposed rule on September 30, 2014. Anyone who submitted an application before this date would not have known about the proposed requirements of the final rule, including updates to the payment requirements and the incentives for developing inside a DLA. Under paragraph (c)(2)(i) of this section, the BLM will reduce the acreage rent of the grant for the first year by 50 percent. This reduction applies only to the first year’s annual payment, even if it is for a partial year. If the BLM requires an upfront payment for the first partial year and next full calendar year, only the partial year will be reduced by 50 percent. The BLM may require such payment for the year in advance for rights-of-way authorized consistent with section 2806.12 of this final rule. No reduction will be applied to the acreage rent for the subsequent years of the grant. Under paragraph (c)(2)(ii) of this section when the project has reached a point where the BLM requires a MW capacity fee payment, the MW capacity fee will be reduced by 75 percent for the first and second year and 50 percent for the third and fourth year of the grant. The first year is the initial partial year, if any, after electricity generation begins. The fifth and subsequent years will be charged at 100 percent of the MW capacity fee. This reduction applies to each approved stage of development. No further comments were received and no other changes were made to this section, beyond those that were already discussed in this preamble in connection with section 2806.52. sradovich on DSK3GMQ082PROD with RULES3 Topic 21:41 Dec 16, 2016 The title of this section was revised by adding ‘‘and fees’’ and removing ‘‘inside designated leasing areas.’’ This was done to be consistent with the title of section 2806.54. See section 2806.54 for a discussion of all components of rent for a wind energy development lease, except for section 2806.54(a)(1), which discusses the per acre zone rates. Section 2806.54(a)(1) does not apply to wind energy development grants and leases because solar and wind energy acreage rents are calculated using different encumbrance factors. Section 2806.64(a)(1) addresses the per acre zone rate for wind energy leases. See section 2806.54(a)(1) for a discussion of acreage rent. Section 2806.64(a)(1) addresses per acre zone rates for wind energy leases. See section 2806.62(a)(1) for a discussion of acreage rent, which differs from solar energy development. The per acre rents are calculated using the methodology discussed in section 2806.62(a)(1), which reflects the 10 percent encumbrance factor for wind energy development. The following chart lists the paragraphs where the wind energy lease provisions parallel the solar energy provisions for the same topic. The discussions for each relevant wind energy provision are found in the preamble under the associated solar energy provision. Wind Acreage Rent ................................................................... Per acre Zone Rate .......................................................... Assignment of Counties ................................................... Acreage Rent Payments .................................................. Acreage Rent Adjustments .............................................. MW Capacity Fee ............................................................. MW Rate .......................................................................... MW Rate Schedule .......................................................... MW Rate Adjustments ..................................................... MW Rate Phase-in ........................................................... Years 1–10 ....................................................................... Years 11–20 ..................................................................... Years 21–30 ..................................................................... MW Capacity Fee if Renewed ......................................... Scheduled Rate Adjustment ............................................. Initial Rates Used ............................................................. Acreage Rate Adjustment ................................................ MW Rate Adjustment ....................................................... MW Rate Phase-in ........................................................... Stage of Development ...................................................... MW Capacity for a Staged Development ........................ Rent for Support Facilities ................................................ VerDate Sep<11>2014 Section 2806.64 Rents and Fees for Wind Energy Development Leases Jkt 241001 PO 00000 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR Frm 00060 Solar 2806.64(a) .......................................................... 2806.64(a)(1) ..................................................... 2806.64(a)(2) ..................................................... 2806.64(a)(3) ..................................................... 2806.64(a)(4) ..................................................... 2806.64(b) .......................................................... 2806.64(b)(1) ..................................................... 2806.64(b)(2) ..................................................... 2806.64(b)(3) ..................................................... 2806.64(c) .......................................................... 2806.64(c)(1) ...................................................... 2806.64(c)(2) ...................................................... 2806.64(c)(3) ...................................................... 2806.64(c)(4) ...................................................... 2806.64(d) .......................................................... 2806.64(d)(1) ..................................................... 2806.64(d)(2) ..................................................... 2806.64(d)(3) ..................................................... 2806.64(d)(4) ..................................................... 2806.64d)(5) ....................................................... 2806.64(c)(5) ...................................................... 2806.66 .............................................................. Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM 19DER3 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 43 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR 2806.54(a) 2806.54(a)(1) 2806.54(a)(2) 2806.54(a)(3) 2806.54(a)(4) 2806.54(b) 2806.54(b)(1) 2806.54(b)(2) 2806.54(b)(3) 2806.54(c) 2806.54(c)(1) 2806.54(c)(2) 2806.54(c)(3) 2806.54(c)(4) 2806.54(d) 2806.54(d)(1) 2806.54(d)(2) 2806.54(d)(3) 2806.54(d)(4) 2806.54(d)(5) 2806.54(c)(5) 2806.56 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations No comments were received on this section, and no changes were made from the proposed to the final version of this section, beyond those discussed in connection with section 2806.54. sradovich on DSK3GMQ082PROD with RULES3 Section 2806.66 Rent for Support Facilities Authorized Under Separate Grants This section states that if a wind energy development project includes separate right-of-way authorizations for support facilities such as wells, control structures, staging areas, or linear rightsof-way (e.g., roads, pipelines, transmission lines, etc.), then the rent schedule will be determined using the Per Acre Rent Schedule for linear facilities found at section 2806.20(c). No comments were received on this section, and no changes were made from the proposed to the final version of this section, beyond those discussed in connection with section 2806.56. Section 2806.68 Rent for Energy Development Testing Grant(s) Section 2806.68(a) describes the rent for any energy site-specific testing grant. A minimum rent is established as $100 per year for each grant issued. Under this section, rent is set by incorporating in this final rule the site-specific rent amount from IM 2009–043, Wind Energy Development Policy. Sitespecific grants are authorized only for one site and do not allow multiple sites to be authorized under a single grant; however, a single entity may hold more than one grant. If a BLM office has an approved small site rental schedule, that office may use the rent amount established in the small site rental schedule, so long as the rent schedule charges more than the $100 minimum rent per year found in the regulations. Since small site rental schedules are provided to the BLM by the Department’s Office of Valuation Services, they represent a third party determination of market value. In lieu of annual payments for a site-specific testing grant, a grant holder may pay for the entire 3-year term of the grant. See sections 2801.9(d)(1) and 2805.11(b)(2)(i) of this preamble for further discussion of site-specific energy testing grants. Consistent with comments received and discussed under section 2801.9 of this preamble, the title of this section is changed from the proposed rule to read as shown above. A similar change was made for the title of paragraphs (a) and (b) of this section. These changes are made in order to ensure the headings of the rule are consistent with revisions to the final rule that will allow sitespecific and project-area testing to be VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 available for both solar and wind energy testing. Section 2806.68(b) describes the rent for a wind energy project-area testing grant. A per-year minimum rent is established at $2,000 per authorization or $2 per acre for the lands authorized by the grant, whichever is greater. The appraisal consultation report by the Office of Valuation Services supports the rent amounts established in this final rule. Project-area grants may authorize multiple meteorological or instrumentation testing sites. There is no additional charge or rent for an increased number of sites authorized under such grants. See sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for further discussion of project-area energy testing grants. No further comments were received on this section and no additional changes were made in the final rule. Section 2806.70 How will the BLM determine the payment for a grant or lease when the linear, communication use, solar energy, or wind energy payment schedules do not apply? Section 2806.70 is redesignated from existing section 2806.50 and is retitled as shown above. This section provides guidance on how the BLM determines the payment for a grant or lease when the linear rent schedule, the communication use rent schedule, the solar acreage rent and MW capacity fee provisions, or the wind acreage rent and MW capacity fee provisions are not applicable. The title of this section is amended by replacing ‘‘rent’’ with ‘‘payment’’ in two places. This final rule introduces the concept of MW capacity fees, which are a payment to the BLM for the commercial utilization value of the public lands, above the rural land values. The term ‘‘payment’’ includes both rents and fees, which is why it was selected. No other change is intended by this revision. The only other change to this redesignated section is that solar and wind energy rights-of-way are now included in the listed rent schedules. No comments were received and no other changes are made from the proposed rule to the final rule. Subpart 2807—Grant Administration and Operation Section 2807.11 When must I contact BLM during operations? This section is revised to make it clear that you must notify the BLM when your use requires a substantial deviation from the issued grant. Under the changes made to section 2807.11(b), PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 92181 ‘‘substantial deviations’’ from the rightof-way grant now require an amendment to the grant. ‘‘Substantial deviations’’ include changing the boundaries of the right-of-way, major improvements not previously approved by the BLM, or a change in use for the right-of-way. Substantial deviations to a grant may require adjustment to a grant or lease rent and fees under subpart 2806, or bonding requirements under subparts 2805 and 2809. Consistent with other revisions to the final rule intended to improve readability, the BLM revised paragraph (b) of this section to read as ‘‘the BLM’s’’ instead of ‘‘our.’’ This revision is intended to improve understanding of who the BLM is referring to in the final rule. Comment: One comment asked the BLM to narrow the circumstances under which a right-of-way holder must notify the BLM, suggesting that these reporting requirements be limited to changes that necessitate an assignment under the standards identified in section 2807.21(h). Response: The requirement to report changes in partners, financial conditions, or business or corporate status is a requirement of the existing regulations found under section 2807.11(c). Section 2807.11(c) was not proposed for revision and is not revised or redesignated by this final rule. In addition, the BLM must have accurate and up-to-date information about rightof-way holders in order to facilitate its management of the public lands. Paragraph (d) of this section requires you to contact the BLM when sitespecific circumstances or conditions result in the need for you to propose changes to an approved right-of-way grant, POD, site plan, or other procedures that are not substantial deviations in location or use. Examples of proposed ‘‘minor deviations’’ include changes in location of improvements in the POD or design of facilities that are all within the existing boundaries of an approved right-of-way. Other such proposed non-substantial deviations might include the modification of mitigation measures or project materials. For purposes of this provision, project materials include the POD, site plan, and other documents that are created or provided by a grant holder. These project materials are a basis for the BLM’s inspection and monitoring activities and are often appended to a right-of-way grant, which is why the BLM needs to understand any changes to those materials. The requested changes may be considered as grant or lease modification requests. Proposals for non-substantial deviations E:\FR\FM\19DER3.SGM 19DER3 92182 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations will require review and approval by the authorized officer or other appropriate personnel. The preliminary application review meetings found under section 2804.12 and public meetings found under section 2804.25 are not required for an assignment. Paragraph (e) requires that right-ofway holders contact the BLM to correct discrepancies or inconsistencies. sradovich on DSK3GMQ082PROD with RULES3 Section 2807.17 Under what conditions may the BLM suspend or terminate my grant? Section 2807.17(d) contains the provisions formerly located at section 2809.10. This section was redesignated in order to make room for the renewable energy right-of-way leasing provisions. No comments were received and no changes are made from the proposed rule to the final rule. Section 2807.21 May I assign or make other changes to my grant or lease? Some revisions were made to this section in response to comments, which are discussed in the following paragraphs. A summary of other revisions to this section is included after these comments and responses. Comments: Some comments noted confusion over the BLM’s requirements for name changes and assignments, specifically, what constitutes a name change or assignment. Additionally, comments noted that mergers and acquisitions are not assignments and that a name change or assignment should not be the basis for or occasion on which the BLM redrafts the terms and conditions of right-of-way agreements. Response: Section 2807.21 is revised to provide clarity on the BLM’s requirements for assignments and name changes. Section 2807.21(b) and (c) of the proposed rule have been combined into section 2807.21(b) in this final rule. As a result of these changes, several paragraphs are also redesignated in the final rule. The BLM agrees with commenters that name changes should not necessitate the rewriting of the terms and conditions of a right-of-way agreement. The BLM disagrees with the commenter equating mergers and acquisitions with name changes. A merger or acquisition is different in character as they can result in material changes to the corporate structure under which a right-of-way grantee or leaseholder operators. Such changes can affect financial positions or the technical capability of a parent company. As a result, the BLM determined that it was appropriate to expand the definition of assignment in VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 both the final and proposed rules to include changes in ownership and other related change in control transactions, including ‘‘mergers or acquisitions.’’ However, recognizing that there are changes in corporate structure within the same corporate family that may technically constitute change in control transactions, but that do not implicate BLM’s concern about technical and financial capability of a grant- or leaseholder’s parent, the BLM has revised section 2807.21(a)(2) and (b)(2) to clarify that change in control transaction within the scope of that provision do not include transactions or restructurings within the same corporate family. When a right or interest in a right-ofway grant or lease is assigned from one party to another, the involved parties are identified as the assignor and assignee. The BLM generally evaluates the assignee, the party that is intended to receive the right or interest, as if they were a new applicant. The BLM may determine that additional terms and conditions are required when assigning the right or interest and would include them as a term or condition of the grant at the time of assignment. New terms and conditions could include the requirement to bond the authorized facility, such as in the case when a potential assignee of a grant has a poor history of meeting the terms and conditions of a BLM grant, that may have not applied to the assignor. The evaluation and determination of whether new terms and conditions should be applied would occur when the BLM considers the proposed conveyance of a right-of-way. Other revisions to the terms and conditions that may occur with assignments are those which the BLM retains authority to revise, such as rents, fees, bonding, and other revisions identified under section 2805.15(e). Section 2805.15(e) allows the BLM to amend the terms and conditions of a right-of-way grant or lease as a result of changes in legislation, regulation, or as otherwise necessary to protect public health or safety or the environment. Because any changes to the terms and conditions of a right-of-way grant or lease would occur after the completion of the agency action (the BLM’s decision to approve the right-of-way), the BLM anticipates doing so through a separate action, generally initiated at the BLM’s discretion and requiring its own decision-making process. Updating corporate or individual filings within a State where only a name is changed, but the filing does not transfer a right or interest to another party, qualifies as a name change. Name PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 changes for a right-of-way grantee or lessee do not require a NEPA analysis and the right-of-way would not be subject to revision. When changing a name, the BLM does not issue a new right-of-way grant or lease, but would re-issue the same right-of-way grant or lease with the new name on it. This is because the BLM would be dealing with the same entity to which it had originally authorized the right-of-way. Name changes are an administrative action taken by the BLM to update its records showing the proper name of the entity it has authorized. In the case of a name change, there is no assignment, in whole or part, of any right or interest in a grant or lease. A name change would occur if an entity had filed paperwork with a State for a name change. Re-issuing a grant or lease with the new name would only provide the BLM an opportunity to notify the right-of-way holder of updated rent, bonding, or other such revised provisions made under section 2805.15(e). Section 2807.21 is amended by revising the section heading and existing paragraphs (a), (d), and (f); adding paragraphs (b), (g), and (h); and making other appropriate redesignations of the remaining paragraphs. We are further revising this section with a few changes made in the final rule in response to comments, which will be explained in greater detail in the discussion of each specific paragraph. The heading for this section is changed from ‘‘May I assign my grant?’’ to read as ‘‘May I assign or make other changes to my grant or lease?’’ The existing regulations do not cover all instances where an assignment is necessary and the section is revised to address situations where assignments may not be required. The changes are necessary to: (1) Add and describe additional changes to a grant other than assignments; (2) Clarify what changes require an assignment; and (3) Specify that right-of-way leases issued under part 2809 are subject to the regulations in this section. Without the BLM’s approval of a right-of-way assignment, a private party’s business transaction would not be recognized by the BLM and this lack of recognition could hinder a new holder’s management and administration of the right-of-way. This rule also clarifies the responsibilities of a grant holder should such private party transactions occur. Paragraph (a) of this section is revised to describe two events that may necessitate an assignment: (1) A transfer by the holder of any right or interest in the right-of-way grant or lease to a third E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations party (e.g., a change in ownership); and (2) A change in control involving the right-of-way grant or lease holder such as a corporate merger or acquisition. Paragraph (a)(1) in this final rule is revised by removing the word ‘‘voluntary’’ when describing a transfer. There are some situations, such as bankruptcy, when a transfer may be involuntary. The BLM did not intend to exclude those circumstances from this section. Paragraph (a)(2) is revised to remove reference to changes in status as a ‘‘wholly owned subsidiary.’’ That provision created confusion and was removed. No additional comments were received and no further changes were made to this paragraph. New paragraph (b) of this section is revised to clarify and remove ambiguities in this section of the rule that explains the circumstances that do not constitute an assignment, but may necessitate filing new or revised information. A change in the holder’s name only does not require an assignment nor do changes in a holder’s articles of incorporation. However, sometimes a change in a holder’s name or articles of incorporation may indicate that an assignment occurred. The BLM will review the documentation filed with it in order to determine if a transfer in part or whole of the right-of-way has occurred or a change in control transaction of the grant-holder or lease holder has occurred. This section is revised from the proposed to the final rule to help further explain these situations more clearly to the public. The introductory text of paragraph (b) of this section is revised to clarify that even though an assignment may not be necessary, some circumstances may necessitate filing new or revised information. Paragraphs (b)(1), (2) and (3) of this section provide examples for when this filing may be necessary. Paragraph (b)(1) of this section is added to this final rule to explain that transactions within the same corporate family do not constitute an assignment. Paragraphs (b)(2) and (3) of this section contain the provisions of proposed paragraphs (b) and (c) of this section with some minor revisions. Existing paragraph (b) of this section is revised and redesignated as paragraph (c). As revised, this paragraph requires the payment of application filing fees in addition to processing fees. This revision promotes consistency between applications for assignments and other applications for rights-of-way. For example, the rule (at section 2804.12(c)(2)) now requires an application filing fee for solar and wind energy applications. As revised, new VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 paragraph (c) also provides that the BLM will not approve any assignment until the assignor makes any outstanding payments that are due. This paragraph is revised from the proposed to final rule by adding a provision stating that preliminary application review meetings are not required for an assignment. Comments: Some comments stated that the pre-application requirements for would be burdensome for an assignments, name changes or even renewals and suggested excluding those requirements for assignments, name changes and renewals. Response: Section 2807.21(c) and (h)(1) are revised to make clear that the pre-application (now known as preliminary application review) meetings are not required for assignments and name changes. No other revisions have been made to these paragraphs in response to this comment. Existing paragraph (c) of this section is redesignated, unchanged, as paragraph (d) and is included in the final rule. Existing paragraph (d) of this section is revised and redesignated as paragraph (e). As revised, new paragraph (e) will except leases issued under revised 43 CFR subpart 2809 (i.e., right-of-way authorizations inside a DLA) from the BLM’s authority to modify terms and conditions when it recognizes an assignment. This provision provides incentives for potential right-of-way lessee to develop lands inside DLAs. The BLM revised the first sentence in paragraph (e) of this section from the proposed to final rule to clarify how an assignment is recognized. The BLM will approve an assignment in writing. Comment: A comment requested clarification of the BLM’s right to modify terms of a lease issued under subpart 2809. As written, the proposed rule would have prohibited the BLM from modifying a lease issued under subpart 2809 when approving an assignment. In addition, the comment requested clarification of the relationship between section 2805.15(e) and sections 2807.21 and 2887.11. Response: The BLM agrees with this suggestion and in the final rule further clarification has been provided to show the relationship between section 2805.15(e) and this provision for leases issued under subpart 2809. Revised section 2807.21(e) now includes an additional statement to make clear that a lease will not be modified to include additional terms and conditions when approving an assignment, unless a modification is required under section 2805.15(e). PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 92183 The BLM may, however, ‘‘require that you obtain, or certify that you have obtained, a performance and reclamation bond or other acceptable bond instrument’’ (see section 2805.20(a)) when approving an assignment. A bond is required for a right-of-way at the BLM’s discretion and is always required for a solar or wind energy grant or lease. If a bond is required, the BLM must be certain that a bond is in place to ensure the protection of the public lands before approving an assignment. In addition, section 2809.18(f) has been modified to be consistent with this provision. The statement that a lease will not be modified to include additional terms and conditions is specific to when the BLM completes an assignment. Under a separate action which may occur at the same time an assignment is completed, the terms and conditions may be modified if requested by a lessee pursuant to section 2805.12(e). No revision has been made under section 2887.11 on this matter since leases issued under subpart 2809 cannot be assigned under section 2887.11. Redesignated section 2807.21(f) provides that the BLM will process assignment applications according to the same time and conditions as in section 2804.25(d). This provision was formerly identified in the regulations as paragraph (e) of this same section. This provision applies the BLM’s customer service standard to processing assignment applications. This paragraph has been revised to update the referenced citation, consistent with the revisions made to the final rule under section 2804.25. Section 2807.21(g) explains that only interests in right-of-way grants or leases are assignable. A pending right-of-way application cannot be assigned. A revision is made to the second sentence of this paragraph, to be consistent with changes made under section 2804.30(g), that clarifies that competitively gained applications held by a preferred applicant do provide a right and interest in the public lands. This revision is made here to be consistent with similar changes made under section 2804.30(g). Section 2807.21(h) addresses how a holder informs the BLM of a name change when the name change is not the result of an underlying change in control of a grant. These procedures are necessary to ensure that the BLM can send rent bills or other correspondence to the appropriate party. This new provision addresses several specific circumstances. For example, it requires any corporation requesting a name change to supply: (1) A copy of the E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92184 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations corporate resolution(s) proposing and approving the name change; (2) A copy of the acceptance of the change in name by the State or Territory in which it is incorporated; and (3) A copy of the appropriate resolution(s), order(s), or other documentation that shows the name change. Under this provision, the BLM could also modify a grant, or add bonding and other requirements, including additional terms and conditions when recognizing such changes. However, the only way that the BLM may modify a lease issued under subpart 2809 would be in accordance with section 2805.15(e), or as otherwise described in the regulations. Such modifications under section 2805.15(e) would be a result of changes in legislation, regulation, or to protect public health, safety, or the environment. Any such name change would be recognized in writing by the BLM. Section 2807.21(h)(1) was modified from the proposed to final rule to improve readability. The first and second sentences were combined and ‘‘preliminary application review and public meetings’’ were added to the list of exempted requirements during a name change only. This change was made to remain consistent with revisions made under section 2807.21(b), which excludes applications for assignments from preliminary application review meetings and public meetings for solar or wind energy development projects and transmission lines with a capacity of 100 kV or more. The BLM revised paragraph (h)(2) of this section from the proposed to final rule in order to clarify the differences in how a grant and lease may be modified during a name change. The BLM added new paragraphs (h)(2)(i) and (ii) in order to more clearly separate these situations. Paragraph (h)(2)(i) of this section explains that the BLM may modify a grant to add bonding and other requirements when processing a name change only. However, under paragraph (h)(2)(ii) of this section, the BLM may modify a lease issued under subpart 2809 in accordance with section 2805.15(e). This is not a change from the requirements proposed rule, but it may not have been clear from the way it was phrased. The final rule is intended to prevent any possible confusion. Generally, the BLM intends to make changes to a grant or lease during a name change only to reflect relevant changes consistent with section 2805.15 (e). This existing section explains the BLM’s right to ‘‘[c]hange the terms and conditions of your grant as a result of changes in legislation, regulation, or as otherwise necessary to protect public VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 health or safety or the environment.’’ The BLM will not make any other changes to lease issued under subpart 2809 as part of a name change only. However, the BLM may take this opportunity to update other aspects of a grant, as appropriate. For example, under section 2805.20(a), the BLM will periodically review your bond for adequacy and may require a new bond, an increase or decrease in the value of an existing bond, or other acceptable security at any time during the term of the grant or lease. The BLM may determine that additional actions are necessary, such as updates to the bond (see section 2805.20(a)) or the 10-year updates to the payment provisions (see sections 2806.54 or 2806.64. If the BLM determines that these actions are necessary, they will be taken separate from the name change only as appropriate. Paragraph (h)(3) of this section is revised in this final rule to read: ‘‘Your name change is not recognized until the BLM approves it in writing.’’ As proposed, the rule was not clear whether a name change would be recognized if submitted in writing to the BLM, or if approved in writing by the BLM. This revision makes it clear to readers of the final rule that it must be the BLM’s approval in writing to recognize a name change. Comments: Some comments recommend that the financial information of the original owner or its subsidiary may be used to meet financial qualification requirements of the grantee when assigning or changing the name on a grant or lease. Response: The BLM will only accept the financial or technical information of the holder of the authorization. The holder is the legally responsible party for the right-of-way and will be held as such under the regulations and any subsequent authorization. However, substitution of one entity’s financial and technical capabilities may be acceptable, provided that documentation showing the two entities are linked, such as in the case of a subsidiary company where the parent company asserts the technical or financial responsibilities of the subsidiary. No revision to the rule was made in response to this comment. No other comments were received or changes made to the final rule. Section 2807.22 How do I renew my grant or lease? The title for section 2807.22 is revised by adding ‘‘or lease’’ to the end of the sentence so that leases issued under subpart 2809 are covered by this section. Likewise, paragraphs (a), (b), PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 and (d) of this section are revised to include leases. Paragraphs (c) and (e) remain unchanged. A new paragraph (f) is also added to this section. Paragraph (f) of this section explains how the BLM would ensure continued operations of a right-of-way during the renewal process. If a holder makes a timely and sufficient application for renewal, the grant or lease does not expire until the BLM acts upon the application for renewal. The second part of this paragraph describes the circumstances in which the BLM would ‘‘reissue’’ a grant or lease instead of ‘‘renew’’ it. Most of the authorizations managed by the BLM are issued under FLPMA’s authority, but some remaining authorizations were issued before FLPMA was enacted. In this situation, the BLM would reissue the grant under FLPMA’s authority. Minor revisions are made to paragraph (f) to improve readability of this new paragraph. This paragraph protects the interests of holders of rights-of-way who have timely and sufficiently made an application for the continued use of an authorization (see 5 U.S.C. 558(c)(1)), and is consistent with policy. In this situation, the authorized activity will not expire until the BLM evaluates the application and issues a decision. No comments were received and no other changes are made to the final rule. Subpart 2809 Competitive Process for Leasing Public Lands for Solar and Wind Energy Development Inside Designated Leasing Areas Existing subpart 2809, which formerly consisted of a single regulation (section 2809.10) pertaining to Federal agency right-of-way grants, is revised and redesignated as new paragraph (d) of section 2807.17. Existing section 2809.10(b) explains that Federal agencies are generally not required to pay rent for a grant. This paragraph is removed, not redesignated, since existing section 2806.14(a)(2) already addresses rental exemptions for Federal agencies and, therefore, section 2809.10(b) is no longer necessary. Revised subpart 2809 is now dedicated to the competitive process for leasing public lands for solar and wind energy development. Comment: Several comments raised concerns that the priority for handling solar or wind energy leases was unclear when compared to solar and wind grant applications under part 2804. Response: Application prioritization is discussed under section 2804.35 of this rule, which specifically states that leases issued under this subpart having priority over grant applications. A new E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations section 2809.10(d) is added to the final rule, consistent with comments received and revisions made in section 2804.35, that clearly identifies the handling of leases issued under subpart 2809 have the highest priority with respect to solar and wind energy on the public lands. Comment: Several comments suggest that regional mitigation strategies should be used for every designated leasing area and should be part of the land use planning process. Response: BLM development of a regional mitigation strategy is not necessary prior to holding a competitive auction inside a DLA or otherwise authorizing solar or wind energy development. However, regional mitigation strategies further increase certainty to developers and stakeholders when considering a solar or wind energy development. The BLM believes that the regional mitigation strategies are a good tool to use when making decisions that would affect resources in certain areas, such as a DLA. Regional mitigations strategies provide a durable basis to evaluate mitigation for the impacted lands and the BLM may use such strategies when making land use planning decisions. The BLM is in the process of developing regional mitigation strategies for many SEZs, which qualify as DLAs under this final rule. The BLM is currently in the process of establishing its mitigation policies and guidance, which include guidance for regional mitigation strategies. Consistent with this guidance, the BLM generally intends to prepare regional mitigation strategies, with opportunities for public review and engagement, before authorizing wind or solar energy development in DLAs, potentially including when the BLM designates DLAs in the future through land use planning. Comment: One comment suggested that the BLM incorporate the FWS’s Wind Energy Guidelines (WEG), which can be found on the Internet at https:// www.fws.gov/ecological-services/eslibrary/pdfs/WEG_final.pdf, into the rule for pre-construction due diligence. Response: The BLM did not revise the rule as a result of this comment. The BLM has a different scope of authority and responsibility in administering the public lands than the FWS and must take into account biological resources, cultural resources, and land uses consistent with FLPMA’s mandate that public lands be used for multiple use and sustained yield for current and future generations. This is different than the FWS’s authority and objectives which do not have a multiple use mandate and generally require limited VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 review for cultural resources. However, the BLM uses processes similar to the WEGs in the review and analysis of resources on the public lands. For wind energy site testing actions similar to steps 2 and 3 of the WEGs are completed prior to a BLM decision. Actions similar to steps 1 through 3 are incorporated into the BLM’s processing of a development grant, as well as monitoring protocols that address similar issues as those in the steps of the WEGs. Comments: Some comments suggest that all final granted right-of-way instrument terms and conditions, regardless of location, should be substantially the same, unless sufficiently justified. Response: The BLM believes that it has adequate reason for differences in terms and conditions of the energy development projects issued as leases under subpart 2809, as compared to those issued as grants under subpart 2804. There are limited differences in leases and grants, which have been explained in great detail in this preamble. These differences are intended to incentivize development in DLAs, which the BLM has identified as preferred areas for solar or wind energy development, based on a high potential for energy development and lesser resource impacts. Consistent with SO 3285, which describes the need for strategic planning and a balanced approach to domestic resource development, the BLM believes that focusing solar and wind energy development in preferred areas would provide a benefit to the public by reducing potential resource conflicts. The BLM identifies DLAs through its land use planning process, which requires the BLM to consider the effects of solar or wind energy developments in the area. Due to this prior planning process, the BLM is able to issue a lease almost immediately after holding an auction, because that type of use has already been approved for the area. Subsequent tiered NEPA analysis will generally be necessary for the BLM to evaluate the lease-holder’s POD to ensure that it fits within the BLM’s decisions before allowing development of the land. Additionally, the rent and fee payment for leases issued under subpart 2809 are phased in over a longer period of time or updated less frequently than those issued under subpart 2804. The rent and fee payment structure is explained in more detail in sections 2806.50 through 2806.68 of this preamble. This difference in payment of the rent and fee allows the BLM to collect the determined fair market value PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 92185 of the public lands while incentivizing solar and wind energy development in DLAs over other public lands. No other comments were received or changes made to the final rule for this section. Section 2809.10 General Under section 2809.10, only lands inside DLAs will be available for solar and wind competitive leasing using the procedures under this subpart. Lands outside of DLAs may be offered competitively using the procedures under section 2804.35 of this rule. Under section 2809.10, the BLM may either include lands in a competitive offer on its own initiative or solicit nominations through a call for nominations (see section 2809.11). A new paragraph (d) is added to this section in the final rule in response to comments on the proposed rule. Paragraph (d) states that the processing of leases awarded under this part will generally be prioritized ahead of grant applications, consistent with revisions made to section 2804.35, clarifying that leases generally have priority over grant applications. This revision is to show how the BLM will prioritize its handling of solar and wind energy development on the public lands. The BLM will generally prioritize leases because they are issued inside DLAs, which are the BLM’s preferred areas for solar and wind energy development. The BLM recognizes that only a few wind energy DLAs have been identified to date, and therefore there are only limited opportunities for project proponents to obtain wind energy leases as opposed to grants. The BLM intends to consider this when prioritizing wind energy applications during this transition period, as the BLM develops additional wind energy DLAs. No other changes are made to the final rule for this section and no other comments were received. Section 2809.11 How will BLM solicit nominations? This section explains the process by which the BLM will request nominations for parcels of lands inside DLAs to be offered competitively for solar or wind energy development. Under paragraph (a) of this section, ‘‘Call for nominations,’’ the BLM requests expressions of interest and nominations for parcels of land located in a DLA. The BLM will publish a notice in the Federal Register for solar and wind energy development and may use other notification methods, such as a newspaper of general circulation in the area affected by a potential offer or the Internet. This final rule is revised to make notice in a newspaper an optional E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92186 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations form of public notice. This section’s public notice requirements are consistent with revisions to other sections of this final rule and are described more fully in section 2804.23(c) of this preamble. Paragraph (b) of this section, ‘‘Nomination submission,’’ outlines the requirements for nominating a parcel of land for a competitive offer. Paragraph (b)(1) of this section requires a payment of $5 per acre for the parcel(s) nominated. This payment is nonrefundable, except when submitted by an individual or company that does not meet the qualifications identified in section 2809.11(d). The average area of solar and wind grant or lease ranges between 4,000 and 6,000 acres. The $5 per acre fee is derived from an appraisal consultation report prepared by the Department’s Office of Valuation Services and will be adjusted for inflation once every 10 years, using the change in the IPD–GDP for the preceding 10-year period. The appraisal consultation report provided a range of $10–$27 per acre per year with the nominal range being $15–$17 per acre as the fair market value for these uses of the public lands. The BLM is establishing the nomination fee below the indicated range in the analysis since the submission of a nomination does not ensure that the nominator would be the successful bidder. The average annual change in the IPD–GDP from 2004–2013 is about 2.1 percent, which will be applied through 2025. The fee will be required only with a nomination and not on a yearly basis and this is noted under section 2809.11(b)(1). The nomination fee is lower than an application filing fee for grants issued under subpart 2804 in order to increase interest and encourage nominators to propose efficient use of the public lands inside DLAs. Payment of fair market value will be received through a combination of the bids (not including Federal administrative costs) received during a competitive process and the rents and MW capacity fees described in sections 2806.50 through 2806.68 of this final rule. Nomination fees are collected under Sections 304(b) and 504(g) of FLPMA as cost recovery fees. The nomination fees will reimburse the BLM for the expense of preparing and holding the competitive process for lands inside a DLA. Furthermore, the nomination allows the BLM to see specifically what parcel of land is of interest to a developer and would inform the BLM of parcel configurations for a competitive process. A variable offset may be offered for qualified bidders who submitted VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 nominations. Variable offsets are discussed further in section 2809.16. The BLM revised paragraph (b) of this section from the proposed to final rule to prevent confusion over how the BLM uses the IPD–GDP to adjust the nomination fees. This revision is consistent with the revision to section 2804.12(c)(2), which describes application filing fees. Both application filing fees and nomination fees may be adjusted once every 10 years. See the preamble discussion for section 2804.12(c)(2) for more information on this revision. Paragraph (b)(2) of this section requires the nomination to include the nominator’s name and address of record. This information is necessary for the BLM to communicate with the nominator about future leasing issues. Paragraph (b)(3) of this section requires that a nomination be accompanied by a legal land description and map of the parcel of land in a DLA. This information will help the BLM in identifying parcels in the competitive offer. Under paragraph (c) of this section, the BLM may consider informal expressions of interest. An expression of interest is an informal submission to the BLM, suggesting that a parcel inside a designated leasing area be considered for a competitive offer. An expression of interest only provides a tentative bidder’s interest in a parcel(s) of land located inside a DLA. If the expression of interest identifies a specific parcel, it must be submitted in writing, include the legal land description of the parcel, and a rationale for its inclusion in a competitive offer. There is no fee required to make an expression of interest, but submission does not qualify a potential bidder for a variable offset, as would formal nominations. Under paragraph (d) of this section, you must qualify to hold a grant or lease under section 2803.10 in order to submit a nomination. Under paragraph (e) of this section, a nomination cannot be withdrawn, except by the BLM for cause, in which case nomination monies would be refunded. This clause parallels language in the BLM’s other competitive process regulations and encourages serious nominations for parcels on public lands. Comments: Some comments stated that nomination fees, as discussed under section 2809.11(b)(1), should reflect the cost for the BLM to plan and conduct a competitive lease process. In addition, one comment recommended that the nomination fee be set at $5 per acre and be adjusted downward to a minimum of $2 per acre for large parcels. In the event the entity that PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 nominates the parcel is not the successful bidder, then the nomination should be refunded to that party and assessed to the successful bidder. Response: The BLM will maintain a flat rate fee for nominations. A tiered or sliding scale approach to such fees would create an unnecessarily complicated system. A flat fee ensures that such costs are consistent for each action and the expectation to meet the requirements are clear. In addition, nomination fees are kept as a nonrefundable fee because they are a cost recovery payment to the BLM for expenses the agency incurs. These fees would be used by the BLM to prepare and hold a competitive offer. Submission of a nomination demonstrates a developer’s seriousness for use of an area. No other comments were received and nor changes are made from the proposed rule to the final rule. Section 2809.12 How will BLM select and prepare parcels? This section provides that the BLM will identify parcels suitable for leasing based on either nominations, expressions of interest, or its own initiative. Before offering the selected lands competitively, the BLM and as appropriate, other Federal or State entities, will conduct studies, comply with NEPA and other applicable laws, and complete other necessary site preparation work. This work is necessary to ensure that the parcels are ready for competitive leasing, to provide appropriate terms and conditions for any issued lease, to appropriately protect valuable resources, and to be consistent with the BLM’s plan(s) for the area. Paragraph (b) of this section is revised from the proposed to final rule by adding ‘‘as applicable’’ after ‘‘other Federal agencies.’’ This revision clarifies that other Federal agencies will be involved, as applicable, but may not be involved on all projects. It may not always be necessary to include other Federal agencies and those agencies may not want to participate. Comments: Some comments recommended that the BLM should include a procedural requirement in the regulation that a regional mitigation strategy must be completed before the initiation of a competitive leasing process. It is also suggested that this approach would benefit the project proponents with enhanced certainty regarding compensatory mitigation costs. One comment specifically recommended the addition of the following text, ‘‘b) work, including applicable environmental reviews and public meetings and publish the E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations availability of a final regional mitigation strategy, before . . . .’’ Response: The BLM considered including a requirement to complete a regional mitigation strategy; however, the BLM did not revise the rule as a result of the comment because each competitive offer will vary based upon resource concerns, public, tribal, and developer issues, and government interests. The BLM is currently in the process of establishing its mitigation policies and guidance, which include guidance for regional mitigation strategies. Consistent with this guidance, the BLM intends to prepare regional mitigation strategies, with opportunities for public review and engagement, before authorizing wind or solar energy development in DLAs, potentially including when the BLM designates DLAs in the future through land use planning. sradovich on DSK3GMQ082PROD with RULES3 Section 2809.13 How will the BLM conduct competitive offers? Under this section, the BLM may use any type of competitive process or procedure to conduct its competitive offer. Several options, such as oral auctions, sealed bidding, a combination of oral and sealed bidding, and others are identified in section 2809.13(a). Oral auctions are planned events where bidders are asked to orally bid for a lease at a predetermined time and location. Sealed bidding would occur when bidders are asked to submit bids in writing by a certain date and time. Combination bidding is when sealed bids are first opened and then afterward an oral auction would occur, with oral bids having to exceed the highest sealed bid. Under paragraph (b) of this section, the BLM would publish a notice of competitive offer at least 30 days before bidding takes place in the Federal Register and through other notification methods, such as a newspaper of general circulation in the area affected by the potential right-of-way or the Internet. This section of the final rule is revised, consistent with revisions to other sections of this final rule, to make notice in a newspaper an optional method for public notice. See section 2804.23(c) of this preamble for further discussion of these revisions. Minor revisions are also made from the proposed to the final rule to paragraph (b)(5) of this section to improve readability. The word ‘‘factor’’ is added throughout paragraph (b)(6) of this section for the final rule. This is intended to help the reader understand that an offset factor is part of the variable offset that may be presented in VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 the notice of competitive offer. A notice of competitive offer must include: 1. The date, time, and location (if any) of the competitive offer; 2. The legal land description of the parcel to be offered; 3. The bidding methodology and procedures that will be used in conducting the competitive offer, including any of the applicable competitive procedures identified in section 2809.13(a); 4. The required minimum bid (see section 2809.14(a)); 5. The qualification requirements for potential bidders (see section 2809.11(d)); 6. If applicable, the variable offset (see section 2809.16), including: i. The percent of each offset factor; ii. How bidders may pre-qualify for each offset factor; and iii. The documentation required to pre-qualify for each offset factor; and 7. The terms and conditions to be contained in the lease, including requirements for the successful bidder to submit a POD for the lands involved in the competitive offer (see section 2809.18) and the lease mitigation requirements. Section 2809.13(b)(7) is revised in the final rule to include in the terms and conditions of a notice of competitive offer any mitigation requirements, including those for compensatory mitigation to address residual impacts associated with the right-of-way. This revision is made to clarify where the BLM will incorporate mitigation in its administrative processes. Including mitigation requirements in this final rule is discussed in greater detail in the general comment and responses portion of this preamble. Under paragraph (c) of this section, the BLM will notify you of its decision to conduct a competitive offer at least 30 days in advance of the bidding if you nominated lands and paid the nomination fees required by section 2809.11(b)(1). No comments were received and no other changes are made from the proposed rule to the final rule. Section 2809.14 What types of bids are acceptable? Section 2809.14 explains the requirements for bids submitted under the competitive process outlined in this subpart. Paragraph (a) of this section provides that your bid submission will be accepted by the BLM only if it included the minimum bid established in the competitive offer, plus at least 20 percent of your bonus bid, and you are able to demonstrate that you are qualified to hold a right-of-way by PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 92187 meeting the requirements in section 2803.10. Consistent with comments received and revisions made to the final rule, the words, ‘‘or lease’’ are added to this paragraph of the final rule to help improve its clarity. As proposed, the rule only referenced a grant, which is defined in these regulations to include the term lease. For the final rule, language was added to make it clear that the qualifications to hold a lease are the same as to hold a grant. Paragraph (b) of this section provides that a minimum bid will consist of three components. The first component is the amount required for reimbursement of administrative costs incurred by the BLM and other Federal agencies in preparing and conducting the competitive offer. Administrative costs include all costs required for the BLM to comply with NEPA plus any other associated costs, including costs identified by other Federal agencies. As mentioned in the general discussion section of this preamble, administrative costs are not a component of fair market value, but are used to reimburse the Federal Government for its work in processing a competitive offer and performing other necessary work. The second component of the minimum bid is an amount determined by the authorized officer for each competitive offer. The BLM will consider known values of the parcel when determining this amount, which include, but are not limited to, the acreage rent and a megawatt capacity fee. The authorized officer will identify these factors and explain how they were used to determine this amount. The third component is a bonus bid submitted by the bidder as part of a bid package. This amount will be determined by the bidder. Consistent with section 2804.30(e)(2)(ii) for notice of competitive offers outside of DLAs, the BLM has removed the reference to mitigation costs from section 2809.14(b)(2). Please see section 2804.30 of this preamble for further discussion on this topic. In other BLM programs, the minimum bid is often a statutory requirement or is based on fair market value of the resource, but there are no statutory requirements for a minimum bid for the right-of-way renewable energy program. The acreage rent is based on the value of the land and the MW capacity fee is based on the value of the commercial use of the land. The BLM plans to base this minimum bid on factors such as these that are known values of the parcel. The minimum bid amount, how it was determined, and the factors used in this determination will be clearly E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92188 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations articulated in the notice of competitive offer for each parcel. A minimum bid is not a determination of fair market value, but a point at which bidding may start. Fair market value will be received through a combination of rent, MW capacity fees, and competitive bidding and this process will determine what the market is willing and able to pay for the parcel. Payment of cost recovery fees is also required, but is not considered a part of the minimum bid. The minimum bid is paid only by the successful bidder and is not prorated among all of the bidders. As described in paragraph (c) of this section, a bonus bid consists of any dollar amount that a bidder wishes to bid, beyond the minimum bid. The total bid equals the minimum bid plus any additional bonus bid amount offered. If you are not the successful bidder, as defined in section 2809.15(a), your bid will be refunded. Comments: Two comments were received pertaining to this section. The first comment states that the proposed rule does not provide an effective mechanism for incentivizing solar development in SEZs by eliminating or significantly reducing developer costs associated with NEPA compliance. Response: There are significant incentives to developers for leases issued under subpart 2809, including the up-front land use planning and other environmental work that the BLM will complete and the certainty that after winning a competitive auction inside a DLA, a successful bidder would be awarded a lease. In addition, the BLM offers variable offsets, longer phase-ins for MW capacity fees, and greater time between acreage rent and MW capacity fees rate updates for leases issued under subpart 2809 that are not available for grants issued under subpart 2804. Comment: The second comment stated that the BLM should not include the potential for lands to be developed for solar energy generation when determining the minimum bid for a competitive offer. Response: Section 2809.14(b)(2) describes how the BLM will consider known and potential land values. While other competitive processes, such as the BLM’s coal program, include a statutory requirement for the minimum bid, the BLM has no such requirement for the solar or wind energy programs. Therefore, the BLM determined that it would be appropriate to tie the minimum bid to the known values of the parcel being auctioned. These known values, such as the acreage rent, would reflect the potential for lands to be developed for solar energy. This VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 minimum bid component will be explained in each notice of competitive offer. Section 2809.15 How will the BLM select the successful bidder? This section explains how the successful bidder is determined and what requirements they must meet in order to be offered a lease. The bidder with the highest total bid, prior to any variable offset, will be declared the successful bidder and may be offered a lease in accordance with section 2805.10. In paragraph (a) of this section, ‘‘will’’ is changed to ‘‘may.’’ The BLM will not offer a lease if the successful bidder does not meet the requirements described in paragraph (d) of this section. As written, paragraphs (a) and (d) of this section were inconsistent with each other and this revision is intended to resolve this inconsistency. The BLM will determine the appropriate variable offset percentage by applying the appropriate factors identified in section 2809.16, before issuing final payment terms. The specific factors will be identified in the competitive offer. If you are the successful bidder, your payment must be submitted to the BLM by the close of official business hours on the day of the offer or at such other time as the BLM may have specified in the offer notice. Your payment must be made by personal check, cashier’s check, certified check, bank draft, or money order, or by any other means the BLM deemed acceptable. Your remittance must be payable to the ‘‘Department of the Interior—Bureau of Land Management.’’ Your payment must include at least 20 percent of the bonus bid prior to application of the variable offset described in section 2809.16, and the total amount of the minimum bid specified in section 2809.14(b). Within 15 calendar days after the day of the offer, you must submit to the BLM the balance of the bonus bid less the variable offset (see section 2809.16) and the acreage rent for the first full year of the solar or wind energy lease as provided for in sections 2806.54(a) or 2806.64(a), respectively. Submit these payments to the BLM office conducting the offer or as otherwise directed by the BLM in the offer notice. In section 2809.15(d) of this final rule, the BLM revised ‘‘will approve your right-of-way lease’’ to ‘‘will offer you a right-of-way-lease.’’ This change is for consistency in terminology with paragraphs (a) and (e) of this section, which refer to the offering of a lease and not its approval. Under paragraph (e) of this section, the BLM will not offer a lease if the requirements of section (d) PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 are not met. The BLM does not intend for this revision to change how it offers a lease to successful bidders. Under section 2809.15(e), the BLM will not offer the successful bidder a lease, and will keep all money submitted, if the requirements of section 2809.15(d) are not met. In this circumstance, the BLM may offer the lease to the next highest bidder under section 2809.17(b) or re-offer the lands under section 2809.17(d). No comments were received and no changes are made from the proposed rule to the final rule. Section 2809.16 When do variable offsets apply? Section 2809.16 provides that a successful bidder inside a DLA may be eligible for a variable offset of the bonus bid (in essence, a bidding credit), based on the factors identified in the notice of competitive offer. Variable offsets are not available outside of DLAs. In providing for these offsets, the BLM intends to promote thoughtful and reasonable development based upon known environmental factors and impacts of different technologies. The BLM believes providing these offsets will increase the likelihood that a project is developed, expedite the development of that project, and encourage development that will result in lesser resource impacts from the right-of-way. Overall, the BLM believes the structure of these offsets will help encourage the production of clean renewable energy on public lands, which is a benefit to the general public. Pre-qualified bidders may be eligible for offsets limited to no more than 20 percent of the high bid. Factors for a bidder to pre-qualify may vary from one competitive lease offer to another and may include offsets for bidders with an approved PPA or Interconnect Agreement, among other factors. For example, the BLM may apply a 5 percent offset factor to a bidder that has a PPA. This offset factor could encourage a bidder to secure an agreement before the offer, which could increase the likelihood of a project being developed and expedite the completion of such development. In the BLM’s experience with solar and wind energy developments, a project is not always developed after a right-of-way is issued. Based on this experience, the BLM believes that it is appropriate to award an offset to a bidder with an agreement in place to sell power, because that bidder will be more likely to develop a project on the right-of-way. This could prevent the unnecessary encumbrance of a right-of-way being issued to a holder who never develops the intended project. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations The BLM may also identify as an offset factor the submission of a plan showing a reasonable development scenario. For example, the BLM may apply a 5 percent offset factor to a bidder that would use a particular technology. The BLM may identify a preferred technology type that would reduce impacts to identified environmental or cultural resources on the proposed parcel. The BLM anticipates selected factors for the offsets to be in increments of 5 percent. These will be reviewed at the BLM Washington Office for consistency and relevance prior to each competitive offer made in the first several years after publication of the final rule. The BLM intends to provide additional guidance on the use of these individual factors to ensure consistency between individual notices of competitive offer. The BLM may offer a different percentage for each offset factor based on how qualified the bidder is for a specific offset factor. For example, the BLM may offer a 3 percent offset for an interim step in the PPA process or a 5 percent offset for a signed PPA. The BLM acknowledges that in some circumstances qualifying for these offsets may be difficult. For this reason, the BLM may offer incremental offset percentages to bidders that are working toward such qualifications. These offset factors (and their various increments) will be identified in the notice of competitive offer (see section 2809.13(b)(6)). The notice of competitive offer will identify each factor for which BLM may grant a variable offset, and the corresponding maximum percentage offset that would be applied to a qualified bidder’s bonus bid. The notice will also identify the documentation a bidder must submit to pre-qualify for the offset. The authorized officer will determine the total offset for each competitive offer, based on the parcel(s) to be offered and any associated environmental concerns or technological limitations. As identified under paragraph (c) of this section, the factors for which the BLM may grant a variable offset in a particular lease sale include: 1. Power purchase agreement. This could be a signed agreement between the potential lessee and an entity that agrees to purchase the power generated from the solar or wind energy facility; 2. Large generator interconnect agreement. This would consist of a signed agreement from the holder of an electrical transmission facility and the potential lessee that power would be accepted on the grid controlled by the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 holder to be transported to a power receiving source; 3. Preferred solar or wind energy technologies. This would be an incentive to use technologies for generating or storing solar or wind energy that would efficiently use public lands or reduce impacts to identified resources such as water; 4. Prior site testing and monitoring inside the DLA. This would consist of evidence that the potential lessee or others associated with the lessee had previously performed appropriate testing or monitoring to determine the suitability and capability of the site for establishment of a successful solar or wind energy generating facility; 5. Pending applications inside the DLA. This would be a situation where the potential lessee had previously filed for authorization to construct facilities inside the DLA; 6. Submission of nomination fees. These are required when submitting a formal nomination (see section 2809.11(b)); 7. Submission of biological opinions, strategies, or plans. This could include biological opinions, bird and bat conservation strategies, and habitat conservation plans; 8. Environmental benefits. This factor would include any positive environmental considerations such as identifying and salvaging archaeological or historical artifacts, additional protection for protected plant or animal species, or similar factors; 9. Holding a solar or wind energy grant or lease on adjacent or mixed land ownership. This could show the bidder’s vested interest in developing the right-of-way; 10. Public benefits. These could include documented commitments or agreements to provide jobs or other support for local communities or supporting local public purposes projects; or 11. Other similar factors. These could include support for other Federal Government programs or national security by providing power for defense purposes or meeting government purchase contracts. The only changes made in the listed variable offset factors between the proposed and final rule is for Factor Number 7, and those made for clarity and consistency in the final rule, are described in greater detail in the response to comments. Comment: One comment requested that the BLM not use the variable offset concept, as it is unworkable and would result in appeals by rejected bidders. Response: Throughout the preambles to the proposed and final rules, the BLM PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 92189 has explained DLAs and the various aspects of the competitive process for solar and wind energy in these areas. By creating incentives for prospective developers and encouraging various conditions that would lead to environmental and other public benefits, the use of a variable offset is an integral aspect of this process. The BLM manages the public land under the principles of multiple use and sustained yield, but does not expect all interested stakeholders to agree with all of the BLM’s decisions. This is, in part, the reason for the BLM’s appeal process, allowing the public to seek an administrative remedy for the BLM’s decisions by which they have been adversely affected. The BLM expects that there will be appeals or protests on decisions that are made regarding management of the public lands. For each notice of competitive offer, the BLM will include the factor(s) of a variable offset, as well as the requirements a bidder must meet to qualify for each incremental percentage. Bidders, as well as the public, will have this information made available to them through the notice of competitive offer and be able to act according to their interests or concerns over the proposed actions. The variable offset is carried forward in the final rule. Comment: A comment expressed confusion over how the BLM would implement the proposed factor Number 7 (Timeliness of project development, financing and economic factors), and if the potential for meeting project timelines was even possible as a variable offset factor since the reduction in bid money would precede the demonstration of meeting agreed-upon time frames. Acts of God and other such influences that are outside the bidder’s control were noted as possible reasons a bidder that received such a factor offset may not be able to meet it. Response: Proposed factor number 7 for timeliness is removed from the final rule. The BLM agrees with the comment that implementing a timeliness factor would be difficult. There are many reasons outside of a winning bidder’s control that may cause a delay to the development of a project. The proposed criteria for timeliness offset factor is a desired objective for an incentive, but was determined too difficult to enforce. Comment: Another comment stated that the BLM must not shortchange taxpayers or other landowners through a discount that unjustly encourages development of public lands rather than comparable private lands. The BLM must ensure fair market value for the use of public lands. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92190 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Response: The variable offset is not a discount to a developer for the use of public lands. It is an incentive provided to a developer of the public lands, that accounts for certain steps a developer has already taken in a particular designated leasing area. Factors of the variable offset may also address the reduction of resource impacts, such as when a less water intensive technology is used. The variable offsets recognize these early developer steps that could increase the certainty of the successful development of a lease area and assist the BLM in its management of the public lands under the multiple use and sustained yield principles. This increased certainty benefits the public by not having public lands unnecessarily encumbered by a lease that may not be developed and increases the likelihood that solar or wind power generation would occur on public lands. Comment: A third comment believes that incentives for DLAs should be reached exclusively by reducing rents rather than a complicated structure of variable offsets, time limits, bonding provisions, authorization terms, and MW capacity fees, and that the BLM proposed incentives should be removed from the final rule. This comment specifically addressed some of the proposed factors as follows: Comment (1): Factors 1 (Power purchase agreement) and 2 (Large generator interconnect agreement) cannot be attained without demonstrated site control. Response (1): Although securing a PPA or large generator interconnect agreement (LGIA) may not be attainable without site control, the notice may identify interim steps toward meeting the requirements of the offset factor. The final rule allows for interim steps in each of these identified offset factors. The text of the rule cites that the ‘‘variable offset may be based on any of the following factors.’’ The notice of competitive offer would include the specific criteria required to qualify for a factor of the variable offset under paragraphs (c)(1) and (2) of this section, including any interim steps toward those factors. Comment (2): Factor 3 (Preferred solar or wind energy technologies) for preferred technologies should be removed as it could discriminate against certain technologies without having the expertise of an energy regulatory body (outside of the BLM’s authority and expertise). Response (2): The BLM has expertise in many areas, including the impacts that a certain a technology type may have on the public lands and its resources. This may include VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 technologies with fewer impacts to wildlife or visual resources, or technologies that consume less water. The BLM may choose to provide a variable offset factor for a preferred technology that reduces impacts to the public lands and resources. However, in some cases, the BLM may choose to consult with one of the national laboratories or State authorities for their expertise for some technologies which may be outside of the BLM’s expertise to determine as a preferred technology. Comment (3): The comment asserts that under section 2809.19(a)(1), applications that are filed prior to the publication of the draft land use plan amendment that establishes a DLA should not make a bidder eligible for factors (4) (prior site testing in a DLA) and (5) (pending applications in a DLA). This would only encourage the strategic filing of speculative applications after publication of the draft land use plan amendment in order to qualify for factors (4) and (5). Response (3): Applications that are filed on public lands before the publication of a notice of intent or other form of public notice by the BLM for a land use plan amendment that are later designated as a DLA will continue to be processed by the BLM and not subject to the competitive offer process of subpart 2809. The filing of speculative applications will not prevent the BLM from holding competitive offers in a particular area. If the BLM elects to hold a competitive offer for the DLA, the applicant may qualify for offset factors (4) or (5) if they chose to participate. The BLM believes that submitting an application after a notice of intent or other public notice, paying the application filing fee, and waiting for the BLM to hold a competitive offer, should qualify an applicant for variable offset factor 4 or 5. Comment (4): Factor 6 (submission of nomination fees) is not an incentive if a bidder can submit an expression of interest, which requires no fee, and increase their bonus bid by the amount of the nomination fee that they would have paid, thereby increasing their chances of being the winning bidder. Response (4): Neither submitting an expression of interest nor submitting a nomination will guarantee that the BLM selects that parcel for a competitive offer. However, if a developer has a particular parcel in mind, the payment of a nomination fee may be preferable so that they may qualify for a variable offset factor. In addition, 5 percent of the bonus bid may result in greater savings to the bidder than the amount submitted for the nomination fees. PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 Comment (5): Factors 8 (environmental benefits) and 10 (public benefits) are open to distortion and variability across field offices. Response (5): The BLM intends that in each notice of competitive offer it will identify each applicable variable offset factor offered and specify how a bidder may qualify for each factor. The criteria listed in the final rule are intended to be broad and varied so that they can be adapted for each competitive offer. Factor 9 is revised from the proposed to the final rule to include grants. As proposed, the factor could appear to only apply for adjacent leases. In this final rule, the BLM may authorize a grant under subpart 2804 inside a DLA, which may be adjacent to a parcel which is bid on. The parcel may also be adjacent to a grant that is outside the DLA. This revision clarifies that the BLM would consider the site control of adjacent lands, regardless of the instrument. Comment: One comment suggests the following variable offsets be added: (1) A bird and bat conservation strategy for the project site; (2) A commitment to a specific right-of-way lease condition to obtain a bald and golden eagle protection act permit; (3) A plan to employ best available operation minimization strategies; and (4) agreement to: (a) Conduct monitoring and research with land-based WEG and Eagle Conservation Plan Guidance; (b) Provide this monitoring data to the public to facilitate a greater understanding to the wildlife impacts; and (c) implement avoidance measures to avoid impacts. Response: A variable offset factor has been added in the final rule to account for biological opinions, strategies and plans. This factor has been added in the place of offset factor 7 which, as noted in an earlier response to comment, has been removed from this rule. New variable offset factor 7 reads as ‘‘Submission of biological opinions, strategies, or plans.’’ This will encourage the early and thoughtful development of the public lands. To have such a plan or opinion completed at this point could lead to fewer biological resource impacts and quicker NEPA review of the project POD. The BLM does not expect many projects to complete a biological opinion at this point in the process, but interim steps toward such a plan would demonstrate the developer’s commitment to protecting resources on public lands. Such interim steps could qualify a developer for this factor of a variable offset, which would be described in the notice of competitive offer. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations No other comments were received and no other changes are made to this section. sradovich on DSK3GMQ082PROD with RULES3 Section 2809.17 Will the BLM ever reject bids or re-conduct a competitive offer? This section identifies situations where the BLM may reject a bid, offer a lease to another bidder, re-offer a parcel, and take other appropriate actions when no bids are received. Under section 2809.17(a), the BLM could reject bids regardless of the amount offered. Bid rejection could be for various reasons, such as discovery of resource values that cannot adequately be mitigated through stipulations (e.g., the only known site of a rare or endangered plant or for security purposes). If this occurs, the bidder will be notified and the notice will explain the reason(s) for the rejection and whether you are entitled to any refunds. If the BLM rejects a bid, the bidder may appeal that decision under section 2801.10. Minor revisions are made from the proposed to the final rule to improve readability of this section’s title by adding the word ‘‘the’’ before BLM. The BLM could offer the lease to the next highest qualified bidder if the first successful bidder is later disqualified or does not sign and accept the offered lease (see section 2809.17(b)). Under paragraph (c) of this section, the BLM could re-offer a parcel if it cannot determine a successful bidder. This may happen in the case of a tie or if a successful bidder is later determined to be unqualified to hold a lease. Under paragraph (d) of this section, if public lands offered competitively under this subpart receive no bids, the BLM could either reoffer the parcels through the competitive process under section 2809.13 or make the lands available through the non-competitive process found in subparts 2803, 2804, and 2805. If the lands are offered on a noncompetitive basis, the successful applicant would receive a right-of-way grant issued under subpart 2804, rather than a lease issued under subpart 2809, and the offsets described in section 2809.16 would not apply. Comment: A comment stated that the right to appeal a rejected bid must be qualified (i.e., not be a spurious appeal). The comment goes on to say that this may be remedied by the BLM: (1) Prohibiting the issuance of a stay against a lease award while there is a pending appeal filed under section 2801.10; and (2) Specifying that a successful appeal would not rescind a lease award, but instead result in an automatic 20 percent offset for the next DLA VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 competitive process in which the successful appellant participates. Response: The BLM agrees that appeals should not be spurious or intended to disrupt the BLM’s administration of the public lands. However, the BLM does not agree that it should prohibit the issuance of a stay in its regulations. The right to appeal a BLM decision, including the issuance of a stay, is an important part of the BLM’s orderly administration of the public lands. Should an appeal be successful in the IBLA, the BLM would not award a 20 percent variable offset to the appellant. A successful appeal may be grounds for a re-offer of the parcels or other similar action that would be consistent with the administrative status of the BLM decision that was appealed. Also, should a variable offset be awarded to successful appellants, it would likely incite further appeals from other unsuccessful bidders in the hopes to secure such a future credit. Therefore, the BLM will not provide for such variable offset awards in the rule for successful appellants. No other comments were received or changes made to the final rule for this section. Section 2809.18 What terms and conditions apply to leases? Section 2809.18 lists the terms and conditions of solar and wind energy leases issued inside DLAs. Under paragraph (a) of this section, the term of a lease issued under subpart 2809 will be 30 years and the lessee may apply for renewal under section 2805.14(g). While the BLM will issue grants under subpart 2804 for a term up to 30 years (see section 2805.11), leases issued under subpart 2809 are guaranteed a lease term of 30 years. Under paragraph (b) of this section, a lessee must pay rent and MW capacity fees as specified in section 2806.54, if the lease is for solar energy development or as specified in section 2806.64, if the lease is for wind energy development. Rent and MW capacity fees are discussed in greater detail in sections 2806.50 through 2806.68 of the section-by-section analysis. Minor revisions are made from the proposed to the final rule to improve readability, but any significant changes are discussed in detail in this preamble. Under paragraph (c) of this section, a lessee must submit, within 2 years of the lease issuance date, a POD that: (1) Is consistent with the development schedule and other requirements in the POD template posted on the BLM’s Web site https://www.blm.gov/wo/st/en/prog/ energy/renewable_energy.html; and (2) Addresses all pre-development and PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 92191 development activities. A POD is often required for rights-of-way under section 2804.25(c) of this final rule and is currently required for all renewable energy projects through policy. Due to their complexity, solar and wind energy development projects will always require a POD. The POD must provide site-specific information that will be reviewed by the BLM and other Federal agencies in accordance with NEPA and other relevant laws. Under paragraph (d) of this section, a lessee must pay the reasonable costs for the BLM or other Federal agencies to review and process the POD and to monitor the lease. The authority for collecting costs is derived from Sections 304(b) and 504(g) of FLPMA that authorize reimbursement to the United States of all reasonable and administrative costs associated with processing right-of-way applications and other documents relating to the public lands, and in the inspection and monitoring of construction, operation, and termination of right-of-way facilities. Such costs may be determined based on consideration of actual costs. A lessee may choose to pay full actual costs for the review of the POD and the monitoring activities of the lease. Through the BLM’s experience, a lessee is more likely to choose payment of full actual costs as this expedites the BLM’s review and monitoring actions by removing administrative steps in cost estimations and verifying estimated account balances. Under paragraph (e) of this section, a lessee must provide a performance and reclamation bond for a solar or wind energy project. Bond amounts for leases issued under subpart 2809 will be set at a standard dollar amount (per acre for solar, or per turbine for wind) for either solar or wind energy development. See section 2805.20 of this preamble for additional information on the determination of these bond amounts. As explained in the general discussion section of this preamble, the BLM does not intend to change the amount of a standard bond after the lease is issued unless there is a change in use. As previously discussed, these bond amounts were determined based on a review of recently bonded solar and wind energy projects. Comments: Several comments were received on paragraph (e) of this section. One comment suggested that the BLM should require bonds that are tied to the actual cost of reclamation and mitigation of the project, rather than an arbitrary per acre or per project figure. Response: It is the intent that these standard bond amounts would incentivize solar and wind energy E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92192 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations development in DLAs. Reclamation of the lands in these DLAs is anticipated to be less than other locations outside of DLAs as the resource impacts are not expected to be as great, and the land could, in turn, be used for solar or wind development again if a developer failed to complete their lease obligation in developing the land. Additionally, consistent with its interim policy guidance for offsite mitigation (IM 2013–142)consistent with the recently issued mitigation manual and handbook guidance, the BLM intends to prepare regional mitigation strategies before authorizing wind or solar energy development in DLAs. These plans may identify additional costs for mitigating residual impacts of the right-of-way. As noted in the preamble for section 2805.20, the minimum and standard bond amounts are the same. The BLM recently completed a review of existing bonded solar and wind energy projects and based the standard bond amounts provided in this final rule on the information found during this review. When determining these bond amounts, the BLM considered potential liabilities associated with the lands affected by the rights-of-way, such as cultural values, wildlife habitat, and scenic values, and the mitigation and reclamation of the project site. The BLM used this review to determine an appropriate standard bond amount to cover the potential liabilities associated with solar and wind energy projects. Comment: Another comment stated that both DLA and non-DLA bonding requirements should be the same. The BLM should use differences in rent to encourage development of DLAs. Response: Bonding requirements for both grants issued under subpart 2804 and leases issued under subpart 2809 are established to protect the public lands. The requirements for leases are established using the same methodology as those minimum amounts established outside of a DLA. However, the standard bond amount recognizes that the impacts to resources and uses are likely to be less inside of a DLA than outside of a DLA, due to the BLM’s effort to establish DLAs in areas where resource conflicts are expected to be lower. Furthermore, standard bond amounts increase the certainty for developers of costs when planning for and developing their project. Comment: A comment recommended that the BLM reevaluate the standard bond amounts and identify a range commensurate with actual costs of decommissioning. The comment noted that the preamble to the proposed rule stated the range of solar bonding costs of $10,000 to $20,000 and wind bonding VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 costs of $22,000 to $60,000. This comment asked if the minimum and standard bond amounts chosen at the bottom or below the stated ranges were adequate. Response: The BLM has considered the recommendation to identify a range of standard bond amounts, but intends to keep these amounts as proposed. In order to accommodate the wind turbines that pose lesser risk to resources, and consistent with revisions made in section 2805.20, the BLM is including in the final rule a $10,000 standard bond amount for projects utilizing smaller turbines. Turbines with a nameplate capacity of one MW or greater will have a standard bond amount of $20,000, consistent with the proposed rule. This is because these amounts represent bond figures that are representative of the impacts to the resources of the public lands and the intended management decisions of DLAs for solar or wind energy development. Should a developer default or fail to fulfill the lease terms, the BLM may pursue a competitive offer to lease those lands again. The full amount of the bond may not be used in this situation. The balance will be returned to the previous leaseholder upon the completion of reclamation activities. See section 2805.20(d) comment responses of this preamble for further discussion on the added $10,000 bond amount. BLM has determined that establishing the proposed standard bond amounts as proposed is appropriate. Using the proposed bond amounts reduces the potential for the BLM to secure bonds in amounts beyond what is necessary for the project. If a higher bond amount were selected, the BLM might over-bond the project, especially considering that the BLM has already identified these areas as having lower potential for resource impacts. Grant holders are still liable for damage done during the term of the grant or lease even if the bond amount does not cover the cost of reclamation. The bonds collected for a project issued under subpart 2809 consider hazardous material liabilities, reclamation, and project site restoration. In addition to the required bond, BLM may require a mitigation fee to address adverse impacts resulting from the rightof-way authorization. Between securing the bond and collection of mitigation fees, the BLM believes that the impacts to the public lands are adequately protected. A new provision (section 2809.18(e)(3)) has been added to this final rule to explain that lease holders for the testing sites that will be authorized under a lease in a DLA will PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 provide a standard bond amount of $2,000 per site. This addition to the final rule is to make this section consistent with revisions to section 2801.9(d), which open up the sitespecific and project-area testing authorizations to solar and wind energy. The standard bond amount for a lease issued under subpart 2809 is the same as a minimum bond amount in the proposed rule. Grants issued in a DLA for testing purposes will have a minimum bond amount as determined under section 2805.20. Testing and monitoring facilities include meteorological towers and instrumentation facilities. For a solar energy development project, a lessee must provide a bond in the amount of $10,000 per acre at the time the BLM approves the POD. See the discussion at section 2805.20(b) for additional information. For a wind energy development project, a lessee must provide a bond in the amount of $10,000 or $20,000 per authorized turbine before the BLM issues a Notice to Proceed or otherwise gives permission to begin construction on of the development. See section 2805.20(c) and (d) of this preamble for additional information. The BLM will adjust the solar or wind energy development bond amounts for inflation every 10 years by the average annual change in the IPD–GDP for the preceding 10-year period, and round the bond amount to the nearest $100. This adjustment would be made at the same time that the Per Acre Rent Schedule for linear rights-of-way is adjusted under section 2806.22. The BLM revised paragraph (e)(4) of this section from the proposed to final rule for consistency with other sections of this final rule where the BLM uses the IPD–GDP to adjust an amount every 10 years. See the preamble discussion of section 2804.12(c)(2) for further information about this revision. Under paragraph (f) of this section, a lessee may assign a lease under section 2807.21, and if an assignment is approved, the BLM would not make any changes to the lease terms or conditions, as provided in section 2807.21(e). See section 2807.21(e) of this preamble for further discussion of this topic, in response to a comment asking that we clarify the BLM’s right to modify the terms of a lease issued under subpart 2809. We added language in paragraph (e) of this section to be consistent with section 2807.21(e) to state that changes made to a lease issued under this subpart will be made only when there is a danger to the public health and safety, environment, or a change to the statutory authority and other E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 responsibilities of the BLM. These changes would only be made in coordination with the lessee. Under paragraph (g) of this section, a lessee must start construction of a project within 5 years and begin generating electricity no later than 7 years from the date of lease issuance, as specified in the approved POD. The approved POD will outline the specific development requirements for the project, but all PODs require a lessee to start generating electricity within 7 years. The 5 years to start construction and 7 years to begin generating electricity contained in the rule should allow leaseholders time to construct and start generation of electricity and give a leaseholder time to address any concerns that are outside of the BLM’s authority. Such concerns include PPAs or private land permitting or site control transactions. A request for an extension may be granted for up to 3 years with a show of good cause and BLM approval. If a leaseholder is unable to meet this timeframe, and does not obtain an extension, the BLM may terminate the lease. No other comments were received or changes made to the final rule for this section. Section 2809.19 Applications in DLAs or on Lands That Later Become DLAs Section 2809.19 explains how the BLM processes applications for lands located inside DLAs or on lands that later become DLAs. Under the rule, lands inside DLAs will be offered through the competitive bidding process described in this subpart, and applications may not be filed inside these areas after the lands have been offered for competitive bid. Section 2809.19 is revised from proposed to the final rule by adding a paragraph (a)(3) and redesignating proposed paragraphs (b) and (c) as paragraphs (c) and (d), respectively. The BLM also moved some provisions of proposed paragraph (a)(2) to a new paragraph (b). These changes are made to clarify how the BLM handles applications in areas that later become designated leasing areas. There is no change from the proposed requirements in the final rule. Paragraph (a) of this section explains how the BLM will process applications filed for solar or wind energy development on lands outside of DLAs that subsequently become DLAs. Under paragraph (a)(1) of this section, if an application is filed before the BLM publishes a notice of intent or other public announcement of intent for a land use plan amendment that considers designating an area for solar or wind energy, the BLM would continue to VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 process the application, which would not be subject to the competitive leasing offer process found in this subpart. After publication of this notice, the public will have been notified of the BLM’s intent to create a DLA. Under paragraph (a)(2) of this section, if an application is filed after the notice of the proposed land use plan amendment, the application will remain in a pending status, unless it is withdrawn by the applicant or the BLM denies it or issues a grant. The BLM made a minor revision to this section from the proposed rule by adding ‘‘or issues a grant.’’ This revision gives the BLM the option to approve a grant in pending status, if it chooses. This revision is made because the proposed rule inadvertently omitted the possibility that a pending application could be approved, instead of only being withdrawn or denied. New paragraph (a)(3) of this section is added in this final rule to explain that applications may resume being processed by the BLM if lands in a DLA later become available for application. Under paragraph 2809.17(d)(2), the BLM may make the lands in a DLA available for application in some circumstances. For example, the BLM may hold a competitive offer and receive no bids. In this situation, the BLM may make these lands available for application and would resume processing any applications that are pending on these lands. This is consistent with the proposed rule but is added to the final rule to clarify how the BLM will handle such applications in these circumstances. Some provisions of proposed paragraph (a)(2) of this section are moved into new paragraph (b) in this final rule. These provisions remain mostly unchanged and are discussed as follows. Under new paragraph (b) of this section, if the subject lands become available for leasing under this subpart, an applicant could submit a bid for the lands. Under new paragraph (b)(1) of this section, any entity with an application pending on a parcel that submits a bid on such parcel may qualify for a variable offset as provided for under section 2809.16. Under paragraph (b)(2) of this section, the applicant may receive a refund for any unused application fees or processing costs if the lands described in the application are later leased to another entity under section 2809.15. This provision is revised consistent with changes made for application filing fees in this final rule, which are now a cost recovery payment. The BLM may use some of these fees in processing an PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 92193 application and will refund any unused fees to the applicant. Proposed paragraph (b) of this section is redesignated as paragraph (c) in this final rule. Under paragraph (c) of this section, the BLM will not accept a new application for solar or wind energy development inside DLAs after the effective date of this rule (see sections 2804.12(b)(1) and 2804.23(e), except as provided for by section 2809.17(d)(2). Proposed paragraph (c) of this section is redesignated as paragraph (d) in this final rule. Under paragraph (d) of this section, the BLM can authorize short term (3-year) grants for testing and monitoring purposes inside DLAs. These would be processed in accordance with sections 2805.11(b)(2)(i) or 2805.11(b)(2)(ii). These testing grants may qualify an entity for a variable offset under section 2809.16(b)(4). Comment: One comment was received pertaining to paragraph (a)(1) of this section. The comment stated that the pending application exception in the paragraph requires clarification. A pending project exemption should be tied to a notice of intent rather than a notice of availability (NOA) to avoid a number of filings made immediately after publication of a notice of intent. Also, a pending project exemption should apply to the potential competitive leasing of non-DLA lands under section 2804.30. In addition, the BLM should clarify that the rule would not apply to applications accepted and serialized or a grant issued before the rule takes effect. Response: The BLM agrees in part with these suggestions. In this final rule, this section has been modified so that a notice of intent or other public notice will be the point at which the BLM determines that your application qualifies as a pending application. The notice of intent is specific to land use plan amendments that use an EIS for the analysis. Because a plan amendment may also be using an environmental assessment, which does not require a notice of intent, the BLM added the language, ‘‘other public announcement’’ into this section. The BLM believes that it is appropriate to continue processing applications that were submitted before the BLM provided public notice (e.g., through a notice of intent). The final rule will apply to applications that are accepted and serialized as well as grants that are issued before this rule is effective. There may be exceptions to whether the rule will fully apply to an application or right-of-way grant. For example, application filing fees and preliminary application review meetings may not be E:\FR\FM\19DER3.SGM 19DER3 92194 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 required for some pending applications. Applications do not confer land use rights to an applicant, and other provisions of the rule such as rent and fees may be determined at the time a right-of-way is authorized, not at the time an application is submitted. Therefore, under the provisions of new sections 2804.40 and 2805.12(e), you may request alternative requirements, stipulations, terms, and conditions from the BLM with a showing of good cause, and an explanation or reason for an alternative requirements, stipulations, terms, and conditions. V. Section-by-Section Analysis for Part 2880 In addition to the revisions to its regulations governing rights-of-way for solar and wind energy development, the BLM is also revising several subparts of part 2880. These revisions are necessary to make rights-of-way administered under part 2880 consistent, where possible, with the policies, processes, and procedures for those administered under part 2800. Specific areas where we are making consistency changes include: Bonding requirements; determination of initial rental payment periods; and when you must contact the BLM, including grant, lease, and temporary use permit (TUP) modification requests, assignments, and renewal requests. The BLM has removed the provision found in the proposed rule regarding pre application requirements and fees for any pipeline 10 inches or more in diameter from this final rule. This is because, based on further analysis and comments received, the use of a 10-inch diameter pipeline was found not to be an appropriate measure that could readily provide a basis for additional requirements. This final rule adds Section 310 of FLPMA to the authority citation for this part to clarify that FLPMA authority may be used in processing a pipeline right-of-way. The MLA authorizes the Secretary to approve MLA pipeline rights-of-way that cross Federal lands when those pipeline rights-of-way are administered by the Secretary or by two or more Federal agencies. Where the Secretary authorizes a pipeline right-ofway across lands managed by the Secretary, including any bureaus or offices of the Department, other authorities applicable to the management of those lands would generally apply to the authorization. We have cited FLPMA specifically because that authority, governing the management of the public lands generally, is the authority most commonly relied upon in such authorizations. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Subpart 2884—Applying for MLA Grants or TUPs Section 2884.10 What should I do before I file my application? In the proposed rule, this section included requirements for preapplication meetings when applying for a right-of-way for an oil or gas pipeline having a diameter exceeding 10 inches. Many comments were received concerning this proposal, including many comments stating that it was not a reasonable criterion to use in determining the need for preapplication meetings. After considering these comments and upon further evaluation of the proposal the BLM decided to not require these preapplication meetings. As a result, the proposed changes were not made to the regulations in this section. Section 2884.11 What information must I submit with my application? Section 2884.11 includes requirements for submitting applications. This section has been retitled from ‘‘What information must I submit in my application?’’ to read as shown above. This revision is consistent with the title revision of section 2804.12. Proposed requirements for pipelines with a diameter of 10 inches or more have been removed from this section in the final rule. Section 2884.11(c)(5) is amended by adding a second sentence that further explains that your POD must be consistent with the development schedule and other requirements that are noted on the POD template for oil or gas pipelines at https://www.blm.gov. Comment: One comment suggested that paragraph (c)(5) of this section be revised to read as follows: ‘‘The estimated schedule for constructing, operating, maintaining, and terminating the project (a POD). Your POD must address the elements specified on the POD template for oil and gas pipelines at https://www.blm.gov.’’ This suggestion would remove the requirement for the POD to be consistent with the development schedule in the POD template. Response: The BLM did not make the suggested changes. The suggested revision to the rule would require that the applicant address each element of a POD, but would not require consistency with the POD template. This could allow a developer to acknowledge the development timeline, but not provide it to the BLM. It is important that applicants provide the necessary information to the BLM for the orderly administration of public lands, including the development schedule for PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 the POD. No other comments were received and no changes are made from the proposed to the final rule. Section 2884.12 What is the processing fee for a grant or TUP application? Section 2884.12 explains the fees associated with an application, including those that involve Federal agencies other than the BLM. The applicant may either pay the BLM for work done by those Federal agencies or pay those Federal agencies directly for their work. This authority was recently delegated to the BLM by the Secretary by Secretarial Order 3327. Paragraph (b) of this section revises the processing fee schedule to remove the 2005 category fees. Paragraph (c) of this section provides instructions on where you may obtain a copy of the current processing fee schedule. These changes parallel those made to section 2804.14, which describe processing fees for grant applications. A further analysis of these changes can be found in that part of the section-by-section analysis. No comments were received and no, changes are made from the proposed rule to the final rule. Section 2884.16 What provisions do Master Agreements contain and what are their limitations? Section 2884.16 is revised to require that Master Agreements describe existing agreements with other Federal agencies for cost reimbursement associated with the application. This change parallels changes made in section 2804.18, which describes Master Agreements for all other rights-of-way. With the authority recently delegated by Secretarial Order 3327 to collect costs for other Federal agencies, it is important for the applicant, the BLM, and other Federal agencies to coordinate and be consistent regarding cost reimbursement. No comments were received and no changes are made from the proposed rule to the final rule. Section 2884.17 How will BLM process my Processing Category 6 Application? Section 2884.17 explains how the BLM processes Category 6 applications and these changes parallel changes in section 2804.19. Under paragraph (e) of this section, the BLM may collect reimbursement for the United States for actual costs with respect to right-of-way applications and other document processing relating to Federal lands. No comments were received and no changes are made from the proposed rule to the final rule. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Section 2884.18 What if there are two or more competing applications for the same pipeline? Section 2884.18 parallels section 2804.23. Under paragraph (a)(1) of this section, the requirement to reimburse the BLM is expanded to allow for cost reimbursement from all Federal agencies for the processing of these right-of-way authorizations. Under paragraph (c) of this section, the BLM may offer lands through a competitive process on its own initiative. Language is added to this paragraph to include ‘‘other notification methods, such as a newspaper of general circulation in the area affected by the potential right-of-way or the Internet.’’ This revision is consistent with other public notice sections of this rule. See section 2804.23(c) of this preamble for further discussion. No comments were received and no other changes are made from the proposed rule to the final rule. sradovich on DSK3GMQ082PROD with RULES3 Section 2884.20 What are the public notification requirements for my application? Under section 2884.20, the phrase ‘‘and may use other notification methods, such as a newspaper of general circulation in the vicinity of the lands involved or the Internet’’ is added to paragraphs (a) and (d) to provide for additional methods to notify the public of a pending application or to announce any public hearings or meetings. This final rule is revised, consistent with changes made to other notification language throughout this rule, to make notice in a newspaper an optional method of notice. See section 2804.23(c) of this preamble for further discussion. No comments were received and no changes are made from the proposed rule to the final rule. Section 2884.21 How will BLM process my application? Under section 2884.21, the BLM will not process your application if you have any trespass action pending for any activity on BLM administered lands (see section 2888.11) or have any unpaid debts owed to the Federal Government. The only application the BLM will process to resolve the trespass is for a right-of-way as authorized in this part, or a lease or permit under the regulations found at 43 CFR part 2920, but only after all outstanding debts are paid. This provision is added to provide incentives for the applicant to resolve outstanding debts or other infractions involving the Federal Government and parallels section 2804.25. New language is added to paragraph (b) of this section stating that VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 outstanding debts are those currently unpaid debts owed to the Federal Government after all administrative collection actions have occurred, including administrative appeal proceedings under applicable Federal regulations and review under the APA. This language is added to be consistent with section 2804.25(d). No comments were received for section 2884.21, but comments were received and addressed under section 2804.25. The notification language contained in paragraph (d)(4) of this section is amended by adding the phrase ‘‘and may use other notification methods, such as a newspaper of general circulation in the vicinity of the lands involved or the Internet.’’ This section is revised, consistent with changes made to other notification language throughout this rule, to make notice in a newspaper an optional method of notice. See section 2804.23(c) of this preamble for further discussion. Section 2884.22 Can BLM ask me for additional information? Section 2884.22 describes what information the BLM may require in processing an application. This section was revised by changing the reference found in paragraph (a) from section 2804.25(b) to section 2804.25(c). This change was not proposed, but is made to be consistent with other changes made in this final rule. No other changes were made to this section. Section 2884.23 Under what circumstances may BLM deny my application? Section 2884.23 describes the circumstances when the BLM may deny an application. In the proposed rule, section 2884.23(a)(6), stated that the BLM may deny an application if the required POD fails to meet the development schedule and other requirements for oil and gas pipelines. Comment: Several comments suggested that the BLM remove the 10inch pipeline threshold requirement in the proposed rule. Response: As noted previously in the preamble, the BLM removed the proposed requirements for pipelines ‘‘10 inch or larger in diameter’’ from the final rule. This includes requirements such as the pre-application meetings, the POD timeline, and other such requirements that are specific to pipelines 10 inches in diameter or larger. The timeliness requirement, among others associated with the largescale pipeline projects description has been removed from the final rule. Comment: One comment stated that the BLM should account for instances when a developer does not meet the PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 92195 timeframe due to reasons outside of their control. Response: The final rule adds a new section 2884.30 that parallels section 2804.40, both of which address situations in which a developer misses a timeframe or is unable to meet a requirement because of circumstances beyond its control. The preamble for section 2804.40 explains in greater detail the circumstances when an applicant may be unable to meet a requirement. No other comments were received and no other changes made from the proposed rule to the final rule. Section 2884.24 What fees do I owe if BLM denies my application or if I withdraw my application? In the proposed rule, this section was consistent with section 2804.27. The proposed section would have required an applicant to pay any pre-application costs submitted under section 2884.10(b)(4). The BLM removed the ‘‘10 inches or larger in diameter’’ criteria used for determining large-scale pipeline projects from the final rule and as a result, requirements that are specific to large-scale pipeline projects are not carried forward in the final rule. This includes requirements such as the pre-application meetings, application submission, POD and other such requirements. Section 2884.30 Cause Showing of Good This section was not in the proposed rule. It is added here to clarify that if you cannot meet one or more of the right-of-way process requirements for a MLA application, then you may: (a) Show good cause as to why you cannot meet a requirement; and (b) Suggest an alternative requirement and explain why that requirement is appropriate. This request must be in writing and received by the BLM before your deadline to meet a requirement(s) has passed. This section is added to respond to comments requesting a way to meet the intent of the regulation if an applicant believes that a requirement(s) cannot be met. Additional discussion can be found in section 2804.40 of this preamble. Subpart 2885—Terms and Conditions of MLA Grants and TUPs Section 2885.11 What terms and conditions must I comply with? Section 2885.11 explains the terms and conditions of a grant. Paragraph (a) of this section is revised by adding the phrase ‘‘with the initial year of the grant considered to be the first year of the E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92196 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations term.’’ This revision clarifies what BLM considers to be the first year of a grant. For example, a 30-year grant issued on September 1, 2015, will expire on December 31, 2044, and have an effective term of 29 years and 4 months. This is consistent with law, policy, and procedures. For all grants issued under parts 2800 and 2880 with terms greater than 3 years, the actual term will include the number of full years, including any partial year. The term for a MLA grant differs from the term for rights-of-way authorized under FLPMA, as FLPMA rights-of-way may be issued for periods greater than 30 years, while a MLA right-of-way may be issued for a maximum period of 30 years. If a 30 year FLPMA grant is issued on a date other than the first of a calendar year, that partial year will count as additional time of the grant (see discussion of section 2805.11 earlier in this preamble section). A new sentence is added to the end of section 2885.11(b)(7) referencing new section 2805.20 that explains the bonding requirements for all rights-ofway. The introduction of this paragraph is revised consistent with the introduction made to paragraph 2805.20(a) that has the similar provision by which the BLM may require a bond. The introduction of this paragraph now reads: ‘‘The BLM may require that you obtain,’’ instead of ‘‘If we require it. . . .’’ This revision is for consistency within the final rule and its regulations. Comments: Several concerns were raised about bonding requirements. One comment suggested that bonding should focus only on large scale operations (e.g., use a 60 acre or greater criterion), that right-of-way holders should be able to use liability insurance to satisfy bonding requirements, and asked that the rule make it clear that the new requirements would not affect existing operations. Response: This final rule does not require bonding for any rights-of-way, except for solar and wind energy developments. As previously noted, the BLM has removed the criteria for large scale projects from this final rule. The BLM will continue to determine whether a bond is necessary and what the bond amount will be on a case-bycase basis. In this final rule, the BLM accepts many bond instruments, including insurance policies. Insurance policies would include those that are issued for general liabilities of a company, individual, or organization. The bonding provisions in the final rule apply to the grants that were issued before the effective date of this rule. The existing regulations require that a holder VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 obtain or certify that they have obtained a bond or other acceptable security to cover any losses, damages, or injury to human health, the environment, and property incurred in connection with the use and occupancy of the right-ofway or TUP area. The current regulations allow the BLM to adjust the bond requirements for any right-of-way grant or lease when a situation warrants it. These requirements in the existing rule are incorporated in this final rule and will continue to apply to existing and future grant holders. Comments: Another comment suggested copying the bonding requirements from part 2800 into part 2880, instead of referring to the relevant requirements. Response: The BLM intends to maintain the continuity of the regulations, as they currently exist. Section 2885.11(b)(7) refers to the terms and conditions in section 2805.12. This creates a consistent use of the regulations for the public as well as the BLM in its administration of the public lands. It is not necessary to duplicate the subpart 2805 regulations in part 2880. No other comments were received and no other changes made from the proposed rule to the final rule. Section 2885.15 How will BLM charge me rent? Section 2885.15 discusses how the BLM will prorate and charge rent for rights-of-way. Revisions to section 2885.15 clarify that there are no reductions of rents for grants or TUPs, except as provided under section 2885.20(b). Section 2885.20(b) is an existing provision under which a grant holder can qualify for phased-in rent. This section is revised to clarify existing requirements and add a cross-reference to another section of these regulations. No comments were received and no changes are made from the proposed rule to the final rule. Section 2885.16 When do I pay rent? Revisions to section 2885.16 clarify that the BLM prorates the initial rental amount based on the number of full months left in the calendar year after the effective date of the grant or TUP. If your grant qualifies for annual payments, the initial rent bill consists of the beginning partial year plus the next full year. For example, the initial rent payment required for a 10-year grant issued on September 1 would be for 1 year and 3 months if the grant qualifies for annual billing. The initial rental bill for the same grant would be for 9 years and 3months if the grant does not qualify for annual billing. This is a new provision that parallels section PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 2806.24(c) and creates consistency in how all rights-of-way are prorated. No comments were received and no changes are made from the proposed rule to the final rule. Section 2885.17 What happens if I do not pay rents and fees or if I pay the rents or fees late? Section 2885.17(e) parallels section 2806.13(e), which identifies when the BLM would retroactively bill for uncollected or under-collected rent, late payments, and administrative fees. The BLM will collect such rents if: (1) A clerical error is identified; (2) A rental schedule adjustment is not applied; or (3) An omission or error in complying with the terms and conditions of the authorized right-of-way is identified. Comment: One comment pointed out that the titles of sections 2806.13(e) and 2885.17(e) were not consistent and also questioned the location of the new subject matter within these paragraphs. Response: The BLM agrees with the comment that the titles of the two paragraphs identified are not consistent, therefore we revised the section heading to read as above. However, we did not revise the placement of the subject matter within the final regulations. After revisions to this section heading, the provisions for retroactive billing and unpaid or under collected rents are appropriately placed in this section. No other comments were received and no other changes made from the proposed rule to the final rule. Section 2885.19 What is the rent for a linear right-of-way grant? Section 2885.19 is revised by updating the addresses in paragraph (b). No comments were received and no changes are made from the proposed rule to the final rule. Section 2885.20 How will the BLM calculate my rent for linear rights-ofway the Per Acre Rent Schedule covers? Section 2885.20 is amended by removing paragraph (b)(1) that discussed the phase-in of the Per Acre Rent Schedule and the 2009 per acre rent, because this provision is no longer applicable. Paragraph (b) now consists of the language formerly found at paragraph (b)(2). No comments were received and no changes are made from the proposed rule to the final rule. Section 2885.24 If I hold a grant or TUP what monitoring fees must I pay? The changes in section 2885.24 parallel the changes made to other sections of this rule that contained tables with outdated numbers. Specific numbers are removed from the table. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations However, the monitoring fee amounts are available to the public either from BLM offices or on the BLM Web site. The rule adds the methodology for adjusting these fees on an annual basis to paragraph (a) of this section. Since this methodology has been added to paragraph (a), a description of how the BLM updates the schedule has been removed from paragraph (b) of this section. Consistent with revisions made under section 2805.16, the BLM is adding the words ‘‘inspecting and’’ to section 2885.24. This additional language codifies current practice or policy. It will allow the BLM to inspect and monitor the right-of-way to ensure a project’s compliance with the terms and conditions of an authorization. Under this provision, if a project is out of compliance, the BLM could inspect the project to ensure that the required actions are completed to the satisfaction of the BLM, such as continued maintenance of the required activity. No comments were received and no other changes are made from the proposed rule to the final rule. sradovich on DSK3GMQ082PROD with RULES3 Subpart 2886—Operations on MLA Grants and TUPs Section 2886.12 When must I contact BLM during operations? Section 2886.12 describes when a right-of-way grant holder must contact the BLM during operations. The changes in this section parallel the changes made to section 2807.11. A grant holder is required to contact the BLM when site-specific circumstances require changes to an approved right-of-way grant, POD, site plan, or other procedures, even when the changes are not substantial deviations in location or use. These types of changes are considered to be grant or TUP modification requests. Paragraph (e) is added to conform to similar provisions found at section 2807.11(e), which requires you to contact the BLM if your authorization requires submission of a certificate of construction. See section 2807.11 for further discussion of these topics. Comment: One comment stated that requiring grant holders to contact the BLM prior to making non-substantial deviations in location or use, including operational changes, project materials, and mitigation measures, is overly burdensome. Response: Unless a grant provides for non-substantial deviations, a grant holder must contact the BLM and request approval of non-substantial deviations for an authorization. Should a holder not receive approval from the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 BLM, they could be found to be in noncompliance with the terms and conditions of the grant. The requirements of this section are required in order for the BLM to review and approve a non-substantial deviation and to ensure that the BLM is meeting its responsibilities under the MLA and any other applicable authorities, including FLPMA. It is the BLM’s responsibility to determine if a deviation is substantial, not a grant holder’s. No other comments were received and nor changes are made from the proposed rule to the final rule. Subpart 2887—Amending, Assigning, or Renewing MLA Grants and TUPs Section 2887.11 May I assign or make other changes to my grant or TUP? The final rule revises section 2887.11 to parallel the revisions made to section 2807.21, which describes assigning or making other changes to a FLPMA grant or lease. We received comments to sections 2807.21 and 2887.11 that apply to both sections. Sections 2807.21 and 2887.11 are consistent with each other in formatting and content, except where cross-references are made to their respective regulatory provisions. The section heading for section 2887.11 is changed to be consistent with the section heading for section 2807.21 and the text in the final section. The existing regulations do not cover all instances when an assignment is necessary and also do not address situations when assignments are not required. The revisions to this section are necessary to: (1) Add and describe additional changes to a grant other than assignments; (2) Clarify what changes require an assignment; and (3) Make right-of-way grants or TUPs subject to the regulations in this section. Paragraph (a) is revised to include two events that may require the filing of an assignment: (1) The transfer by the holder of any right or interest in the right-of-way grant to a third party, e.g., a change in ownership; and (2) A change in control transactions involving the right-of-way grantee. See section 2807.21 of this preamble for further discussion. Revised paragraph (b) clarifies that a change in the holder’s name only does not require an assignment. It also clarifies that changes in a holder’s articles of incorporation do not trigger an assignment. Revised paragraph (c) pertains to payments for assignments and adds a requirement to pay application fees in addition to processing fees. Also, the BLM may now condition a grant assignment on payment of outstanding cost recovery fees to the BLM. PO 00000 Frm 00077 Fmt 4701 Sfmt 4700 92197 Added paragraph (g) clarifies that only interests in right-of-way grants or TUPs are assignable. A pending right-ofway application is not a property right or other interest that can be assigned. No comments were received and no other changes made from the proposed rule to the final rule. Section 2887.12 grant? How do I renew my Section 2887.12 adds paragraph (d), to be consistent with the revisions made to section 2807.22, explaining that if a holder makes a timely and sufficient application for renewal, the existing grant or lease does not expire until BLM issues a decision on the application for renewal. This provision is derived from the APA (5 U.S.C. 558(c)(1)), and it protects the interests of existing right-ofway holders who have timely and sufficiently made an application for the continued use of an existing authorization. In this situation, the authorized activity does not expire until the application for continued use has been evaluated and a decision on the extension is made by the agency. This reiterates and clarifies existing policy and procedures. Under section 2887.12(e), you may appeal the BLM’s decision to deny your application under section 2881.10. This paragraph parallels the language under proposed section 2807.22(f), which is redesignated as section 2807.22(g). No comments were received and no changes are made from the proposed rule to the final rule. VI. Procedural Matters Regulatory Planning and Review (Executive Orders 12866 and 13563) Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. OIRA has determined that this rule is significant because it could raise novel legal or policy issues. Executive Order 13563 reaffirms the principles of Executive Order 12866 while calling for improvements in the nation’s regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. This Executive Order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible and consistent with regulatory objectives. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process E:\FR\FM\19DER3.SGM 19DER3 92198 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements. This rule includes provisions intended to facilitate responsible solar and wind energy development and to receive fair market value for such development. These provisions are designed to: 1. Promote the use of preferred areas for solar and wind energy development (i.e., DLAs); and 2. Establish competitive processes, terms, and conditions (including rental and bonding requirements) for solar and wind energy development rights-of-way both inside and outside of DLAs. These provisions also will assist the BLM in: (a) Meeting goals established in Section 211 of the EPAct of 2005, Secretarial Order 3285A1, and the President’s Climate Action Plan; and (b) Implementing recommendations from the GAO and OIG regarding renewable energy development. In addition to provisions that would affect renewable energy specifically, this rule also includes some provisions that affect all rights-of-way, and some that affect only transmission lines with a capacity of 100 kV or more. These provisions clarify existing regulations and codify existing policies. Economic Impacts The rule does not have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The BLM anticipates this rule will reduce total costs to all applicants, lessees, and operators by up to approximately 17.9 million per year. The change in rents and fees from those currently set by policy primarily reflect changing market conditions. Increases in the minimum bond amounts also reflect increases in estimated reclamation costs. These impacts are discussed in detail in the Economic and Threshold Analysis for the rule. sradovich on DSK3GMQ082PROD with RULES3 Other Agencies This rule does not create a serious inconsistency or otherwise interfere with another agency’s actions or plans. The BLM is the only agency that may promulgate regulations for rights-of-way on public lands. Budgetary Impacts This rule does not materially alter the budgetary effects of entitlements, grants, VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 user fees, loan programs, or the rights or obligations of their recipients. Novel Legal or Policy Issues This rule may raise novel legal or policy issues. It codifies existing BLM policies and provides additional detail about submitting applications for solar or wind energy development grants, and for transmission lines with a capacity of 100 kV or more. In addition, the rule provides for a competitive process for those entities seeking solar and wind energy development leases inside of DLAs. National Environmental Policy Act (NEPA) These regulatory amendments are of an administrative or procedural nature and thus are eligible to be categorically excluded from the requirement to prepare an environmental assessment (EA) or EIS. See 43 CFR 46.205 and 46.210(i). They do not present any of the extraordinary circumstances listed at 43 CFR 46.215. Nonetheless, the BLM prepared an EA and Finding of No Significant Impact (FONSI) analyzing the final rule to inform agency decision-makers and the public. The EA/FONSI incorporates by reference the Final Solar Energy Development Programmatic Environmental Impact Statement (July 2012) and the Final Programmatic Environmental Impact Statement on Wind Energy Development on BLMAdministered Lands in the Western United States (June 2005). The EA concludes that this rule does not constitute a major Federal action significantly affecting the quality of the human environment under Section 102(2)(C) of NEPA (42 U.S.C. 4332(2)(C)). A detailed statement under NEPA is not required. To obtain single copies of the Programmatic EISs or the EA/FONSI, you may contact the person listed under the section of this rule titled, FOR FURTHER INFORMATION CONTACT. You may also view the EA/ FONSI and Programmatic Environmental Impact Statements at, respectively, https://windeis.anl.gov/, https://solareis.anl.gov/, and https:// www.blm.gov/wo/st/en/prog/energy/ renewable_energy.html. Regulatory Flexibility Act Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as amended, 5 U.S.C. 601–612, to ensure that Government regulations do not unnecessarily or disproportionately burden small entities. The RFA requires a regulatory flexibility analysis if a rule would have a significant economic impact, either detrimental or beneficial, PO 00000 Frm 00078 Fmt 4701 Sfmt 4700 on a substantial number of small entities. For the purposes of this analysis, the BLM assumes that all entities (all grant holders, lessees, and applicants for rights-of-way for solar or wind energy projects, pipelines, or transmission lines with a capacity of 100 kV or more) that may be affected by this rule are small entities, even though that is not actually the case. This rule does not have a significant economic effect on a substantial number of small entities under the RFA. The rule does affect new applicants or bidders for authorizations of solar or wind energy development and transmission lines with a capacity of 100 kV or more. The BLM reviewed current holders of such authorizations to determine whether they are small businesses as defined by the SBA. The BLM was unable to find financial reports or other information for all potentially affected entities, so this analysis assumes that the rule could potentially affect a substantial number of small entities. To determine the extent to which this rule will impact these small entities, we took two approaches. First, we attempted to measure the direct costs of the rule as a portion of the net incomes of affected small entities. However, we were unable to obtain the financial records for a representative sample. Next, we estimated the direct costs of the rule as a portion of the total costs of a project. The analysis showed that a range of potential impacts on the total cost of a project varied from a savings of 0.08 percent to a cost of 1.45 percent of the total project cost. The BLM determined that this was an insignificant impact in the context of developing a project and, therefore, not a significant economic impact on a substantial number of small businesses. For a more detailed discussion, please see the economic analysis. Small Business Regulatory Enforcement Fairness Act For the same reasons as discussed under the Executive Order 12866, Regulatory Planning and Review section of this preamble, this rule is not a ‘‘major rule’’ as defined at 5 U.S.C. 804(2). That is, it would not have an annual effect on the economy of $100 million or more; it would not result in major cost or price increases for consumers, industries, government agencies, or regions; and it would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Unfunded Mandates Reform Act This rule does not impose an unfunded mandate on State, local, or tribal governments, or on the private sector of $100 million or more per year; nor would it have a significant or unique effect on State, local, or tribal governments. This rule amends portions of the regulations found at 43 CFR parts 2800 and 2880, redesignates existing 43 CFR part 2809 in its entirety to a new paragraph found at 2801.6(a)(2), adds new 43 CFR part 2809, and modifies the MLA pipeline regulations in 43 CFR part 2880, but does not result in any unfunded mandates. Therefore, the BLM does not need to prepare a statement containing the information required by Sections 202 or 205 of the Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531 et seq. The rule is also not subject to the requirements of Section 203 of UMRA because it contains no regulatory requirements that might uniquely affect small governments, nor does it contain requirements that either apply to such governments or impose obligations upon them. Executive Order 12630, Governmental Actions and Interference With Constitutionally Protected Property Rights (Takings) sradovich on DSK3GMQ082PROD with RULES3 This rule is not a government action that interferes with constitutionally protected property rights. This rule sets out competitive processes for solar and wind energy development and revises some requirements for pipelines and electric transmission facilities on BLMmanaged public lands. It establishes rent and fee schedules for various components of the development of such facilities inside DLAs that are conducive to competitive right-of-way leasing and clarifies a process that would rely on the BLM’s existing land use planning system to allow for these types of uses. Because any land use authorizations and resulting development of facilities under this rule are subject to valid existing rights, it does not interfere with constitutionally protected property rights. Therefore, the Department determined that this rule does not have significant takings implications and does not require further discussion of takings implications under this Executive Order. Executive Order 13132, Federalism The BLM determined that this rule does not have a substantial direct effect on the States, or the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. It does not VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 apply to State or local governments or State or local government entities. Therefore, in accordance with Executive Order 13132, the BLM determined that this rule does not have sufficient Federalism implications to warrant preparation of a Federalism Assessment. Executive Order 12988, Civil Justice Reform Under Executive Order 12988, the Department determined that this rule does not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order. The Department’s Office of the Solicitor has reviewed this rule to eliminate drafting errors and ambiguity. It has been written to minimize litigation, provide clear legal standards for affected conduct rather than general standards, promote simplification, and avoid unnecessary burdens. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments In accordance with Executive Order 13175, the BLM found that this rule does not have significant tribal implications. Additionally, because the rulemaking itself is administrative in nature and does not establish any DLAs or approve any specific projects, the BLM has determined that it does not require tribal consultation. Moreover, in the future when additional DLAs are established or projects are approved, the rule calls for further tribal consultation by the BLM and right-of-way applicants. Specifically, DLAs will be identified through the BLM’s land use planning process. Tribal consultation is an important component of that process and will be undertaken when DLAs are identified. In addition to the preliminary review covered in the planning process, existing BLM regulations require site-specific analysis for specific projects. As part of that sitespecific analysis, right-of-way applicants must consult with affected tribes to discuss the proposed action and other aspects of the proposed project. For example, site-specific requirements for applications for a grant issued under subpart 2804 include application review, public meetings, and tribal consultation. The BLM would be able to deny an application after these meetings based on a variety of criteria, including tribal concerns. Data Quality Act In promulgating this rule, the BLM did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 92199 (Section 515 of Public Law 106–554). In accordance with the Data Quality Act, the Department has issued guidance regarding the quality of information that it relies upon for regulatory decisions. This guidance is available at the Department’s Web site at: https:// www.doi.gov/archive/ocio/iq.html. Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use Executive Order 13211 requires Federal agencies to prepare and submit to OMB a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; (2) Is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) Is designated by the Administrator of OIRA as a significant energy action. This rule could raise novel legal or policy issues within the meaning of Executive Order 12866 or any successor order. However, the BLM believes this rule is unlikely to have a significant adverse effect on the supply, distribution, or use of energy, and may in fact have a positive impact on energy supply, distribution, or use. In fact, its intent is to facilitate such development. The rule codifies BLM policies and provides additional detail about the process for submitting applications for solar or wind energy development grants issued under subpart 2804, or for solar or wind energy development leases issued under subpart 2809. Executive Order 13352, Facilitation of Cooperative Conservation In accordance with Executive Order 13352, the BLM determined that this rule will not impede the facilitation of cooperative conservation. The rule takes appropriate account of and respects the interests of persons with ownership or other legally recognized interests in land or other natural resources; properly accommodates local participation in the Federal decision-making process; and provides that the programs, projects, and activities are consistent with protecting public health and safety. Paperwork Reduction Act The Paperwork Reduction Act (PRA) (44 U.S.C. 3501–3521) provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless it displays a currently valid OMB control number. Collections of information include requests and requirements that E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92200 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations an individual, partnership, or corporation obtain information, and report it to a Federal agency. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k). This rule contains information collection activities that require approval by the OMB under the Paperwork Reduction Act. The BLM included an information collection request in the proposed rule. OMB has approved the information collection for the final rule under control number 1004–0206. Some of the information collection activities in the final rule require the use of Standard Form 299 (SF–299), Application for Transportation and Utility Systems and Facilities on Federal Lands. SF–299 is approved for use by the BLM and other Federal agencies under control number 0596– 0082. The U.S. Forest Service administers control number 0596–0082. The OMB has approved the information collection activities in this final rule under control number 1004–0206. The information collection activities in this rule are described below along with estimates of the annual burdens. Included in the burden estimates are the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each component of the proposed information collection. The following features of the final rule pertain to more than one information collection activity. Designated leasing areas: As defined in an amendment to 43 CFR 2801.5, a designated leasing area is a parcel of land identified in a BLM land use plan as a preferred location for solar or wind energy development. Regulations at 43 CFR subpart 2809 provide for the issuance of solar or wind right-of-way development ‘‘leases’’ inside a designated leasing area. Regulations at subpart 2804 provide for right-of-way development ‘‘grants’’ for solar or wind energy projects outside of any designated leasing area. Regulations at subpart 2804 also provide for testing grants for solar or wind energy inside or outside designated leasing areas. Competitive process for solar or wind energy outside any designated leasing area: Section 2804.30 provides that the BLM may invite bids for land outside any designated leasing area for solar or wind energy testing and development. Section 2804.30(g) allows only one applicant (i.e., a ‘‘preferred applicant’’) to apply for a right-of-way grant for solar or wind energy testing or development outside any designated leasing area. The preferred applicant is the successful VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 bidder in the competitive process outlined in subpart 2804. Competitive process for solar or wind energy inside a designated leasing area: Subpart 2809 outlines a competitive process for land inside a designated leasing area, which provides for a parcel nomination and competitive offer instead of an application process. Application filing fees: Section 2804.12(c)(2) requires an ‘‘application filing fee’’ as follows: (1) $15 per acre for applications for solar or wind energy development outside any designated leasing area; and (2) $2 per acre for applications for energy project-area testing inside or outside designated leasing areas. As defined in an amendment to section 2801.5, an application filing fee is specific to solar and wind energy right-of-way applications. Section 2804.30(e)(4) provides that the BLM will refund the fee, except for the reasonable costs incurred on behalf of the applicant, if the applicant is not a successful bidder under subpart 2804 or subpart 2809. The proposed rule would have required an application filing fee for energy site-specific testing grants. On consideration of comments questioning whether site-specific testing should be subject to an application filing fee, the BLM has removed that requirement from the final rule. The $2 per acre filing fee applies to applications for energy project-area testing, but not to energy site-specific testing. Applications: Section 2804.12(b) refers to applications in the context of large-scale projects. In the BLM’s experience, most applications and plans of development for large-scale projects evolve from several iterations of the first application that is submitted. Some requirements in the final rule (for example, application filing fees) apply to the first time an application is submitted but not to subsequent submissions of an application for the same project. The information collection activities in the final rule are discussed below. Application for a Solar or Wind Energy Development Project Outside Any Designated Leasing Area (43 CFR 2804.12 and 2804.30(g)); and Application for an Electric Transmission Line with a Capacity of 100 kV or More (43 CFR 2804.12) New requirements at section 2804.12(b) apply to the following types of applications: • Solar and wind energy development grants outside any designated leasing area; and PO 00000 Frm 00080 Fmt 4701 Sfmt 4700 • Electric transmission lines with a capacity of 100 kV or more. In addition to these categories of applications, the proposed rule would have made these new requirements applicable to applications for pipelines 10 inches or greater. The rationale was that these applications, as well as the other 2 types of applications, were for large-scale operations that warrant their own procedures. Some comments questioned the BLM’s description of pipelines 10 inches or greater in diameter as a measure for large-scale pipeline projects, and suggested that the scale of pipeline projects is better measured by acreage than pipeline diameter. The BLM agrees. Rights-ofway for pipelines 10 inches or greater in diameter are not subject to section 2804.12 of the final rule. Section 2804.12(b) includes the following requirements for applications for a solar or wind energy development project outside a designated leasing area, and to applications for a transmission line project with a capacity of 100 kV or more: • A discussion of all known potential resource conflicts with sensitive resources and values, including special designations or protections; and • Applicant-proposed measures to avoid, minimize, and compensate for such resource conflicts, if any. Section 2804.12(b) also requires applicants to initiate early discussions with any grazing permittees that may be affected by the proposed project. This requirement stems from FLPMA Section 402(g) (43 U.S.C. 1752(g)) and a BLM grazing regulation (43 CFR 4110.4–2(b)) that require 2 years’ prior notice to grazing permittees and lessees before cancellation of their grazing privileges. In addition to the information listed at 43 CFR 2804.12(b), an application for a solar or wind project, or for a transmission line of at least 100 kV, must include the information listed at 43 CFR 2804.12(a)(1) through (7). These provisions are not amended in the final rule. The requirements at section 2804.12(e) (formerly section 2804.12(b)) apply to applicants that are business entities. These requirements are not amended substantively in the final rule. The burdens for all of these regulations are already included in the burdens associated with the BLM for SF–299 and control number 0596–0082, and therefore are not included in the burdens for the final rule. Applications for solar or wind energy development outside any designated leasing area, but not applications for large-scale transmission lines, are subject to a requirement (at 43 CFR 2804.12(c)(2)) to submit an ‘‘application E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations filing fee’’ of $15 per acre. As defined in an amendment to section 2801.5, an application filing fee is specific to solar and wind energy right-of-way applications. Section 2804.30(e)(4) provides that the BLM will refund the fee, except for the reasonable costs incurred on behalf of the applicant, if the applicant is not a successful bidder in the competitive process outlined in subpart 2804. sradovich on DSK3GMQ082PROD with RULES3 General Description of a Proposed Project and Schedule for Submittal of a POD (2804.12(b)(1) and (2)) Paragraph 2804.12(b)(1) and (2) require applicants for a solar or wind development project outside a designated leasing area to submit the following information, using Form SF– 299: • A general description of the proposed project and a schedule for the submission of a POD conforming to the POD template at https://www.blm.gov; • A discussion of all known potential resource conflicts with sensitive resources and values, including special designations or protections; and • Proposals to avoid, minimize, and compensate for such resource conflicts, if any. Preliminary Application Review Meetings for a Large-Scale Right-of-Way (43 CFR 2804.12 (b)(4)) The proposed rule would have required pre-application meetings for each large-scale project (defined in the proposed rule as an application for a solar or wind energy development project outside a designated leasing area, a transmission line project with a capacity of 100 kV or more, or a pipeline 10 inches or more in diameter). Several comments suggested that the BLM lacks authority to impose requirements on a developer before submission of an application without an application being submitted to the BLM. The BLM agrees with these comments and has revised the proposed rule. Instead of pre-application meetings, the final rule requires ‘‘preliminary application review meetings’’ that will be held after an application for a largescale right-of-way has been filed with the BLM. As discussed above, the BLM also has decided to remove 10-inch pipelines from the final rule, in response to comments questioning the characterization of pipelines 10 inches or greater in diameter as large-scale projects. Within 6 months from the time the BLM receives the cost recovery fee for an application for a large-scale project (i.e., for solar or wind energy development outside a designated VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 leasing area or for a transmission line with a capacity of 100 kV or more), the applicant must schedule and hold at least two preliminary application review meetings. In the first meeting, the BLM will collect information from the applicant to supplement the application on subjects such as the general project proposal. The BLM will also discuss with the applicant subjects such as the status of BLM land use planning for the lands involved, potential siting issues or concerns, potential environmental issues or concerns, potential alternative site locations, and the right-of-way application process. In the second meeting, the applicant and the BLM will meet with appropriate Federal and State agencies and tribal and local governments to facilitate coordination of potential environmental and siting issues and concerns. The applicant and the BLM may agree to hold additional preliminary application review meetings. Application for an Energy Site-Specific Testing Grant (43 CFR 2804.30, 2805.11(b)(2)(i), and 2809.19(c)); Application for an Energy Project-Area Testing Grant (43 CFR 2804.30, 2805.11(b)(2)(ii), and 2809.19(c)); and Application for a Short-Term Grant (43 CFR 2805.11(b)(2)(iii)) Section 2804.30(g) authorizes only one applicant (i.e., a ‘‘preferred applicant’’) to apply for an energy project-area testing grant or an energy site-specific testing grant for land outside any designated leasing area. Section 2809.19(c) authorizes only one applicant (i.e., the successful bidder in the competitive process outlined at 43 CFR subpart 2809) to apply for an energy project-area testing grant or an energy site-specific testing grant for land inside a designated leasing area. Section 2805.11(b) authorizes applications for short-term grants for other purposes (such as geotechnical testing and temporary land-disturbing activities) either inside or outside a designated leasing area. Each of these grants is for 3 years or less. All of these applications must be submitted on an SF–299. Applications for project-area grants (but not sitespecific grants) are subject to a $2 peracre application filing fee in accordance with section 2804.12(c)(2). Applicants for short-term grants for other purposes (such as geotechnical testing and temporary land-disturbing activities) are subject to a processing fee in accordance with section 2804.14. The proposed rule would have limited testing grants to wind energy. PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 92201 Some comments suggested that these authorizations should be made available for solar energy. The BLM has adopted this suggestion in the final rule. Showing of Good Cause (43 CFR 2805.12(c)(6)) Any authorization for a solar and wind energy right-of-way requires due diligence in development. In accordance with section 2805.12(c)(6), the BLM will notify the holder before suspending or terminating a right-of-way for lack of due diligence. This notice will provide the holder with a reasonable opportunity to correct any noncompliance or to start or resume use of the right-of-way. A showing of good cause will be required in response. That showing must include: • Reasonable justification for any delays in construction (for example, delays in equipment delivery, legal challenges, and acts of God); • The anticipated date for the completion of construction and evidence of progress toward the start or resumption of construction; and • A request for extension of the timelines in the approved POD. The BLM will use the information to determine whether or not to suspend or terminate the right-of-way for failure to comply with due diligence requirements. Reclamation Cost Estimate for Lands Outside Any Designated Leasing Area (43 CFR 2805.20(a)(3) and (5)) New section 2805.20(a)(3) provides that the bond amount for projects other than a solar or wind energy lease under subpart 2809 (i.e., inside a designated leasing area) will be determined based on the preparation of a reclamation cost estimate that includes the cost to the BLM to administer a reclamation contract and review it periodically for adequacy. New section 2805.20(a)(5) provides that reclamation cost estimate must include at minimum: • Remediation of environmental liabilities such as use of hazardous materials waste and hazardous substances, herbicide use, the use of petroleum-based fluids, and dust control or soil stabilization materials; • The decommissioning, removal, and proper disposal, as appropriate, of any improvements and facilities; and • Interim and final reclamation, revegetation, recontouring, and soil stabilization. This component must address the potential for flood events and downstream sedimentation from the site that may result in offsite impacts. E:\FR\FM\19DER3.SGM 19DER3 92202 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Request To Assign a Solar or Wind Energy Development Right-of-Way (43 CFR 2807.21) Section 2807.21, as amended, provides for assignment, in whole or in part, of any right or interest in a grant or lease for a solar or wind development right-of-way. Actions that may require an assignment include the transfer by the holder (assignor) of any right or interest in the grant or lease to a third party (assignee) or any change in control transaction involving the grant holder or lease holder, including corporate mergers or acquisitions. The proposed assignee must file an assignment application, using SF–299, and pay application and processing fees. No preliminary application review meetings and or public meetings are required. The assignment application must include: • Documentation that the assignor agrees to the assignment; and • A signed statement that the proposed assignee agrees to comply with and be bound by the terms and conditions of the grant that is being assigned and all applicable laws and regulations. sradovich on DSK3GMQ082PROD with RULES3 Application for Renewal of an Energy Project-Area Testing Grant or ShortTerm Grant (43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22) Section 2805.11(b)(2), as amended, provides that holders of some types of grants may seek renewal of those grants. For an energy site-specific testing grant, the term is 3 years or less, without the option of renewal. However, for an energy project-area testing grant, the initial term is 3 years or less, with the option to renew for one additional 3year period when the renewal application is also accompanied by a solar or wind energy development application and a POD. For short-term grants, such as for geotechnical testing and temporary land-disturbing activities, the term is 3 years or less with an option for renewal. Applications for renewal of testing grants (except site-specific testing grants) may be filed, using SF–299, under sections 2805.14(h) and 2807.22. Processing fees in accordance with section 2804.14, as amended, apply to these renewal applications. Section 2807.22 provides that an application for renewal of any right-ofway grant or lease must be submitted at least 120 calendar days before the grant or lease expires. The application must show that the grantee or lessee is in compliance with the renewal terms and conditions (if any), with the other terms, VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 conditions, and stipulations of the grant or lease, and with other applicable laws and regulations. The application also must explain why a renewal of the grant or lease is necessary. Environmental, Technical, and Financial Records, Reports, and Other Information (43 CFR 2805.12(a)(15)) Section 2805.12(a)(15) authorizes the BLM to require a holder of any type of right-of-way to provide, or give the BLM access to, any pertinent environmental, technical, and financial records, reports, and other information. The use of SF– 299 is required. The BLM will use the information for monitoring and inspection activities. Application for Renewal of a Solar or Wind Energy Development Grant or Lease (43 CFR 2805.14(g) and 2807.22) Amendments to sections 2805.14 and 2807.22 authorize holders of leases and grants to apply for renewal of their rights-of-way. A renewal requires submission of the same information, on SF–299, that is necessary for a new application. Processing fees, in accordance with 43 CFR 2804.14, as amended, will apply to these renewal applications. The BLM will use the information submitted by the applicant to decide whether or not to renew the right-of-way. Request for an Amendment or Name Change, Amendment, or Assignment (FLPMA) (43 CFR 2807.11(b) and (d)) and 2807.21) New section 2807.11(b) requires a holder of any type of right-of-way grant to contact the BLM, seek an amendment to the grant under section 2807.20 (a regulation that is not amended in this final rule), and obtain the BLM’s approval before beginning any activity that is a ‘‘substantial deviation’’ from what is authorized. New section 2807.11(d) requires contact with the BLM, a request for an amendment to the pertinent right-ofway grant or lease, and prior approval whenever site-specific circumstances or conditions result in the need for changes to an approved right-of-way grant or lease, plan of development, site plan, mitigation measures, or construction, operation, or termination procedures that are not ‘‘substantial deviations.’’ New section 2807.21 authorizes assignment of a grant or leased with the BLM’s approval. It also authorizes the BLM to require a grant or lease holder to file new or revised information in circumstances that include, but are not limited to: PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 • Transactions within the same corporate family; • Changes in the holder’s name only; and • Changes in the holder’s articles of incorporation. A request for an amendment of a right-of-way, using SF–299, is required in cases of a substantial deviation (for example, a change in the boundaries of the right-of-way, major improvements not previously approved by the BLM, or a change in the use of the right-of-way). Other changes, such as changes in project materials, or changes in mitigation measures within the existing, approved right-of-way area, must be submitted to the BLM for review and approval. In order to assign a grant, the proposed assignee must file an assignment application and follow the same procedures and standards as for a new grant or lease, as well as pay application and processing fees. In order to request a name change, the holder will be required to file an application and follow the same procedures and standards as for a new grant or lease and pay processing fees, but no application fee is required. The following documents are also required in the case of a name change: • A copy of the court order or legal document effectuating the name change of an individual; or • If the name change is for a corporation, a copy of the corporate resolution proposing and approving the name change, a copy of a document showing acceptance of the name change by the State in which incorporated, and a copy of the appropriate resolution, order, or other document showing the name change. In all these cases, the BLM will use the information to monitor and inspect rights-of-way, and to maintain current data. Nomination of a Parcel of Land Inside a Designated Leasing Area (43 CFR 2809.10 and 2809.11) Sections 2809.10 and 2809.11 authorize the BLM to offer land competitively inside a designated leasing area for solar or wind energy development on its own initiative. These regulations also authorize the BLM to solicit nominations for such development. In order to nominate a parcel under this process, the nominator must be qualified to hold a right-of-way under 43 CFR 2803.10. After publication of a notice by the BLM, anyone meeting the qualifications may submit a nomination for a specific parcel of land to be developed for solar or wind energy. There is a fee of $5 per acre for E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations each nomination. The following information is required: • The nominator’s name and personal or business address; • The legal land description; and • A map of the nominated lands. The BLM will use the information to communicate with the nominator and to determine whether or not to proceed with a competitive offer. Expression of Interest in Parcel of Land Inside a Designated Leasing Area (43 CFR 2809.11(c)) Section 2809.11(c) authorizes the BLM to consider informal expressions of interest suggesting specific lands inside a designated leasing area to be included in a competitive offer. The expression of interest must include a description of the suggested lands and a rationale for their inclusion in a competitive offer. The information will assist the BLM in determining whether or not to proceed with a competitive offer. Plan of Development for a Solar or Wind Energy Development Lease Inside a Designated Leasing Area (43 CFR 2809.18) Section 2809.18(c) requires the holder of a solar or wind energy development lease for land inside a designated leasing area to submit a plan of development, using SF–299, within 2 years of the lease issuance date. The plan must address all pre-development and development activities. This collection activity is necessary to ensure diligent development. This new provision will be a new use of Item #7 of SF–299, which calls for the following information: sradovich on DSK3GMQ082PROD with RULES3 Project description (describe in detail): (a) Type of system or facility (e.g., canal, pipeline, road); (b) related structures and facilities; (c) physical specifications (length, width, grading, etc.); (d) term of years needed; (e) time of year of use or operation; (f) volume or amount of product to be transported; (g) duration and timing of construction; and (h) temporary work areas needed for construction. This collection has been justified and authorized under control number 0596– 0082. In addition, section 2809.18(c) provides that the minimum requirements for either a ‘‘Wind Energy Plan of Development’’ or ‘‘Solar Energy Plan of Development’’ can be found at a link to a template at www.blm.gov. To some extent, that template duplicates the information required by Item #7 of SF–299. The following requirements do not duplicate the elements listed in SF– 299: • Financial Operations and maintenance. This information will VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 assist the BLM in verifying the right-ofway holder’s compliance with terms and conditions regarding all aspects of operations and maintenance, including road maintenance and workplace safety; • Environmental considerations. This information will assist the BLM in monitoring compliance with terms and conditions regarding mitigation measures and site-specific issues such as protection of sensitive species and avoidance of conflicts with recreation uses of nearby lands; • Maps and drawings. This information will assist the BLM in monitoring compliance with all terms and conditions; and • Supplementary information. This information, which will be required after submission of the holder’s initial POD, will assist the BLM in reviewing possible alternative designs and mitigation measures for a final POD. Section 2809.18(d) requires the holder of a solar or wind energy development lease for land inside a designated leasing area to pay reasonable costs for the BLM or other Federal agencies to review and approve the plan of development and to monitor the lease. To expedite review and monitoring, the holder may notify BLM in writing of an intention to pay the full actual costs incurred by the BLM. Request for an Amendment, Assignment, or Name Change (MLA) (43 CFR 2886.12(b) and (d) and 2887.11) Sections 2886.12 and 2887.11 pertain to holders of rights-of-way and temporary use permits authorized under the Mineral Leasing Act (MLA). A temporary use permit authorizes a holder of a MLA right-of-way to use land temporarily in order to construct, operate, maintain, or terminate a pipeline, or for purposes of environmental protection or public safety. See 43 CFR 2881.12. The regulations require these holders to contact the BLM: • Before engaging in any activity that is a ‘‘substantial deviation’’ from what is authorized; • Whenever site-specific circumstances or conditions arise that result in the need for changes that are not substantial deviations; • When the holder submits a certification of construction; • Before assigning, in whole or in part, any right or interest in a grant or lease; • Before any change in control transaction involving the grant- or leaseholder; and • Before changing the name of a holder (i.e., when the name change is PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 92203 not the result of an underlying change in control of the right-of-way). A request for an amendment of a right-of-way or temporary use permit is required in cases of a substantial deviation (e.g., a change in the boundaries of the right-of-way, major improvements not previously approved by the BLM, or a change in the use of the right-of-way). Other changes, such as changes in project materials, or changes in mitigation measures within the existing, approved right-of-way area, are required to be submitted to the BLM for review and approval. In order to assign a grant, the proposed assignee must file an assignment application and follow the same procedures and standards as for a new grant or lease, as well as pay processing fees. In order to request a name change, the holder will be required to file an application and follow the same procedures and standards as for a new grant or lease and pay processing fees, but no application fee is required. The following documents are also required in the case of a name change: • A copy of the court order or legal document effectuating the name change of an individual; or • If the name change is for a corporation, a copy of the corporate resolution proposing and approving the name change, a copy of a document showing acceptance of the name change by the State in which incorporated, and a copy of the appropriate resolution, order, or other document showing the name change. The use of SF–299 is required. In all these cases, the BLM will use the information for monitoring and inspection purposes, and to maintain current data on rights-of-way. Certification of Construction (43 CFR 2886.12(f)) A certification of construction is a document a holder of an MLA right-ofway must submit, using SF–299, to the BLM after finishing construction of a facility, but before operations begin. The BLM will use the information to verify that the holder has constructed and tested the facility to ensure that it complies with the terms of the right-ofway and is in accordance with applicable Federal and State laws and regulations. Estimated Hour Burdens The estimated hour burdens of the proposed supplemental collection requirements are shown in the following table. E:\FR\FM\19DER3.SGM 19DER3 92204 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations INFORMATION COLLECTION REQUIREMENTS: ESTIMATED ANNUAL HOUR BURDENS Type of response Number of responses Hours per response Total hours (column B × column C) A. B. C. D. Application for a Solar or Wind Energy Development Project Outside Any Designated Leasing Area .................................................................................................................................... 43 CFR 2804.12 and 2804.30(g) ................................................................................................ Form SF–299 ............................................................................................................................... Application for an Electric Transmission Line with a Capacity of 100 kV or More ..................... 43 CFR 2804.12 .......................................................................................................................... Form SF–299 ............................................................................................................................... General Description of a Proposed Project and Schedule for Submittal of a Plan of Development ......................................................................................................................................... 43 CFR 2804.12(b)(1) and (2) ..................................................................................................... Form SF–299 ............................................................................................................................... Preliminary Application Review Meetings for a Large-Scale Right-of-Way ................................ 43 CFR 2804.12(b)(4) ................................................................................................................. Application for an Energy Site-Specific Testing Grant ................................................................ 43 CFR 2804.30, 2805.11(b)(2)(i), and 2809.19(c) .................................................................... Form SF–299 ............................................................................................................................... Application for an Energy Project-Area Testing Grant ................................................................ 43 CFR 2804.30, 2805.11(b)(2)(ii), and 2809.19(c) .................................................................... Form SF–299 ............................................................................................................................... Application for a Short-Term Grant ............................................................................................. 43 CFR 2805.11(b)(2)(iii) ............................................................................................................. Form SF–299 ............................................................................................................................... Showing of good cause ............................................................................................................... 43 CFR 2805.12(c)(6) .................................................................................................................. Reclamation Cost Estimate for Lands Outside Any Designated Leasing Area .......................... 43 CFR 2805.20(a)(3) and (a)(5) ................................................................................................ Request to Assign a Solar or Wind Energy Development Right-of-Way .................................... 43 CFR 2807.21 .......................................................................................................................... Form SF–299 ............................................................................................................................... Application for Renewal of an Energy Project-Area Testing Grant or Short-Term Grant ........... 43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22 ....................................................................... Form SF–299 ............................................................................................................................... Environmental, Technical, and Financial Records, Reports, and Other Information .................. 43 CFR 2805.12(a)(15) ............................................................................................................... Form SF–299 ............................................................................................................................... Application for Renewal of a Solar or Wind Energy Development Grant or Lease ................... 43 CFR 2805.14(g) and 2807.22 ................................................................................................ Form SF–299 ............................................................................................................................... Request for an Amendment or Name Change (FLPMA) ............................................................ 43 CFR 2807.11(b) and (d) and 2807.21 .................................................................................... Form SF–299 ............................................................................................................................... Nomination of a Parcel of Land Inside a Designated Leasing Area ........................................... 43 CFR 2809.10 and 2809.11 ..................................................................................................... Expression of Interest in a Parcel of Land Inside a Designated Leasing Area .......................... 43 CFR 2809.11(c) ...................................................................................................................... Plan of Development for a Solar or Wind Energy Development Lease Inside a Designated Leasing Area ............................................................................................................................ 43 CFR 2809.18(c) ...................................................................................................................... Form SF–299 ............................................................................................................................... Request for an Amendment, Assignment, or Name Change (MLA) .......................................... 43 CFR 2886.12(b) and (d) and 2887.11 .................................................................................... Form SF–299 ............................................................................................................................... Certification of Construction ........................................................................................................ 43 CFR 2886.12(f) ....................................................................................................................... Form SF–299 ............................................................................................................................... 10 sradovich on DSK3GMQ082PROD with RULES3 Estimated Non-Hour Burdens The non-hour burdens of this final rule consist of fees authorized by Sections 304 and 504(g) of FLPMA (43 U.S.C. 1734 and 1764(g)). Section 1734 authorizes the Secretary of the Interior to establish reasonable filing and service VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 fees and reasonable charges with respect to applications and other documents relating to the public lands. Section 504(g) authorizes the Secretary to promulgate regulations that require, as a condition of a right-of-way, that an applicant for or holder of a right-of-way PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 80 10 8 80 20 2 40 20 2 40 20 8 160 20 8 160 1 8 8 1 2 2 1 10 10 11 8 88 6 6 36 20 4 80 1 12 12 30 16 480 1 4 4 1 4 4 2 8 16 2,862 16 45,792 5 4 20 3,042 Totals .................................................................................................................................... 8 130 47,112 reimburse the United States for all reasonable administrative and other costs incurred with respect to right-ofway applications and with respect to inspection and monitoring of construction, operation, and termination E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations of a facility pursuant to such right-ofway. 92205 The fees (i.e., non-hour burdens) are itemized in the following table. INFORMATION COLLECTION REQUIREMENTS—ESTIMATED ANNUAL NON-HOUR BURDENS Type of response Regulatory authority for fee Number of responses Amount of fee per response Total amount of fees (column C × column D) A. B. C. D. E. Application for a Solar or Wind Energy Development Project Outside Any Designated Leasing Area. 43 CFR 2804.12 and 2804.30(g) ........................... Form SF–299 ......................................................... Application for an Electric Transmission Line with a Capacity of 100 kV or More. 43 CFR 2804.12 ..................................................... Form SF–299 ......................................................... Application for an Energy Project-Area Testing Grant. 43 CFR 2804.30, 2805.11(b)(2)(ii), and 2809.19(c). Form SF–299 ......................................................... Application for a Short-Term Grant ........................ 43 CFR 2805.11(b)(2)(iii) ....................................... Form SF–299 ......................................................... Request to Assign a Solar or Wind Energy Development Right-of-Way. 43 CFR 2807.21 ..................................................... Form SF–299 ......................................................... Application for Renewal of an Energy ProjectArea Testing Grant or Short-Term Grant. 43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22 .. Form SF–299 ......................................................... Application for Renewal of a Solar or Wind Energy Development Grant or Lease. 43 CFR 2805.14(g) and 2807.22 ........................... Form SF–299 ......................................................... Nomination of a Parcel of Land Inside a Designated Leasing Area. 43 CFR 2809.10 and 2809.11 ............................... 43 CFR 2804.12(c)(2) 10 $15 per acre × average of 6,000 acres per application = $90,000. $900,000 43 CFR 2804.14 ........ 10 $1,156 1 ....................................... 11,560 43 CFR 2804.12(c)(2) 20 $2 per acre × average of 6,000 acres per application = $12,000. 240,000 43 CFR 2804.14 ........ 1 $1,156 2 ....................................... 1,156 43 CFR 2804.14 ........ 11 $15 per acre × average of 6,000 acres per application = $90,000. 990,000 43 CFR 2804.14 ........ 6 $1,156 3 ....................................... 6,936 43 CFR 2804.14 ........ 1 $1,156 4 ....................................... 1,156 43 CFR 2809.11(b)(1) 1 $5 per acre × average of 6,000 acres per nomination = $30,000. 30,000 Total ................................................................ .................................... ........................ ..................................................... 2,180,808 Authors sradovich on DSK3GMQ082PROD with RULES3 The principal author of this rule is Jayme Lopez, Program Lead, National 1 In the BLM’s experience, this collection activity usually falls under Category Four of the Processing Fee Schedule at 43 CFR 2804.14. The amount shown is for Processing Category Four for calendar year 2016, at IM 2016–025 (Dec. 1, 2015) (‘‘Rightsof-Way Management and Land Use Authorization Management’’). 2 In the BLM’s experience, this collection activity usually falls under Category Four of the Processing Fee Schedule at 43 CFR 2804.14. The amount shown is for Processing Category Four for calendar year 2016, at IM 2016–025 (Dec. 1, 2015) (‘‘Rightsof-Way Management and Land Use Authorization Management’’). 3 In the BLM’s experience, this collection activity usually falls under Category Four of the Processing Fee Schedule at 43 CFR 2804.14. The amount shown is for Processing Category Four for calendar year 2016, at IM 2016–025 (Dec. 1, 2015) (‘‘Rightsof-Way Management and Land Use Authorization Management’’). 4 In the BLM’s experience, this collection activity usually falls under Category Four of the Processing Fee Schedule at 43 CFR 2804.14. The amount shown is for Processing Category Four for calendar VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Renewable Energy Coordination Office Washington Office, Bureau of Land Management, Department of the Interior, assisted by Charles Yudson, Jean Sonneman and Ian Senio, Office of Regulatory Affairs, BLM Washington Office; Michael Ford, Economist, BLM Washington Office; Michael Hildner, Planning and Environmental Analyst; Dylan Fuge, Counselor to the Director, BLM Washington Office; and Gregory Russell, Attorney Advisor, Office of the Solicitor, Department of the Interior. List of Subjects 43 CFR Part 2880 Administrative practice and procedures, Common carriers, Pipelines, Federal lands and rights-of-way, Reporting and recordkeeping requirements. Accordingly, for the reasons stated in the preamble, the BLM amends 43 CFR parts 2800 and 2880 as set forth below: ■ PART 2800—RIGHTS-OF-WAY UNDER THE FEDERAL LAND POLICY AND MANAGEMENT ACT 1. The authority citation for part 2800 continues to read as follows: ■ 43 CFR Part 2800 Communications, Electric power, Highways and roads, Penalties, Public lands and rights-of-way, Reporting and recordkeeping requirements. Authority: 43 U.S.C. 1733, 1740, 1763, and 1764. year 2016, at IM 2016–025 (Dec. 1, 2015) (‘‘Rightsof-Way Management and Land Use Authorization Management’’). Subpart 2801—General Information PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 2. Revise the heading of part 2800 to read as set forth above. ■ ■ 3. Amend § 2801.5(b) by: E:\FR\FM\19DER3.SGM 19DER3 92206 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations a. Adding, in alphabetical order, definitions of ‘‘Acreage rent,’’ ‘‘Application filing fee,’’ ‘‘Assignment,’’ ‘‘Designated leasing area,’’ ‘‘Megawatt (MW) capacity fee,’’ ‘‘Megawatt rate,’’ ‘‘Performance and reclamation bond,’’ ‘‘Reclamation cost estimate (RCE),’’ ‘‘Screening criteria for solar and wind energy development,’’ and ‘‘Short-term right-of-way grant;’’ and ■ b. Revising the definitions of ‘‘Designated right-of-way corridor,’’ ‘‘Management overhead costs,’’ and ‘‘Right-of-way.’’ The additions and revisions read as follows: ■ sradovich on DSK3GMQ082PROD with RULES3 § 2801.5 What acronyms and terms are used in the regulations in this part? (b) * * * Acreage rent means rent assessed for solar and wind energy development grants and leases that is determined by the number of acres authorized for the grant or lease. * * * * * Application filing fee means a filing fee specific to solar and wind energy applications. This fee is an initial payment for the reasonable costs for processing, inspecting, and monitoring a right-of-way. Assignment means the transfer, in whole or in part, of any right or interest in a right-of-way grant or lease from the holder (assignor) to a subsequent party (assignee) with the BLM’s written approval. A change in ownership of the grant or lease, or other related changein-control transaction involving the holder, including a merger or acquisition, also constitutes an assignment for purposes of these regulations requiring the BLM’s written approval, unless applicable statutory authority provides otherwise. * * * * * Designated leasing area means a parcel of land with specific boundaries identified by the BLM land use planning process as being a preferred location for solar or wind energy development that may be offered competitively. Designated right-of-way corridor means a parcel of land with specific boundaries identified by law, Secretarial order, the land use planning process, or other management decision, as being a preferred location for existing and future linear rights-of-way and facilities. The corridor may be suitable to accommodate more than one right-ofway use or facility, provided that they are compatible with one another and the corridor designation. * * * * * Management overhead costs means Federal expenditures associated with a VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 particular Federal agency’s directorate. The BLM’s directorate includes all State Directors and the entire Washington Office staff, except where a State Director or Washington Office staff member is required to perform work on a specific right-of-way case. Megawatt (MW) capacity fee means the fee paid in addition to the acreage rent for solar and wind energy development grants and leases. The MW capacity fee is the approved MW capacity of the solar or wind energy grant or lease multiplied by the appropriate MW rate. A grant or lease may provide for stages of development, and the grantee or lessee will be charged a fee for each stage by multiplying the MW rate by the approved MW capacity for the stage of the project. Megawatt rate means the price of each MW of capacity for various solar and wind energy technologies as determined by the MW rate formula. Current MW rates are found on the BLM’s MW rate schedule, which can be obtained at any BLM office or at https://www.blm.gov. The MW rate is calculated by multiplying the total hours per year by the net capacity factor, by the MW hour (MWh) price, and by the rate of return, where: (1) Net capacity factor means the average operational time divided by the average potential operational time of a solar or wind energy development, multiplied by the current technology efficiency rates. The BLM establishes net capacity factors for different technology types but may determine another net capacity factor to be more appropriate, on a case-by-case or regional basis, to reflect changes in technology, such as a solar or wind project that employs energy storage technologies, or if a grant or lease holder or applicant is able to demonstrate that another net capacity factor is appropriate for a particular project or region. The net capacity factor for each technology type is: (i) Photovoltaic (PV)—20 percent; (ii) Concentrated photovoltaic (CPV) and concentrated solar power (CSP)—25 percent; (iii) CSP with storage capacity of 3 hours or more—30 percent; and (iv) Wind energy—35 percent; (2) Megawatt hour (MWh) price means the 5 calendar-year average of the annual weighted average wholesale prices per MWh for the major trading hubs serving the 11 western States of the continental United States (U.S.); (3) Rate of return means the relationship of income (to the property owner) to revenue generated from authorized solar and wind energy development facilities based on the 10- PO 00000 Frm 00086 Fmt 4701 Sfmt 4700 year average of the 20-year U.S. Treasury bond yield rounded to the nearest one-tenth percent; and (4) Hours per year means the total number of hours in a year, which, for purposes of this part, means 8,760 hours. * * * * * Performance and reclamation bond means the document provided by the holder of a right-of-way grant or lease that provides the appropriate financial guarantees, including cash, to cover potential liabilities or specific requirements identified by the BLM for the construction, operation, decommissioning, and reclamation of an authorized right-of-way on public lands. (1) Acceptable bond instruments. The BLM will accept cash, cashier’s or certified check, certificate or book entry deposits, negotiable U.S. Treasury securities, and surety bonds from the approved list of sureties (U.S. Treasury Circular 570) payable to the BLM. Irrevocable letters of credit payable to the BLM and issued by banks or financial institutions organized or authorized to transact business in the United States are also acceptable bond instruments. An insurance policy can also qualify as an acceptable bond instrument, provided that the BLM is a named beneficiary of the policy, and the BLM determines that the insurance policy will guarantee performance of financial obligations and was issued by an insurance carrier that has the authority to issue policies in the applicable jurisdiction and whose insurance operations are organized or authorized to transact business in the United States. (2) Unacceptable bond instruments. The BLM will not accept a corporate guarantee as an acceptable form of bond instrument. * * * * * Reclamation cost estimate (RCE) means the estimate of costs to restore the land to a condition that will support pre-disturbance land uses. This includes the cost to remove all improvements made under the right-of-way authorization, return the land to approximate original contour, and establish a sustainable vegetative community, as required by the BLM. The RCE will be used to establish the appropriate amount for financial guarantees of land uses on the public lands, including those uses authorized by right-of-way grants or leases issued under this part. * * * * * Right-of-way means the public lands that the BLM authorizes a holder to use E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations or occupy under a particular grant or lease. Screening criteria for solar and wind energy development refers to the policies and procedures that the BLM uses to prioritize how it processes solar and wind energy development right-ofway applications to facilitate the environmentally responsible development of such facilities through the consideration of resource conflicts, land use plans, and applicable statutory and regulatory requirements. Applications for projects with lesser resource conflicts are anticipated to be less costly and time-consuming for the BLM to process and will be prioritized over those with greater resource conflicts. Short-term right-of-way grant means any grant issued for a term of 3 years or less for such uses as storage sites, construction areas, and site testing and monitoring activities, including site characterization studies and environmental monitoring. * * * * * ■ 4. In § 2801.6, revise paragraph (a)(2) to read as follows: § 2801.6 Scope. (a) * * * (2) Grants to Federal departments or agencies for all systems and facilities identified in § 2801.9(a), including grants for transporting by pipeline and related facilities, commodities such as oil, natural gas, synthetic liquid or gaseous fuels, and any refined products produced from them; and * * * * * ■ 5. Amend § 2801.9 by revising paragraphs (a)(4) and (7) and adding paragraph (d) to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2801.9 When do I need a grant? (a) * * * (4) Systems for generating, transmitting, and distributing electricity, including solar and wind energy development facilities and associated short-term actions, such as site and geotechnical testing for solar and wind energy projects; * * * * * (7) Such other necessary transportation or other systems or facilities, including any temporary or short-term surface disturbing activities associated with approved systems or facilities, which are in the public interest and which require rights-ofway. * * * * * (d) All systems, facilities, and related activities for solar and wind energy projects are specifically authorized as follows: VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (1) Energy site-specific testing activities, including those with individual meteorological towers and instrumentation facilities, are authorized with a short-term right-ofway grant issued for 3 years or less; (2) Energy project-area testing activities are authorized with a shortterm right-of-way grant for an initial term of 3 years or less with the option to renew for one additional 3-year period under § 2805.14(h) when the renewal application is accompanied by an energy development application; (3) Solar and wind energy development facilities located outside designated leasing areas, and those facilities located inside designated leasing areas under § 2809.17(d)(2), are authorized with a right-of-way grant issued for up to 30 years (plus the initial partial year of issuance). An application for renewal of the grant may be submitted under § 2805.14(g); (4) Solar and wind energy development facilities located inside designated leasing areas are authorized with a solar or wind energy development lease when issued competitively under subpart 2809. The term is fixed for 30 years (plus the initial partial year of issuance). An application for renewal of the lease may be submitted under § 2805.14(g); and (5) Other associated actions not specifically included in § 2801.9(d)(1) through (4), such as geotechnical testing and other temporary land disturbing activities, are authorized with a shortterm right-of-way grant issued for 3 years or less. Subpart 2802—Lands Available for FLPMA Grants 6. In § 2802.11, revise the section heading and paragraphs (a), (b) introductory text, (b)(3), (4), (6), and (7), and (d) to read as follows: ■ § 2802.11 How does the BLM designate right-of-way corridors and designated leasing areas? (a) The BLM may determine the locations and boundaries of right-of-way corridors or designated leasing areas during the land use planning process described in part 1600 of this chapter. During this process, the BLM coordinates with other Federal agencies, State, local, and tribal governments, and the public to identify resource-related issues, concerns, and needs. The process results in a resource management plan or plan amendment, which addresses the extent to which you may use public lands and resources for specific purposes. (b) When determining which lands may be suitable for right-of-way PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 92207 corridors or designated leasing areas, the factors the BLM considers include, but are not limited to, the following: * * * * * (3) Physical effects and constraints on corridor placement or leasing areas due to geology, hydrology, meteorology, soil, or land forms; (4) Costs of construction, operation, and maintenance and costs of modifying or relocating existing facilities in a proposed right-of-way corridor or designated leasing area (i.e., the economic efficiency of placing a rightof-way within a proposed corridor or providing a lease inside a designated leasing area); * * * * * (6) Potential health and safety hazards imposed on the public by facilities or activities located within the proposed right-of-way corridor or designated leasing area; (7) Social and economic impacts of the right-of-way corridor or designated leasing area on public land users, adjacent landowners, and other groups or individuals; * * * * * (d) The resource management plan or plan amendment may also identify areas where the BLM will not allow right-ofway corridors or designated leasing areas for environmental, safety, or other reasons. Subpart 2804—Applying for FLPMA Grants 7. Amend § 2804.10 by revising paragraph (a)(2) to read as follows: ■ § 2804.10 What should I do before I file my application? (a) * * * (2) Determine whether the lands are located inside a designated or existing right-of-way corridor or a designated leasing area; * * * * * ■ 8. Revise § 2804.12 to read as follows: § 2804.12 What must I do when submitting my application? (a) File your application on Standard Form 299, available from any BLM office or at https://www.blm.gov, and fill in the required information as completely as possible. Your completed application must include the following: (1) A description of the project and the scope of the facilities; (2) The estimated schedule for constructing, operating, maintaining, and terminating the project; (3) The estimated life of the project and the proposed construction and reclamation techniques; E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92208 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (4) A map of the project, showing its proposed location and existing facilities adjacent to the proposal; (5) A statement of your financial and technical capability to construct, operate, maintain, and terminate the project; (6) Any plans, contracts, agreements, or other information concerning your use of the right-of-way and its effect on competition; (7) A statement certifying that you are of legal age and authorized to do business in the State(s) where the rightof-way would be located and that you have submitted correct information to the best of your knowledge; and (8) A schedule for the submission of a plan of development (POD) conforming to the POD template at https://www.blm.gov, should the BLM require you to submit a POD under § 2804.25(c). (b) When submitting an application for a solar or wind energy development project or for a transmission line project with a capacity of 100 kV or more, in addition to the information required in paragraph (a) of this section, you must: (1) Include a general description of the proposed project and a schedule for the submission of a POD conforming to the POD template at https:// www.blm.gov; (2) Address all known potential resource conflicts with sensitive resources and values, including special designations or protections, and include applicant-proposed measures to avoid, minimize, and compensate for such resource conflicts, if any; (3) Initiate early discussions with any grazing permittees that may be affected by the proposed project in accordance with 43 CFR 4110.4–2(b); and (4) Within 6 months from the time the BLM receives the cost recovery fee under § 2804.14, schedule and hold two preliminary application review meetings as follows: (i) The first meeting will be with the BLM to discuss the general project proposal, the status of BLM land use planning for the lands involved, potential siting issues or concerns, potential environmental issues or concerns, potential alternative site locations and the right-of-way application process; (ii) The second meeting will be with appropriate Federal and State agencies and tribal and local governments to facilitate coordination of potential environmental and siting issues and concerns; and (iii) You and the BLM may agree to hold additional preliminary application review meetings. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (c) When submitting an application for a solar or wind energy project under this subpart rather than subpart 2809, you must: (1) Propose a project sited on lands outside a designated leasing area, except as provided for by § 2809.19; and (2) Pay an application filing fee of $15 per acre for solar or wind energy development applications and $2 per acre for energy project-area testing applications. The BLM will refund your fee, except for the reasonable costs incurred on your behalf, if you are the unsuccessful bidder in a competitive offer held under § 2804.30 or subpart 2809. The BLM will adjust the application filing fee at least once every 10 years using the change in the Implicit Price Deflator, Gross Domestic Product (IPD–GDP) for the preceding 10-year period and round it to the nearest onehalf dollar. This 10-year average will be adjusted at the same time as the Per Acre Rent Schedule for linear rights-ofway under § 2806.22. (d) If you are unable to meet a requirement of the application outlined in this section, you may submit a request for an alternative requirement under § 2804.40. (e) If you are a business entity, you must also submit the following information: (1) Copies of the formal documents creating the entity, such as articles of incorporation, and including the corporate bylaws; (2) Evidence that the party signing the application has the authority to bind the applicant; (3) The name and address of each participant in the business; (4) The name and address of each shareholder owning 3 percent or more of the shares and the number and percentage of any class of voting shares of the entity which such shareholder is authorized to vote; (5) The name and address of each affiliate of the business; (6) The number of shares and the percentage of any class of voting stock owned by the business, directly or indirectly, in any affiliate controlled by the business; (7) The number of shares and the percentage of any class of voting stock owned by an affiliate, directly or indirectly, in the business controlled by the affiliate; and (8) If you have already provided the information in paragraphs (b)(1) through (7) of this section to the BLM and the information remains accurate, you need only reference the BLM serial number under which you previously filed it. (f) The BLM may require you to submit additional information at any PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 time while processing your application. See § 2884.11(c) of this chapter for the type of information we may require. (g) If you are a Federal oil and gas lessee or operator and you need a rightof-way for access to your production facilities or oil and gas lease, you may include your right-of-way requirements with your Application for Permit to Drill or Sundry Notice required under parts 3160 through 3190 of this chapter. (h) If you are filing with another Federal agency for a license, certificate of public convenience and necessity, or other authorization for a project involving a right-of-way on public lands, simultaneously file an application with the BLM for a grant. Include a copy of the materials, or reference all the information, you filed with the other Federal agency. (i) Inter-agency coordination. You may request, in writing, an exemption from the requirements of this section if you can demonstrate to the BLM that you have satisfied similar requirements by participating in an inter-agency coordination process with another Federal, State, local, or Tribal authority. No exemption is approved until you receive BLM approval in writing. ■ 9. In § 2804.14, revise paragraphs (a), (b), and (c) to read as follows: § 2804.14 What is the processing fee for a grant application? (a) Unless you are exempt under § 2804.16, you must pay a fee to the BLM for the reasonable costs of processing your application. Subject to applicable laws and regulations, if processing your application involves Federal agencies other than the BLM, your fee may also include the reasonable costs estimated to be incurred by those Federal agencies. Instead of paying the BLM a fee for the reasonable costs incurred by other Federal agencies in processing your application, you may pay other Federal agencies directly for such costs. Reasonable costs are those costs as defined in Section 304(b) of FLPMA (43 U.S.C. 1734(b)). The fees for Processing Categories 1 through 4 (see paragraph (b) of this section) are one-time fees and are not refundable. The fees are categorized based on an estimate of the amount of time that the Federal Government will expend to process your application and issue a decision granting or denying the application. (b) There is no processing fee if the Federal Government’s work is estimated to take 1 hour or less. Processing fees are based on categories. The BLM will update the processing fees for Categories 1 through 4 in the schedule each calendar year, based on the previous E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations year’s change in the IPD–GDP, as measured second quarter to second quarter, rounded to the nearest dollar. The BLM will update Category 5 processing fees as specified in the Master Agreement. These categories and 92209 the estimated range of Federal work hours for each category are: PROCESSING CATEGORIES Processing category Federal work hours involved (1) Applications for new grants, assignments, renewals, and amendments to existing grants ........................ (2) Applications for new grants, assignments, renewals, and amendments to existing grants ........................ (3) Applications for new grants, assignments, renewals, and amendments to existing grants ........................ (4) Applications for new grants, assignments, renewals, and amendments to existing grants ........................ (5) Master agreements ....................................................................................................................................... (6) Applications for new grants, assignments, renewals, and amendments to existing grants ........................ (c) You may obtain a copy of the current year’s processing fee schedule from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current processing fee schedule at https://www.blm.gov. * * * * * ■ 10. Amend § 2804.18 by redesignating paragraphs (a)(6) through (8) as paragraphs (a)(7) through (9) and adding new paragraph (a)(6) to read as follows: § 2804.18 What provisions do Master Agreements contain and what are their limitations? (a) * * * (6) Describes existing agreements between the BLM and other Federal agencies for cost reimbursement; * * * * * ■ 11. Amend § 2804.19 by revising paragraph (a) and adding paragraph (e) to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2804.19 How will BLM process my Processing Category 6 application? (a) For Processing Category 6 applications, you and the BLM must enter into a written agreement that describes how the BLM will process your application. The final agreement consists of a work plan, a financial plan, and a description of any existing agreements you have with other Federal agencies for cost reimbursement associated with your application. * * * * * (e) We may collect reimbursement for reasonable costs to the United States for processing applications and other documents under this part relating to the public lands. ■ 12. Amend § 2804.20 by revising paragraphs (a)(1) and (5), redesignating paragraph (a)(6) as paragraph (a)(7), and VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 adding new paragraph (a)(6) to read as follows: § 2804.20 How does BLM determine reasonable costs for Processing Category 6 or Monitoring Category 6 applications? * * * * * (a) * * * (1) Actual costs to the Federal Government (exclusive of management overhead costs) of processing your application and of monitoring construction, operation, maintenance, and termination of a facility authorized by the right-of-way grant; * * * * * (5) Any tangible improvements, such as roads, trails, and recreation facilities, which provide significant public service and are expected in connection with constructing and operating the facility; (6) Existing agreements between the BLM and other Federal agencies for cost reimbursement associated with such application; and * * * * * ■ 13. Amend § 2804.23 by revising the section heading and paragraphs (a)(1) and (c) and adding paragraphs (d) and (e) to read as follows: § 2804.23 When will the BLM use a competitive process? (a) * * * (1) Processing Category 1 through 4. You must reimburse the Federal Government for processing costs as if the other application or applications had not been filed. * * * * * (c) If we determine that competition exists, we will describe the procedures for a competitive bid through a bid announcement in the Federal Register. We may also provide notice by other methods, such as a newspaper of general circulation in the area affected by the potential right-of-way, or the Internet. We may offer lands through a PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 Estimated Federal >1 ≤ 8 Estimated Federal >8 ≤ 24 Estimated Federal >24 ≤ 36 Estimated Federal >36 ≤ 50 Varies Estimated Federal >50 work hours are work hours are work hours are work hours are work hours are competitive process on our own initiative. The BLM will not competitively offer lands for which the BLM has accepted an application and received a plan of development and cost recovery agreement. (d) Competitive process for solar and wind energy development outside designated leasing areas. Lands outside designated leasing areas may be made available for solar and wind energy applications through a competitive application process established by the BLM under § 2804.30. (e) Competitive process for solar and wind energy development inside designated leasing areas. Lands inside designated leasing areas may be offered competitively under subpart 2809. ■ 14. Amend § 2804.24 by revising paragraph (a), redesignating paragraph (b) as paragraph (c), and adding new paragraph (b) to read as follows: § 2804.24 Do I always have to submit an application for a grant using Standard Form 299? * * * * * (a) The BLM offers lands competitively under § 2804.23(c) and you have already submitted an application for the facility or system; (b) The BLM offers lands for competitive lease under subpart 2809 of this part; or * * * * * ■ 15. Revise § 2804.25 to read as follows: § 2804.25 How will BLM process my application? (a) The BLM will notify you in writing when it receives your application. This notification will also: (1) Identify your processing fee described at § 2804.14; and (2) Inform you of any other grant applications which involve all or part of the lands for which you applied. E:\FR\FM\19DER3.SGM 19DER3 92210 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (b) The BLM will not process your application if you have any: (1) Outstanding unpaid debts owed to the Federal Government. Outstanding debts are those currently unpaid debts owed to the Federal Government after all administrative collection actions have occurred, including any appeal proceedings under applicable Federal regulations and the Administrative Procedure Act; or (2) Trespass action pending against you for any activity on BLMadministered lands (see § 2808.12), except those to resolve the trespass with a right-of-way as authorized in this part, or a lease or permit under the regulations found at 43 CFR part 2920, but only after outstanding unpaid debts are paid. (c) The BLM may require you to submit additional information necessary to process the application. This information may include a detailed construction, operation, rehabilitation, and environmental protection plan (i.e., a POD), and any needed cultural resource surveys or inventories for threatened or endangered species. If the BLM needs more information, the BLM will identify this information in a written deficiency notice asking you to provide the additional information within a specified period of time. (1) For solar or wind energy development projects, and transmission lines with a capacity of 100 kV or more, you must commence any required resource surveys or inventories within one year of the request date, unless otherwise specified by the BLM; or (2) If you are unable to meet any of the requirements of this section, you must show good cause and submit a request for an alternative under § 2804.40. (d) Customer service standard. The BLM will process your completed application as follows: Processing time Conditions 1–4 ................... 60 calendar days ..................................... 5 ....................... 6 ....................... sradovich on DSK3GMQ082PROD with RULES3 Processing category As specified in the Master Agreement .... Over 60 calendar days ............................ If processing your application will take longer than 60 calendar days, the BLM will notify you in writing of this fact prior to the 30th calendar day and inform you of when you can expect a final decision on your application. The BLM will process applications as specified in the Agreement. The BLM will notify you in writing within the initial 60-day processing period of the estimated processing time. (e) In processing an application, the BLM will: (1) Hold public meetings if sufficient public interest exists to warrant their time and expense. The BLM will publish a notice in the Federal Register and may use other notification methods, such as a newspaper of general circulation in the vicinity of the lands involved in the area affected by the potential right-of-way or the Internet, to announce in advance any public hearings or meetings; (2) If your application is for solar or wind energy development: (i) Hold a public meeting in the area affected by the potential right-of-way; (ii) Apply screening criteria to prioritize processing applications with lesser resource conflicts over applications with greater resource conflicts and categorize screened applications according to the criteria listed in § 2804.35; and (iii) Evaluate the application based on the information provided by the applicant and input from other parties, such as Federal, State, and local government agencies, and tribes, as well as comments received in preliminary application review meetings held under § 2804.12(b)(4) and the public meeting held under paragraph (e)(2)(i) of this section. The BLM will also evaluate your application based on whether you propose to site the development appropriately (e.g. outside of a designated leasing area or exclusion area) and whether you address known resource values discussed in the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 preliminary application review meetings. Based on these evaluations, the BLM will either deny your application or continue processing it. (3) Determine whether a POD schedule submitted with your application meets the development schedule or other requirements described by the BLM, such as in § 2804.12(b); (4) Complete appropriate National Environmental Policy Act (NEPA) compliance for the application, as required by 43 CFR part 46 and 40 CFR parts 1500 through 1508; (5) Determine whether your proposed use complies with applicable Federal and State laws; (6) If your application is for a road, determine whether it is in the public interest to require you to grant the United States an equivalent authorization across lands that you own; (7) Consult, as necessary, on a government-to-government basis with tribes and other governmental entities; and (8) Take any other action necessary to fully evaluate and decide whether to approve or deny your application. (f)(1) The BLM may segregate, if it finds it necessary for the orderly administration of the public lands, lands included in a right-of-way application under this subpart for the generation of electrical energy from wind or solar sources. In addition, the BLM may also segregate lands that it identifies for potential rights-of-way for electricity generation from wind or solar sources when initiating a competitive PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 process for solar or wind development on particular lands. Upon segregation, such lands would not be subject to appropriation under the public land laws, including location under the Mining Law of 1872 (30 U.S.C. 22 et seq.), but would remain open under the Mineral Leasing Act of 1920 (30 U.S.C. 181 et seq.) or the Materials Act of 1947 (30 U.S.C. 601 et seq.). The BLM would effect a segregation by publishing a Federal Register notice that includes a description of the lands being segregated. The BLM may effect segregation in this way for both pending and new right-of-way applications. (2) The effective date of segregation is the date of publication of the notice in the Federal Register. Consistent with 43 CFR 2091–3.2, the segregation terminates and the lands automatically open on the date that is the earliest of the following: (i) When the BLM issues a decision granting, granting with modifications, or denying the application for a right-ofway; (ii) Automatically at the end of the segregation period stated in the Federal Register notice initiating the segregation; or (iii) Upon publication of a Federal Register notice terminating the segregation and opening the lands. (3) The segregation period may not exceed 2 years from the date of publication in the Federal Register of the notice initiating the segregation, unless the State Director determines and documents in writing, prior to the E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations expiration of the segregation period, that an extension is necessary for the orderly administration of the public lands. If the State Director determines an extension is necessary, the BLM will extend the segregation for up to 2 years by publishing a notice in the Federal Register, prior to the expiration of the initial segregation period. Segregations under this part may only be extended once and the total segregation period may not exceed 4 years. ■ 16. Amend § 2804.26 by revising paragraph (a)(5), redesignating paragraph (a)(6) as paragraph (a)(8), revising newly redesignated paragraph (a)(8), and adding new paragraphs (a)(6), (a)(7), and (c) to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2804.26 Under what circumstances may BLM deny my application? (a) * * * (5) You do not have or cannot demonstrate the technical or financial capability to construct the project or operate facilities within the right-ofway. (i) Applicants must have or be able to demonstrate technical and financial capability to construct, operate, maintain, and terminate a project throughout the application process and authorization period. You can demonstrate your financial and technical capability to construct, operate, maintain, and terminate a project by: (A) Documenting any previous successful experience in construction, operation, and maintenance of similar facilities on either public or non-public lands; (B) Providing information on the availability of sufficient capitalization to carry out development, including the preliminary study stage of the project and the environmental review and clearance process; or (C) Providing written copies of conditional commitments of Federal and other loan guarantees; confirmed power purchase agreements; engineering, procurement, and construction contracts; and supply contracts with credible third-party vendors for the manufacture or supply of key components for the project facilities. (ii) Failure to demonstrate and sustain technical and financial capability is grounds for denying an application or terminating an authorization; (6) The PODs required by §§ 2804.25(e)(3) and 2804.12(a)(8) and (c)(1) do not meet the development schedule or other requirements in the POD template and the applicant is unable to demonstrate why the POD should be approved; VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (7) Failure to commence necessary surveys and studies, or plans for permit processing as required by § 2804.25(c); or (8) The BLM’s evaluation of your solar or wind application made under § 2804.25(e)(2)(iii) provides a basis for a denial. * * * * * (c) If you are unable to meet any of the requirements in this section you may request an alternative from the BLM (see § 2804.40). ■ 17. In § 2804.27, revise the section heading and introductory text to read as follows: § 2804.27 What fees must I pay if BLM denies my application or if I withdraw my application? If the BLM denies your application or you withdraw it, you must still pay any application filing fees under § 2804.12(b)(2), and any processing fee set forth at § 2804.14, unless you have a Processing Category 5 or 6 application. Then, the following conditions apply: * * * * * ■ 18. Add § 2804.30 to subpart 2804 to read as follows: § 2804.30 What is the competitive process for solar or wind energy development for lands outside of designated leasing areas? (a) Available land. The BLM may offer through a competitive process any land not inside a designated leasing area and open to right-of-way applications under § 2802.10. (b) Variety of competitive procedures available. The BLM may use any type of competitive process or procedure to conduct its competitive offer and any method, including the use of the Internet, to conduct the actual auction or competitive bid procedure. Possible bid procedures could include, but are not limited to: Sealed bidding, oral auctions, modified competitive bidding, electronic bidding, and any combination thereof. (c) Competitive offer. The BLM may identify a parcel for competitive offer if competition exists or may include land in a competitive offer on its own initiative. (d) Notice of competitive offer. The BLM will publish a notice in the Federal Register at least 30 days prior to the competitive offer and may use other notification methods, such as a newspaper of general circulation in the area affected by the potential right-ofway or the Internet. The notice would explain that the successful bidder would become the preferred applicant (see paragraph (g) of this section) and may then apply for a grant. The Federal PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 92211 Register and other notices must also include: (1) The date, time, and location, if any, of the competitive offer; (2) The legal land description of the parcel to be offered; (3) The bidding methodology and procedures to be used in conducting the competitive offer, which may include any of the competitive procedures identified in § 2804.30(b); (4) The minimum bid required (see § 2804.30(e)(2)); (5) The qualification requirements for potential bidders (see § 2803.10); and (6) The requirements for the successful bidder to submit a schedule for the submission of a POD for the lands involved in the competitive offer (see § 2804.12(c)(1)). (e) Bidding—(1) Bid submissions. The BLM will accept your bid only if it includes payment for the minimum bid and at least 20 percent of the bonus bid. (2) Minimum bid. The minimum bid is not prorated among all bidders, but paid entirely by the successful bidder. The minimum bid consists of: (i) The administrative costs incurred by the BLM and other Federal agencies in preparing for and conducting the competitive offer, including required environmental reviews; and (ii) An amount determined by the authorizing officer and disclosed in the notice of competitive offer. This amount will be based on known or potential values of the parcel. In setting this amount, the BLM will consider factors that include, but are not limited to, the acreage rent and megawatt capacity fee. (3) Bonus bid. The bonus bid consists of any dollar amount that a bidder wishes to bid in addition to the minimum bid. (4) If you are not the successful bidder, as defined in paragraph (f) of this section, the BLM will refund your bid and any application filing fees, less the reasonable costs incurred by the United States in connection with your application, under § 2804.12(c)(2). (f) Successful bidder. The successful bidder is determined by the highest total bid. If you are the successful bidder, you become the preferred applicant only if, within 15 calendar days after the day of the offer, you submit the balance of the bonus bid to the BLM office conducting the competitive offer. You must make payments by personal check, cashier’s check, certified check, bank draft, money order, or by other means deemed acceptable by the BLM, payable to the ‘‘Department of the Interior—Bureau of Land Management.’’ (g) Preferred applicant. The preferred applicant may apply for an energy project-area testing grant, an energy site- E:\FR\FM\19DER3.SGM 19DER3 92212 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations specific testing grant, or a solar or wind energy development grant for the parcel identified in the offer. Grant approval is not guaranteed by winning the subject bid and is solely at the BLM’s discretion. The BLM will not accept applications on lands where a preferred applicant has been identified, unless allowed by the preferred applicant. (h) Reservations. (1) The BLM may reject bids regardless of the amount offered. If the BLM rejects your bid under this provision, you will be notified in writing and such notice will include the reasons for the rejection and any refunds to which you are entitled. (2) The BLM may make the next highest bidder the preferred applicant if the first successful bidder fails to satisfy the requirements under paragraph (f) of this section. (3) If the BLM is unable to determine the successful bidder, such as in the case of a tie, the BLM may re-offer the lands competitively to the tied bidders, or to all bidders. (4) If lands offered under this section receive no bids the BLM may: (i) Re-offer the lands through the competitive process under this section; or (ii) Make the lands available through the non-competitive application process found in subparts 2803, 2804, and 2805 of this part, if the BLM determines that doing so is in the public interest. ■ 19. Add § 2804.31 to subpart 2804 to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2804.31 How will the BLM call for site testing for solar and wind energy? (a) Call for site testing. The BLM may, at its own discretion, initiate a call for site testing. The BLM will publish this call for site testing in the Federal Register and may also use other notification methods, such as a newspaper of general circulation in the area affected by the potential right-ofway, or the Internet. The Federal Register and any other notices will include: (1) The date, time, and location that site testing applications identified under § 2801.9(d)(1) of this part may be submitted; (2) The date by which applicants will be notified of the BLM’s decision on timely submitted site testing applications; (3) The legal land description of the area for which site testing applications are being requested; and (4) The qualification requirements for applicants (see § 2803.10). (b) You may request that the BLM hold a call for site testing for certain public lands. The BLM may proceed with a call for site testing at its own discretion. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (c) The BLM may identify lands surrounding the site testing as designated leasing areas under § 2802.11. If a designated leasing area is established, a competitive offer for a development lease under subpart 2809 may be held at the discretion of the BLM. ■ 20. Add § 2804.35 to subpart 2804 to read as follows: § 2804.35 How will the BLM prioritize my solar or wind energy application? The BLM will prioritize your application by placing it into one of three categories and may re-categorize your application based on new information received through surveys, public meetings, or other data collection, or after any changes to the application. The BLM will generally prioritize the processing of leases awarded under subpart 2809 before applications submitted under subpart 2804. For applications submitted under subpart 2804, the BLM will categorize your application based on the following screening criteria. (a) High-priority applications are given processing priority over mediumand low-priority applications and may include lands that meet the following criteria: (1) Lands specifically identified as appropriate for solar or wind energy development, other than designated leasing areas; (2) Previously disturbed sites or areas adjacent to previously disturbed or developed sites; (3) Lands currently designated as Visual Resource Management Class IV; or (4) Lands identified as suitable for disposal in BLM land use plans. (b) Medium-priority applications are given priority over low-priority applications and may include lands that meet the following criteria: (1) BLM special management areas that provide for limited development, including recreation sites and facilities; (2) Areas where a project may adversely affect conservation lands, including lands with wilderness characteristics that have been identified in an updated wilderness characteristics inventory; (3) Right-of-way avoidance areas; (4) Areas where project development may adversely affect resources and properties listed nationally such as the National Register of Historic Places, National Natural Landmarks, or National Historic Landmarks; (5) Sensitive habitat areas, including important species use areas, riparian areas, or areas of importance for Federal or State sensitive species; PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 (6) Lands currently designated as Visual Resource Management Class III; (7) Department of Defense operating areas with land use or operational mission conflicts; or (8) Projects with proposed groundwater uses within groundwater basins that have been allocated by State water resource agencies. (c) Low-priority applications may not be feasible to authorize. These applications may include lands that meet the following criteria: (1) Lands near or adjacent to lands designated by Congress, the President, or the Secretary for the protection of sensitive viewsheds, resources, and values (e.g., units of the National Park System, Fish and Wildlife Service Refuge System, some National Forest System units, and the BLM National Landscape Conservation System), which may be adversely affected by development; (2) Lands near or adjacent to Wild, Scenic, and Recreational Rivers and river segments determined suitable for Wild or Scenic River status, if project development may have significant adverse effects on sensitive viewsheds, resources, and values; (3) Designated critical habitat for federally threatened or endangered species, if project development may result in the destruction or adverse modification of that critical habitat; (4) Lands currently designated as Visual Resource Management Class I or Class II; (5) Right-of-way exclusion areas; or (6) Lands currently designated as no surface occupancy for oil and gas development in BLM land use plans. ■ 21. Add § 2804.40 to subpart 2804 to read as follows: § 2804.40 Alternative requirements. If you are unable to meet any of the requirements in this subpart you may request approval for an alternative requirement from the BLM. Any such request is not approved until you receive BLM approval in writing. Your request to the BLM must: (a) Show good cause for your inability to meet a requirement; (b) Suggest an alternative requirement and explain why that requirement is appropriate; and (c) Be received in writing by the BLM in a timely manner, before the deadline to meet a particular requirement has passed. Subpart 2805—Terms and Conditions of Grants 22. Amend § 2805.10 as follows: a. Revise the section heading and paragraph (a); ■ ■ E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations b. Redesignate paragraph (b) and (c) as paragraphs (c) and (d), respectively; and ■ c. Add new paragraph (b). The revisions and addition read as follows: ■ § 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? (a) The BLM will send you a written response when it has made a decision on your application or if you are the successful bidder for a solar or wind energy development grant or lease. If we approve your application, we will send you an unsigned grant for your review and signature. If you are the successful bidder for a solar or wind energy lease inside a designated leasing area under § 2809.15, we may send you an unsigned lease for your review and signature. If your bid is unsuccessful, it will be refunded under § 2804.30(e)(4) or § 2809.14(d) and you will receive written notice from us. (b) Your unsigned grant or lease document: (1) Will include any terms, conditions, and stipulations that we determine to be in the public interest, such as modifying your proposed use or changing the route or location of the facilities; (2) May include terms that prevent your use of the right-of-way until you have an approved Plan of Development (POD) and BLM has issued a Notice to Proceed; and (3) Will impose a specific term for the grant or lease. Each grant or lease that we issue for 20 or more years will contain a provision requiring periodic review at the end of the twentieth year and subsequently at 10-year intervals. We may change the terms and conditions of the grant or lease, including leases issued under subpart 2809, as a result of these reviews in accordance with § 2805.15(e). * * * * * ■ 23. Amend § 2805.11 by redesignating paragraph (b)(2) as paragraph (b)(3), adding new paragraph (b)(2), and revising newly redesignated paragraph (b)(3) to read as follows: § 2805.11 What does a grant contain? sradovich on DSK3GMQ082PROD with RULES3 * * * * * (b) * * * (2) Specific terms for solar and wind energy grants and leases are as follows: (i) For an energy site-specific testing grant, the term is 3 years or less, without the option of renewal; (ii) For an energy project-area testing grant, the initial term is 3 years or less, with the option to renew for one VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 additional 3-year period when the renewal application is also accompanied by a solar or wind energy development application and a POD as required by § 2804.25(e)(3); (iii) For a short-term grant for all other associated actions not specifically included in paragraphs (b)(2)(i) and (ii) of this section, such as geotechnical testing and other temporary land disturbing activities, the term is 3 years or less; (iv) For solar and wind energy development grants, the term is up to 30 years (plus the initial partial year of issuance) with adjustable terms and conditions. The grantee may submit an application for renewal under § 2805.14(g); and (v) For solar and wind energy development leases located inside designated leasing areas, the term is fixed for 30 years (plus the initial partial year of issuance). The lessee may submit an application for renewal under § 2805.14(g). (3) All grants and leases, except those issued for a term of 3 years or less and those issued in perpetuity, will expire on December 31 of the final year of the grant or lease. For grants and leases with terms greater than 3 years, the actual term includes the number of full years specified, plus the initial partial year, if any. * * * * * ■ 24. Revise § 2805.12 to read as follows: § 2805.12 What terms and conditions must I comply with? (a) By accepting a grant or lease, you agree to comply with and be bound by the following terms and conditions. During construction, operation, maintenance, and termination of the project you must: (1) To the extent practicable, comply with all existing and subsequently enacted, issued, or amended Federal laws and regulations and State laws and regulations applicable to the authorized use; (2) Rebuild and repair roads, fences, and established trails destroyed or damaged by the project; (3) Build and maintain suitable crossings for existing roads and significant trails that intersect the project; (4) Do everything reasonable to prevent and suppress wildfires on or in the immediate vicinity of the right-ofway area; (5) Not discriminate against any employee or applicant for employment during any stage of the project because of race, creed, color, sex, sexual orientation, or national origin. You must PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 92213 also require subcontractors to not discriminate; (6) Pay monitoring fees and rent described in § 2805.16 and subpart 2806; (7) Assume full liability if third parties are injured or damages occur to property on or near the right-of-way (see § 2807.12); (8) Comply with project-specific terms, conditions, and stipulations, including requirements to: (i) Restore, revegetate, and curtail erosion or conduct any other rehabilitation measure the BLM determines necessary; (ii) Ensure that activities in connection with the grant comply with air and water quality standards or related facility siting standards contained in applicable Federal or State law or regulations; (iii) Control or prevent damage to: (A) Scenic, aesthetic, cultural, and environmental values, including fish and wildlife habitat; (B) Public and private property; and (C) Public health and safety; (iv) Provide for compensatory mitigation for residual impacts associated with the right-of-way; (v) Protect the interests of individuals living in the general area who rely on the area for subsistence uses as that term is used in Title VIII of Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111 et seq.); (vi) Ensure that you construct, operate, maintain, and terminate the facilities on the lands in the right-ofway in a manner consistent with the grant or lease, including the approved POD, if one was required; (vii) When the State standards are more stringent than Federal standards, comply with State standards for public health and safety, environmental protection, and siting, constructing, operating, and maintaining any facilities and improvements on the right-of-way; and (viii) Grant the BLM an equivalent authorization for an access road across your land if the BLM determines that a reciprocal authorization is needed in the public interest and the authorization the BLM issues to you is also for road access; (9) Immediately notify all Federal, State, tribal, and local agencies of any release or discharge of hazardous material reportable to such entity under applicable law. You must also notify the BLM at the same time and send the BLM a copy of any written notification you prepared; (10) Not dispose of or store hazardous material on your right-of-way, except as provided by the terms, conditions, and stipulations of your grant; E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92214 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (11) Certify your compliance with all requirements of the Emergency Planning and Community Right-to-Know Act of 1986, (42 U.S.C. 11001 et seq.), when you receive, assign, renew, amend, or terminate your grant; (12) Control and remove any release or discharge of hazardous material on or near the right-of-way arising in connection with your use and occupancy of the right-of-way, whether or not the release or discharge is authorized under the grant. You must also remediate and restore lands and resources affected by the release or discharge to the BLM’s satisfaction and to the satisfaction of any other Federal, State, tribal, or local agency having jurisdiction over the land, resource, or hazardous material; (13) Comply with all liability and indemnification provisions and stipulations in the grant; (14) As the BLM directs, provide diagrams or maps showing the location of any constructed facility; (15) As the BLM directs, provide, or give access to, any pertinent environmental, technical, and financial records, reports, and other information, such as Power Purchase and Interconnection Agreements or the production and sale data for electricity generated from the approved facilities on public lands. Failure to comply with such requirements may, at the discretion of the BLM, result in suspension or termination of the rightof-way authorization. The BLM may use this and similar information for the purpose of monitoring your authorization and for periodic evaluation of financial obligations under the authorization, as appropriate. Any records the BLM obtains will be made available to the public subject to all applicable legal requirements and limitations for inspection and duplication under the Freedom of Information Act. Any information marked confidential or proprietary will be kept confidential to the extent allowed by law; and (16) Comply with all other stipulations that the BLM may require. (b) You must comply with the bonding requirements under § 2805.20. The BLM will not issue a Notice to Proceed or give written approval to proceed with ground disturbing activities until you comply with this requirement. (c) By accepting a grant or lease for solar or wind energy development, you also agree to comply with and be bound by the following terms and conditions. You must: (1) Not begin any ground disturbing activities until the BLM issues a Notice VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 to Proceed (see § 2807.10) or written approval to proceed with ground disturbing activities; (2) Complete construction within the timeframes in the approved POD, but no later than 24 months after the start of construction, unless the project has been approved for staged development, or as otherwise authorized by the BLM; (3) If an approved POD provides for staged development, unless otherwise approved by the BLM: (i) Begin construction of the initial phase of development within 12 months after issuance of the Notice to Proceed, but no later than 24 months after the effective date of the right-of-way authorization; (ii) Begin construction of each stage of development (following the first) within 3 years of the start of construction of the previous stage of development, and complete construction of that stage no later than 24 months after the start of construction of that stage, unless otherwise authorized by the BLM; and (iii) Have no more than 3 development stages, unless otherwise authorized by the BLM; (4) Maintain all onsite electrical generation equipment and facilities in accordance with the design standards in the approved POD; (5) Repair and place into service, or remove from the site, damaged or abandoned facilities that have been inoperative for any continuous period of 3 months and that present an unnecessary hazard to the public lands. You must take appropriate remedial action within 30 days after receipt of a written noncompliance notice, unless you have been provided an extension of time by the BLM. Alternatively, you must show good cause for any delays in repairs, use, or removal; estimate when corrective action will be completed; provide evidence of diligent operation of the facilities; and submit a written request for an extension of the 30-day deadline. If you do not comply with this provision, the BLM may suspend or terminate the authorization under §§ 2807.17 through 2807.19; and (6) Comply with the diligent development provisions of the authorization or the BLM may suspend or terminate your grant or lease under §§ 2807.17 through 2807.19. Before suspending or terminating the authorization, the BLM will send you a notice that gives you a reasonable opportunity to correct any noncompliance or to start or resume use of the right-of-way (see § 2807.18). In response to this notice, you must: (i) Provide reasonable justification for any delays in construction (for example, PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 delays in equipment delivery, legal challenges, and acts of God); (ii) Provide the anticipated date of completion of construction and evidence of progress toward the start or resumption of construction; and (iii) Submit a written request under paragraph (e) of this section for extension of the timelines in the approved POD. If you do not comply with the requirements of paragraph (c)(7) of this section, the BLM may deny your request for an extension of the timelines in the approved POD. (7) In addition to the RCE requirements of § 2805.20(a)(5) for a grant, the bond secured for a grant or lease must cover the estimated costs of cultural resource and Indian cultural resource identification, protection, and mitigation for project impacts. (d) For energy site or project testing grants: (1) You must install all monitoring facilities within 12 months after the effective date of the grant or other authorization. If monitoring facilities under a site testing and monitoring right-of-way authorization have not been installed within 12 months after the effective date of the authorization or consistent with the timeframe of the approved POD, you must request an extension pursuant to paragraph (e) of this section; (2) You must maintain all onsite equipment and facilities in accordance with the approved design standards; (3) You must repair and place into service, or remove from the site, damaged or abandoned facilities that have been inoperative for any continuous period of 3 months and that present an unnecessary hazard to the public lands; and (4) If you do not comply with the diligent development provisions of either the site testing and monitoring authorization or the project testing and monitoring authorization, the BLM may terminate your authorization under § 2807.17. (e) Notification of noncompliance and request for alternative requirements. (1) As soon as you anticipate that you will not meet any stipulation, term, or condition of the approved right-of-way grant or lease, or in the event of your noncompliance with any such stipulation, term, or condition, you must notify the BLM in writing and show good cause for the noncompliance, including an explanation of the reasons for the failure. (2) You may also request that the BLM consider alternative stipulations, terms, or conditions. Any request for an alternative stipulation, term, or E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations condition must comply with applicable law in order to be considered. Any proposed alternative to applicable bonding requirements must provide the United States with adequate financial assurance for potential liabilities associated with your right-of-way grant or lease. Any such request is not approved until you receive BLM approval in writing. ■ 25. Amend § 2805.14 by removing ‘‘and’’ from the end of paragraph (e), removing the period from the end of paragraph (f) and adding ‘‘; and’’ in its place, and adding paragraphs (g) and (h) to read as follows: § 2805.14 convey? What rights does a grant * * * * * (g) Apply to renew your solar or wind energy development grant or lease, under § 2807.22; and (h) Apply to renew your energy project-area testing grant for one additional term of 3 years or less when the renewal application also includes an energy development application under § 2801.9(d)(2). ■ 26. In § 2805.15, revise the first sentence of paragraph (b) to read as follows: § 2805.15 What rights does the United States retain? * * * * * (b) Require common use of your rightof-way, including facilities (see § 2805.14(b)), subsurface, and air space, and authorize use of the right-of-way for compatible uses. * * * * * * * * ■ 27. Revise § 2805.16 to read as follows: § 2805.16 If I hold a grant, what monitoring fees must I pay? (a) You must pay a fee to the BLM for the reasonable costs the Federal Government incurs in inspecting and 92215 monitoring the construction, operation, maintenance, and termination of the project and protection and rehabilitation of the public lands your grant covers. Instead of paying the BLM a fee for the reasonable costs incurred by other Federal agencies in monitoring your grant, you may pay the other Federal agencies directly for such costs. The BLM will annually adjust the Category 1 through 4 monitoring fees in the manner described at § 2804.14(b). The BLM will update Category 5 monitoring fees as specified in the Master Agreement. Category 6 monitoring fees are addressed at § 2805.17(c). The BLM categorizes the monitoring fees based on the estimated number of work hours necessary to monitor your grant. Category 1 through 4 monitoring fees are one-time fees and are not refundable. The monitoring categories and work hours are as follows: MONITORING CATEGORIES Federal work hours involved Monitoring category (1) Inspecting and monitoring of new grants, assignments, renewals, and amendments to existing grants ............... (2) Inspecting and monitoring of new grants, assignments, renewals, and amendments to existing grants ............... (3) Inspecting and monitoring of new grants, assignments, renewals, and amendments to existing grants ............... (4) Inspecting and monitoring of new grants, assignments, renewals, and amendments to existing grants ............... (5) Master Agreements .................................................................................................................................................. (6) Inspecting and monitoring of new grants, assignments, renewals, and amendments to existing grants ............... (b) The monitoring cost schedule is available from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov. ■ 28. Add § 2805.20 to subpart 2805 to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2805.20 Bonding requirements. If you hold a grant or lease under this part, you must comply with the following bonding requirements: (a) The BLM may require that you obtain, or certify that you have obtained, a performance and reclamation bond or other acceptable bond instrument to cover any losses, damages, or injury to human health, the environment, or property in connection with your use and occupancy of the right-of-way, including costs associated with terminating the grant, and to secure all obligations imposed by the grant and applicable laws and regulations. If you VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 plan to use hazardous materials in the operation of your grant, you must provide a bond that covers liability for damages or injuries resulting from releases or discharges of hazardous materials. The BLM will periodically review your bond for adequacy and may require a new bond, an increase or decrease in the value of an existing bond, or other acceptable security at any time during the term of the grant or lease. (1) The BLM must be listed as an additionally named insured on the bond instrument if a State regulatory authority requires a bond to cover some portion of environmental liabilities, such as hazardous material damages or releases, reclamation, or other requirements for the project. The bond must: (i) Be redeemable by the BLM; (ii) Be held or approved by a State agency for the same reclamation requirements as specified by our rightof-way authorization; and PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 Estimated Federal work hours are >1 ≤8. Estimated Federal work hours are >8 ≤24. Estimated Federal work hours are >24 ≤36. Estimated Federal work hours are >36 ≤50. Varies. Estimated Federal work hours are >50. (iii) Provide the same or greater financial guarantee that we require for the portion of environmental liabilities covered by the State’s bond. (2) Bond acceptance. The BLM authorized officer must review and approve all bonds, including any State bonds, prior to acceptance, and at the time of any right-of-way assignment, amendment, or renewal. (3) Bond amount. Unless you hold a solar or wind energy lease under subpart 2809, the bond amount will be determined based on the preparation of a RCE, which the BLM may require you to prepare and submit. The estimate must include our cost to administer a reclamation contract and will be reviewed periodically for adequacy. The BLM may also consider other factors, such as salvage value, when determining the bond amount. (4) You must post a bond on or before the deadline that we give you. E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92216 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (5) Bond components that must be addressed when determining the RCE amount include, but are not limited to: (i) Environmental liabilities such as use of hazardous materials waste and hazardous substances, herbicide use, the use of petroleum-based fluids, and dust control or soil stabilization materials; (ii) The decommissioning, removal, and proper disposal, as appropriate, of any improvements and facilities; and (iii) Interim and final reclamation, revegetation, recontouring, and soil stabilization. This component must address the potential for flood events and downstream sedimentation from the site that may result in offsite impacts. (6) You may ask us to accept a replacement performance and reclamation bond at any time after the approval of the initial bond. We will review the replacement bond for adequacy. A surety company is not released from obligations that accrued while the surety bond was in effect unless the replacement bond covers those obligations to our satisfaction. (7) You must notify us that reclamation has occurred and you may request that the BLM reevaluate your bond. If we determine that you have completed reclamation, we may release all or part of your bond. (8) If you hold a grant, you are still liable under § 2807.12 if: (i) We release all or part of your bond; (ii) The bond amount does not cover the cost of reclamation; or (iii) There is no bond in place; (b) If you hold a grant for solar energy development outside of designated leasing areas, you must provide a performance and reclamation bond (see paragraph (a) of this section) prior to the BLM issuing a Notice to Proceed (see § 2805.12(c)(1)). We will determine the bond amount based on the RCE (see paragraph (a)(3) of this section) and it must be no less than $10,000 per acre that will be disturbed; (c) If you hold a grant for wind energy development outside of designated leasing areas, you must provide a performance and reclamation bond (see paragraph (a) of this section) prior to the BLM issuing a Notice to Proceed (see § 2805.12(c)(1)). We will determine the bond amount based on the RCE (see paragraph (a)(3) of this section) and it must be no less than $10,000 per authorized turbine less than 1 MW in nameplate capacity or $20,000 per authorized turbine equal to or greater than 1 MW in nameplate capacity; and (d) For short-term right-of-way grants for energy site or project-area testing, the bond amount must be no less than $2,000 per authorized meteorological tower or instrumentation facility VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 location and must be provided before the written approval to proceed with ground disturbing activities (see § 2805.12(c)(1)). ■ 29. Revise the heading for subpart 2806 to read as follows: Subpart 2806—Annual Rents and Payments 30. Amend § 2806.12 by revising the section heading and paragraphs (a) and (b) and adding paragraph (d) to read as follows: ■ § 2806.12 When and where do I pay rent? (a) You must pay rent for the initial rental period before the BLM issues you a grant or lease. (1) If your non-linear grant or lease is effective on: (i) January 1 through September 30 and qualifies for annual payments, your initial rent bill is pro-rated to include only the remaining full months in the initial year; or (ii) October 1 through December 31 and qualifies for annual payments, your initial rent bill is pro-rated to include the remaining full months in the initial year plus the next full year. (2) If your non-linear grant allows for multi-year payments, such as a short term grant issued for energy site-specific testing, you may request that your initial rent bill be for the full term of the grant instead of the initial rent bill periods provided under paragraph (a)(1)(i) or (ii) of this section. (b) You must make all rental payments for linear rights-of-way according to the payment plan described in § 2806.24. * * * * * (d) You must make all rental payments as instructed by us or as provided for by Secretarial order or legislative authority. ■ 31. Amend § 2806.13 by: ■ a. Revising the section heading and paragraph (a); ■ b. Redesignating paragraph (e) as paragraph (f); and ■ c. Adding new paragraphs (e) and (g). The revisions and additions read as follows: § 2806.13 What happens if I do not pay rents and fees or if I pay the rents or fees late? (a) If the BLM does not receive the rent or fee payment required in subpart 2806 within 15 calendar days after the payment was due under § 2806.12, we will charge you a late payment fee of $25 or 10 percent of the amount you owe, whichever is greater, per authorization. * * * * * PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 (e) Subject to applicable laws and regulations, we will retroactively bill for uncollected or under-collected rent, fees, and late payments, if: (1) A clerical error is identified; (2) An adjustment to rental schedules is not applied; or (3) An omission or error in complying with the terms and conditions of the authorized right-of-way is identified. * * * * * (g) We will not approve any further activities associated with your right-ofway until we receive any outstanding payments that are due. ■ 32. In § 2806.20, revise paragraph (c) to read as follows: § 2806.20 What is the rent for a linear right-of-way grant? * * * * * (c) You may obtain a copy of the current Per Acre Rent Schedule from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. We also post the current rent schedule at https:// www.blm.gov. ■ 33. In § 2806.22, revise the second sentence of paragraph (a) to read as follows: § 2806.22 When and how does the Per Acre Rent Schedule change? (a) * * * For example, the average annual change in the IPD–GDP from 1994 to 2003 (the 10-year period immediately preceding the year (2004) that the 2002 National Agricultural Statistics Service Census data became available) was 1.9 percent. * * * * * * * * § 2806.23 [Amended] 34. Amend § 2806.23 by removing paragraph (b) and redesignating paragraph (c) as paragraph (b). ■ 35. In § 2806.24, revise paragraph (c) to read as follows: ■ § 2806.24 How must I make rental payments for a linear grant? * * * * * (c) Proration of payments. The BLM prorates the first year rental amount based on the number of months left in the calendar year after the effective date of the grant. If your grant requires, or you chose a 10-year payment term, or multiples thereof, the initial rent bill consists of the remaining partial year plus the next 10 years, or multiple thereof. ■ 36. Amend § 2806.30 by: ■ a. Revising paragraphs (a)(1) and (2); ■ b. Removing paragraph (b); and ■ c. Redesignating paragraph (c) as paragraph (b). E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations § 2806.44 How will BLM calculate rent for a facility owner’s or facility manager’s grant or lease which authorizes communication uses? The revisions read as follows: § 2806.30 What are the rents for communication site rights-of-way? (a) Rent schedule. (1) The BLM uses a rent schedule to calculate the rent for communication site rights-of-way. The schedule is based on nine population strata (the population served), as depicted in the most recent version of the Ranally Metro Area (RMA) Population Ranking, and the type of communication use or uses for which we normally grant communication site rights-of-way. These uses are listed as part of the definition of ‘‘communication use rent schedule,’’ set out at § 2801.5(b). You may obtain a copy of the current schedule from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. We also post the current communication use rent schedule at https://www.blm.gov. (2) We update the schedule annually based on two sources: The U.S. Department of Labor Consumer Price Index for All Urban Consumers, U.S. City Average (CPI–U), as of July of each year (difference in CPI–U from July of one year to July of the following year), and the RMA population rankings. * * * * * ■ 37. In § 2806.34, revise the second sentence of paragraph (b)(4) to read as follows: This section applies to a grant or lease that authorizes a mixture of communication uses, some of which are subject to the communication use rent schedule and some of which are not. We will determine rent for these leases under the provisions of this section. (a) The BLM establishes the rent for each of the uses in the facility that are not covered by the communication use rent schedule using § 2806.70. * * * * * ■ 40. Remove the undesignated centered heading preceding § 2806.50. § 2806.34 How will BLM calculate the rent for a grant or lease authorizing a multipleuse communication facility? If you hold a right-of-way authorizing solar energy site-specific or project-area testing, or solar energy development, you must pay an annual rent and fee in accordance with this section and subpart. Your solar energy right-of-way authorization will either be a grant (if issued under subpart 2804) or a lease (if issued under subpart 2809). Rents and fees for either type of authorization consist of an acreage rent that must be paid prior to issuance of the authorization and a phased-in MW capacity fee. Both the acreage rent and the phased-in MW capacity fee are charged and calculated consistent with § 2806.11 and prorated consistent with § 2806.12(a). The MW capacity fee will vary depending on the size and technology of the solar energy development project. * * * * * (b) * * * (4) * * * This paragraph (b)(4) does not apply to facilities exempt from rent under § 2806.14(a)(4) except when the facility also includes ineligible facilities. ■ 38. In § 2806.43, revise the third sentence of paragraph (a) to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2806.43 How does BLM calculate rent for passive reflectors and local exchange networks? (a) * * * For passive reflectors and local exchange networks not covered by a Forest Service regional schedule, we use the provisions in § 2806.70 to determine rent. * * * * * * * * ■ 39. Amend § 2806.44 by revising the section heading, adding introductory text, and revising paragraph (a) to read as follows: VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 § 2806.50 [Redesignated as § 2806.70] 41. Redesignate § 2806.50 as § 2806.70. ■ 42. Add an undesignated centered heading and §§ 2806.50, 2806.51, 2806.52, 2806.54, 2806.56, and 2806.58 to read as follows: ■ Solar Energy Rights-of-Way Sec. 2806.50 Rents and fees for solar energy rights-of-way. 2806.51 Scheduled Rate Adjustment. 2806.52 Rents and fees for solar energy development grants. 2806.54 Rents and fees for solar energy development leases. 2806.56 Rent for support facilities authorized under separate grant(s). 2806.58 Rent for energy development testing grants. § 2806.50 Rents and fees for solar energy rights-of-way. § 2806.51 Scheduled Rate Adjustment. (a) The BLM will adjust your acreage rent and MW capacity fee over the course of your authorization as described in these regulations. For new grants or leases, you may choose either PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 92217 the standard rate adjustment method (see § 2806.52(a)(5) and (b)(3) for grants; see § 2806.54(a)(4) or (c) for leases) or the scheduled rate adjustment method (see § 2806.52(d) for grants; see § 2806.54(d) for leases). Once you select a rate adjustment method, that method will be fixed until you renew your grant or lease (see § 2807.22). (b) For new grants or leases, if you select the scheduled rate adjustment method you must notify the BLM of your decision in writing. Your decision must be received by the BLM before your grant or lease is issued. If you do not select the scheduled rate adjustment method, the standard rate adjustment method will apply. (c) If you hold a grant that is in effect prior to January 18, 2017, you may either accept the standard rate adjustment method or request in writing that the BLM apply the scheduled rate adjustment method, as set forth in § 2806.52(d), to your grant. To take advantage of the scheduled rate adjustment option, your request must be received by the BLM before December 19, 2018. The BLM will continue to apply the standard rate adjustment method to adjust your rates unless and until it receives your request to use the scheduled rate adjustment method. § 2806.52 Rents and fees for solar energy development grants. You must pay an annual acreage rent and MW capacity fee for your solar energy development grant as follows: (a) Acreage rent. The BLM will calculate the acreage rent by multiplying the number of acres (rounded up to the nearest tenth of an acre) within the authorized area times the annual per acre zone rate from the solar energy acreage rent schedule in effect at the time the authorization is issued. (1) Per acre zone rate. The annual per acre zone rate from the solar energy acreage rent schedule is calculated using the per acre zone value (as assigned under paragraph (a)(2) of this section), encumbrance factor, rate of return, and the annual adjustment factor. The calculation for determining the annual per acre zone rate is A × B × C × D = E where: (i) A is the per acre zone value = the same per acre zone values described in the linear rent schedule in § 2806.20(c); (ii) B is the encumbrance factor = 100 percent; (iii) C is the rate of return = 5.27 percent; (iv) D is the annual adjustment factor = the average annual change in the IPD– GDP for the 10-year period immediately preceding the year that the NASS E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92218 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Census data becomes available (see § 2806.22(a)). The BLM will adjust the per acre zone rates each year based on the average annual change in the IPD– GDP as determined under § 2806.22(a). Adjusted rates are effective each year on January 1; and (v) E is the annual per acre zone rate. (2) Assignment of counties. The BLM will calculate the per acre zone rate in paragraph (a)(1) of this section by using a State-specific factor to assign a county to a zone in the solar energy acreage rent schedule. The BLM will calculate a State-specific factor and apply it to the NASS data (county average per acre land and building value) to determine the per acre value and assign a county (or other geographical area) to a zone. The State-specific factor represents the percent difference between improved agricultural land and unimproved rangeland values, using NASS data. The calculation for determining the Statespecific factor is (A/B)¥(C/D) = E where: (i) A = the NASS Census statewide average per acre value of non-irrigated acres; (ii) B = the NASS Census statewide average per acre land and building value; (iii) C = the NASS Census total statewide acres in farmsteads, homes, buildings, livestock facilities, ponds, roads, wasteland, etc.; (iv) D = the total statewide acres in farms; and (v) E = the State-specific percent factor or 20 percent, whichever is greater. (3) The initial assignment of counties to the zones on the solar energy acreage rent schedule will be based upon the most recent NASS Census data (2012) for years 2016 through 2020. The BLM may on its own or in response to requests consider making regional adjustments to those initial assignments, based on evidence that the NASS Census values do not accurately reflect the value of the BLM-managed lands in a given area. The BLM will update this rent schedule once every 5 years by reassigning counties to reflect the updated NASS Census values as described in § 2806.21 and recalculate the Statespecific percent factor once every 10 years as described in § 2806.22(b). (4) Acreage rent payment. You must pay the acreage rent regardless of the stage of development or operations on the entire public land acreage described in the right-of-way authorization. The BLM State Director may approve a rental payment plan consistent with § 2806.15(c). (5) Acreage rent adjustments. This paragraph (a)(5) applies unless you VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 selected the scheduled rate adjustment method (see § 2806.51). The BLM will adjust the acreage rent annually to reflect the change in the per acre zone rates as specified in paragraph (a)(1) of this section. The BLM will use the most current per acre zone rates to calculate the acreage rent for each year of the grant term. (6) You may obtain a copy of the current per acre zone rates for solar energy development (solar energy acreage rent schedule) from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable Energy Coordination Office, Washington, DC 20003. The BLM also posts the current solar energy acreage rent schedule for solar energy development at https://www.blm.gov. (b) MW capacity fee. The MW capacity fee is calculated by multiplying the approved MW capacity by the MW rate (for the applicable type of technology employed by the project) from the MW rate schedule (see paragraph (b)(2) of this section). You must pay the MW capacity fee annually when electricity generation begins or is scheduled to begin in the approved POD, whichever comes first: (1) MW rate. The MW rate is calculated by multiplying the total hours per year, by the net capacity factor, by the MWh price, by the rate of return. For an explanation of each of these terms, see the definition of MW rate in § 2801.5(b). (2) MW rate schedule. You may obtain a copy of the current MW rate schedule for solar energy development from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable Energy Coordination Office, Washington, DC 20003. The BLM also posts the current MW rate schedule for solar energy development at https:// www.blm.gov. (3) Periodic adjustments in the MW rate. This paragraph (b)(3) applies unless you selected the scheduled rate adjustment method (see § 2806.51). The BLM will adjust the MW rate applicable to your grant every 5 years, beginning in 2021, by recalculating the following two components of the MW rate formula: (i) The adjusted MWh price is 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 for the full 5 calendar-year period preceding the adjustment, rounded to the nearest dollar increment; and PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 (ii) The adjusted rate of return is the 10-year average of the 20-year U.S. Treasury bond yield for the full 10 calendar-year period preceding the adjustment, rounded to the nearest onetenth percent, with a minimum rate of return of 4 percent. (4) MW rate phase-in. This paragraph (b)(4) applies unless you selected the scheduled rate adjustment method (see § 2806.51). If you hold a solar energy development grant, the MW rate will be phased in as follows: (i) There is a 3-year phase-in of the MW rate when electricity generation begins or is scheduled to begin in the approved POD, whichever comes first, at the rates of: (A) 25 percent for the first year. This rate applies for the first partial calendar year of operations, from the date electricity generation begins until Dec. 31 of that year; (B) 50 percent for the second year; and (C) 100 percent for the third and subsequent years of operations. (ii) After generation of electricity starts and an approved POD provides for staged development: (A) The 3-year phase-in of the MW rate applies to each stage of development; and (B) The MW capacity fee is calculated using the authorized MW capacity approved for that stage plus any previously approved stages, multiplied by the MW rate. (5) The general payment provisions for rents described in this subpart, except for § 2806.14(a)(4), also apply to the MW capacity fee. (c) Initial implementation of the acreage rent and MW capacity fee. This paragraph (c) applies unless you selected the scheduled rate adjustment method (see § 2806.51). If you hold a solar energy grant and made payments for billing year 2016, the BLM will reduce by 50 percent the net increase in annual costs between billing year 2017 and billing year 2016. The net increase will be calculated based on a full calendar year. (d) Scheduled rate adjustment. Under the scheduled rate adjustment method (see § 2806.51), the BLM will update your per acre zone rate and MW rate as follows: (1) The BLM will calculate your payments using the per acre zone rate (see § 2806.52(a)(1)) and MW rate (see § 2806.52(b)(1)) in place when your grant is issued, or for existing grants, the per acre zone rate and MW rate in place prior to December 19, 2016, as adjusted under paragraph (d)(6) of this section; (2) The per acre zone rate will increase: E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (i) Annually, beginning after the first full calendar year plus any initial partial year following issuance of your grant, by the average annual change in the IPD– GDP as described in § 2806.22(b); and (ii) Every 5 years, beginning after the first 5 calendar years, plus any initial partial year, following issuance of your grant, by 20 percent; (3) The MW rate will increase by 20 percent every 5 years, beginning after the first 5 years, plus the initial partial year, if any, your grant is in effect; (4) The BLM will not apply the phasein to your MW rate under § 2806.52(b)(4) or the reduction under § 2806.52(c); (5) If the approved POD for your project provides for staged development, the BLM will calculate the MW capacity fee using the MW capacity approved for the current stage plus any previously approved stages, multiplied by the MW rate, as described under this section. (6) For grants in place prior to January 18, 2017 that select the scheduled rate adjustment method offered under § 2806.51(c), the per acre zone rate and the MW rate in place prior to December 19, 2016 will be adjusted for the first year’s payment using the scheduled rate adjustment method as follows: (i) The per acre zone rate will increase by the average annual change in the IPD–GDP as described in § 2806.22(b) plus 20 percent; (ii) The MW rate will increase by 20 percent; and (iii) Subsequent increases will be performed as set forth in paragraphs (d)(2) and (3) of this section from the date of the initial adjustment under this paragraph (d). sradovich on DSK3GMQ082PROD with RULES3 § 2806.54 Rents and fees for solar energy development leases. If you hold a solar energy development lease obtained through competitive bidding under subpart 2809 of this part, you must make annual payments in accordance with this section and subpart, in addition to the one-time, upfront bonus bid you paid to obtain the lease. The annual payment includes an acreage rent for the number of acres included within the solar energy lease and an additional MW capacity fee based on the total authorized MW capacity for the approved solar energy project on the public lands. (a) Acreage rent. The BLM will calculate and bill you an acreage rent that must be paid prior to issuance of your lease as described in § 2806.52(a). This acreage rent will be based on the following: VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (1) Per acre zone rate. See § 2806.52(a)(1). (2) Assignment of counties. See § 2806.52(a)(2) and (3). (3) Acreage rent payment. See § 2806.52(a)(4). (4) Acreage rent adjustments. This paragraph (a)(4) applies unless you selected the scheduled rate adjustment method (see § 2806.51). Once the acreage rent is determined under § 2806.52(a), no further adjustments in the annual acreage rent will be made until year 11 of the lease term and each subsequent 10-year period thereafter. The BLM will use the per acre zone rates in effect when it adjusts the annual acreage rent at those 10-year intervals, (b) MW capacity fee. See § 2806.52(b) introductory text and (b)(1), (2), and (3). (c) MW rate phase-in. This paragraph (c) applies unless you selected the scheduled rate adjustment method (see § 2806.51). If you hold a solar energy development lease, the MW capacity fee will be phased in, starting when electricity begins to be generated. The MW capacity fee for years 1–20 will be calculated using the MW rate in effect when the lease is issued. The MW capacity fee for years 21–30 will be calculated using the MW rate in effect in year 21 of the lease. These rates will be phased-in as follows: (1) For years 1 through 10 of the lease, plus any initial partial year, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 50 percent of the applicable solar technology MW rate, as described in § 2806.52(b)(2). (2) For years 11 through 20 of the lease, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 100 percent of the applicable solar technology MW rate, as described in § 2806.52(b)(2). (3) For years 21 through 30 of the lease, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 100 percent of the applicable solar technology MW rate, as described in § 2806.52(b)(2). (4) If the lease is renewed, the MW capacity fee is calculated using the MW rates at the beginning of the renewed lease period and will remain at that rate through the initial 10-year period of the renewal term. The MW capacity fee will be adjusted using the MW rate at the beginning of each subsequent 10-year period of the renewed lease term. (5) If an approved POD provides for staged development, the MW capacity fee is calculated using the MW capacity approved for that stage plus any previously approved stages, multiplied by the MW rate as described under this section. PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 92219 (d) Scheduled rate adjustment. Under the scheduled rate adjustment (see § 2806.51), the BLM will update your per acre zone rate and MW rate as follows: (1) The BLM will calculate your payments using the per acre zone rate (see § 2806.52(a)(1)) and MW rate (see § 2806.52(b)(1)) in place when your lease is issued; (2) The per acre zone rate will increase every 10 years, beginning after the first 10 years, plus the initial partial year, if any, your lease is in effect, by the average annual change in the IPD– GDP for the preceding 10-year period as described in § 2806.22(b) plus 40 percent; (3) The MW rate will increase by 40 percent every 10 years, beginning after the first 10 years, plus the initial partial year, if any, your lease is in effect; (4) The BLM will not apply the phasein to your MW rate under § 2806.52(c). Instead, for years 1 through 5, plus any initial partial year, the BLM will calculate the MW capacity fee by multiplying the project’s authorized MW capacity by 50 percent of the applicable solar technology MW rate. This phase-in will not be applied to renewed leases; and (5) If the approved POD for your project provides for staged development, the BLM will calculate the MW capacity fee using the MW capacity approved for the current stage plus any previously approved stages, multiplied by the MW rate, as described under this section. § 2806.56 Rent for support facilities authorized under separate grant(s). If a solar energy development project includes separate right-of-way authorizations issued for support facilities only (administration building, groundwater wells, construction lay down and staging areas, surface water management and control structures, etc.) or linear right-of-way facilities (pipelines, roads, power lines, etc.), rent is determined using the Per Acre Rent Schedule for linear facilities (see § 2806.20(c)). § 2806.58 Rent for energy development testing grants. (a) Grants for energy site-specific testing. You must pay $100 per year for each meteorological tower or instrumentation facility location. BLM offices with approved small site rental schedules may use those fee structures if the fees in those schedules charge more than $100 per meteorological tower per year. In lieu of annual payments, you may instead pay for the entire term of the grant (3 years or less). E:\FR\FM\19DER3.SGM 19DER3 92220 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (b) Grants for energy project-area testing. You must pay $2,000 per year or $2 per acre per year for the lands authorized by the grant, whichever is greater. There is no additional rent for the installation of each meteorological tower or instrumentation facility located within the site testing and monitoring project-area. ■ 43. Add an undesignated centered heading and §§ 2806.60, 2806.61, 2806.62, 2806.64, 2806.66, and 2806.68 to read as follows: Wind Energy Rights-of-Way Sec. 2806.60 Rents and fees for wind energy rights-of-way. 2806.61 Scheduled Rate Adjustment. 2806.62 Rents and fees for wind energy development grants. 2806.64 Rents and fees for wind energy development leases. 2806.66 Rent for support facilities authorized under separate grant(s). 2806.68 Rent for energy development testing grants. § 2806.62 Rents and fees for wind energy development grants. § 2806.60 Rents and fees for wind energy rights-of-way. If you hold a right-of-way authorizing wind energy site-specific testing or project-area testing or wind energy development, you must pay an annual rent and fee in accordance with this section and subpart. Your wind energy development right-of-way authorization will either be a grant (if issued under subpart 2804) or a lease (if issued under subpart 2809). Rents and fees for either type of authorization consist of an acreage rent that must be paid prior to issuance of the authorization and a phased-in MW capacity fee. Both the acreage rent and the phased-in MW capacity fee are charged and calculated consistent with § 2806.11 and prorated consistent with § 2806.12(a). The MW capacity fee will vary depending on the size of the wind energy development project. sradovich on DSK3GMQ082PROD with RULES3 § 2806.61 Scheduled Rate Adjustment. (a) The BLM will adjust your acreage rent and MW capacity fee over the course of your authorization as described in these regulations. For new grants or leases, you may choose either the standard rate adjustment method (see § 2806.52(a)(5) and (b)(3) for grants; see § 2806.54(a)(4) or (c) for leases) or the scheduled rate adjustment method (see § 2806.52(d) for grants; see § 2806.54(d) for leases). Once you select a rate adjustment method, that method will be fixed until you renew your grant or lease (see § 2807.22). (b) For new grants or leases, if you select the scheduled rate adjustment method you must notify the BLM of VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 your decision in writing. Your decision must be received by the BLM before your grant or lease is issued. If you do not select the scheduled rate adjustment method, the standard rate adjustment method will apply. (c) If you hold a grant that is in effect prior to January 18, 2017, you may either accept the standard rate adjustment method or request in writing that the BLM apply the scheduled rate adjustment method, as set forth in § 2806.52(d), to your grant. To take advantage of the scheduled rate adjustment option, your request must be received by the BLM before December 19, 2018. The BLM will continue to apply the standard rate adjustment method to adjust your rates unless and until it receives your request to use the scheduled rate adjustment method. You must pay an annual acreage rent and MW capacity fee for your wind energy development grant as follows: (a) Acreage rent. The BLM will calculate the acreage rent by multiplying the number of acres (rounded up to the nearest tenth of an acre) within the authorized area times the per acre zone rate from the wind energy acreage rent schedule in effect at the time the authorization is issued. (1) Per acre zone rate. The annual per acre zone rate from the wind energy acreage rent schedule is calculated using the per acre zone value (as assigned in accordance with paragraph (a)(2) of this section), encumbrance factor, rate of return, and the annual adjustment factor. The calculation for determining the annual per acre zone rate is A × B × C × D = E where: (i) A is the per acre zone value = the same per- acre zone values described in the linear rent schedule in § 2806.20(c); (ii) B is the encumbrance factor = 10 percent; (iii) C is the rate of return = 5.27 percent; (iv) D is the annual adjustment factor = the average annual change in the IPD–GDP for the 10-year period immediately preceding the year that the NASS Census data becomes available (see § 2806.22(a)). The BLM will adjust the per acre rates each year based on the average annual change in the IPD–GDP as determined under § 2806.22(a). Adjusted rates are effective each year on January 1; and (v) E is the annual per acre zone rate. (2) Assignment of counties. The BLM will calculate the per acre zone rate in paragraph (a)(1) of this section by using a State-specific factor to assign a county to a zone in the wind energy acreage rent schedule. The BLM will calculate a State-specific factor and apply it to the NASS data (county average per acre land and building value) to determine PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 the per acre value and assign a county (or other geographical area) to a zone. The State-specific factor represents the percent difference between improved agricultural land and unimproved rangeland values, using NASS data. The calculation per acre for determining the State-specific factor is (A/B)¥(C/D) = E where: (i) A = the NASS Census statewide average per acre value of non-irrigated acres; (ii) B = the NASS Census statewide average per acre land and building value; (iii) C = the NASS Census total statewide acres in farmsteads, homes, buildings, livestock facilities, ponds, roads, wasteland, etc.; (iv) D = the total statewide acres in farms; and (v) E = the State-specific percent factor or 20 percent, whichever is greater. (3) The initial assignment of counties to the zones on the wind energy acreage rent schedule will be based upon the most recent NASS Census data (2012) for years 2016 through 2020. The BLM may on its own or in response to requests consider making regional adjustments to those initial assignments, based on evidence that the NASS Census values do not accurately reflect those of the BLM-managed lands. The BLM will update this rent schedule once every 5 years by re-assigning counties to reflect the updated NASS Census values as described in § 2806.21 and recalculate the State-specific percent factor once every 10 years as described in § 2806.22(b). (4) Acreage rent payment. You must pay the acreage rent regardless of the stage of development or operations on the entire public land acreage described in the right-of-way authorization. The BLM State Director may approve a rental payment plan consistent with § 2806.15(c). (5) Acreage rent adjustments. This paragraph (a)(5) applies unless you selected the scheduled rate adjustment method (see § 2806.61). The BLM will adjust the acreage rent annually to reflect the change in the per acre zone rates as specified in paragraph (a)(1) of this section. The BLM will use the most current per acre zone rates to calculate the acreage rent for each year of the grant term. (6) The acreage rent must be paid as described in § 2806.62(a) except for the initial implementation of the wind energy acreage rent schedule of section § 2806.62(c). (7) You may obtain a copy of the current per acre zone rates for wind energy development (wind energy acreage rent schedule) from any BLM State, district, or field office or by writing: U.S. Department of the Interior, E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable Energy Coordination Office, Washington, DC 20003. The BLM also posts the current wind energy acreage rent schedule for wind energy development at https://www.blm.gov. (b) MW capacity fee. The MW capacity fee is calculated by multiplying the approved MW capacity by the MW rate. You must pay the MW capacity fee annually when electricity generation begins or is scheduled to begin in the approved POD, whichever comes first. (1) MW rate. The MW rate is calculated by multiplying the total hours per year by the net capacity factor, by the MWh price, by the rate of return. For an explanation of each of these terms, see the definition of MW rate in § 2801.5(b). (2) MW rate schedule. You may obtain a copy of the current MW rate schedule for wind energy development from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable Energy Coordination Office, Washington, DC 20003. The BLM also posts the current MW rate schedule for wind energy development at https:// www.blm.gov. (3) Periodic adjustments in the MW rate. This paragraph (b)(3) applies unless you selected the scheduled rate adjustment method (see § 2806.61). We will adjust the MW rate every 5 years, beginning in 2021, by recalculating the following two components of the MW rate formula: (i) The adjusted MWh price is 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 for the full 5 calendar-year period preceding the adjustment, rounded to the nearest dollar increment; and (ii) The adjusted rate of return is the 10-year average of the 20-year U.S. Treasury bond yield for the full 10 calendar-year period preceding the adjustment, rounded to the nearest onetenth percent, with a minimum rate of return of 4 percent. (4) MW rate phase-in. This paragraph (b)(4) applies unless you selected the scheduled rate adjustment method (see § 2806.61). If you hold a wind energy development grant, the MW rate will be phased in as follows: (i) There is a 3-year phase-in of the MW rate when electricity generation begins or is scheduled to begin in the approved POD, whichever comes first, at the rates of: VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (A) 25 percent for the first year. This rate applies for the first partial calendar year of operations; (B) 50 percent for the second year; and (C) 100 percent for the third and subsequent years of operations. (ii) After generation of electricity starts and an approved POD provides for staged development: (A) The 3-year phase-in of the MW rate applies to each stage of development; and (B) The MW capacity fee is calculated using the authorized MW capacity approved for that stage, plus any previously approved stages, multiplied by the MW rate. (iii) The MW rate may be phased in further, as described in paragraph (c) of this section. (5) The general payment provisions for rents described in this subpart, except for § 2806.14(a)(4), also apply to the MW capacity fee. (c) Initial implementation of the acreage rent and MW capacity fee. This paragraph (c) applies unless you selected the scheduled rate adjustment method (see § 2806.61). (1) If you hold a wind energy grant and made payments for billing year 2016, the BLM will reduce by 50 percent the net increase in annual costs between billing year 2017 and billing year 2016. The net increase will be calculated based on a full calendar year. (2) If the BLM accepted your application for a wind energy development grant, including a plan of development and cost recovery agreement, prior to September 30, 2014, the BLM will phase in your payment of the acreage rent and MW capacity fee by reducing the: (i) Acreage rent of the grant by 50 percent for the initial partial year of the grant; and (ii) MW capacity fee by 75 percent for the first (initial partial) and second years and by 50 percent for the third and fourth years for which the BLM requires payment of the MW capacity fee. This reduction to the MW capacity fee applies to each stage of development. (d) Scheduled rate adjustment. Under the scheduled rate adjustment (see § 2806.61), the BLM will update your per acre zone rate and MW rate as follows: (1) The BLM will calculate your payments using the per acre zone rate (see § 2806.62(a)(1)) and MW rate (see § 2806.62(b)(1)) in place when your grant is issued, or for existing grants, the per acre zone rate and MW rate in place prior to December 19, 2016, as adjusted under paragraph (d)(6) of this section; PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 92221 (2) The per acre zone rate will increase: (i) Annually, beginning after the first full year plus the initial partial year, if any, your grant is in effect by the average annual change in the IPD–GDP as described in § 2806.22(b); and (ii) Every 5 years, beginning after the first 5 years, plus the initial partial year, if any, your grant is in effect, by 20 percent; (3) The MW rate will increase by 20 percent every 5 years, beginning after the first 5 years, plus the initial partial year, if any, your grant is in effect; (4) The BLM will not apply the phasein to your MW rate under § 2806.62(b)(4) or the reduction under § 2806.62(c); and (5) If the approved POD for your project provides for staged development, the BLM will calculate the MW capacity fee using the MW capacity approved for that stage in question plus any previously approved stages, multiplied by the MW rate as described under this section. (6) For grants in place prior to January 18, 2017 that select the scheduled rate adjustment method offered under § 2806.61(c), the per acre zone rate and the MW rate in place prior to December 19, 2016 will be adjusted for the first year’s payment using the scheduled rate adjustment method as follows: (i) The per acre zone rate will increase by the average annual change in the IPD–GDP as described in § 2806.22(b) plus 20 percent; (ii) The MW rate will increase by 20 percent; and (iii) Subsequent increases will be performed as set forth in paragraphs (d)(2) and (3) of this section from the date of the initial adjustment under paragraph (d)(6) of this section. § 2806.64 Rents and fees for wind energy development leases. If you hold a wind energy development lease obtained through competitive bidding under subpart 2809 of this part, you must make annual payments in accordance with this section and subpart, in addition to the one-time, up front bonus bid you paid to obtain the lease. The annual payment includes an acreage rent for the number of acres included within the wind energy lease and an additional MW capacity fee based on the total authorized MW capacity for the approved wind energy project on the public lands. (a) Acreage rent. The BLM will calculate and bill you an acreage rent that must be paid prior to issuance of your lease as described in § 2806.62(a). E:\FR\FM\19DER3.SGM 19DER3 sradovich on DSK3GMQ082PROD with RULES3 92222 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations This acreage rent will be based on the following: (1) Per acre zone rate. See § 2806.62(a)(1). (2) Assignment of counties. See § 2806.62(a)(2) and (3). (3) Acreage rent payment. See § 2806.62(a)(4). (4) Acreage rent adjustments. This paragraph (a)(4) applies unless you selected the scheduled rate adjustment method (see § 2806.61). Once the acreage rent is determined under § 2806.62(a), no further adjustments in the annual acreage rent will be made until year 11 of the lease term and each subsequent 10-year period thereafter. We will use the per acre zone rates in effect at the time the acreage rent is due (at the beginning of each 10-year period) to calculate the annual acreage rent for each of the subsequent 10-year periods. (b) MW capacity fee. See § 2806.62(b) introductory text and (b)(1), (2), and (3). (c) MW rate phase-in. This paragraph (c) applies unless you selected the scheduled rate adjustment method (see § 2806.61). If you hold a wind energy development lease, the MW capacity fee will be phased in, starting when electricity begins to be generated. The MW capacity fee for years 1–20 will be calculated using the MW rate in effect when the lease is issued. The MW capacity fee for years 21–30 will be calculated using the MW rate in effect in year 21 of the lease. These rates will be phased-in as follows: (1) For years 1 through 10 of the lease, plus any initial partial year, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 50 percent of the wind energy technology MW rate, as described in § 2806.62(b)(2); (2) For years 11 through 20 of the lease, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 100 percent of the wind energy technology MW rate described in § 2806.62(b)(2); (3) For years 21 through 30 of the lease, the MW capacity fee is calculated by multiplying the project’s authorized MW capacity by 100 percent of the wind energy technology MW rate as described in § 2806.62(b)(2); (4) If the lease is renewed, the MW capacity fee is calculated using the MW rates at the beginning of the renewed lease period and will remain at that rate through the initial 10 year period of the renewal term. The MW capacity fee will continue to adjust at the beginning of each subsequent 10 year period of the renewed lease term to reflect the then currently applicable MW rates; and (5) If an approved POD provides for staged development, the MW capacity VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 fee is calculated using the MW capacity approved for that stage plus any previously approved stage, multiplied by the MW rate, as described in this section. (d) Scheduled rate adjustment. Under the scheduled rate adjustment (see § 2806.61), the BLM will update your per acre zone rate and MW rate as follows: (1) The BLM will calculate your payments using the per acre zone rate (see § 2806.62(a)(1)) and MW rate (see § 2806.62(b)(1)) in place when your lease is issued; (2) The per acre zone rate will increase every 10 years, beginning after the first 10 years, plus the initial partial year, if any, your lease is in effect, by the average annual change in the IPD– GDP for the preceding 10-year period as described in § 2806.22(b) plus 40 percent; (3) The MW rate will increase by 40 percent every 10 years, beginning after the first 10 years, plus the initial partial year, if any, your lease is in effect; (4) The BLM will not apply the phasein to your MW rate under § 2806.62(c). Instead, for years 1 through 5, plus any initial partial year, the BLM will calculate the MW capacity fee by multiplying the project’s authorized MW capacity by 50 percent of the applicable solar technology MW rate. This phase-in will not be applied to renewed leases; and (5) If the approved POD for your project provides for staged development, the BLM will calculate the MW capacity fee using the MW capacity approved for that stage in question plus any previously approved stages, multiplied by the MW rate as described under this section. § 2806.66 Rent for support facilities authorized under separate grant(s). If a wind energy development project includes separate right-of-way authorizations issued for support facilities only (administration building, groundwater wells, construction lay down and staging areas, surface water management, and control structures, etc.) or linear right-of-way facilities (pipelines, roads, power lines, etc.), rent is determined using the Per Acre Rent Schedule for linear facilities (see § 2806.20(c)). § 2806.68 Rent for energy development testing grants. (a) Grant for energy site-specific testing. You must pay $100 per year for each meteorological tower or instrumentation facility location. BLM offices with approved small site rental schedules may use those fee structures PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 if the fees in those schedules charge more than $100 per meteorological tower per year. In lieu of annual payments, you may instead pay for the entire term of the grant (3 years or less). (b) Grant for energy project-area testing. You must pay $2,000 per year or $2 per acre per year for the lands authorized by the grant, whichever is greater. There is no additional rent for the installation of each meteorological tower or instrumentation facility located within the site testing and monitoring project area. ■ 44. Add an undesignated centered heading immediately preceding newly redesignated § 2806.70 to read as follows: Other Rights-of-Way 45. Revise newly redesignated § 2806.70 to read as follows: ■ § 2806.70 How will the BLM determine the payment for a grant or lease when the linear, communication use, solar energy, or wind energy payment schedules do not apply? When we determine that the linear, communication use, solar, or wind energy payment schedules do not apply, we may determine your payment through a process based on comparable commercial practices, appraisals, competitive bids, or other reasonable methods. We will notify you in writing of the payment determination. If you disagree with the payment determination, you may appeal our final determination under § 2801.10. Subpart 2807—Grant Administration and Operation 46. Amend § 2807.11 by: a. Revising paragraph (b); b. Redesignating paragraphs (d) and (e) as paragraphs (f) and (g); and ■ c. Adding new paragraphs (d) and (e). The revisions and additions read as follows: ■ ■ ■ § 2807.11 When must I contact BLM during operations? * * * * * (b) When your use requires a substantial deviation from the grant. You must seek an amendment to your grant under § 2807.20 and obtain the BLM’s approval before you begin any activity that is a substantial deviation; * * * * * (d) Whenever site-specific circumstances or conditions result in the need for changes to an approved right-of-way grant or lease, POD, site plan, mitigation measures, or construction, operation, or termination procedures that are not substantial deviations in location or use authorized E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations by a right-of-way grant or lease. Changes for authorized actions, project materials, or adopted mitigation measures within the existing, approved right-of-way area must be submitted to us for review and approval; (e) To identify and correct discrepancies or inconsistencies; * * * * * ■ 47. Amend § 2807.17 by redesignating paragraph (d) as paragraph (e) and adding new paragraph (d) to read as follows: § 2807.17 Under what conditions may the BLM suspend or terminate my grant? * * * * * (d) The BLM may suspend or terminate another Federal agency’s grant only if: (1) The terms and conditions of the Federal agency’s grant allow it; or (2) The agency head holding the grant consents to it. * * * * * ■ 48. Revise § 2807.21 to read as follows: sradovich on DSK3GMQ082PROD with RULES3 § 2807.21 May I assign or make other changes to my grant or lease? (a) With the BLM’s approval, you may assign, in whole or in part, any right or interest in a grant or lease. Assignment actions that may require BLM approval include, but are not limited to, the following: (1) The transfer by the holder (assignor) of any right or interest in the grant or lease to a third party (assignee); and (2) Changes in ownership or other related change in control transactions involving the BLM right-of-way holder and another business entity (assignee), including corporate mergers or acquisitions, but not transactions within the same corporate family. (b) The BLM may require a grant or lease holder to file new or revised information in some circumstances that do not constitute an assignment (see subpart 2803 and §§ 2804.12(e) and 2807.11). Circumstances that would not constitute an assignment but may necessitate this filing include, but are not limited to: (1) Transactions within the same corporate family; (2) Changes in the holder’s name only (see paragraph (h) of this section); and (3) Changes in the holder’s articles of incorporation. (c) In order to assign a grant or lease, the proposed assignee must file an assignment application and follow the same procedures and standards as for a new grant or lease, including paying application and processing fees, and the grant must be in compliance with the VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 terms and conditions of § 2805.12. The preliminary application review meetings and public meeting under §§ 2804.12 and 2804.25 are not required for an assignment. We will not approve any assignment until the assignor makes any outstanding payments that are due (see § 2806.13(g)). (d) The assignment application must also include: (1) Documentation that the assignor agrees to the assignment; and (2) A signed statement that the proposed assignee agrees to comply with and be bound by the terms and conditions of the grant that is being assigned and all applicable laws and regulations. (e) Your assignment is not recognized until the BLM approves it in writing. We will approve the assignment if doing so is in the public interest. Except for leases issued under subpart 2809 of this part, we may modify the grant or lease or add bonding and other requirements, including additional terms and conditions, to the grant or lease when approving the assignment, unless a modification to a lease issued under subpart 2809 of this part is required under § 2805.15(e). We may decrease rents if the new holder qualifies for an exemption (see § 2806.14) or waiver or reduction (see § 2806.15) and the previous holder did not. Similarly, we may increase rents if the previous holder qualified for an exemption or waiver or reduction and the new holder does not. If we approve the assignment, the benefits and liabilities of the grant or lease apply to the new grant or lease holder. (f) The processing time and conditions described at § 2804.25(d) of this part apply to assignment applications. (g) Only interests in issued right-ofway grants and leases are assignable. Except for applications submitted by a preferred applicant under § 2804.30(g), pending right-of-way applications do not create any property rights or other interest and may not be assigned from one entity to another, except that an entity with a pending application may continue to pursue that application even if that entity becomes a wholly owned subsidiary of a new third party. (h) To complete a change in name only, (i.e., when the name change in question is not the result of an underlying change in control of the right-of-way grant), the following requirements must be met: (1) The holder must file an application requesting a name change and follow the same procedures as for a new grant, including paying processing fees. However, the PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 92223 application fees (see subpart 2804 of this part) and the preliminary application review and public meetings (see §§ 2804.12 and 2804.25) are not required. The name change request must include: (i) If the name change is for an individual, a copy of the court order or other legal document effectuating the name change; or (ii) If the name change is for a corporation, a copy of the corporate resolution(s) proposing and approving the name change, a copy of the acceptance of the change in name by the State or Territory in which it is incorporated, and a copy of the appropriate resolution, order or other documentation showing the name change. (2) When reviewing a proposed name change only, we may determine it is necessary to: (i) Modify a grant issued under subpart 2804 to add bonding and other requirements, including additional terms and conditions to the grant; or (ii) Modify a lease issued under subpart 2809 in accordance with § 2805.15(e). (3) Your name change is not recognized until the BLM approves it in writing. ■ 49. Amend § 2807.22 by: ■ a. Revising the section heading and paragraphs (a), (b), and (d); ■ b. Redesignating paragraph (f) as paragraph (g); and ■ c. Adding new paragraph (f). The revisions and addition read as follows: § 2807.22 lease? How do I renew my grant or (a) If your grant or lease specifies the terms and conditions for its renewal, and you choose to renew it, you must request a renewal from the BLM at least 120 calendar days before your grant or lease expires consistent with the renewal terms and conditions specified in your grant or lease. We will renew the grant or lease if you are in compliance with the renewal terms and conditions; the other terms, conditions, and stipulations of the grant or lease; and other applicable laws and regulations. (b) If your grant or lease does not specify the terms and conditions for its renewal, you may apply to us to renew the grant or lease. You must send us your application at least 120 calendar days before your grant or lease expires. In your application you must show that you are in compliance with the terms, conditions, and stipulations of the grant or lease and other applicable laws and regulations, and explain why a renewal E:\FR\FM\19DER3.SGM 19DER3 92224 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations of your grant or lease is necessary. We may approve or deny your application to renew your grant or lease. * * * * * (d) We will review your application and determine the applicable terms and conditions of any renewed grant or lease. * * * * * (f) If you make a timely and sufficient application for a renewal of your existing grant or lease, or for a new grant or lease, in accordance with this section, the existing grant does not expire until we have issued a decision to approve or deny the application. * * * * * ■ 50. Revise subpart 2809 to read as follows: Subpart 2809—Competitive Process for Leasing Public Lands for Solar and Wind Energy Development Inside Designated Leasing Areas Sec. 2809.10 General. 2809.11 How will the BLM solicit nominations? 2809.12 How will the BLM select and prepare parcels? 2809.13 How will the BLM conduct competitive offers? 2809.14 What types of bids are acceptable? 2809.15 How will the BLM select the successful bidder? 2809.16 When do variable offsets apply? 2809.17 Will the BLM ever reject bids or reconduct a competitive offer? 2809.18 What terms and conditions apply to leases? 2809.19 Applications in designated leasing areas or on lands that later become designated leasing areas. Subpart 2809—Competitive Process for Leasing Public Lands for Solar and Wind Energy Development Inside Designated Leasing Areas sradovich on DSK3GMQ082PROD with RULES3 § 2809.10 General. (a) Lands inside designated leasing areas may be made available for solar and wind energy development through a competitive leasing offer process established by the BLM under this subpart. (b) The BLM may include lands in a competitive offer on its own initiative. (c) The BLM may solicit nominations by publishing a call for nominations under § 2809.11(a). (d) The BLM will generally prioritize the processing of ‘‘leases’’ awarded under this subpart over the processing of non-competitive ‘‘grant’’ applications under subpart 2804, including those that are ‘‘high priority’’ under § 2804.35. § 2809.11 How will the BLM solicit nominations? (a) Call for nominations. The BLM will publish a notice in the Federal VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Register and may use other notification methods, such as a newspaper of general circulation in the area affected by the potential offer of public land for solar and wind energy development or the Internet; to solicit nominations and expressions of interest for parcels of land inside designated leasing areas for solar or wind energy development. (b) Nomination submission. A nomination must be in writing and must include the following: (1) Nomination fee. If you nominate a specific parcel of land under paragraph (a) of this section, you must also include a non-refundable nomination fee of $5 per acre. We will adjust the nomination fee once every 10 years using the change in the IPD–GDP for the preceding 10year period and round it to the nearest half dollar. This 10 year average will be adjusted at the same time as the per acre rent schedule for linear rights-of-way under § 2806.22; (2) Nominator’s name and personal or business address. The name of only one citizen, association, partnership, corporation, or municipality may appear as the nominator. All communications relating to leasing will be sent to that name and address, which constitutes the nominator’s name and address of record; and (3) The legal land description and a map of the nominated lands. (c) We may consider informal expressions of interest suggesting lands to be included in a competitive offer. If you submit a written expression of interest, you must provide a description of the suggested lands and rationale for their inclusion in a competitive offer. (d) In order to submit a nomination, you must be qualified to hold a grant or lease under § 2803.10. (e) Nomination withdrawals. A nomination cannot be withdrawn, except by the BLM for cause, in which case all nomination monies will be refunded to the nominator. § 2809.12 How will the BLM select and prepare parcels? (a) The BLM will identify parcels for competitive offer based on nominations and expressions of interest or on its own initiative. (b) The BLM and other Federal agencies, as applicable, will conduct necessary studies and site evaluation work, including applicable environmental reviews and public meetings, before offering lands competitively. PO 00000 Frm 00104 Fmt 4701 Sfmt 4700 § 2809.13 How will the BLM conduct competitive offers? (a) Variety of competitive procedures available. The BLM may use any type of competitive process or procedure to conduct its competitive offer, and any method, including the use of the Internet, to conduct the actual auction or competitive bid procedure. Possible bid procedures could include, but are not limited to: Sealed bidding, oral auctions, modified competitive bidding, electronic bidding, and any combination thereof. (b) Notice of competitive offer. We will publish a notice in the Federal Register at least 30 days prior to the competitive offer and may use other notification methods, such as a newspaper of general circulation in the area affected by the potential right-ofway or the Internet. The Federal Register and other notices will include: (1) The date, time, and location, if any, of the competitive offer; (2) The legal land description of the parcel to be offered; (3) The bidding methodology and procedures to be used in conducting the competitive offer, which may include any of the competitive procedures identified in paragraph (a) of this section; (4) The minimum bid required (see § 2809.14(a)), including an explanation of how we determined this amount; (5) The qualification requirements for potential bidders (see § 2803.10); (6) If a variable offset (see § 2809.16) is offered: (i) The percent of each offset factor; (ii) How bidders may pre-qualify for each offset factor; and (iii) The documentation required to pre-qualify for each offset factor; and (7) The terms and conditions of the lease, including the requirements for the successful bidder to submit a POD for the lands involved in the competitive offer (see § 2809.18) and any lease mitigation requirements, including compensatory mitigation for residual impacts associated with the right-ofway. (c) We will notify you in writing of our decision to conduct a competitive offer at least 30 days prior to the competitive offer if you nominated lands and paid the nomination fees required by § 2809.11(b)(1). § 2809.14 What types of bids are acceptable? (a) Bid submissions. The BLM will accept your bid only if: (1) It includes the minimum bid and at least 20 percent of the bonus bid; and (2) The BLM determines that you are qualified to hold a grant or lease under E:\FR\FM\19DER3.SGM 19DER3 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations § 2803.10. You must include documentation of your qualifications with your bid, unless we have previously approved your qualifications under § 2809.10(d) or § 2809.11(d). (b) Minimum bid. The minimum bid is not prorated among all bidders, but must be paid entirely by the successful bidder. The minimum bid consists of: (1) The administrative costs incurred by the BLM and other Federal agencies in preparing for and conducting the competitive offer, including required environmental reviews; and (2) An amount determined by the authorized officer and disclosed in the notice of competitive offer. This amount will be based on known or potential values of the parcel. In setting this amount, the BLM will consider factors that include, but are not limited to, the acreage rent and megawatt capacity fee. (c) Bonus bid. The bonus bid consists of any dollar amount that a bidder wishes to bid in addition to the minimum bid. (d) If you are not the successful bidder, as defined in § 2809.15(a), the BLM will refund your bid. sradovich on DSK3GMQ082PROD with RULES3 § 2809.15 How will the BLM select the successful bidder? (a) The bidder with the highest total bid, prior to any variable offset, is the successful bidder and may be offered a lease in accordance with § 2805.10. (b) The BLM will determine the variable offsets for the successful bidder in accordance with § 2809.16 before issuing final payment terms. (c) Payment terms. If you are the successful bidder, you must: (1) Make payments by personal check, cashier’s check, certified check, bank draft, or money order, or by other means deemed acceptable by the BLM, payable to the Department of the Interior— Bureau of Land Management; (2) By the close of official business hours on the day of the offer or such other time as the BLM may have specified in the offer notices, submit for each parcel: (i) Twenty percent of the bonus bid (before the offsets are applied under paragraph (b) of this section); and (ii) The total amount of the minimum bid specified in § 2809.14(b); (3) Within 15 calendar days after the day of the offer, submit the balance of the bonus bid (after the variable offsets are applied under paragraph (b) of this section) to the BLM office conducting the offer; and (4) Within 15 calendar days after the day of the offer, submit the acreage rent for the first full year of the solar or wind energy development lease as provided in § 2806.54(a) or § 2806.64(a), VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 respectively. This amount will be applied toward the first 12 months acreage rent, if the successful bidder becomes the lessee. (d) The BLM will offer you a right-ofway lease if you are the successful bidder and: (1) Satisfy the qualifications in § 2803.10; (2) Make the payments required under paragraph (c) of this section; and (3) Do not have any trespass action pending against you for any activity on BLM-administered lands (see § 2808.12) or have any unpaid debts owed to the Federal Government. (e) The BLM will not offer a lease to the successful bidder and will keep all money that has been submitted, if the successful bidder does not satisfy the requirements of paragraph (d) of this section. In this case, the BLM may offer the lease to the next highest bidder under § 2809.17(b) or re-offer the lands under § 2809.17(d). § 2809.16 When do variable offsets apply? (a) The successful bidder may be eligible for an offset of up to 20 percent of the bonus bid based on the factors identified in the notice of competitive offer. (b) The BLM may apply a variable offset to the bonus bid of the successful bidder. The notice of competitive offer will identify each factor of the variable offset, the specific percentage for each factor that would be applied to the bonus bid, and the documentation required to be provided to the BLM prior to the day of the offer to qualify for the offset. The total variable offset cannot be greater than 20 percent of the bonus bid. (c) The variable offset may be based on any of the following factors: (1) Power purchase agreement; (2) Large generator interconnect agreement; (3) Preferred solar or wind energy technologies; (4) Prior site testing and monitoring inside the designated leasing area; (5) Pending applications inside the designated leasing area; (6) Submission of nomination fees; (7) Submission of biological opinions, strategies, or plans; (8) Environmental benefits; (9) Holding a solar or wind energy grant or lease on adjacent or mixed land ownership; (10) Public benefits; and (11) Other similar factors. (d) The BLM will determine your variable offset prior to the competitive offer. PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 92225 § 2809.17 Will the BLM ever reject bids or re-conduct a competitive offer? (a) The BLM may reject bids regardless of the amount offered. If the BLM rejects your bid under this provision, you will be notified in writing and such notice will include the reason(s) for the rejection and what refunds to which you are entitled. If the BLM rejects a bid, the bidder may appeal that decision under § 2801.10. (b) We may offer the lease to the next highest qualified bidder if the successful bidder does not execute the lease or is for any reason disqualified from holding the lease. (c) If we are unable to determine the successful bidder, such as in the case of a tie, we may re-offer the lands competitively (under § 2809.13) to the tied bidders or to all prospective bidders. (d) If lands offered under § 2809.13 receive no bids, we may: (1) Re-offer the lands through the competitive process under § 2809.13; or (2) Make the lands available through the non-competitive application process found in subparts 2803, 2804, and 2805 of this part, if we determine that doing so is in the public interest. § 2809.18 What terms and conditions apply to leases? The lease will be issued subject to the following terms and conditions: (a) Lease term. The term of your lease includes the initial partial year in which it is issued, plus 30 additional full years. The lease will terminate on December 31 of the final year of the lease term. You may submit an application for renewal under § 2805.14(g). (b) Rent. You must pay rent as specified in: (1) Section 2806.54, if your lease is for solar energy development; or (2) Section 2806.64, if your lease is for wind energy development. (c) POD. You must submit, within 2 years of the lease issuance date, a POD that: (1) Is consistent with the development schedule and other requirements in the POD template posted at https:// www.blm.gov; and (2) Addresses all pre-development and development activities. (d) Cost recovery. You must pay the reasonable costs for the BLM or other Federal agencies to review and approve your POD and to monitor your lease. To expedite review of your POD and monitoring of your lease, you may notify BLM in writing that you are waiving paying reasonable costs and are electing to pay the full actual costs incurred by the BLM. E:\FR\FM\19DER3.SGM 19DER3 92226 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (e) Performance and reclamation bond. (1) For Solar Energy Development, you must provide a bond in the amount of $10,000 per acre prior to written approval to proceed with ground disturbing activities. (2) For Wind Energy Development, you must provide a bond in the amount of $10,000 per authorized turbine less than 1 MW in nameplate capacity or $20,000 per authorized turbine equal or greater than 1 MW in nameplate capacity prior to written approval to proceed with ground disturbing activities. (3) For testing and monitoring sites authorized under a development lease, you must provide a bond in the amount of $2,000 per site prior to receiving written approval to proceed with ground disturbing activities. (4) The BLM will adjust the solar and wind energy development bond amounts every 10 years using the change in the IPD–GDP for the preceding 10-year period rounded to the nearest $100. This 10-year average will be adjusted at the same time as the Per Acre Rent Schedule for linear rights-ofway under § 2806.22. (f) Assignments. You may assign your lease under § 2807.21, and if an assignment is approved, the BLM will not make any changes to the lease terms or conditions, as provided for by § 2807.21(e) except for modifications required under § 2805.15(e). (g) Due diligence of operations. You must start construction within 5 years and begin generation of electricity no later than 7 years from the date of lease issuance, as specified in your approved POD. A request for an extension may be granted for up to 3 years with a show of good cause and approval by the BLM. sradovich on DSK3GMQ082PROD with RULES3 § 2809.19 Applications in designated leasing areas or on lands that later become designated leasing areas. (a) Applications for solar or wind energy development filed on lands outside of designated leasing areas, which subsequently become designated leasing areas will: (1) Continue to be processed by the BLM and are not subject to the competitive leasing offer process of this subpart, if such applications are filed prior to the publication of the notice of intent or other public announcement from the BLM of the proposed land use plan amendment to designate the solar or wind leasing area; or (2) Remain in pending status unless withdrawn by the applicant, denied, or issued a grant by the BLM, or the subject lands become available for application or leasing under this part, if such applications are filed on or after the date VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 of publication of the notice of intent or other public announcement from the BLM of the proposed land use plan amendment to designate the solar or wind leasing area. (3) Resume being processed by the BLM if your application is pending under paragraph (a)(2) of this section and the lands become available for application under § 2809.17(d)(2). (b) An applicant that submits a bid on a parcel of land for which an application is pending under paragraph (a)(2) of this section may: (1) Qualify for a variable offset under § 2809.16; and (2) Receive a refund for any unused application fees or processing costs if the lands identified in the application are subsequently leased to another entity under § 2809.13. (c) After the effective date of this regulation, the BLM will not accept a new application for solar or wind energy development inside designated leasing areas (see §§ 2804.12(b)(1) and 2804.23(e)), except as provided by § 2809.17(d)(2). (d) You may file a new application under part 2804 for testing and monitoring purposes inside designated leasing areas. If the BLM approves your application, you will receive a short term grant in accordance with § 2805.11(b)(2)(i) or (ii), which may qualify you for an offset under § 2809.16. PART 2880—RIGHTS-OF-WAY UNDER THE MINERAL LEASING ACT 51. Revise the authority citation for part 2880 to read as follows: ■ § 2884.12 What is the processing fee for a grant or TUP application? (a) You must pay a processing fee with the application to cover the costs to the Federal Government of processing your application before the Federal Government incurs them. Subject to applicable laws and regulations, if processing your application will involve Federal agencies other than the BLM, your fee may also include the reasonable costs estimated to be incurred by those Federal agencies. Instead of paying the BLM a fee for the estimated work of other Federal agencies in processing your application, you may pay other Federal agencies directly for the costs estimated to be incurred by them in processing your application. The fees for Processing Categories 1 through 4 are one-time fees and are not refundable. The fees are categorized based on an estimate of the amount of time that the Federal Government will expend to process your application and issue a decision granting or denying the application. (b) There is no processing fee if work is estimated to take 1 hour or less. Processing fees are based on categories. We update the processing fees for Categories 1 through 4 in the schedule each calendar year, based on the previous year’s change in the IPD–GDP, as measured second quarter to second quarter. We will round these changes to the nearest dollar. We will update Category 5 processing fees as specified in the Master Agreement. These processing categories and the estimated range of Federal work hours for each category are: PROCESSING CATEGORIES Authority: 30 U.S.C. 185 and 189, and 43 U.S.C. 1732(b), 1733, and 1740. Subpart 2884—Applying for MLA Grants or TUPs 52. In § 2884.11, revise paragraph (c)(5) to read as follows: ■ § 2884.11 What information must I submit in my application? * * * * * (c) * * * (5) The estimated schedule for constructing, operating, maintaining, and terminating the project (a POD). Your POD must be consistent with the development schedule and other requirements as noted on the POD template for oil and gas pipelines at https://www.blm.gov; * * * * * 53. In § 2884.12, revise paragraphs (a), (b), and (c) to read as follows: PO 00000 Frm 00106 Fmt 4701 Sfmt 4700 Processing category (1) Applications for new grants or TUPs, assignments, renewals, and amendments to existing grants or TUPs. (2) Applications for new grants or TUPs, assignments, renewals, and amendments to existing grants or TUPs. (3) Applications for new grants or TUPs, assignments, renewals, and amendments to existing grants or TUPs. (4) Applications for new grants or TUPs, assignments, renewals, and amendments to existing grants or TUPs. (5) Master Agreements ......... E:\FR\FM\19DER3.SGM 19DER3 Federal work hours involved Estimated Federal work hours are >1 ≤8. Estimated Federal work hours are >8 ≤24. Estimated Federal work hours are >24 ≤36. Estimated Federal work hours are >36 ≤50. Varies. Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations PROCESSING CATEGORIES—Continued Processing category (6) Applications for new grants or TUPs, assignments, renewals, and amendments to existing grants or TUPs. Federal work hours involved Estimated Federal work hours are >50. (c) You may obtain a copy of the current schedule from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov. * * * * * ■ 54. Amend § 2884.16 by redesignating paragraphs (a)(6), (7), and (8) as paragraphs (a)(7), (8), and (9), and adding new paragraph (a)(6) to read as follows: § 2884.16 What provisions do Master Agreements contain and what are their limitations? (a) * * * (6) Describes existing agreements between the BLM and other Federal agencies for cost reimbursement; * * * * * ■ 55. Amend § 2884.17 by revising paragraph (a) and adding paragraph (e) to read as follows: § 2884.17 How will BLM process my Processing Category 6 application? sradovich on DSK3GMQ082PROD with RULES3 (a) For Processing Category 6 applications, you and the BLM must enter into a written agreement that describes how we will process your application. The final agreement consists of a work plan, a financial plan, and a description of any existing agreements you have with other Federal agencies for cost reimbursement associated with such application. * * * * * (e) We may collect funds to reimburse the Federal Government for reasonable costs for processing applications and other documents under this part relating to the Federal lands. ■ 56. In § 2884.18, revise paragraphs (a)(1) and (c) to read as follows: § 2884.18 What if there are two or more competing applications for the same pipeline? (a) * * * (1) Processing Categories 1 through 4. You must reimburse the Federal Government for processing costs as if the other application or applications had not been filed. * * * * * VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 (c) If we determine that competition exists, we will describe the procedures for a competitive bid through a bid announcement in the Federal Register and may use other notification methods, such as a newspaper of general circulation or the Internet. We may offer lands through a competitive process on our own initiative. ■ 57. Amend § 2884.20 by revising paragraphs (a) introductory text and (d) to read as follows: § 2884.20 What are the public notification requirements for my application? (a) When the BLM receives your application, it will publish a notice in the Federal Register and may use other notification methods, such as a newspaper of general circulation in the vicinity of the lands involved or the Internet. If we determine the pipeline(s) will have only minor environmental impacts, we are not required to publish this notice. The notice will, at a minimum, contain: * * * * * (d) We may hold public hearings or meetings on your application if we determine that there is sufficient interest to warrant the time and expense of such hearings or meetings. We will publish a notice in the Federal Register and may use other notification methods, such as a newspaper of general circulation in the vicinity of the lands involved or the Internet, to announce in advance any public hearings or meetings. ■ 58. Amend § 2884.21 by: ■ a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d); ■ b. Adding new paragraph (b); and ■ c. Revising newly redesignated paragraph (d)(4). The revisions and addition read as follows: § 2884.21 How will BLM process my application? * * * * * (b) The BLM will not process your application if you have any trespass action pending against you for any activity on BLM-administered lands (see § 2888.11) or have any unpaid debts owed to the Federal Government. The only applications the BLM would process are those to resolve the trespass with a right-of-way as authorized in this part, or a lease or permit under the regulations found at 43 CFR part 2920, but only after outstanding debts are paid. Outstanding debts are those currently unpaid debts owed to the Federal Government after all administrative collection actions have occurred, including any appeal proceedings under applicable Federal PO 00000 Frm 00107 Fmt 4701 Sfmt 4700 92227 regulations and the Administrative Procedure Act. * * * * * (d) * * * (4) Hold public meetings, if sufficient public interest exists to warrant their time and expense. The BLM will publish a notice in the Federal Register and may use other methods, such as a newspaper of general circulation in the vicinity of the lands involved or the Internet, to announce in advance any public hearings or meetings; and * * * * * ■ 59. Amend § 2884.22 by revising paragraph (a) to read as follows: § 2884.22 Can BLM ask me for additional information? (a) If we ask for additional information, we will follow the procedures in § 2804.25(c) of this chapter. * * * * * ■ 60. Amend § 2884.23 by revising paragraph (a)(6), redesignating paragraph (b) as paragraph (c), and adding new paragraph (b) to read as follows: § 2884.23 Under what circumstances may BLM deny my application? (a) * * * (6) You do not adequately comply with a deficiency notice (see § 2804.25(c) of this chapter) or with any requests from the BLM for additional information needed to process the application. (b) If you are unable to meet any of the requirements in this section you may request an alternative from the BLM (see § 2884.30). * * * * * ■ 61. Add § 2884.30 to read as follows: § 2884.30 Showing of good cause. If you are unable to meet any of the processing requirements in this subpart, you may request approval for an alternative requirement from the BLM. Any such request is not approved until you receive BLM approval in writing. Your request to the BLM must: (a) Show good cause for your inability to meet a requirement; (b) Suggest an alternative requirement and explain why that requirement is appropriate; and (c) Be received in writing by the BLM in a timely manner, before the deadline to meet a particular requirement has passed. Subpart 2885—Terms and Conditions of MLA Grants and TUPs 62. Amend § 2885.11 by revising paragraphs (a) introductory text and (b)(7) to read as follows: ■ E:\FR\FM\19DER3.SGM 19DER3 92228 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations § 2885.11 What terms and conditions must I comply with? (a) Duration. All grants, except those issued for a term of 3 years or less, will expire on December 31 of the final year of the grant. The term of a grant may not exceed 30 years, with the initial partial year of the grant considered to be the first year of the term. The term of a TUP may not exceed 3 years. The BLM will consider the following factors in establishing a reasonable term: * * * * * (b) * * * (7) The BLM may require that you obtain, or certify that you have obtained, a performance and reclamation bond or other acceptable security to cover any losses, damages, or injury to human health, the environment, and property incurred in connection with your use and occupancy of the right-of-way or TUP area, including terminating the grant or TUP, and to secure all obligations imposed by the grant or TUP and applicable laws and regulations. Your bond must cover liability for damages or injuries resulting from releases or discharges of hazardous materials. We may require a bond, an increase or decrease in the value of an existing bond, or other acceptable security at any time during the term of the grant or TUP. This bond is in addition to any individual lease, statewide, or nationwide oil and gas bonds you may have. All other provisions in§ 2805.12(b) of this chapter regarding bond requirements for grants and leases issued under FLPMA also apply to grants or TUPs for oil and gas pipelines issued under this part; * * * * * ■ 63. Amend § 2885.15 by revising paragraph (b) to read as follows: § 2885.15 How will BLM charge me rent? * * * * * (b) There are no reductions or waivers of rent for grants or TUPs, except as provided under § 2885.20(b). * * * * * ■ 64. Amend § 2885.16 by revising paragraph (a) to read as follows: § 2885.16 When do I pay rent? (a) You must pay rent for the initial rental period before we issue you a grant or TUP. We prorate the initial rental amount based on the number of full months left in the calendar year after the effective date of the grant or TUP. If your grant qualifies for annual payments, the initial rent consists of the remaining partial year plus the next full year. If your grant or TUP allows for multi-year payments, your initial rent payment may be for the full term of the grant or TUP. See § 2885.21 for additional information on payment of rent. * * * * * ■ 65. Amend § 2885.17 by revising the section heading, redesignating paragraph (e) as paragraph (f), and adding new paragraph (e) to read as follows: § 2885.17 What happens if I do not pay rents and fees or if I pay the rents or fees late? * * * * * (e) We will retroactively bill for uncollected or under-collected rent, including late payment and administrative fees, upon discovery if: (1) A clerical error is identified; (2) An adjustment to rental schedules is not applied; or (3) An omission or error in complying with the terms and conditions of the authorized right-of-way is identified. * * * * * ■ 66. In § 2885.19, revise paragraph (b) to read as follows: § 2885.19 What is the rent for a linear right-of-way grant? * * * * * (b) You may obtain a copy of the current Per Acre Rent Schedule from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current rent schedule at https:// www.blm.gov. ■ 67. In § 2885.20, revise paragraph (b) to read as follows: § 2885.20 How will the BLM calculate my rent for linear rights-of-way the Per Acre Rent Schedule covers? * * * * * (b) Phase-in provisions. If, as the result of any revisions made to the Per Acre Rent Schedule under § 2885.19(a)(2), the payment of your new annual rental amount would cause you undue hardship, you may qualify for a 2-year phase-in period if you are a small business entity as that term is defined in Small Business Administration regulations and if it is in the public interest. We will require you to submit information to support your claim. If approved by the BLM State Director, payment of the amount in excess of the previous year’s rent may be phased-in by equal increments over a 2-year period. In addition, the BLM will adjust the total calculated rent for year 2 of the phase-in period by the annual index provided by § 2885.19(a)(1). * * * * * ■ 68. Revise § 2885.24 to read as follows: § 2885.24 If I hold a grant or TUP, what monitoring fees must I pay? (a) Monitoring fees. Subject to § 2886.11, you must pay a fee to the BLM for any costs the Federal Government incurs in inspecting and monitoring the construction, operation, maintenance, and termination of the pipeline and protection and rehabilitation of the affected public lands your grant or TUP covers. We update the monitoring fees for Categories 1 through 4 in the schedule each calendar year, based on the previous year’s change in the IPD–GDP, as measured second quarter to second quarter. We will round these changes to the nearest dollar. We will update Category 5 monitoring fees as specified in the Master Agreement. We categorize the monitoring fees based on the estimated number of work hours necessary to monitor your grant or TUP. Monitoring fees for Categories 1 through 4 are one-time fees and are not refundable. These monitoring categories and the estimated range of Federal work hours for each category are: sradovich on DSK3GMQ082PROD with RULES3 MONITORING CATEGORIES Federal work hours involved Monitoring category (1) Inspecting and monitoring of new grants and TUPs, assignments, renewals, and amendments to existing grants and TUPs. (2) Inspecting and monitoring of new grants and TUPs, assignments, renewals, and amendments to existing grants and TUPs. (3) Inspecting and monitoring of new grants and TUPs, assignments, renewals, and amendments to existing grants and TUPs. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00108 Fmt 4701 Sfmt 4700 E:\FR\FM\19DER3.SGM 19DER3 Estimated Federal work hours are >1 ≤8. Estimated Federal work hours are >8 ≤24. Estimated Federal work hours are >24 ≤36. Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations 92229 MONITORING CATEGORIES—Continued Federal work hours involved Monitoring category (4) Inspecting and monitoring of new grants and TUPs, assignments, renewals, and amendments to existing grants and TUPS. (5) Master Agreements ....................................................................................................................................................... (6) Inspecting and monitoring of new grants and TUPs, assignments, renewals, and amendments to existing grants and TUPs. (b) The current monitoring cost schedule is available from any BLM State, district, or field office or by writing: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov. ■ 69. Amend § 2886.12 by: ■ a. Revising paragraph (b); ■ b. Redesignating paragraph (d) as paragraph (g); and ■ c. Adding new paragraphs (d), (e), and (f). The revisions and additions read as follows: § 2886.12 When must I contact BLM during operations? sradovich on DSK3GMQ082PROD with RULES3 * * * * * (b) When your use requires a substantial deviation from the grant or TUP. You must seek an amendment to your grant or TUP under § 2887.10 and obtain our approval before you begin any activity that is a substantial deviation; * * * * * (d) Whenever site-specific circumstances or conditions arise that result in the need for changes to an approved right-of-way grant or TUP, POD, site plan, mitigation measures, or construction, operation, or termination procedures that are not substantial deviations in location or use authorized by a right-of-way grant or TUP. Changes for authorized actions, project materials, or adopted mitigation measures within the existing, approved right-of-way or TUP area must be submitted to the BLM for review and approval; (e) To identify and correct discrepancies or inconsistencies; (f) When you submit a certification of construction, if the terms of your grant require it. A certification of construction is a document you submit to the BLM after you have finished constructing a facility, but before you begin operating it, verifying that you have constructed and tested the facility to ensure that it complies with the terms of the grant and with applicable Federal and State laws and regulations; and * * * * * VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 Subpart 2887—Amending, Assigning, or Renewing MLA Grants and TUPs 70. Revise § 2887.11 to read as follows: ■ § 2887.11 May I assign or make other changes to my grant or TUP? (a) With the BLM’s approval, you may assign, in whole or in part, any right or interest in a grant or TUP. Assignment actions that may require BLM approval include, but are not limited to, the following: (1) The transfer by the holder (assignor) of any right or interest in the grant or TUP to a third party (assignee); and (2) Changes in ownership or other related change in control transactions involving the BLM right-of-way grant holder or TUP holder and another business entity (assignee), including corporate mergers or acquisitions, but not transactions within the same corporate family. (b) The BLM may require a grant or lease holder to file new or revised information in some circumstances that do not constitute an assignment (see subpart 2883 and §§ 2884.11(c) and 2886.12). Circumstances that would not constitute an assignment but may necessitate this filing include, but are not limited to: (1) Transactions within the same corporate family; (2) Changes in the holder’s name only (see paragraph (h) of this section); and (3) Changes in the holder’s articles of incorporation. (c) In order to assign a grant or TUP, the proposed assignee, subject to § 2886.11, must file an application and follow the same procedures and standards as for a new grant or TUP, including paying processing fees (see § 2884.12). (d) The assignment application must also include: (1) Documentation that the assignor agrees to the assignment; and (2) A signed statement that the proposed assignee agrees to comply with and to be bound by the terms and conditions of the grant or TUP that is being assigned and all applicable laws and regulations. PO 00000 Frm 00109 Fmt 4701 Sfmt 4700 Estimated Federal work hours are >36 ≤50. Varies. Estimated Federal work hours >50. (e) Your assignment is not recognized until the BLM approves it in writing. We will approve the assignment if doing so is in the public interest. The BLM may modify the grant or TUP or add bonding and other requirements, including terms and conditions, to the grant or TUP when approving the assignment. If we approve the assignment, the benefits and liabilities of the grant or TUP apply to the new grant or TUP holder. (f) The processing time and conditions described at § 2884.21 apply to assignment applications. (g) Only interests in issued right-ofway grants and TUPs are assignable. Pending right-of-way and TUP applications do not create any property rights or other interest and may not be assigned from one entity to another, except that an entity with a pending application may continue to pursue that application even if that entity becomes a wholly owned subsidiary of a new third party. (h) Change in name only of holder. Name-only changes are made by individuals, partnerships, corporations, and other right-of-way and TUP holders for a variety of business or legal reasons. To complete a change in name only, (i.e., when the name change in question is not the result of an underlying change in control of the right-of-way grant or TUP), the following requirements must be met: (1) The holder must file an application requesting a name change and follow the same procedures as for a new grant or TUP, including paying processing fees (see subpart 2884 of this part). The name change request must include: (i) If the name change is for an individual, a copy of the court order or other legal document effectuating the name change; or (ii) If the name change is for a corporation, a copy of the corporate resolution(s) proposing and approving the name change, a copy of the filing/ acceptance of the change in name by the State or territory in which it is incorporated, and a copy of the appropriate resolution(s), order(s), or E:\FR\FM\19DER3.SGM 19DER3 92230 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES3 other documentation showing the name change. (2) In connection with processing of a name change only, the BLM retains the authority under § 2885.13(e) to modify the grant or TUP, or add bonding and other requirements, including additional terms and conditions, to the grant or TUP. (3) Your name change is not recognized until the BLM approves it in writing. VerDate Sep<11>2014 21:41 Dec 16, 2016 Jkt 241001 71. In § 2887.12, add paragraphs (d) and (e) to read as follows: ■ § 2887.12 How do I renew my grant? * * * * * (d) If you make a timely and sufficient application for a renewal of your existing grant or for a new grant in accordance with this section, the existing grant does not expire until we have issued a decision to approve or deny the application. PO 00000 Frm 00110 Fmt 4701 Sfmt 9990 (e) If we deny your application, you may appeal the decision under § 2881.10. Dated: November 10, 2016. Amanda C. Leiter, Acting Assistant Secretary for Land and Minerals Management, Department of the Interior. [FR Doc. 2016–27551 Filed 12–16–16; 8:45 am] BILLING CODE 4310–84–P E:\FR\FM\19DER3.SGM 19DER3

Agencies

[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Rules and Regulations]
[Pages 92122-92230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27551]

[[Page 92121]]

Vol. 81

Monday,

No. 243

December 19, 2016

Part III

Book 2 of 2 Books

Pages 92121-92498

Department of the Interior

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Bureau of Land Management

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43 CFR Parts 2800 and 2880

Competitive Processes, Terms, and Conditions for Leasing Public Lands
for Solar and Wind Energy Development and Technical Changes and
Corrections; Final Rule

Federal Register / Vol. 81 , No. 243 / Monday, December 19, 2016 /
Rules and Regulations

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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 2800 and 2880

[LLWO301000.L13400000]
RIN 1004-AE24

Competitive Processes, Terms, and Conditions for Leasing Public
Lands for Solar and Wind Energy Development and Technical Changes and
Corrections

AGENCY: Bureau of Land Management, Department of the Interior.

ACTION: Final rule.

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SUMMARY: Through this final rule the Bureau of Land Management (BLM) is
amending its regulations governing rights-of-way issued under the
Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing
Act (MLA). The principal purposes of these amendments are to facilitate
responsible solar and wind energy development on BLM-managed public
lands and to ensure that the American taxpayer receives fair market
value for such development. This final rule includes provisions to
promote the use of preferred areas for solar and wind energy
development, called ``designated leasing areas'' (DLAs). It builds upon
existing regulations and policies to expand BLM's ability to utilize
competitive processes to offer authorizations for development inside or
outside of DLAs. It also addresses the appropriate terms and conditions
(including payment and bonding requirements) for solar and wind energy
development rights-of-way issued under the regulations. Finally, the
rule makes technical changes, corrections, and clarifications to the
existing rights-of-way regulations. Some of these changes affect all
rights-of-way, while some provisions affect only specific rights-of-
way, such as those for transmission lines with a capacity of 100
kilovolts (kV) or more.

DATES: Effective Date: This final rule is effective January 18, 2017.

FOR FURTHER INFORMATION CONTACT: John Kalish, Bureau of Land
Management, at 202-912-7312, for information relating to the BLM's
solar and wind renewable energy programs, or the substance of the final
rule. For information pertaining to the changes made for any
transmission line with a capacity of 100 kV or more you may contact
Stephen Fusilier at 202-912-7426. For information on procedural matters
or the rulemaking process you may contact Charles Yudson at 202-912-
7437. Persons who use a telecommunications device for the deaf (TDD)
may call the Federal Information Relay Service (FIRS) at 1-800-877-
8339, to contact the above individuals.

SUPPLEMENTARY INFORMATION:
I. Executive Summary
II. Background
III. Final Rule as Adopted and Responses to Comments
IV. Section-by-Section Analysis for Part 2800
V. Section-by-Section Analysis for Part 2880
VI. Procedural Matters

I. Executive Summary

The BLM initiated this rulemaking in 2011 through publication of an
Advance Notice of Proposed Rulemaking (ANPR) seeking public comment on
a potential regulatory framework for competitive solar and wind energy
rights-of-way. A proposed rule was published in the Federal Register on
September 30, 2014, summarizing and discussing the comments that the
BLM received on the ANPR. The proposed rule set forth a framework for
the competitive leasing of solar and wind energy rights-of-way both
inside and outside of designated leasing areas. It also proposed
codifying existing solar and wind energy policies in 43 CFR part 2800,
establishing a new acreage rent for wind energy projects, and updating
the methods used to set acreage rents and megawatt (MW) capacity fees
for existing and future solar and wind energy projects. In addition to
the changes related to solar and wind energy development, the rule also
proposed related updates to other provisions of the rights-of-way
regulations, including those applicable to transmission lines with a
capacity of 100 kV or more and pipelines 10 inches or more in diameter.
Based on comments on the proposed rule and consideration of other
factors, the BLM prepared this final rule.

Statutory and Regulatory Authority

Facilities for the generation, transmission, and distribution of
electric energy 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) requires that the BLM generally receive fair market
value for a right-of-way. Under Title V, the BLM can issue easements,
leases, licenses, and permits to occupy, use or traverse public lands
for particular purposes. The BLM generally refers to all such rights-
of-way as ``grants.'' The final rule continues to refer to solar and
wind energy development rights-of-way issued noncompetitively or
outside a DLA as ``grants,'' but designates solar and wind energy
development rights-of-way issued competitively and within a DLA under
revised subpart 2809 as ``leases,'' to which specific requirements and
benefits are attached, as explained below.
Rights-of-way for oil and gas pipelines are authorized under
Section 28 of the MLA (30 U.S.C. 185), Sections 302, 303, and 310 of
FLPMA (43 U.S.C. 1732, 1733, and 1740), and the applicable implementing
regulations at 43 CFR part 2880. The BLM processes applications for
these categories of rights-of-way in accordance with section 2884.11.

Policies

The BLM released a Draft Solar Energy Programmatic Environmental
Impact Statement (EIS) on December 17, 2010 and released a Supplement
to the Draft EIS on October 28, 2011. The Supplement to the Draft EIS
contemplated a process to identify and offer public lands in solar
energy zones (SEZs) through a competitive leasing process. The
Supplement to the Draft EIS described how the BLM intended to pursue a
rulemaking process to implement a competitive leasing program within
SEZs. The BLM released the Final Solar EIS on July 27, 2012, and the
Secretary of the Interior (Secretary) signed the Record of Decision
(ROD) on October 12, 2012. The Solar Programmatic EIS ROD, or Western
Solar Plan, likewise described the BLM's intent to establish a
competitive leasing program within the SEZs.
The Western Solar Plan provides the foundation for a Bureau-
initiated competitive process for offering lands for solar energy
development within the SEZs. Similar comprehensive or regional land use
planning efforts could be initiated by the BLM in the future to
designate additional renewable energy development areas, such as for
wind development. For example, the recently completed Desert Renewable
Energy Conservation Plan (DRECP) identified Development Focus Areas
(DFAs) in Southern California that were designed to support wind,
solar, and geothermal development. As explained elsewhere in this
preamble, in the Western Solar Plan and in the DRECP Record of Decision
(ROD), SEZs and DFAs, like all DLAs, represent areas that have been
prescreened by the BLM and identified as having high energy generation
potential, access to transmission (either existing or proposed), and
low potential for conflicts with other resources. The rule supports the
establishment of these areas through procedures to inform their
identification and establishment.

[[Page 92123]]

Competitive Leasing Process

Existing regulations authorize the BLM to determine whether
competition exists among right-of-way applications filed for the same
facility or system; however, they do not allow the BLM to offer such
lands competitively absent such a finding. The existing regulations
allow the BLM to resolve any such competition using competitive bidding
procedures. All such grants are issued subject to valid existing rights
in accordance with 43 CFR 2805.14.
Building on recommendations and analysis in the Western Solar Plan,
this final rule expands the existing regulations to allow the BLM to
offer lands competitively on its own initiative, both inside and
outside DLAs, even in the absence of identified competition. Within
DLAs, the rule will require competitive leasing procedures except in
certain circumstances, when applications could be considered outside
the competitive process. Outside DLAs, the BLM will have discretion
whether to utilize competitive leasing procedures. This rule identifies
what constitutes a DLA, and outlines the competitive process for solar
and wind energy leasing inside DLAs, including the nomination process
for areas inside DLAs, the process for reviewing nominations, the
competitive bidding procedures to be deployed, and the rules governing
administration of solar or wind energy leases issued through the
competitive process.

Incentives

This rule includes various provisions to incentivize development
inside rather than outside of DLAs. For example, the rule establishes a
new $15 per acre application filing fee for right-of-way applications
outside of DLAs to discourage speculative applications and encourage
development in DLAs. In addition, a winning bidder outside a DLA will
be deemed the ``preferred applicant'' and eligible to apply for a
grant, while a winning bidder within a DLA will be offered a lease. A
primary reason for this distinction is that the prescreening done by
the BLM as part of the identification of DLAs enables it to issue a
lease prior to the conclusion of the project-specific reviews (such
project-specific reviews would, however, have to be completed prior to
the commencement of construction).
Further, this final rule establishes a mechanism whereby bidders
inside DLAs may qualify for variable offsets (a form of bidding credit)
that will give them a financial advantage in the competitive bidding
process. Specifically, a bidder that meets the qualifications set forth
in the Notice of Competitive Offer for a particular offset will have an
opportunity to pre-qualify for a reduction to their bid amount, up to
20 percent of the bid. Suppose, for example, a bidder pre-qualified for
a 20 percent offset and then won the auction with a high bid of $100.
The bidder would only be obligated to pay the BLM $80 for the lease.
These reductions would be sale-specific and would be based on factors
identified in the initial sale notice. The final rule gives the BLM the
flexibility to vary the factors that could enable a bidder to obtain a
variable offset from one competitive offer to another, but possible
factors include having an approved Power Purchase Agreement (PPA) or
Interconnect Agreement, or employing a less water-intensive technology.
Each of the factors will be identified in the Notice of Competitive
Offer, which will also specify the pre-determined reduction (e.g., 5
percent) associated with any individual factor. The total aggregate
reduction across all factors cannot exceed 20 percent.
Additional provisions that incentivize development within DLAs
include a reduced nomination fee of $5 per acre, which is electively
paid by a potential bidder, compared to $15 per acre non-elective
application filing fee for competitive parcels outside of DLAs; a 10-
year phase-in of the MW capacity fee inside a DLA as opposed to a 3-
year phase-in of the fee outside of a DLA; and more favorable bonding
requirements inside DLAs. Specifically, outside DLAs, bonding must be
determined based on reclamation cost estimates, whereas inside DLAs,
the final rule requires a standard bond in the amount of $10,000 per
acre for solar energy development and either $10,000 or $20,000 per
wind energy turbine for wind energy development, depending on the
nameplate capacity of the turbine.
Finally, successful competitive processes within DLAs will result
in the issuance of a 30-year fixed-term lease, whereas a successful
competitive process outside of a DLA will result in a preferred
applicant status for the winner. The 30-year fixed term lease issued to
the high bidder for a parcel offered competitively within a DLA will
increase the certainty for developers and, in turn, make it easier to
secure financing or reach terms on other agreements. Specifically, the
lease will provide developers with evidence of site control, and they
will obtain it much earlier in the review process than they would under
existing regulations (notably, before project-specific NEPA reviews
have been concluded).

Rents and Fees

The rule updates the payments currently established by BLM policies
to ensure that the BLM obtains fair market value for the use of the
public lands. Specifically, it updates and codifies the acreage rent
for both solar and wind energy authorizations. The acreage rent will be
based on the acreage of the authorization, using a 10 percent
encumbrance value for wind energy authorizations and a 100 percent
encumbrance value for solar energy authorizations. This compares to the
50 percent encumbrance value that is used for determining rent for
linear rights-of-way on the public lands.
The acreage rent for linear rights-of-way and solar and wind energy
rights-of-way will vary by individual counties and is based on
agricultural land values determined from data published by the National
Agricultural Statistics Service (NASS). The BLM may also determine on a
project-specific or regional basis that a different rate should be
utilized. The ``acreage rent'' component captures the value of
unimproved rural land encumbered by a project.
In addition to acreage rent, the rule also updates and codifies the
MW capacity fee that the BLM already charges under existing policies.
As under existing policy, that fee is designed to capture the
difference between a particular project area's unimproved land value
and the higher value associated with the area's solar or wind energy
development potential. The BLM uses a MW capacity fee as a proxy for
the area's electrical generation development potential. That fee is
calculated using a formula that includes the nameplate capacity of the
approved project, a capacity factor or efficiency factor that varies
based on the average potential electric generation of different solar
and wind technologies, the average wholesale prices of electricity, and
a Federal rate of return based on a 20-year Treasury bond. In this
final rule, the capacity factors used for calculating the MW capacity
fee are 20 percent for solar photovoltaic (PV), 25 percent for
concentrated solar power (CSP), 30 percent for CSP with storage
capacity of 3 hours or more, and 35 percent for wind. Additionally, the
final rule allows the BLM to determine, on a project-specific or
regional basis, that a different net capacity factor is more
appropriate, such as if a project takes advantage of a new technology
(e.g., energy storage) or project design considerations (e.g., solar
array layout).
The final rule increases the MW capacity fee currently established
by BLM policy from $4,155 per MW to

[[Page 92124]]

$5,010 per MW for wind energy authorizations, and reduces the MW
capacity fee from $5,256 to $2,863 per MW for PV solar, from $6,570 to
$3,578 per MW for concentrated photovoltaic (CPV) or CSP solar, and
from $7,884 to $4,294 per MW for CSP with storage capacity of 3 hours
or more. The rule provides for a three-year phase-in of the MW capacity
fee for right-of-way grants outside DLAs (25 percent in year one, 50
percent in year two, and 100 percent for subsequent years) and for a
longer, ten-year phase-in for right-of-way leases inside DLAs (50
percent for the first 10 years and 100 percent for subsequent years).
As explained elsewhere in this preamble, both the acreage rent and
MW capacity fees adjust periodically based on identified factors,
including changes in NASS survey values and wholesale power prices. In
addition, based on comments received on the proposed rule, this final
rule includes provisions that allow grant or lease holders the option
to select fixed, scheduled rate adjustments to the applicable per acre
zone rate (or rent) and MW rate over the term of the right-of-way grant
or lease. This scheduled rate adjustment method would be used in lieu
of the rule's standard rate adjustment method, under which those rates
could increase or decrease by irregular amounts depending on changes to
NASS survey values or wholesale power prices.
The rule includes requirements to hold preliminary application
review meetings after the submission of an application for a solar or
wind energy project, including authorizing the BLM to collect cost
recovery fees for those meetings. Through this final rule the BLM is
also extending the preliminary application review meeting requirement
to any transmission line having a capacity of 100 kV or more. This
change is appropriate because both solar or wind energy projects and
transmission lines with a capacity greater than 100 kV are generally
large-scale facilities with greater potential for impacts and resource
conflicts. Based on experience with existing solar and wind energy
projects, the BLM has found that those preliminary application meetings
provide both the applicant and the BLM with an opportunity to identify
and discuss resource conflicts early on in the process. In addition,
the rule provides for additional cost reimbursement measures,
consistent with Sections 304(b) and 504(g) of FLPMA.

Changes to 43 CFR Part 2880

In addition to the changes to 43 CFR part 2800, this final rule
also revises several subparts of part 2880. These revisions are
necessary to ensure consistency of policies, processes, and procedures,
where possible, between rights-of-way applied for and administered
under part 2800 and rights-of-way applied for and administered under
part 2880. These changes are discussed in more detail in Section II of
this preamble. However, a proposal to require preliminary application
review meetings for right-of-way applications for pipelines exceeding
10 inches in diameter was dropped from this final rule in response to
comments.

II. Background

A. Rule Overview

The BLM published the proposed rule in the Federal Register on
September 30, 2014 (79 FR 59022) for a 60-day comment period ending on
December 1, 2014. In response to public requests for extensions of the
public comment period the BLM extended the period for an additional 15
days on November 29, 2014, through December 16, 2014. We received 36
comment letters on the proposed rule. We also received similar feedback
through stakeholder engagement meetings held as part of BLM's regular
course of business. This final rule addresses the comments received
during the comment period and during stakeholder engagement meetings in
the section-by-section discussion in section III. of this preamble.
As explained above, the primary purpose of this rule is to
facilitate the responsible development of solar and wind energy
development on the public lands, with a specific focus on incentivizing
development on lands identified as DLAs. To that end, this rule, in an
amendment of section 2801.5, defines the term ``designated leasing
area'' as a parcel of land with specific boundaries identified by the
BLM land use planning process as being a preferred location for solar
or wind energy that can be leased competitively for energy development.
In this rule, the BLM amends its regulations implementing FLPMA to
provide for two competitive processes for solar and wind energy rights-
of-way on public lands. One of the processes is for lands inside DLAs.
The other process is for lands outside of DLAs.
For lands outside DLAs, the BLM amends section 2804.23 to provide
for a competitive bidding process designed specifically for solar or
wind energy development. Prior to this final rule, section 2804.23
authorized a competitive process to resolve competing right-of-way
applications for the same facility or system. Under amended section
2804.23, the BLM can now competitively offer lands on its own
initiative. The competitive process for solar and wind energy
development on lands outside of DLAs is outlined in new section
2804.30.
The competitive process for lands inside DLAs is outlined in
revised 43 CFR subpart 2809, which provides for a parcel nomination and
competitive offer, instead of an application process.
This rule includes not only these competitive processes, but also a
number of amendments to other provisions of the right-of-way
regulations found at 43 CFR parts 2800 and 2880. The BLM determined
that it is necessary to first articulate the general requirements for
rights-of-way in order to set the solar and wind requirements apart.
For example, the final rule has mandatory bonding requirements for
solar and wind energy, including a minimum bond amount. The BLM
determined that bonding is necessary for all solar and wind energy
rights-of-way because of the intensity and duration of the impacts of
such authorizations. For other right-of-way authorizations, the BLM
will continue to require bonding at its discretion under this final
rule.
Other amendments to the regulations include changes in right-of-way
application submission and processing requirements, rents and fees, and
alternative requirement requests. In addition, this final rule makes
several technical corrections as explained in the section-by-section
analysis below.

B. Statutory and Regulatory Background

FLPMA provides 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'' (43 U.S.C. 1701(a)(7) and 1732(a)). 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)). Title V
of FLPMA (43 U.S.C. 1761-1771) authorizes the BLM to issue rights-of-
way on the public lands for electric generation systems, including
solar and wind energy generation systems. FLPMA also 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. 1701(a)(9) and 1764(g)). Section 28 of the MLA (30 U.S.C.
185) and FLPMA provide similar authority for authorizing rights-of-way

[[Page 92125]]

for oil and gas pipelines. The BLM has authority to issue regulations
under both FLPMA (43 U.S.C. 1732, 1733, and 1740) and the MLA (30
U.S.C. 185 and 189).
The Energy Policy Act of 2005 (codified at 42 U.S.C. 15801 et seq.)
(EPAct) includes provisions authorizing and encouraging the Federal
Government to develop energy producing facilities. Title II of the
EPAct includes a provision encouraging the Secretary to approve non-
hydropower renewable energy projects (solar, wind, and geothermal) on
public lands with a total combined generation capacity of at least
10,000 MWs of electricity by 2015. See Section 211, Public Law 109-58,
119 Stat. 660 (2005).
Since passage of the EPAct, the Secretary has issued several orders
that emphasize the importance of renewable energy development on public
lands and the Department of the Interior's (Department's) efforts to
achieve the goal that Congress established in Section 211 of the EPAct.
Secretarial Order No. 3283, ``Enhancing Renewable Energy Development on
the Public Lands,'' signed by Secretary Kempthorne on January 16, 2009,
facilitates the Department's efforts to achieve the goal established by
Congress in Section 211 of the EPAct. On March 11, 2009, Secretary
Salazar signed Secretarial Order No. 3285, ``Renewable Energy
Development by the Department of the Interior,'' which describes the
need for strategic planning and a balanced approach to domestic
resource development. This order was amended by Secretarial Order
3285A1 in February 2010. Amended Order 3285A1 establishes the
development of renewable energy on public lands as one of the
Department's highest priorities.
While the BLM has already met the goal established by Congress by
approving over 12,000 MWs of renewable energy by the end of 2012, the
development of renewable energy resources on the public lands remains a
national priority. To advance that goal, President Obama included in
the administration's Climate Action Plan to reduce carbon pollution,
released on June 25, 2013, a new goal for the Department to approve at
least 20,000 MWs of new renewable energy capacity on federal lands by
2020. As of the end of fiscal year 2015, the BLM has reviewed and
approved 60 projects capable of generating over 15,000 MWs of power.
The BLM has issued several instruction memoranda (IMs) that
identify policies and procedures related to processing solar and wind
energy right-of-way applications. The BLM is incorporating some of
these existing policies and procedures into its right-of-way
regulations. The IMs can be found at: https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
Briefly, the IMs are as follows:
1. IM 2009-043, Wind Energy Development Policy. This IM provides
guidance on processing right-of-way applications for wind energy
projects on public lands;
2. IM 2011-003, Solar Energy Development Policy. This IM provides
guidance on the processing of right-of-way applications and the
administration of authorized solar energy projects on public lands;
3. IM 2011-059, National Environmental Policy Act (NEPA) Compliance
for Utility-Scale Renewable Energy Right-of-Way Authorizations. This IM
clarifies NEPA policy for evaluating solar and wind energy project
right-of-way applications;
4. IM 2011-060, Solar and Wind Energy Applications--Due Diligence.
This IM provides guidance on the due diligence requirements for solar
and wind energy development right-of-way applications; and
5. IM 2011-061, Solar and Wind Energy Applications--Pre-Application
and Screening. This IM provides guidance on the review of right-of-way
applications for solar and wind energy development projects on public
lands; and
6. IM 2016-122, Policy Guidance for Federal Land Policy and
Management Act Right-of-Way Rent Exemptions for Electric or Telephone
Facilities Financed or Eligible for Financing under the Rural
Electrification Act of 1936, as amended (IM 2016-122). This IM provides
guidance for processing requests for FLPMA right-of-way rent exemptions
for electric and telephone facilities financed or eligible for
financing by the United States Department of Agriculture, Rural
Utilities Service (RUS) under the Rural Electrification Act of 1936, as
amended (Rural Electrification Act), 7 U.S.C.901 et seq. In particular,
this IM makes clear that wind and solar entities that qualify under the
Rural Electrification Act pay the MW capacity fees but not acreage
rent.
In addition, in 2005 and 2012 the BLM issued landscape-level land
use plan amendment decisions supported by programmatic EISs to
facilitate wind and solar energy development. These land use plan
amendments guide future BLM management actions by identifying desired
outcomes and allowable uses on public lands.
On June 24, 2005, the BLM published the Final Programmatic
Environmental Impact Statement on Wind Energy Development on BLM-
Administered Lands in the Western United States (Wind Programmatic EIS)
(70 FR 36651), which analyzed the environmental impact of the
development of wind energy projects on public lands in the West and
identified approximately 20.6 million acres of public lands with wind
energy development potential (https://windeis.anl.gov). Following the
publication of the Wind Programmatic EIS, the BLM issued the ROD for
Implementation of a Wind Energy Development Program and Associated Land
Use Plan Amendments (Wind Programmatic EIS ROD) (71 FR 1768), which
amended 48 BLM land use plans. The Wind Programmatic EIS ROD did not
identify specific wind energy development leasing areas, but rather
identified areas that have potential for the development of wind energy
production facilities, along with areas excluded from consideration for
wind energy facility development because of other resource values that
are incompatible with that use.
On July 27, 2012, the BLM and the Department of Energy published
the Notice of Availability of the Final Programmatic Environmental
Impact Statement for Solar Energy Development in Six Southwestern
States (Solar Programmatic EIS) (77 FR 44267). The Solar Programmatic
EIS assessed the environmental, social, and economic impacts associated
with utility-scale solar energy development on public lands in Arizona,
California, Colorado, Nevada, New Mexico, and Utah (https://solareis.anl.gov). On October 12, 2012, the Department and the BLM
issued the Western Solar Plan, which amended 89 BLM land use plans to
identify 17 solar energy zones (SEZs) and identify mandatory design
features applicable to utility-scale solar development on BLM managed
lands. The Western Solar Plan also described the BLM's intent to use a
competitive offer process to facilitate solar energy development
projects in SEZs. SEZs, including those identified in the Western Solar
plan, will be considered DLAs under this final rule.
This final rule is one of the steps being taken by the Department
and the BLM to promote renewable energy development on the public
lands. It implements one of the Western Solar Plan's key
recommendations, namely that the BLM institute a process whereby it can
competitively offer lands within DLAs. In addition to addressing
recommendations in the Western Solar Plan, the final rule also
implements suggestions for improving the renewable energy program made
by the Department of the Interior's Office of

[[Page 92126]]

Inspector General for the Department, initially in a draft report and
carried over to the final report (Report No. CR-EV-BLM-0004-2010), and
by the Government Accountability Office (GAO) (Audit No. 361373), both
of which address the use of competitive leasing for solar and wind
development authorizations. The Inspector General (OIG) reviewed the
BLM's renewable energy activities to assess the effectiveness of the
BLM's development and management of its renewable energy program. The
IG also made recommendations on other aspects of the BLM's right-of-way
program.
The OIG report discusses only wind energy projects, as the solar
energy program was not at a stage where it had been fully implemented.
However, based on experience gained from its authorization of solar
projects, the BLM believes that recommendations made for the wind
energy program would also benefit the solar energy program. Other OIG
recommendations pertained to the amounts and collection procedures for
bonds for wind energy projects. These recommendations included:
1. Requiring a bond for all wind energy projects and reassessing
the minimum bond requirements;
2. Tracking and managing bond information;
3. Developing and implementing procedures to ensure that when a
project is transferred from one entity to another, the BLM would return
the first bond to the company that obtained it and request a new bond
from the newly assigned company; and
4. Developing and implementing Bureau-wide guidance for using
competitive bidding on wind and solar energy rights-of-way.
The BLM concurred with all of the OIG's recommendations. The last
recommendation is one of the principal reasons for developing this
rule. The other recommendations form the basis for other changes being
made as part of the BLM's operating procedures that are also addressed
through this rulemaking.
Through this rulemaking, the BLM amends regulations in 43 CFR parts
2800 and 2880, and in particular:
1. Section 2804.12, to establish preliminary application review
requirements for solar and wind energy development, and for development
of any transmission line with a capacity of 100 kV or more;
2. Section 2804.25, to establish application processing and
evaluation requirements for solar and wind energy development;
3. Section 2804.30, to establish a competitive process for public
lands outside of DLAs for solar and wind energy development;
4. Section 2804.31, to establish a two-step process for solar or
wind energy testing and conversion of testing areas to DLAs;
5. Section 2804.35, to establish screening criteria to prioritize
applications for solar or wind energy development;
6. Section 2804.40, to establish a requirement to propose
alternative requirements with a showing of good cause;
7. Section 2805.11(b), to establish a term for granting rights-of-
way for solar or wind energy development;
8. Section 2805.12(c), to establish terms and conditions for a
solar or wind energy development grant or lease;
9. Section 2805.20, to provide more detail on bonding requirements;
10. Sections 2806.50, 2806.52, 2806.54, 2806.56, and 2806.58, to
provide information on rents for solar energy development rights-of-
way;
11. Sections 2806.60, 2806.62, 2806.64, 2806.66, and 2806.68, to
provide information on rents for wind energy development rights-of-way;
12. Subpart 2809, to establish a competitive process for leasing
public lands inside DLAs for solar and wind energy development; and
13. Provisions in 43 CFR part 2800 pertaining to transmission lines
with a capacity of 100 kV or more.
In addition to these amendments, this rule also makes several
technical changes, corrections, and clarifications to the regulations
at 43 CFR parts 2800 and 2880. The following table provides a summary
of the principal changes made in this final rulemaking. The table
shows: A description and CFR reference to the existing rule, a
description of the changes in the proposed rule, and a description of
the changes made in this final rule. The BLM made minor revisions
throughout the final rule to improve its readability, which are not
noted in this table but are discussed in the section- by- section
analysis of this preamble.

Table 1--Abbreviated Descriptions of the Major Changes Made to 43 CFR Parts 2800 and 2880 by This Rule
----------------------------------------------------------------------------------------------------------------
Changes between
43 CFR reference and description proposed rule and Changes between final Additional comments
existing regulations rule and proposed rule
----------------------------------------------------------------------------------------------------------------
2801.5(b)--Acronyms and terms........ Adds definitions for 10 This final rule adopts Changes made in this
items and revises the definitions in the section were based on
definitions for 3 proposed rule, except comments received from
items, mostly that under the final the public to account
pertaining to solar rule the definitions for the application
and wind energy allow the BLM to filing fee, energy
development. determine a more storage, and MW rate.
appropriate Net
Capacity Factor for
rights-of-way with
storage on a case-by-
case basis.
No other substantive
changes were made from
the proposed to the
final rule.
2801.6--Scope........................ Clarifies that the No changes were made
regulations in this from the proposed to
part apply to all the final rule for
systems and facilities this section.
identified under
section 2801.9(a).
2801.9--When do I need a grant?...... Revises language in The testing provisions Changes made in this
paragraph (a)(7) to at new paragraphs section were based on
include solar and wind (d)(1) and (2) are comments received from
development revised to include the public requesting
facilities. Adds both solar and wind that the testing
paragraph (d) that facilities, as opposed provisions account for
references solar and to just wind. solar facilities as
wind energy projects. well as wind
facilities.
2802.11--Designation of right-of-way Adds a process for No changes were made
corridors and leasing areas. designating leasing from the proposed to
areas for solar and the final rule.
wind energy projects.

[[Page 92127]]

2804.10--Actions to be taken before Discusses pre- Removes all discussion Requirements of this
filing a right-of-way application. application or requirements for section are also
requirements and pre-application applicable to
specifically addresses meetings. Now the only transmission lines
solar and wind filing change from the with a capacity of 100
requirements. existing regulation is kV or more. Based on
to include designated comments received, the
leasing areas in final rule removes the
paragraph (a)(2). provision in the
proposed rule that
would have applied
certain application
requirements to
pipelines greater than
10 inches in diameter.
2804.12--Right-of-way application Discusses additional This section has been Changes made in this
requirements. filing fees required retitled to improve section were based on
for solar and wind clarity. This section comments received from
energy applications. also removes the public. The
requirements for pre- paragraphs formerly
application meetings located in section
and substitutes 2804.10(b) and (c) are
preliminary now found in section
application review 2804.12(b) and (c).
meetings that will
occur after rather
than before an
application is filed.
This section is also
revised to clarify how
the BLM will use the
IPD-GDP to update fees.
2804.14--Processing fees for grant Gives the BLM No changes were made
applications. discretion to collect from the proposed to
the estimated the final rule for
reasonable costs this section.
incurred by other
Federal agencies.
2804.18 and 2804.19--Master Adds information on No changes were made
agreements and major projects. cost reimbursement from the proposed to
requirements for work the final rule.
performed by other
Federal agencies.
2804.20--Determining reasonable costs Section title revised Any reference to ``pre- Changes made in this
for work on major (Category 6) for clarity. Adds application'' section were based on
rights-of-ways. discussions on right- requirements was comments received from
of-way work performed removed to be the public in regards
by other Federal consistent with other to collecting cost
agencies and pre- changes made to this recovery with the
application final rule to submission of an
requirements for major reference preliminary application.
rights-of-way. application meetings.
2804.23--Competitive process for Adds provisions for Minor changes were made Changes made in this
applications. competition for solar from the proposed to section were based on
and wind energy rights- the final rule. The comments received from
of-way, both inside latter clarifies that the public requesting
and outside of the BLM will not that the BLM provide
designated leasing competitively offer assurance that it will
areas. lands where a plan of not competitively
development (POD) has offer lands if a
been accepted and cost developer has
recovery established. committed considerable
The requirement to time and resources to
publish in a newspaper a project, as
is now optional evidenced by the
instead of required. existence of a
complete POD and
executed cost recovery
agreement.
2804.24--Use of Standard Form 299 for Updates the No changes were made
submitting a right-of-way circumstances when an from the proposed to
application. application is not the final rule for
required to account this section.
for competitive offers
under both section
2804.23(c) and subpart
2809.
2804.25--BLM actions in processing a Describes POD Changes were made from Changes were made in
right-of-way application. requirements and adds the proposed to the the final rule for
additional other final rule to reflect clarity, especially a
requirements for solar the shift from ``pre- description of what
and wind energy application meetings'' constitutes ``unpaid
applications. Covers to ``preliminary debts.'' Other changes
instances where a application review were made to
right-of-way is meetings'' as accommodate new
authorized to resolve described in section requirements for solar
a trespass. 2804.12. The and wind rights-of-way
requirement to publish and to clarify when
in a newspaper is now the time clock begins
optional instead of for a due diligence
required. request.
2804.26--Circumstances when the BLM Adds additional Adds language to This change was made to
may deny your application. situations where the correspond to the due be consistent with
BLM may deny your diligence requirements other changes in this
application, including found in sections final rule.
specific examples for 2804.12 and 2804.25.
solar and wind energy Additional language
applications. added to provide
consideration when the
BLM may deny an
application when
circumstances are
outside of an
applicant's control.
2804.27--What fees are owed if an Revises this section to Removes the term pre- This change was made to
application is not completed?. include any pre- application costs and be consistent with
application costs that substitutes other changes in this
must be paid if an preliminary final rule with
application is application review respect to the pre-
withdrawn or rejected. costs. application meeting
identified in the
proposed rule.

[[Page 92128]]

2804.30--Description of the Adds section 2804.30, Several minor changes The final rule changes
competitive process for solar or which describes the were made from the were made principally
wind energy development. competitive process proposed to the final for clarification. The
for solar or wind rule, including change in notification
energy development removing a reference requirements is
outside of DLAs. to mitigation costs, a consistent with other
statement that filing changes in this final
fees will be refunded rule.
to unsuccessful
bidders, and that a
successful bidder will
have site control over
applications from
other developers (by
virtue of being
identified as the
preferred applicant
following completion
of the sale process).
Additionally, the
requirement to publish
in a newspaper is now
optional instead of
required.
2804.31--Site testing for solar and No section 2804.31 in Adds section 2804.31. This new section is a
wind energy. proposed rule. This new section result of public
describes how the BLM comments on the
will inform the public proposed rule
that site-testing requesting
applications will be clarification on site
accepted for lands testing procedures.
within a DLA. This new section does
not make any changes
to existing policies
or procedures.
2804.35--Prioritizing solar and wind Adds section 2804.35 The rule clarifies that The changes were made
energy applications. which describes a the BLM will generally to clarify how the BLM
process for prioritize the will prioritize leases
prioritizing solar and processing of solar and applications.
wind energy and wind energy leases
applications. issued under subpart
2809 over applications
for solar and wind
energy grants issued
under subpart 2804.
Other minor revisions
were made in response
to comments and
discussed further in
the section-by-section
analysis.
2804.40--Alternative requirements.... No section 2804.40 in Adds a provision that This section was added
proposed rule. allows an applicant to in response to
submit an alternate comments about the BLM
requirement if it is need for a process for
believed that the applicants to
original requirements demonstrate, based on
cannot be met. a showing of good
cause, the reasons for
its failure to meet
the rule requirements
and demonstrate why
alternative
requirements should be
put in place in their
stead.
2805.10--Approving or denying a grant Includes right-of-way No changes were made
leases in addition to from the proposed to
grants, and adds the final rule.
specific items to be
included within a
solar or wind energy
grant or lease.
2805.11- What does a grant contain? Adds specific terms for Removed specific This change was made to
solar and wind energy references to ``wind'' be consistent with
grants and leases. so that section would other changes in this
apply to project final rule.
testing for either
solar or wind.
2805.12--Terms and conditions in a Revises this section in Adds new section Changes made in this
right-of-way authorization. its entirety and adds 2805.12(e) stating section were based on
specific terms and that good cause must comments received from
conditions for solar be shown for extension the public, concerning
and wind energy grants of time requests. This a holder's inability
and leases. section now includes to meet BLM
solar in addition to requirements in some
wind energy circumstances.
development processes.
Other revisions in
this section are
discussed in the
section-by-section
analysis.
2805.14--Rights conveyed by a right- Adds section 2805.14(g) Removed specific This change was made to
of-way grant. allowing for renewal references to ``wind'' be consistent with
applications for wind so that section would other changes in this
projects and section apply to project final rule.
2805.14(h) allowing testing for either
renewal for site solar or wind.
testing grants.
2805.15--Rights retained by the Adds a provision No changes were made
United States. requiring common use from the proposed to
of your right-of-way the final rule.
for compatible uses.
2805.16--Payment of monitoring fees.. Adds a provision to Adds the word This change was made to
allow the BLM to ``inspecting'' in be consistent with
collect monitoring addition to the other changes in this
fees for expenses existing word final rule.
incurred by other ``monitoring.''.
Federal agencies.

[[Page 92129]]

2805.20--Bonding requirements........ Adds new section The final rule adds a Changes made in this
2805.20 describing requirement to have section were based on
bonding requirements. periodic reviews of comments received from
project bonds for the public.
adequacy. Also, the
bond amounts for wind
turbines are changed
to be based on the
nameplate capacity.
The final rule also
explains that the BLM
may consider factors
in addition to the
reclamation cost
estimate (RCE), such
as the salvage value
of project components,
when determining bond
amounts.
2806.12--Payment of rents............ Adds provisions for the No changes were made
payment of rents for from the proposed to
non-linear rights-of- the final rule for
way, including solar this section.
and wind grants and
leases.
2806.13--Late payment of rents....... Adds penalties for non- No changes were made
payment of rents and from the proposed to
removes the $500 limit the final rule.
for late payment fees.
2806.20--Rents for linear right-of- Describes where you may No changes were made
way grants. obtain a copy of the from the proposed to
current rent schedule. the final rule.
2806.22--Changes in the Per Acre Rent Corrects a reference to No changes were made
Schedule. the IPD-GDP. from the proposed to
the final rule.
2806.24--Making payment for a linear Requires making a No changes were made
grant. payment for the from the proposed to
initial partial year, the final rule.
along with the first
year's rent. Also,
provides for multiple
year payments.
2806.30--Communication site rents.... The communication site No changes were made
rent schedule is from the proposed to
removed. Several other the final rule.
minor changes made for
clarification.
2806.34--Calculation of rent for a Corrects an existing No changes were made
multiple-use communication facility. citation to read from the proposed to
section 2806.14(a)(4). the final rule.
2806.43--Calculation of rents for Changes a former No changes were made
passive reflectors and local reference to new from the proposed to
exchange networks. section 2806.70. the final rule.
2806.44--Calculation of rents for a Changes a former No changes were made
facility owners that authorizes reference to new from the proposed to
communication uses. section 2806.70. the final rule.
2806.50--Rents and fees for solar Existing section No substantive changes
energy rights-of-way. 2806.50 (provisions were made to the final
for determining rents rule.
where the linear right-
of-way schedule or the
communication rent
schedule do not apply)
is redesignated as
section 2806.70. New
section 2806.50
introduces rents and
fees for solar energy
rights-of-way.
2806.51--Scheduled Rate Adjustment... Not in the proposed This section gives These changes were made
rule; added to the solar project in response to
final rule in response proponents the option comments received from
to comments received. of selecting scheduled the public and were
rate adjustments to designed to provide
the per acre zone rate project proponents
and MW rate for an with the option to
individual grant or choose greater payment
lease, instead of certainty over the
following the process life of a right-of-way
in the rule for grant or lease.
periodic adjustments
in response to changes
in NASS values and
wholesale market
prices.
Parallel revisions were
made to section
2806.52 for grants and
section 2806.54 for
leases.

[[Page 92130]]

2806.52 through 2806.58 Provide data Sections 2806.50, The rule now allows for The methodology of
for rents and fees for solar energy 2806.52, 2806.54, solar energy site determining rents and
projects. 2806.56, and 2806.58 testing. The fees for wind is the
describe rents and calculation of the same as solar, except
fees for solar energy acreage rent has been where noted in the
authorizations. expanded to explain preamble.
the process more Changes made in this
thoroughly. Acreage section were based on
rent reductions are comments received from
now adjusted to show the public and to be
greater rent consistent with other
reductions in certain changes in this final
States for solar rule.
energy rights-of-way.
2806.60 through 2806.68 Provide data Sections 2806.60, The changes to these Changes made in this
for rents and fees for wind energy 2806.62, 2806.64, sections parallel the section were made to
projects. 2806.66 and 2806.68 changes in sections be consistent with
describe rents and 2806.50 through other changes in this
fees for wind energy 2806.58. final rule.
authorizations.
2806.61--Scheduled Rate Adjustment... Not in the proposed Similar to the These changes were made
rule; added to the provisions of section in response to
final rule in response 2806.51. This section comments received from
to comments received. gives wind project the public and were
proponents the option designed to provide
of selecting scheduled project proponents
rate adjustments to with an option to
the per acre zone rate choose greater payment
and MW rate for an certainty over the
individual grant or life of a right-of-way
lease, instead of grant or lease.
following the process
in the rule for
periodic adjustments
in response to changes
in NASS values and
wholesale market
prices.
Parallel revisions were
made to section
2806.62 for grants and
section 2806.64 for
leases.
2806.70--Rent determinations for Adds redesignated No changes were made This section is
other rights-of-way. section 2806.70, which from the proposed to applicable to all
contains the text the final rule. rights-of-way that are
formerly found at not subject to rent
section 2806.50, with schedules.
minor modifications.
2807.11--Contacting the BLM during Specifies requirements No changes were made
operations. when a change in a from the proposed to
right-of-way grant is the final rule.
warranted.
2807.17--Grant suspensions or This provision contains No changes were made
terminations. the regulation from the proposed to
formerly located at the final rule.
section 2809.10.
2807.21--Assigning a grant or lease.. Revises the title to Adds two events that Changes made in this
include leases and may require an section were based on
clarifies when an assignment. Clarifies comments received from
assignment is or is that changing only a the public requesting
not required. holder's name does not clarity on assignments
constitute an and name changes
assignment and
explains how the BLM
will process a change
only to a holder's
name for a grant or
lease. It also
clarifies that
ownership changes
within the same
corporate family do
not constitute an
assignment.
2807.22--Renewing a grant............ Revises the title to No changes were made
include leases and from the proposed to
clarifies that if you the final rule.
apply for a renewal
before it expires,
your grant will not
expire until a
decision has been made
on your renewal
request.
Subpart 2809--Grants for Federal Existing language in No changes were made
agencies. this subpart from the proposed to
redesignated as new the final rule.
paragraph (d) of
section 2807.17. The
title is changed to
reflect that it now
pertains to
competitive leasing
for solar or wind
energy rights-of-way.
This subpart is
divided into several
added sections as
described below.
2809.10--Competitive process for Section 2809.10 Clarifies that leases Changes made in this
leasing public lands for solar and provides for solar and under this section section were made to
wind energy projects. wind energy leasing generally have be consistent with
inside designated processing priority other changes in this
leasing areas. over grant final rule.
applications to the
extent they require
the same BLM
resources. No other
changes were made from
the proposed to the
final rule.
2809.11--Solicitation of nominations. Section 2809.11 The requirement to This change is
describes how the BLM publish in a newspaper consistent with other
will solicit is now optional notification
nominations for solar instead of required. requirements in the
or wind energy final rule.
development.

[[Page 92131]]

2809.12--Parcel selection............ Section 2809.12 No changes were made
describes how the BLM from the proposed to
will select and the final rule.
prepare parcels.
2809.13--Competitive offers for solar Section 2809.13 A reference to lease The reference to
and wind energy development. describes how the BLM mitigation mitigation was added
will conduct a requirements is added. in response to
competitive offer for The requirement to comments received from
solar or wind energy publish in a newspaper the public. The
development. is now optional notification change is
instead of required. consistent with other
notification
requirements in the
final rule
2809.14--Acceptable bids............. Section 2809.14 The words ``and Changes made in this
describes the types of mitigation costs'' section were made to
bids that the BLM will were removed to be be consistent with
accept. consistent with other changes in this
section 2804.30. final rule.
2809.15--How will BLM select the Section 2809.15 No changes were made
successful bidder?. describes how the BLM from the proposed to
will select a the final rule.
successful bidder.
2809.16--Variable offsets............ Section 2809.16 Added a new offset Changes made in this
identifies when factor for preparing section were based on
variable offsets will draft biological comments received from
be applied. strategies and plans. the public on variable
offset factors.
2809.17--Rejection of bids........... Section 2809.17 No changes were made
describes conditions from the proposed to
when the BLM may the final rule.
reject bids or re-
conduct a competitive
offer.
2809.18--Lease terms and conditions.. Section 2809.18 Paragraph (e)(2) of These changes are
identifies terms and this section is consistent with
conditions that will changed so bond changes to section
apply to leases. amounts for wind 2805.20.
turbines reflect their
nameplate capacity.
Paragraph (e)(3) is
added to this section
to account for testing.
2809.19--Applications made inside Section 2809.19 This section is revised The changes made in the
designated leasing areas. describes situations to clarify how the BLM final rule were made
when an application will handle in response to
may be accepted inside applications submitted comments and are
a DLA. inside DLAs. intended to clarify
the final rule.
2884.10--What needs to be done before Adds a provision to The reference to pre- See the discussion in
filing an application for an oil or this section that application meetings section 2804.10 of
gas pipeline right-of-way?. describes several and additional this preamble for
additional steps, requirements for additional information
including pre- pipelines greater than on changes made in
application meetings, 10 inches were response to comment.
to be taken if an removed, resulting in
application is for a no changes being made
pipeline 10 inches or from the existing
more in diameter. regulation.
2884.11--Information submitted with Adds provision to be No changes were made
application. consistent with POD from the proposed to
template development the final rule.
schedule and other
requirements.
2884.12--Processing fees for an Adds information on No changes were made
application or permit. cost reimbursement from the proposed to
requirements for work the final rule.
performed by other
Federal agencies.
2884.16--Master Agreements........... Adds information on No changes were made
cost reimbursement from the proposed to
requirements for work the final rule.
performed by other
Federal agencies.
2884.17--Processing Category 6 right- Adds discussions on No changes were made
of-way applications. right-of-way costs for from the proposed to
work performed by the final rule.
other Federal agencies
to this section.
2884.18--Competing applications for Adds discussions on The requirement to This change is
the same pipeline. right-of-way costs for publish in a newspaper consistent with other
work performed by is now optional notification
other Federal agencies instead of required. requirements of this
to this section. final rule.
2884.20--Public notification Adds a provision to The requirements to This change is
requirements for an application. this section that we publish in a newspaper consistent with other
may put a notice on are now optional notification
the Internet or use instead of required. requirements of this
other forms of final rule.
notification as deemed
appropriate.
2884.21--Application processing by The BLM will not Changes are made to Changes made in this
the BLM. process your section 2884.21 section were made to
application if you are consistent with those be consistent with
in trespass. Several made to section other changes in this
other minor changes 2807.21. final rule.
were made to be
consistent with other
changes made in these
regulations.
2884.22--Additional information No change was proposed This section was This change was not
requirements. for this section. revised by changing proposed, but is made
the reference found in to be consistent with
paragraph (a) from other changes in this
section 2804.25(b) to final rule. No other
section 2804.25(c). changes were made to
this section.

[[Page 92132]]

2884.23--When can my application be To be consistent with No changes were made
denied?. section 2804.27, from the proposed to
section 2884.23 was the final rule.
changed to state that
the BLM may deny an
application if the
required POD fails to
meet the development
schedule and other
requirements for oil
and gas pipelines.
2884.24--Fees owed if application is Changes made to be Since pre-application The revisions to this
withdrawn or denied. consistent with meetings are no longer section suggested by
section 2804.27, would required in this final the proposed rule are
require an applicant rule and additional not included in the
to pay any pre- requirements for final rule based on
application costs pipelines greater than comments received from
submitted under 10 inches were the public on BLM's
section 2884.10(b)(4). removed, the final criteria for large-
rule does not make any scale pipeline
changes to this projects.
existing provision.
2884.30--Showing of good cause....... There was no section This section was added This section was added
2884.30 in proposed to be consistent with to be consistent with
rule. section 2804.40. other changes in this
final rule.
2885.11--Terms and conditions........ This section makes No changes were made
reference to section from the proposed to
2805.12(b) (bond the final rule.
requirements for FLPMA
authorizations) and
makes those bonding
requirements
applicable to MLA
rights-of-way. Also,
the regulation will be
clarified by providing
guidance on terms of
MLA grants.
2885.15--Rental charges.............. Clarifies that there is No changes were made
no reduction in rents from the proposed to
for grants or TUPs, the final rule.
except as provided in
section 2885.20(b).
2885.16--When is rent paid?.......... Requires making a No changes were made
payment for the from the proposed to
initial partial year, the final rule.
along with the first
years rent. Also,
provides for multiple
year payments.
2885.17--Consequences for not paying New paragraph (e) No changes were made
or paying rent late. explains the from the proposed to
circumstances under the final rule.
which the BLM would
retroactively collect
rents or fees.
2885.19--Rents for linear right-of- Provides information No changes were made
way grants. about where you may from the proposed to
obtain a copy of the the final rule.
current rental
schedule.
2885.20--Per Acre Rent Schedule Would remove an No changes were made
calculations. obsolete provision from the proposed to
(existing paragraph the final rule.
(b)(1)) that provided
for a 25 percent
reduction in rent for
calendar year 2009.
2885.24--Monitoring fees............. Provides an updated Minor revisions were Changes made in this
table describing made consistent with section were made to
monitoring categories, changes to section be consistent with
but without the cost 2805.16. other changes in this
schedule. Paragraph final rule.
(b) provides
information about
where to obtain a copy
of the current
monitoring cost
schedule.
2886.12--When you must contact the Adds to this section, No changes were made
BLM during operations. contact requirements from the proposed to
for when there is a the final rule.
need for changes to a
right-of-way grant and
to correct
discrepancies.
2887.11--Assigning a right-of-way Clarifies this section Adds two events that These changes are made
grant or TUP. to show when an may require an to be consistent with
assignment is or is assignment. Clarifies section 2807.21.
not required. that a change in a
holder's name only
does not constitute an
assignment.
2887.12--Renewing a grant............ Clarifies that if you No changes were made
apply for a renewal from the proposed to
before it expires, the final rule.
your grant will not
expire until a
decision has been made
on your renewal
request.
----------------------------------------------------------------------------------------------------------------

[[Page 92133]]

III. Final Rule as Adopted and Responses to Comments

General Comments by Topic

Competitive Process Comments
A number of comments agreed with the BLM's proposals to create a
competitive process for solar and wind development.
One comment stated that the proposed rule, if made final, would be
a positive first step in improving the existing processes for solar and
wind energy development by incentivizing development in appropriate
areas, helping developers estimate costs, and providing a fair return
to the taxpayer for the use of public lands. The BLM did not make any
changes in response to this comment.
Another comment, on the other hand, recommended that the BLM
maintain its current pre-application and application processes rather
than adding untested or unproven administrative processes to promote
competition inside and outside of DLAs. The BLM notes that it has
already successfully used competitive processes when authorizing
renewable energy development and it continues to gain experience with
competitive auctions. The BLM also intends to continue improving its
solar and wind energy policies, including by building upon the
provisions codified in this final rule, to reduce administrative
timeframes and costs in order to support reasonable and responsible
project development, such as those policies designed to further
streamline application review and processing.
Several comments provided statements on the use of a competitive
process for issuing grants.
One comment stated that we should clarify that the competitive bid
process applies only to renewable energy authorizations. The BLM only
agrees with this comment in part. In this final rule, the BLM has
codified competitive processes inside of DLAs that relate only to solar
and wind energy rights-of-way. However, the final rule modifies
existing regulations so that those same competitive processes may also
be used outside of DLAs and for other types of rights-of-way in the
future, such as when they are necessary to resolve other situations
where there are competing right-of-way and other land use authorization
requests or when the BLM otherwise determines it is appropriate to
initiate a competitive process for a particular use in a given area.
Specifically, the final rule expands the BLM's ability to initiate a
competitive process for other rights-of-way relative to existing
regulations. Should the BLM hold a competitive offer for another type
of right-of-way, it would be appropriate for the BLM to use processes
similar to those developed for this rule because those policies were
developed based on sound competitive principles. Therefore, utilizing
them as a model in other areas would promote consistency across the
agency.
One comment stated that competitive leasing would both lengthen and
complicate project siting, using the recent Dry Lake competitive
offering in Nevada as an example, noting that the preparations for
competition took years. The BLM believes that much of the work required
for competitive leasing has already been completed for solar energy in
the SEZs identified in the Western Solar Plan and other DLAs
established by other planning efforts. The upfront work done when
identifying these areas provides a basis for them to be offered under
the most favorable competitive process provisions of this rule. That
analysis also increases the certainty that the BLM will approve a
project in those areas, which ultimately reduces the overall project
review timeframes. The work done in establishing a DLA through the land
use planning process, including completion of a NEPA analysis, provides
a framework from which future project-specific analyses can tier, which
should save time and money for both the BLM and project developers.
Additionally, by expanding the circumstances under which the BLM can
utilize competitive procedures the final rules provides a more direct
path than was available to the BLM when setting up the Dry Lake SEZ
sale in Nevada.
To further support development in these areas, the BLM is also
developing regional mitigation strategies for many of the identified
SEZs. While the existence of a regional mitigation strategy is not a
prerequisite for holding a competitive sale, the BLM believes that such
strategies further clarify development requirements in a given area
allowing auction participants to more carefully evaluate potential
costs and requirements when formulating a project or a bid in advance
of competitive sale.
Collectively, these efforts and the provisions of this rule are
consistent with existing policies to encourage the timely and
responsible development of renewable energy while protecting the public
land and its resources.
One comment suggested that competition should be used only where
there are multiple applications for use of the same land. While the BLM
intends to use competition in those circumstances, it does not believe
that is the only circumstances where such processes are appropriate.
The existence of competition is not only indicated by competing
application; in some situations competition would be determined where
other evidence of competitive interests becomes known through emails,
letters, and other contact with the public. As a result, the BLM does
not believe it is appropriate to limit the use of competitive leasing
regulations to just instances of competing applications. Instead, the
provisions of this rule have been designed to provide more flexibility.
The BLM is able to hold competitive offers inside DLAs, outside DLA, in
response to competing applications, and on its own initiative, in order
to encourage development in areas where it determines those processes
to be appropriate, such as when it determines that fewer resource
conflicts are present. In total, the BLM believes that the competitive
processes established by this final rule will enable the BLM to
encourage solar and wind energy development on public lands, while also
protecting the sensitive resources found on those lands.
Summary of Key Changes Between the Proposed and Final Rule
One comment suggested that we use a table to identify technical
changes, corrections, and clarifications being made to the right-of-way
regulations by this rule, similar to the table we included in the
preamble of the proposed rule. We agree and have included a similar
table in this preamble.
Pipeline and Transmission Line Comments
Some comments questioned the BLM's description of pipelines 10
inches or greater in diameter as a measure for large-scale pipeline
projects and recommended the removal of additional processes such as
mandatory pre-application meetings to facilitate Federal and State
reviews of the project. Alternatives for the description of a large-
scale project were suggested, such as using a total acreage of
disturbance.
In light of these comments, the BLM has decided to remove the
description of large-scale pipelines and additional processes required
for such projects from the final rule. While some comments included
recommendations for alternative ways of determining a threshold for
large-scale pipelines, the BLM decided that it must further analyze how
it will identify large-scale pipelines before including requirements
for such projects in its regulations. If the

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BLM were to take such action in the future it would coordinate with
other Federal agencies, as appropriate, to identify an appropriate
threshold for large-scale pipeline projects and establish consistent,
non-duplicative requirements. The removal of the pipeline threshold
from the final rule requires deletion of the requirements in the
proposed rule that were specifically applicable to large-scale pipeline
projects. A more detailed discussion of these revisions can be found in
the relevant portions of the section-by-section analysis in this
preamble (see sections 2804.10, 2884.10, and 2885.11 of this preamble).
Some comments also questioned the BLM's description of transmission
lines with capacities of 100 kV or more as constituting large-scale
transmission projects. Those commenters recommended the removal of that
threshold and the associated requirements. Some comments suggested that
there are no readily identifiable 100 kV transmission projects by which
to determine if the proposed threshold is a fair representation of a
large-scale project. The BLM does not agree with these comments and
believes that the description is appropriate since there is a clear
separation between lower voltage transmission lines, generally 69 kV or
less, and high voltage transmission lines, beginning at 115 kV of
capacity or more. For example, the North American Electric Reliability
Corporation established the 100 kV threshold as a bright line criterion
to determine which transmission lines are included in the Bulk Electric
System, a system that is used by the Regional Reliability Organization
for electric system reliability. The BLM is maintaining the description
of transmission lines with capacity of 100 kV or the rule as a suitable
description to determine large-scale transmission projects.
Megawatt Capacity Fee Comments
Some comments argued that the BLM lacks authority to collect a MW
capacity fee because the Federal Government does not own the sunlight
or the wind, which are inexhaustible resources. While the BLM agrees
that sunlight and wind are renewable resources present on the public
lands, it does not agree that it lacks the authority to collect a fee
for the use of such resources.
Under FLPMA, the BLM is generally required to obtain fair market
value for the use of the public lands and its resources, including for
rights-of-way. In accordance with the BLM's FLPMA authority and
existing policies, the BLM has determined that the most appropriate way
to obtain fair market value is through the collection of multi-
component fee that comprises an acreage rent, a MW capacity fee, and,
where applicable, a minimum and a bonus bid for lands offered
competitively. The BLM determined that the collection of this multi-
component 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.
The BLM notes that the MW capacity payments are best characterized
as ``fees'' rather than ``rent'' because they reflect the commercial
utilization value of the public's resource, above and beyond the rural
or agricultural value of the land in its unimproved state. In the BLM's
experience, and in accordance with generally accepted appraisal and
valuation standards, the value of the public lands for solar or wind
energy generation use depends on factors other than the acreage of the
occupied land and that land's unimproved value. Other key elements that
add value include the solar insolation level, wind speed and density,
proximity to demand for electricity, proximity to transmission lines,
and the relative degree of resource conflicts that could inhibit solar
or wind energy development. To account for these elements of land use
value that are not intrinsic to the rural value of the lands in their
unimproved state, the solar and wind right-of-way payments in this
final rule incorporate ``MW capacity fees'' in addition to ``acreage
rent.''
The use of a multi-component fee that comprises both an acreage
rent and a MW capacity fee, and in some cases also a minimum and a
bonus bid, achieves four important BLM objectives. First, the approach
allows BLM to ensure that it is capturing the full fair market value of
the land being encumbered by these projects. Second, the approach is
consistent with the approach employed by the BLM for other uses of the
public land (i.e., it ensures that our approach to acreage rent is
consistent across various categories of public land uses, while
mirroring the multi-component payments received from activities like
oil and gas development where both rent and royalties are charged),
ensuring consistency across users. Third, the approach encourages the
efficient use of the public lands by reducing relative costs for
comparable projects that take up less acreage. That is, for a project
with a given MW capacity, the overall payments to the BLM will be lower
if the project employs a more efficient technology that produces more
MW per acre and thus encumbers fewer acres. Fourth, the approach is
consistent with existing policies governing the BLM's renewable energy
program, which have been in place since 2008. As explained in the
section-by-section analysis in Section IV of this preamble, this final
rule refines the calculation of the fee components (e.g., the MW
capacity fee for solar is reduced relative to existing policies) but
does not alter the basic multi-component fee structure for solar and
wind projects on the public lands.
The BLM's multi-component fee structure also bears similarities to
one of the more common structures for solar and wind energy development
on private lands, where projects pay a rent for the use of an area of
land at the outset and, and then a royalty on the power produced once
generation commences. (The BLM recognizes that private-land projects
use a variety of fee structures. For example, some projects rely solely
on an acreage rent--but in those cases, the BLM believes that the
increased value of the land due to project development is captured in
other ways, such as by charging a higher base rent that reflects more
than the land's unimproved value.)
The acreage rent charged by the BLM is analogous to the rent
charged in most private land leases. With respect to the MW capacity
fee, the BLM uses the approved electrical generation capacity as a
component of the value of the use of the public lands for renewable
energy development instead of relying on a royalty like private
landowners do. On private lands, such royalties are typically assessed
after-the-fact, as a percentage of the value of power actually
produced, and the rate can range from 2 to 12 percent. The BLM has
determined instead to charge a fee based on the installed nameplate MW
capacity of an authorized wind or solar project. This approach is
consistent with the BLM's legal authority, including the direction in
FLPMA that right-of-way holders ``pay in advance'' the fair market
value for the use of the lands. The BLM considered charging a royalty,
assessed as a percentage of power generated, but the FLPMA directive
that right-of-way holders must ``pay in advance'' would require the BLM
to collect any such royalty payments in advance of the corresponding
power generation and then ``true up'' at the end of each calendar year.
The BLM determined that the MW capacity fee approach in the final rule
presents fewer administrative burdens and costs for both the BLM and
right-of-way holders than an approach based on in-advance royalty
payments followed by annual ``true-ups.'' The BLM worked with the
Office of

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Valuation Services to compare its combined acreage rent and MW capacity
fee against the total stream of payments from a similarly situated
private land project to ensure the total payments collected by the BLM
are comparable to those collected on private land. Finally, the BLM
notes that in retaining the multi-component payment structure for solar
or wind developments as separate ``rent'' and ``fee'' components as
established under existing policy, the BLM is retaining its existing
interpretation of how that multi-component structure interfaces with
the Rural Electrification Act (IM 2016-122). Under the final rule,
consistent with existing policy, the acreage payment remains classified
as ``rent,'' as it is directly tied to the area of public lands
encumbered by the project and the constraints that the project imposes
on other uses of the public lands. As noted, however, the MW capacity
fee is more properly characterized as a ``fee'' because it reflects the
commercial utilization value of the public's resource, independent of
the acreage encumbered. As specified under FLPMA, facilities that
qualify for financing under the Rural Electrification Act may be exempt
from paying ``rental fees.'' As explained in IM 2016-122, however, the
BLM has determined that such facilities are not exempt from paying
other components of the fair market value of the land, such as the MW
capacity fee, minimum bid, bonus bid, or other administrative costs, as
none of those costs are related to the rental value of the unimproved
land.
Designated Leasing Areas Comments
Several comments requested clarification about the differences
between the competitive processes for lands inside and outside of a
DLA. Other comments expressed confusion over whether certain
requirements of the proposed rule would apply to both ``grants''
(authorizations issued under subpart 2804 for solar and wind energy
development) and ``leases'' (authorizations issued under subpart 2809).
The BLM has expanded multiple provisions in the final rule to clarify
the requirements for solar and wind energy development grants and
leases, including those relating to competitive processes, rents and
fees, bonding, and due diligence.
Comments Beyond the Scope of the Proposed Rule
In addition to the general comments discussed above and the more
specific ones discussed in the section-by-section portion of this
preamble below, the BLM received many other comments that suggested
revisions to the BLMs right-of-way regulations that were beyond the
scope of the proposed rule and/or that are better suited for
supplemental policy guidance of the type found in BLM manuals,
handbooks, or IMs. The BLM did not make any changes to the proposed
rule in light of these comments. However, they are discussed in the
relevant portions of the section-by-section analysis of this preamble.
Additional Comments on the Rule
During the preparation of this final rule, the BLM received
additional comments from various stakeholders and other interested
parties following the close of the comment period and participated in
additional stakeholder engagement meetings as part of the BLM's regular
course of business. During those meetings and in those comments,
stakeholders provided additional information clarifying the concerns,
comments, and questions they had previously raised through written
comments on the proposed rule. The BLM considered this additional
information during the drafting of this final rule. This additional
information is addressed in the relevant section-by-section discussion
of this preamble.
For example, industry stakeholders provided additional information
that was previously unavailable regarding their uncertainty, under the
proposed rule, about how both acreage rent and MW capacity fee payments
would increase over the life of a lease or grant, and particularly
their concern that such rents and fees could increase in an
unpredictable manner. These comments and the BLM's responses are
discussed further in sections 2806.51 and 2806.61 of this preamble.
Industry stakeholders also raised concern over the factors that the
BLM considers when determining a bond amount. This comment and the
BLM's response are discussed further under sections 2805.12(e)(1) and
2805.20(a)(3).
Environmental stakeholders also provided additional substantive
discussion of their comments. Specifically, they requested additional
detail in the final rule explaining the evaluation criteria that the
BLM uses when establishing DLAs going forward. The environmental
stakeholders' comment and the BLM's response are discussed further in
section 2802.11 of this preamble.

IV. Section-by-Section Analysis for Part 2800

This rule makes the following changes in part 2800. The language
found at section 2809.10 of the existing regulations is revised and
redesignated as section 2807.17(d), while revised subpart 2809 is now
devoted to solar and wind energy development in DLAs. This rule also
amends parts 2800 and 2880 to clarify the BLM's administrative
procedures used to process right-of-way grants and leases. These
clarifications ensure uniform application of the BLM's procedures and
requirements. A more in-depth discussion of the comments and changes
made is provided below.

Subpart 2801--General Information

Section 2801.5 What acronyms and terms are used in these regulations?
This section contains the acronyms and defines the terms that are
used in these regulations. Several comments suggested changes to the
proposed rule. These suggestions and comments are analyzed under the
applicable definition contained in the final rule.
The following terms are added to the definitions in section 2801.5:
``Acreage rent'' is a new term that means rent assessed for solar
and wind energy development grants and leases that is determined by the
number of acres authorized by the grant or lease. The acreage rent is
calculated by multiplying the number of acres (rounded up to the
nearest tenth of an acre) within the authorized area times the per acre
zone rate in effect at the time the authorization is issued. Provisions
addressing adjustments in the acreage rent are found in sections
2806.52, 2806.54, 2806.62, and 2806.64. An example of how to calculate
acreage rent is discussed in this preamble in the section-by-section
analysis of section 2806.52(a). No comments pertaining to this
definition were received and no changes are made from the proposed to
the final rule.
``Application filing fee'' is a new term that means a filing fee
specific to solar and wind energy right-of-way applications for the
initial reasonable costs for processing, inspecting, and monitoring a
right-of-way. The fee is $15 per acre for solar and wind energy
development applications and $2 per acre for energy project-area
testing applications. The BLM will adjust the application filing fee
once every 10 years to account for inflation. Further discussion of
application filing fees can be found in section 2804.12. This
definition is revised for consistency with comments received on
sections 2804.12 and 2804.30 on application filing fees. See those
respective sections of this preamble for further discussion. No other
comments were received and no other change is made from the proposed
rule to the final rule concerning this definition.

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``Assignment'' means the transfer, in whole or in part, of any
right or interest in a right-of-way grant or lease from the holder
(assignor) to a subsequent party (assignee) with the BLM's written
approval. The rule adds this definition to section 2801.5 to help
clarify regulations. A more detailed explanation of assignments and the
changes made is found under section 2807.21. Although some comments
were received pertaining to assignments, as discussed later in this
preamble, none of them pertain to the definition. No change is made
from the proposed to the final rule concerning this definition.
``Designated leasing area'' (DLA) is a new term that means a parcel
of land with specific boundaries identified by the BLM's land use
planning process as being a preferred location for the leasing of
public lands for solar or wind energy development via a competitive
offer. Examples of DLAs for solar energy include SEZs designated
through the Western Solar Plan; Renewable Energy Development Areas
(REDAs) designated through the BLM Arizona Restoration Design Energy
Project (REDP) planning process; and Development Focus Areas (DFAs)
designated through BLM's California's Desert Renewable Energy
Conservation Plan (DRECP) planning process. The competitive offer
process is discussed in subpart 2809 of this preamble. Further
discussion of DLAs can be found under section 2802.11 of this preamble.
Comments: Some comments recommended that the definition of DLA
should indicate criteria that must be met to designate a DLA, in
particular, wind energy-specific DLAs. The comment also suggested the
final rule include criteria to identify right-of-way exclusion and
avoidance areas. Other comments stated a similar concern, and indicated
that land use planning varies by BLM State or field office, so DLA
standards should be developed.
Response: The BLM considered establishing standard criteria for
DLAs as well as for exclusion and avoidance areas, but this approach is
not carried forward in the final rule. Doing so could unintentionally
limit the BLM's management of such lands when considering the varied
landscapes and resources that the BLM manages. However, the BLM intends
to establish guidance, as part of the implementation of this rule, to
assist the BLM in establishing DLAs, such as wind energy sites, through
its land use planning processes. Further discussion on this issue is
found under section 2804.31 of this preamble.
Comments: Some comments stated that identifying new DLAs through
land use planning was too time consuming, and therefore DLA designation
should be a separate process.
Response: Many land use planning efforts take several years to
complete and consider many resources and uses in addition to solar or
wind energy development. These types of land use planning efforts would
not consider a specific project, but instead the effect of such
developments in the planning area, and inform the BLM if the lands
should be an exclusion or avoidance area, or identified as a DLA for
solar or wind energy development. Although the BLM's land use planning
process may be time consuming, it is necessary for the BLM in its
orderly administration of the public lands to use this process to
properly protect and manage the public lands. When amending a resource
management plan, the BLM must be consistent with its planning
regulations (see 43 CFR part 1600). Absent a larger planning effort
underway for the same planning area, the BLM could use a targeted land
use plan amendment to identify a designated leasing area. In such
cases, the land use planning process may be less time consuming than
suggested by commenters. For further discussion, please see section
2804.31 of this preamble. No specific changes were made in response to
this comment.
In addition to the amendments to section 2804.31, the BLM has begun
its Planning 2.0 initiative, which is aimed at improving the BLM's
planning process. This initiative includes targeted revisions to the
planning regulations (see 43 CFR part 1600) and land use planning
handbook, in order to improve the BLM's use of Resource Management
Plans, which guide the BLM's administration of the public lands. The
Planning 2.0 initiative will help the BLM to conduct effective planning
across landscapes at multiple scales, create more dynamic and efficient
planning processes that are responsive to change, and provide new and
enhanced opportunities for collaboration with the public and partners.
You can find further information on the BLM's Planning 2.0 initiative
at the following Web site https://www.blm.gov/wo/st/en/prog/planning/planning_overview/planning_2_0.html.
Comment: A comment recommended that the BLM use one consistent
definition to ensure that DLAs represent areas of fewer resource
conflicts for solar and wind energy development.
Response: Because of the many variables that the BLM must consider
when designating a DLA, the definition provided is intentionally broad
and identifies a DLA as a preferred location for development that may
be offered competitively. This definition allows the BLM to identify
such areas in land use planning processes using plan-specific criteria
to best identify the area. However, we are modifying the definition by
removing the example of solar energy zones that was cited in the
proposed rule in order to eliminate potential confusion about the
future identification of additional DLAs, which may not be identified
in the same manner as the solar energy zones. No other comments were
received concerning this definition.
``Designated right-of-way corridor'' is a term that is defined in
existing regulations. The word ``linear'' has been added to this
definition in the final rule to distinguish between these corridors and
DLAs. No comments were received concerning this definition change and
no changes are made from the proposed rule to the final rule.
``Management overhead costs'' is defined in existing regulations as
Federal expenditures associated with the BLM. This definition has been
expanded in the final rule to include other Federal agencies. This
revision is consistent with Secretarial Order 3327 and will help to
promote effective cost reimbursement. Under Sections 304(b) and 504(g)
of FLPMA, the Secretary may require payments intended to reimburse the
United States for its reasonable costs with respect to applications and
other documents relating to public lands. Secretarial Order 3327
delegated the Secretary's authority under FLPMA to receive reimbursable
payments to the bureaus and offices of the Department. No comments were
received pertaining to this definition change, and no revisions were
made from the proposed rule to the final rule.
``Megawatt capacity fee'' is a new term meaning the fee paid in
addition to the acreage rent for solar and wind development grants and
leases based on the approved MW capacity of the solar or wind
authorization. The MW capacity fee is calculated based on the MW
capacity for an approved solar or wind energy project authorized by the
BLM. Examples of how MW capacity fees are calculated may be found after
the discussion of section 2806.56. While the acreage rent reflects the
value of the land itself in its unimproved state, the MW capacity fee
reflects the value of the industrial use of the property to generate
electricity. Specifically, it captures the additional value of public
land used for solar and wind energy generation that are not reflected
in the NASS land values.

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The BLM revised the definition of MW capacity fee from the proposed
to final rule to clarify that the MW capacity fee is calculated for
staged developments by multiplying the MW rate by the approved MW
capacity for each stage of development. The proposed rule stated that
the MW rate would be multiplied to the approved stage of development,
but did not specify that it was the approved MW capacity for the stage
of development. The BLM made this revision to help improve the public's
understanding of the MW capacity fee calculation for staged
developments.
Comment: One comment acknowledged that fair market value can be
determined by using a competitive process and agreed with the proposed
rule's approach of using a competitive process to authorize solar and
wind energy development on public lands. The comment went on to express
a preference for a system that includes the payment of a royalty fee
for the use of commercial power facilities on public lands.
Response: As explained above, the BLM has established through
existing policy, and now by this rule, a multi-component structure for
obtaining fair market value from renewable energy development. Since
FLPMA directs right-of-way holders ``to pay in advance the fair market
value'' for the use of the public lands, subject to certain exceptions
(43 U.S.C. 1764(g)), the BLM's existing regulations governing the use
of public lands, under Title V of FLPMA, generally require the
prepayment of annual rent and fees in amounts determined by the BLM.
This requirement is carried forward in existing guidance governing
acreage rent and MW capacity fees for wind and solar energy projects
and was selected in lieu of other means of obtaining fair market value.
Consistent with the BLM's authority under FLPMA, its existing policies,
and the proposed rule, the BLM has determined that it will continue to
charge in advance both an acreage rent and a MW capacity fee for solar
and wind energy projects, as a means of obtaining fair market value for
those projects. Given that FLPMA requires payment in advance, the BLM
has determined it is appropriate to base that the MW capacity fee on
rated MW capacity as opposed to actual generation. In instances where
competitive processes are utilized, any minimum and bonus bids
represent an additional component of fair market value on top of the
annual acreage rent and MW capacity. No other comments were received on
the proposed definition of MW capacity fee, and no changes to the
definition were made in this final rule.
``Megawatt rate'' is a new term that means the price of each MW for
various solar and wind energy technologies as determined by the MW rate
schedule. The MW rate equals the (1) the net capacity factor multiplied
by (2) the MW per hour (MWh) price multiplied by (3) the rate of return
multiplied by (4) the total number of hours per year where:
1. The ``net capacity factor'' means the average operational time
divided by the average potential operational time of a solar or wind
energy development, multiplied by the current technology efficiency
rates. This rule establishes net capacity factors for different
technology types, but the BLM may determine a different net capacity
factor to be more appropriate, on a case-by-case or regional basis, to
reflect changes in technology, such as a solar or wind project that
employs energy storage technologies, or if a grant or lease holder or
applicant is able to demonstrate that a different net capacity factor
is more appropriate for a particular project design, layout, or
location.
The default net capacity factor for each technology type is:
a. Photovoltaic (PV) = 20 percent;
b. Concentrated photovoltaic (CVP) and concentrated solar power
(CSP) = 25 percent;
c. CSP with storage capacity of 3 hours or more = 30 percent; and
d. Wind energy = 35 percent.
Comments: Several comments were received concerning the definition
and description of net capacity factor. One comment stated that the net
capacity factors should not be specified in the proposed rule for CSP
projects, as they will undoubtedly increase over time with technology
improvements and be updated on a regular basis, in a similar manner as
rents. CSP can be designed to operate from a range of 10 to 50 percent
efficiency depending on the intended use of the facility (e.g., base
load or peaker plant). Another comment recommended using an estimate of
the capacity factor identified in the POD and the plant's design as the
basis for this calculation.
Response: The BLM recognizes that there may be technology
improvements over time, and that there are variables which may affect a
specific project's net capacity factor. For example, a CSP project may
be designed to operate at lower or higher efficiency rate depending on
its intended use. The BLM took this into account in determining the net
capacity factor of the technologies for the final rule. Future
rulemaking would be required to change the established net capacity
factors for each technology. The BLM will not incorporate the
recommendation to use the project owner's estimate of the capacity
factor in the POD to calculate its MW capacity fee. The estimated net
capacity factor in a POD would be specific to a particular project, but
would be a subjective value that could be inaccurate or misleading.
Incorporating the methodology suggested by the comment could raise
questions as to whether the BLM was truly collecting a reasonable
return for use of the public lands.
However, the BLM has revised the final rule, consistent with this
comment and those comments submitted regarding storage technologies, to
allow the BLM to determine another net capacity factor to be more
appropriate on a case-by-case basis. The BLM could determine another
net capacity factor to be more appropriate when there is a change in
technology, such as when a project employs energy storage technologies.
Determining another net capacity factor may also be appropriate if a
project uses a more current version of a technology.
Comment: Another comment agreed with the BLM's proposal to use an
average net capacity factor for wind energy projects. However, the
comment recommended using a net capacity factor of 26 percent as
identified in the wind capacity factor for Western States (see the
Department of Energy's 2013 Wind Technologies Report) instead of the
national average wind capacity factor of 35 percent.
Response: While the BLM acknowledges that most solar and wind
projects on public lands will be located in the western United States,
it nevertheless elected to use the national averages in calculating the
net capacity factors for both solar and wind projects, because the BLM
believes those values are more representative of the technology that
will be deployed on projects developed in the future. The net capacity
factor for a given project is greatly influenced by project design,
layout, and location. The national average reflects a larger set of
projects than the regional average, and is therefore more
representative of the full range of older and newer technologies
currently sited on public lands.
With respect to the wind capacity factor in particular, the BLM
reviewed data from the Department of Energy's 2014 and 2015 Wind
Technology Reports (https://emp.lbl.gov/sites/all/files/lbnl-188167.pdf
and https://emp.lbl.gov/sites/all/files/2015-windtechreport.final.pdf,
respectively). Based on its review of that data, the

[[Page 92138]]

BLM determined that its selection of a 35 percent capacity factor for
wind was appropriate for several reasons.
First, the geographic scope of the lands included in the ``West
Region'' of the Department of Energy's reports does not adequately
capture the full extent of BLM lands. Using the geographic distribution
classifications set by the Department of Energy, BLM lands are located
in both the ``West'' and ``Interior'' regions, with 7 states in the
West and 4 states in the Interior (Colorado, Montana, New Mexico, and
Wyoming). It should also be noted that the four BLM states in the
Interior region possess significant wind energy development potential.
Accordingly, the BLM believes it is reasonable to select a wind
capacity factor between the values for the West and Interior. In the
Interior Region the Department of Energy reported capacity factors of
41.2 percent and 42.7 percent in 2014 and 2015, respectively. Data from
the 2014 report shows that while the average capacity factor in the
West was 27 percent, there was considerable spread in the factors by
project, from just below 20 percent to over 37 percent. In the
Interior, the spread in capacity factors was from 26 percent to 52
percent. Thirty-five percent represents a reasonable average of these
very disparate, project-specific capacity factors.
In addition to looking at capacity factors regionally, the
Department of Energy's analysis also controlled for wind quality.
Notably, the Department of Energy determined that even in low wind
quality areas, which predominate in the West, new projects achieve 35
percent capacity factors. As explained in the reports, this analysis
was based on wind turbine specific power, which is the ratio of a
turbine's nameplate capacity rating to its rotor-swept area. All else
being equal, a decline in specific power leads to an increase in
capacity factor according to the analysis presented in the report. In
general, since the wind industry is shifting towards deploying lower
specific power wind turbines at new wind energy projects across the
United States, the BLM believes it is reasonable to select 35 percent
as the default capacity factor for a wind project in the final rule.
It should also be noted that the BLM considered basing the net
capacity factors for these technologies on an average of the annual
capacity factors posted by the Energy Information Administration (EIA)
on its Web site at: https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_07_b. However, the BLM is not carrying
this approach forward in the final rule because, as discussed earlier
in the preamble regarding net capacity factors, we believe that the 35
percent capacity factor better represents the technologies that will be
deployed on projects developed in the future. For this reason, the BLM
determined that the EIA annual capacity factors are not appropriate for
use in this rule.
Finally, the BLM notes that if an applicant or a grant or lease
holder believes that the BLM's net capacity factor is set too high for
a particular project, the project proponent can request that the BLM
use an alternative net capacity factor when setting the MW capacity
rate for the project. Such a request would be made as described under
section 2804.40 for applicants or section 2805.12(e) for grant or lease
holders. See the section-by-section portion of this preamble for
further discussion of requests for alternative requirements.
No other comments were received, and the definition of ``net
capacity factor'' was not changed from the proposed to the final rule
as result of this comment.
2. The ``MWh price'' equals the 5 calendar-year 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
(see sections 2806.52(b) and 2806.62(b)).
Comment: One comment believed that rent and fee calculations may be
inaccurate based on inaccurate determinations of the capacity factor
and the wholesale price of electricity used in the formula. In the
proposed rule, the BLM specified the Intercontinental Exchange (ICE) as
the source of data for the wholesale price data.
Response: As discussed under section 2806.52 for MW capacity fee,
ICE was removed as the only vendor for the wholesale data. We revised
this definition to account for appropriate wholesale data without
limiting it by source. This will allow the BLM to use the best
information available, should a company that tracks trading hubs fail
to maintain accurate or reliable trade information. No other comments
were received concerning this definition.
3. The ``rate of return'' is the relationship of income to the
property owner (or, in this case, the United States) to the revenue
generated from authorized solar and wind energy development facilities,
based on the 10-year average of the 20-year U.S. Treasury bond yield,
rounded to the nearest one-tenth percent.
Comment: One comment believed that the BLM should use a 5-year
average, not a 10-year average, eliminate the 4 percent minimum, and
consider rounding down or not at all.
Response: The BLM disagrees with the suggestion to use a 5-year
average. A 10-year average of the 20-year Treasury bond rate provides a
more stable rate of return and will benefit the holder when interest
rates rise. Under the same concept, this would benefit the BLM when
interest rates decline, as is the case in the current cycle.
The BLM also disagrees that it should eliminate a 4 percent minimum
rate of return, considering the risk of energy development projects and
the fluctuation of energy commodity prices. It is not uncommon for
private parties to insist on a minimum return. The 4 percent minimum
rate of return recognizes a grant or lease holder's risk of projects
that have other financial safeguards in place, such as performance
bonds. The minimum is at the lower end of similar rates in the private
sector.
The 4 percent minimum rate of return is established for solar
energy in section 2806.52(b)(3)(ii) and for wind energy in section
2806.62(b)(3)(ii). The minimum is not included in the definitions
section of this final rule because setting the minimum is a substantive
regulatory provision. This is not a change from the proposed rule. No
changes are made in this final rule from the proposed rule regarding
the rate of return in the definitions section (section 2801.5) or in
the specific solar (section 2806.52(b)(3)(ii)) or wind (section
2806.62(b)(3)(ii)) provisions.
With respect to rounding, the BLM did agree that it should revisit
the proposed rule's approach. While it does not agree with the
commenter's suggestion that it should always round down, the BLM did
determine upon further review that it should round bond yields to the
nearest tenth of a percent to avoid a rounding-based surcharge.
4. The number of hours per year is a fixed number (i.e., 8,760
hours, the total number of hours in a 365-day year). No comments were
received on the definition of this term and no changes are made to this
definition from the proposed rule to the final rule.
``Performance and reclamation bond'' is a new term that means the
document provided by the holder of a right-of-way grant or lease that
provides the appropriate financial guarantees, including cash, to cover
potential liabilities or specific requirements identified by the BLM.
This term is defined here to clarify the expectations of what a bond
accomplishes. The definition also explains which instruments are or are
not acceptable.

[[Page 92139]]

Acceptable bond instruments include cash, cashiers or certified checks,
certificate or book entry deposits, negotiable U.S. Treasury
securities, surety bonds from the approved list of sureties, and
irrevocable letters of credit. The BLM will not accept a corporate
guarantee. These provisions codify the BLM's existing procedures and
practices.
Comment: A comment suggested adding the words ``certificate of
insurance or other acceptable security'' to each of these paragraphs in
appropriate places.
Response: The BLM believes that adding the comment's suggestion to
the text of the rule is unnecessary, as the definition of acceptable
bond instruments includes insurance policies and does not need to be
expanded to include a specific form of insurance. Furthermore, the list
of bond instruments that are acceptable is not an all-inclusive list.
There may be other forms of bond instruments, but they are not
specified in the rule as they are not as common a form of bond as those
identified. If we had intended the bond list to be an all-inclusive
list we may have unintentionally excluded an acceptable bond
instrument. No other comments were received and no changes to this
definition were made from the proposed rule to the final rule.
``Reclamation cost estimate (RCE)'' is a new term that means the
report used by the BLM to estimate the costs to restore the intensive
land uses on the right-of-way to a condition that would support pre-
disturbance land uses.
The BLM revised this definition from the proposed to final rule to
clarify that the reclamation work described must meet the BLM's
requirements. This change is important because the BLM is required to
protect the public lands and must determine if the reclamation work
done by the holder is acceptable.
No comments were received on the definition of this term and no
other changes are made from the proposed to the final rule.
``Right-of-way'' is defined in existing regulations as the public
lands the BLM authorizes a holder to use or occupy under a grant. The
revised definition describes the authorizing instrument for use of the
public lands as ``a particular grant or lease.'' No comments were
received on the definition of this term and no changes are made from
the proposed to the final rule.
``Screening criteria for solar and wind energy development'' is a
term referring to the policies and procedures that the BLM uses to
prioritize how it processes solar and wind energy development right-of-
way applications outside of DLAs. Some examples of screening criteria
are:
1. Applications filed for areas specifically identified for solar
or wind energy development, other than DLAs;
2. Previously disturbed areas or areas located adjacent to
previously disturbed areas;
3. Lands currently designated as Visual Resource Management (VRM)
Class IV; and
4. Lands identified for disposal in a BLM land use plan.
Screening criteria for solar and wind energy development were
previously established by policy through IM 2011-61, and are further
discussed in section 2804.25(d)(2) and section 2804.35 of this rule.
The IM may be found at: https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html. No changes were made from the proposed rule to
the final rule, nor were any comments received pertaining to this
definition. However, there are several comments made on the specific
screening criteria proposed that are addressed later in the section-by-
section analysis of these criteria.
``Short term right-of-way grant'' is a new term meaning any grant
issued for a term of 3 years or less for such uses as storage sites,
construction sites, and short-term site testing and monitoring
activities. The holder may find the area unsuitable for development or
the BLM may determine that a resource conflict exists in the area. No
comments were received and no changes are made from the proposed rule
to the final rule.
Section 2801.6 Scope
The scope in 43 CFR part 2800 clarifies that the regulations in
this part apply to all systems and facilities identified under section
2801.9(a). No comments were received and no changes are made from the
proposed rule to the final rule on this provision.
Section 2801.9 When do I need a grant?
Section 2801.9 explains when a grant or lease is required for
systems or facilities located on public lands. In section 2801.9(a)(4),
the term ``systems for generation, transmission, and distribution of
electricity'' is expanded to include solar and wind energy development
facilities and associated short-term authorizations. Language is also
added to section 2801.9(a)(7) to allow any temporary or short-term
surface-disturbing activities associated with any of the systems
described in this section. A new paragraph (d) is added to specifically
describe the types of authorizations required for various components of
solar and wind energy development projects. These are:
1. Short term authorizations (term to not exceed 3 years);
2. Long term right-of-way grants (up to 30 years); and
3. Solar and wind energy development leases (30 years).
This paragraph also identifies the type of authorizations issued
for solar and wind projects depending on whether they are located
inside or outside of DLAs. Authorizations for solar or wind energy
development outside a DLA, or authorizations issued non-competitively
within a DLA, will be issued under subpart 2804 as right-of-way grants
for a term of up to 30 years. Authorizations within a DLA will be
issued under subpart 2809 as right-of-way leases for a term of 30
years.
Comments: Some comments were received requesting that the site-
specific and project-area testing authorizations be made available for
solar energy. A comment further suggested that section 2801.9 be
revised so that the authorization types would be listed in the order in
which actions are taken to develop a project.
Response: The BLM revised this section, in response to the comment,
by removing the specific references to ``wind.'' As a result, the
testing provisions apply to both solar and wind energy. The BLM also
revised this section to reflect the order in which actions are taken to
develop a project. The ``other appropriate actions'' listed under
paragraph (d)(3) of this section in the proposed rule are moved to
paragraph (d)(5) of this section in the final rule. Paragraphs (d)(4)
and (5) of this section in the proposed rule are now paragraphs (d)(3)
and (4) of this section, respectively.

Subpart 2802--Lands Available for FLPMA Grants

Section 2802.11 How does the BLM designate right-of-way corridors and
designated leasing areas?
Section 2802.11, which explains how the BLM designates right-of-way
corridors, is revised to include DLAs. Under this rule, the BLM will
identify DLAs as preferred areas for solar or wind energy development,
based on a high potential for energy development and lesser resource
impacts. This section provides the factors the BLM considers when
determining which lands may be suitable for right-of-way corridors or
DLAs. These factors are unchanged from the existing regulations. This
final rule amends paragraphs (a), (b) introductory text,

[[Page 92140]]

(b)(3), (4), (6), and (7) and (d) of section 2802.11 to include
references to DLAs.
Comment: One recommendation was made suggesting that the BLM make
it clear that we will not accept applications in areas that are closed
to development by means of land use plans or other mechanisms.
Response: The comment's recommendation is addressed in the existing
rule at section 2802.10(a). This section clarifies that some lands are
not available for a right-of-way grant, which includes those lands that
the BLM identifies through the land use planning process as
inappropriate for rights-of-way, as well as public land orders,
statutes, and regulations that exclude rights-of-way, and lands
segregated from application.
Comment: One comment stated that DLAs are created through the BLM's
resource management planning process, but that such plans are changed
only every 15 to 20 years. Also, many plans are undergoing or have
recently undergone such changes, especially in areas having sage-grouse
habitat, but those plans do not designate any DLAs.
Response: Due to the timing of the comment submission and the BLM's
response, the plans noted in this comment have been finalized and the
BLM decisions are issued. The Greater Sage-Grouse Plan Amendments and
Revisions did not designate any DLAs. These plans are focused on
conservation of the Greater Sage-Grouse and its habitat. The decisions
issued in these plans safeguard primary and general habitat from the
impacts of development, including solar and wind energy.
However, the BLM may have an opportunity to designate some areas
for wind energy development using recent analyses or information that
identifies areas suitable for energy development on public lands.
Examples of such areas may be those identified as not having
significant resource and use siting concerns, as identified in the
BLM's wind mapper. The wind mapper is a BLM web-based geographic data
viewer, found at https://wwmp.anl.gov, that has up-to-date geographic
information representing the BLM's land use planning decisions for
administering public lands and other pertinent regulatory information,
specific to wind energy resources. Using information on the wind
mapper, a targeted land use plan amendment may be completed more
expeditiously than the 15 to 20 years discussed in this comment.
Comment: Another comment suggested that we consider developing a
generic EIS process suitable to all prospective solar and wind leases,
coupled with a specific discussion of variations between areas. Also,
the comment suggested that we should automate the EIS process to
leverage existing GIS and satellite data whenever possible.
Response: Although worth considering, this concept is outside the
scope of this rule, which is focused on the administrative process of
solar and wind energy rights-of-way and competitive processes. However,
the BLM plans to evaluate its NEPA process and promote automation of
the process where possible. Until that time, the BLM will designate
such areas through its existing land use planning process.
Comment: Another comment states that the designation of DLAs will
waste taxpayers' money and impede development. The cost to the public
for the BLM to designate a DLA will not be fully recaptured and the DLA
will not provide any additional value to the public through the
competitive process.
Response: Costs for the preparation of DLAs will be recaptured at
the competitive bidding stage as the administrative costs will be paid
by the successful bidder. As demonstrated by the BLM's recent
competitive actions for solar energy, there is a monetary return to the
public for auctions of parcels within renewable energy development
areas.
Comment: During stakeholder engagement meetings, environmental
stakeholders expanded on their comment on the definition of
``designated leasing area.'' The stakeholders suggested that the BLM
should not only revise the definition of DLA to include additional
specific criteria, but also make changes to section 2802.11 to specify
that the BLM consider those criteria when designating DLAs. The
stakeholders also recommended that the BLM consider sensitive
environmental resources when evaluating potential DLAs.
Response: The BLM considered adding additional criteria to section
2802.11 that would be considered when the BLM evaluates an area for
inclusion in a DLA, but it ultimately made no changes in the final
rule. The existing regulations in section 2802.11(b) already explain in
great detail what the BLM considers when making a DLA designation.
Adding an undefined term, ``sensitive environmental resources,'' could
unintentionally limit the BLM's management of public lands when
considering the varied landscapes and resources that are found there.
Furthermore, consideration of sensitive resources is already addressed
in section 2802.11(b)(2), which requires the BLM to consider
``environmental impacts on cultural resources and natural resources,
including air, water, soil, fish, wildlife, and vegetation.''
While the BLM did not make any changes to the final rule in
response to this comment, it should be noted that the BLM intends to
establish guidance, as part of the implementation of this rule, to
assist the BLM in establishing DLAs through its land use planning
processes. The implementing guidance will allow the BLM to be more
specific for these areas without unintentionally limiting itself, and
maintain the BLM's flexibility to make any necessary adjustments to the
process for evaluating potential DLAs across the varied landscapes that
it manages.

Subpart 2804--Applying for FLPMA Grants

Section 2804.10 What should I do before I file my application?
Existing section 2804.10 encourages prospective applicants for a
right-of-way grant to schedule and hold a pre-application meeting.
Under this final rule, section 2804.10 continues to encourage such
meetings regarding some right-of-way grants, and under paragraph
(a)(2), would now identify DLAs along with right-of-way corridors as a
point of discussion for these meetings if held.
Under existing section 2804.10(a)(2), the BLM determines if your
application is on BLM land within a right-of-way corridor. This revised
paragraph now includes ``or a designated leasing area.'' The BLM
generally will not accept applications for grants on lands inside DLAs.
The BLM will offer lands inside DLAs competitively through the process
described in subpart 2809, which does not involve submitting an
application. The BLM will only accept applications on lands inside DLAs
in limited circumstances (see section 2809.19(c) and (d)).
The BLM proposed amending paragraphs (a) introductory text and
(a)(2) and (4), and also adding two new paragraphs that would apply to
any solar or wind energy project, transmission line with a capacity of
100 kV or more, or pipeline 10 inches or more in diameter. For these
types of projects, the BLM proposed mandatory pre-application meetings.
Proposed amendments for paragraphs (a) introductory text and (a)(4) are
not included in the final rule, since pre-application meetings will not
be required and specific requirements associated with them are no
longer necessary. Paragraph (b) of the existing regulations will not be
redesignated and there will be no new paragraphs (b) and

[[Page 92141]]

(c) in this final rule. The only changes to section 2804.10 in the
final rule are found in paragraph (a)(2).
Under this final rule, pre-application meetings will not be
required for solar and wind energy developments, or any transmission
line with a capacity of 100 kV or more. Instead, the BLM will require
what we term ``preliminary application review meetings'' that will be
held after an application for a right-of-way has been filed with the
BLM. These meetings will fall under the BLM's cost recovery authority
for processing applications and are discussed in greater detail under
section 2804.12. Based on comments received, no requirements for
pipelines 10 inches or more in diameter are carried forward into the
final rule.
Section 2804.12 What must I do when submitting my application?
In this final rule, section 2804.12 has been retitled from ``What
information must I submit in my application?'' to ``What must I do when
submitting my application?''. Relocation of the early coordination
meeting requirements to this section has resulted in revisions to this
section that would make the previous title misleading. As revised,
section 2804.12 requires that an applicant must provide specific
information, and in the case of solar or wind energy development
projects and transmission line projects with a capacity of 100 kV or
more, must also complete certain actions when initially submitting an
application.
The last sentence in section 2804.12(a) is revised to show that a
completed application must include all of the items identified in
section 2804.12(a)(1) through (8). The text of paragraphs (a)(1)
through (7) are republished without amendment, and new paragraph (a)(8)
is added.
Comments: Several comments were submitted regarding the BLM's
proposed pre-application requirements for solar and wind energy
development and transmission lines with a capacity of 100 kV or more.
Comments suggested that the BLM could not place requirements on a
developer prior to an application being submitted to the BLM. This
general comment was focused on two aspects of the BLM's proposed
requirement for pre-application meetings. The first aspect was that the
BLM was requiring that two pre-application meetings be completed prior
to a developer submitting an application for a solar or wind energy
development project or transmission line with a capacity of 100 kV or
more. The second aspect of concern was that the BLM would require the
developer to pay cost recovery for the required pre-application
meetings. Under the proposed rule, the BLM would have required both of
these prior to submission of an application for use of the public
lands.
Response: The intent of the pre-meeting requirements is to ensure
early coordination with the developer and other Federal, State, and
tribal governments to gather information to better inform the developer
of different considerations to be made if pursuing their project on
BLM-administered lands. Considerations would include existing uses,
environmental resources, and cultural or tribal values in the area of
the proposed project. Pre-application meetings are currently required
by the BLM's policy. Discussing a proposed project with a developer
early on has demonstrated an improvement in project siting and design,
avoiding and minimizing impacts the project would have to the public
land, and reducing the BLM's processing timeframes. This final rule has
been revised and now requires early coordination, not through pre-
application meetings, but through preliminary application review
meetings, which are to be held after an application is submitted to the
BLM. These requirements for early coordination with developer and other
Federal, State, and tribal governments are found under section
2804.12(b). Additional discussion of the preliminary application review
meetings is found under section 2804.12(b) of this preamble.
Section 2804.12(a)(8) states that if the BLM requires you to submit
a POD, you must include a schedule for its submittal in your
application. This requirement was in the proposed rule's section
2804.10(c)(4), but is now moved to section 2804.12(a)(8) in the final
rule. This provision was proposed in section 2804.10 because the early
coordination with BLM was done under pre-application meetings. It is
moved to section 2804.12 of this final rule to coincide with the timing
of the preliminary application review meetings.
Section 2804.12(b) explains requirements for submitting an
application for solar or wind energy development (outside of DLAs), or
any transmission line with a capacity of 100 kV or more. Requirements
under section 2804.12(b) were found at section 2804.10(b) in the
proposed rule, but have been moved to this section instead as
application processing requirements. This includes the BLM's
requirement for preliminary application review meetings. This provision
provides clear instructions to the public about what they should expect
when filing an application for such developments.
The BLM commonly refers to the first filing of an application as an
``initial'' application due to the BLM's experience with such projects.
In most cases, a project POD goes through several iterations during the
BLM's application review process and may require additional submissions
or revisions of the application to accompany the revised plans.
Additional applications are not always necessary when revising a
project POD, but could be required.
Section 2804.12(b) also contains provisions from section 2804.10(b)
and (c) of the proposed rule. These provisions are moved in the final
rule in response to comments. An additional provision is added to
paragraph (b) of this section to reiterate that the requirements for
submitting a solar or wind application are in addition to those
described in paragraph (a) of this section for all rights-of-way.
Comments: Several comments questioned the requirement to hold pre-
application meetings, as well as the BLM's authority to require
conditions for project processing, prior to the submission of an
application to the BLM and collecting cost recovery fees for that time
period.
Response: The early coordination that resulted from the pre-
application meetings required by existing BLM policy has been essential
to the timely review and approval of solar and wind energy projects on
the public lands. However, this final rule moves these meetings and
requirements so that they occur after the submission of an application
in response to comments received. The changes retain BLM's intent to
ensure earlier coordination on such applications with other Federal,
State, local, and tribal governments. Under the final rule, such
meetings would be subject to cost recovery requirements.
Section 2804.12(b) also states that your application for a solar or
wind energy project, or a transmission line project with a capacity of
100 kV or more, must include a general description of the proposed
project and a schedule for submittal of a POD, address all known
resource conflicts, and initiate early discussions with any grazing
permittees that may be affected by the proposed project. Further,
section 2804.12(b) requires that you hold two preliminary application
review meetings, within 6 months from the date on which the BLM
receives the cost recovery fee payment required under section 2804.14.
Section 2804.12(b)(4), as previously described, is relocated from
section

[[Page 92142]]

2804.10(c) of the proposed rule. Under this paragraph, the BLM will
process an application only if the application addresses the following
items: (1) Known potential resource conflicts with sensitive resources;
(2) Values that are the basis for special designations or protections;
and (3) Applicant-proposed measures to avoid, minimize, and compensate
for such resource conflicts. For example, some applicant-proposed
measures could utilize a landscape-level approach as conceptualized by
Secretarial Order 3330 and subsequent reports, and be consistent with
the BLM's IM 2013-142, interim policy guidance. Due to the intense use
of the land from the projects covered in this section, the BLM will
require applicants to identify potential conflicts and how they may be
avoided, minimized, or mitigated. The BLM will work with applicants
throughout the application process to ensure the most efficient use of
public land and to minimize possible resource conflicts. This provision
will require an applicant to consider these concerns before submitting
an application and, therefore, provide the BLM with potential plans to
minimize and mitigate conflicts.
Comments: Some comments stated that the BLM should ensure that
meetings are structured so that participants are provided all the
project information necessary so they can meaningfully assist the BLM
to make an appropriate determination about the proposed project.
Response: The BLM agrees with these comments and has modified the
regulation to have meetings occur after an application is filed, rather
than hold the meetings beforehand. The intent of these meetings will be
to bring all Federal, State, local, and tribal governments together and
provide them with the best available information to have an informed
discussion on the right-of-way application. Authorizations for solar
and wind energy projects, and transmission lines with a capacity of 100
kV or more, are generally larger and more complex than the average
right-of-way authorization, and this extra step will help protect the
public lands and make application processing more efficient.
Furthermore, the BLM will not proceed with an application until all
appropriate meetings are held and the BLM has notified appropriate
grazing permittees (see 43 CFR 4110.4-2(b)). Applicants must pay
reasonable or actual costs associated with the requirements identified
in section 2804.12(b). Payment for reasonable costs associated with an
application must be received by the BLM after the initial filing of the
application and prior to the first meeting, consistent with section
2804.14.
After enactment of the Energy Policy Act of 2005, the BLM received
an influx of solar and wind energy development applications. Many of
these applications were unlikely to be approved due to issues such as
siting, environmental impacts, and lack of involvement with other
interested parties. As the BLM gained more experience with these
applications, it developed policies and procedures to process
applications more efficiently. These policies and procedures required
pre-application meetings and use of application screening criteria (see
section 2804.35 of this preamble) in order to help BLM and the
proponent address siting concerns early on in the process.
Pre-application meetings have helped both the BLM and prospective
applicants to identify necessary resource studies, and other interests
and concerns associated with a project. Further, the meetings have
provided an opportunity to direct development away from lands with high
conflict or sensitive resource values. As a result of these meetings,
the applications submitted were more appropriately sited and had fewer
resource issues than those submitted where no pre-application meetings
were held. Holding these meetings early in the application process made
the applications more likely to be approved by the BLM. This saved the
applicant the time and money spent on doing resource studies and
developing projects that may not have been accepted or approved by the
BLM.
Some prospective applicants chose not to pursue development after
these meetings, once they had a better understanding of the potential
issues and resource conflicts with the project as proposed. The BLM
found that applicants who participated in these meetings saved money
that would have been spent planning a project that the BLM would not
have approved. This also saved the BLM time by reducing the number of
applications it would need to process and the time spent reviewing
resource studies and project plans.
A January 2013 Government Accountability Office report (GAO-13-189)
found that the average BLM permitting timeframes have decreased since
implementation of BLM's solar and wind energy policies, which include
the early inter-agency coordination meeting requirements in this rule.
The GAO concluded that applications submitted in 2006 averaged about 4
years to process, while applications submitted in 2009 and later
averaged about 1.5 years to process. At the time of the GAO review,
these meetings were pre-application meetings. In the final rule, the
timing of these early meetings has been changed until after the
submission of an application to the BLM. Based on its experience, the
BLM believes that holding inter-agency and government coordination
meetings early in the review of a proposed large-scale development will
continue to save both the BLM and applicant time and money during the
BLM's review and processing of the application.
Based on a review of its records, the BLM identified a range of
costs and time estimated associated with the processing of each type of
application for a use of the public lands. These cost and time
estimates varied between the solar and wind energy and transmission
line projects. For solar and wind energy rights-of-way a range of costs
was identified between $40,000 and $4 million, including up to
approximately 40,000 BLM staff labor hours and other non-labor costs
per project. For transmission lines 100 kV or larger a range of costs
was identified between $260,000 and $2.1 million, including up to
approximately 21,000 BLM staff labor hours and other non-labor costs
per project. Based on this review, the BLM observed that projects with
early coordination generally had lower costs relative to similarly
situated projects.
Based on the BLM's experience, two meetings are usually sufficient
to address all known potential concerns with a project, which is why
the final rule calls for two meetings. However, the BLM understands
that additional meetings may be beneficial to a project before an
application is submitted. The BLM does not want to limit its ability to
hold additional meetings should a project be particularly complex and,
therefore, the final rule allows for additional preliminary application
review meetings to be held when mutually agreed upon. For example, a
project that crosses State lines could require additional coordination
with local governments and other interested parties.
Comments: Some comments noted concern over the BLM's existing and
proposed pre-application process and its open-ended timeframe. Comments
were concerned that this would be a deterrent for pursuing development
on the public land, even if the project itself was well sited and
designed. A developer would need assurances that a project would
proceed expeditiously. Suggested timeframes included 30 days between
meetings and application submittal.

[[Page 92143]]

Response: New paragraph (b)(4) specifies that within 6 months from
the time the BLM receives the cost recovery fee, you must hold at least
two preliminary application review meetings. The first meeting will be
held with the BLM to discuss the proposal, the right-of-way application
process, the status of BLM land use planning for the lands involved,
potential siting and environmental issues, and alternative site
locations. The second meeting will be held with appropriate Federal and
State agencies and tribal and local governments to discuss concerns as
identified above. If you do not believe you need to schedule the first
or second meeting described above, you can ask the BLM for an
exemption. The process of requesting an exemption is discussed further
in section 2804.12(i), under the newly added paragraph labeled ``Inter-
agency Coordination.''
Section 2804.12(c) contains requirements for submitting an
application for solar and wind energy development. These requirements,
located in section 2804.10(a)(8) and (c)(2) in the proposed rule, have
been relocated to section 2804.12(c)(1) and (2) in this final rule.
Under section 2804.12(c)(1), the BLM specifies that an application for
solar or wind energy development must be submitted for lands outside of
DLAs, except as provided for by section 2809.19. Lands inside DLAs will
be offered competitively under subpart 2809. See section 2809.19 of
this preamble for further discussion. No comments were received and the
only changes made to this paragraph are those identified for relocating
the requirement to this section and putting it in the context of a
requirement for submitting an application.
Section 2804.12(c)(2) requires that an applicant submit an
application filing fee with any initial solar or wind energy right-of-
way application. Section 304 of FLPMA authorizes the BLM to establish
filing and service fees. A per acre application filing fee may
discourage applicants from applying for more land than is necessary for
a proposed project. Under this final rule, application filing fees will
be retained by the BLM as a cost recovery fee, instead of being sent to
the General Fund of the Treasury as collected revenue as proposed. A
similarly structured nomination fee is established following the same
criteria and is described in section 2809.11(b)(1).
Paragraph (c)(2) of this section is revised to replace ``by the
average annual change in the Implicit Price Deflator, Gross Domestic
Product (IPD-GDP)'' to read as ''using the change in the Implicit Price
Deflator, Gross Domestic Product (IPD-GDP)''. As proposed, this
provision may have been interpreted as limiting how the BLM would use
the IPD-GDP when updating this fee. It is appropriate for adjustments
that occur annually, such as acreage rent, to refer to the average
annual change in the IPD-GDP. However, the application filing fee may
be adjusted once every ten years and this adjustment would be based on
the cumulative change to the IPD-GDP over the 10-year period.
The application filing fee is the initial fee paid to the BLM for
the reasonable costs of processing, inspecting, and monitoring a right-
of-way. The BLM will use these funds towards processing your
application. The balance of these funds, if any, will be allocated
towards a cost reimbursement agreement that is later established
between the BLM and the applicant or refunded if the application is
denied or otherwise terminated. A cost reimbursement agreement is
established under the authority of FLPMA section 304(b) and 504(g).
This change is made in conformance with those changes made under
section 2804.30(e)(4) in response to comments.
The application filing fee is based on the appraisal consultation
report performed by the Department's Office of Valuation Services. The
appraisal consultation report compared similar costs on private lands,
and provided a range between $10 and $25 per acre per year. The nominal
range or median was reported as between $15 and $17 per acre per year.
The appraisal consultation report is available for review by contacting
individuals listed under the FOR FURTHER INFORMATION CONTACT section of
this preamble.
The BLM is adopting a single filing fee at the time of filing an
application, as opposed to a yearly payment. Based on the appraisal
consultation report, fees are $15 per acre for solar and wind energy
applications and $2 per acre for wind energy project-area and site-
specific testing applications.
Comments: Several comments were made concerning the fees identified
in the description of requirements for section 2804.12(c)(2). One
comment suggested that the $15 per acre filing fee should be made a
part of a cost recovery fee and used to reimburse the BLM for its
expenses. In addition, the comment suggested that the fee should be
refundable if the lands are later made subject to competition.
Response: The BLM has revised this rule, including this section, to
make application filing fees part of cost reimbursement paid to the
BLM. Payment of cost reimbursement to the BLM is under Sections 304(b)
and 504(g) of FLPMA. Application filing fees and other costs associated
with the BLM's processing of applications can be recovered because the
BLM's application review and other work facilitates, and will generally
be essential for, the BLM's processing, inspecting, and monitoring of a
right-of-way. Consistent with FLPMA, application filing fees are
retained by the BLM as cost reimbursement and will not be sent to the
General Fund of the U.S. Treasury as originally proposed. If lands are
later subject to a competitive offer for the use for which application
filing fees were provided, (e.g., competition for a site development
when development application filing fees are paid), then these fees
would be refunded to the unsuccessful bidders who had already paid
them, except for the reasonable costs incurred.
Comment: One comment opposes the proposed $15 per acre filing fee
for wind energy applications and $2 per acre fee for wind energy site-
specific testing applications as this would increase processing costs.
The comment suggested that fees should be as low as possible to
encourage wind energy development on public lands.
Response: The BLM has removed the application filing fee from site-
specific testing applications to address concerns of increasing costs
for development on the public lands. Site-specific testing generally
takes up less than an acre, so it would not be necessary to encourage a
smaller area of use. Project area testing and developments can each
encompass thousands of acres and a per acre filing fee is appropriate.
This final rule retains a $2 per acre filing fee for project area
testing applications and a $15 per acre filing fee for development
applications to encourage thoughtful development on public lands. Fees
for solar and wind energy development applications will be adjusted for
inflation once every 10 years, using the Implicit Price Deflator for
Gross Domestic Product (IPD-GDP).
Section 2804.12(d) references an applicant's option to request an
alternative requirement if the applicant is unable to meet one of the
requirements outlined for submitting an application. Requests for an
alternative requirement are submitted under section 2804.40. This
provision applies to all right-of-way applications submitted to the BLM
and is added to the final rule in response to comments submitted on the
proposed rule. Further discussion on requesting an alternative
requirement is found under section 2804.40.

[[Page 92144]]

Comments: Some comments stated that the mandatory pre-application
meetings included in the proposed rule would discourage a developer
from pursuing public lands for development, since the process and costs
associated with development on BLM lands are greater than those on
private lands. These comments expressed concern that these requirements
are overly burdensome and duplicative of the NEPA process.
Response: Although costs to develop a project may end up being
higher on public lands, the BLM has a different scope of authority and
responsibility than agencies and offices that administer developments
that occur on private land. The BLM is charged with managing the public
lands under principles of multiple use and sustained yield. The BLM
must take into account resources and use of the public land, and
balance those with each additional proposed use and its impacts to
resources for current and future generations.
Based on the BLM's experience, these early coordination meetings
help reduce the overall time and costs associated with the BLM's
application process. The pre-application meetings described in the
proposed rule, which are existing policy, are changed in this final
rule to ``preliminary application review meetings,'' which take place
after an application is submitted. The BLM believes these meetings will
facilitate a more efficient application process and will not discourage
development on public lands.
The BLM is required, under NEPA, to consider the environmental
impacts of a significant action on the public lands. These early
coordination meetings help the BLM and proponent determine the best
possible approach for developing a proposed project that would avoid,
minimize, reduce or otherwise compensate for its environmental impacts.
Based on the BLM's experience, these meetings have reduced the overall
time of the NEPA analysis necessary for projects on the public lands.
The GAO's report (GAO-13-189) found that the average BLM permitting
timeframes have decreased since implementation of BLM's solar and wind
energy policies, which include the early inter-agency coordination
meeting requirements in this rule.
The BLM added section 2804.12(i), ``Inter-agency Coordination,'' in
response to these comments. This paragraph provides that an applicant
may request an exemption from some of the requirements of this section,
should they participate in an inter-agency coordination process with
another Federal, State, local, or tribal authority. This final rule
allows a developer to formally request an exemption to the requirements
under section 2804.12, pertaining to application filings and other
requirements that may be duplicative of other activities that a
developer is completing. In order for a developer to qualify for an
exemption from these requirements, the other activities must meet the
same criteria as required by the BLM. An example of such a situation
would be if a developer had already met with the Department of Energy
for purposes similar to what is required under the BLM's first
preliminary application review meeting.
No other comments were received and no additional changes made to
this section.
Sections 2804.12(e) through (h) are redesignated in the final rule
from paragraphs (b) through (e) of the existing regulations and no
other changes were made to these paragraphs.
Section 2804.14 What is the processing fee for a grant application?
Under section 2804.14, applicants must pay for reasonable costs for
processing an application as defined by FLPMA. Under section
2804.14(a), the BLM may collect the estimated reasonable costs incurred
by other Federal agencies. Applicants may pay those costs to other
affected agencies directly instead of paying them to the BLM.
Section 2804.14(b) includes a table of the application processing
categories. The specific outdated values for cost recovery categories 1
through 4 have been removed from this table, while the explanations of
the categories and the methodology of calculating the costs remain.
These numbers are available in writing upon request or may be found on
the BLM's Web site at https://www.blm.gov/. These cost figures were
removed from the regulations because they are outdated after the first
year, since the BLM updates these costs annually and has done so since
this section of the regulations was originally published. The revision
allows the BLM to update these numbers without modifying the CFR and
prevents confusion to potential applicants who would see incorrect
information. The explanation of how these costs are calculated,
formerly found in section 2804.14(c), is moved up to paragraph (b) to
provide better context for the amended table. Redundant language is
removed from the Category 1 processing fee.
Comments: Some comments were received stating that the BLM does not
have authority to collect cost recovery on behalf of other Federal,
State, and non-regulatory offices, such as tribal governments and
interested public stakeholders. These comments stated that the
authority delegated by the Secretarial Order was by the Secretary, and,
therefore, delegation of the authority could not apply to any agency or
office outside of the Department.
Response: Secretarial Order 3327 delegating cost recovery authority
applies only to agencies and offices of the Department of the Interior.
Sections 304(b) and 504(g) of FLPMA, however, give the Secretary
authority to collect payments intended to reimburse the United States,
not just the Department of the Interior. Under Section 304(b) of FLPMA,
the Secretary may charge for reasonable costs of the United States
concerning ``applications and other documents relating to [the public]
lands.'' Section 504(g) of FLPMA provides that the Secretary may charge
for ``all reasonable administrative and other costs incurred in
processing'' a right-of-way application and costs associated with the
inspection and monitoring of right-of-way facilities.
The revision under section 2804.14 and other cost recovery
provisions of this rule clarify that the BLM's cost recovery authority
is consistent with FLPMA, in that it seeks reimbursement to the United
States--i.e., it can seek reimbursement of its own costs as well as
those of other Federal agencies. This does not include reimbursement of
costs for State and non-regulatory offices. The BLM intends that
collecting such reasonable costs for other Federal agencies would
primarily arise in situations where the BLM's decision to approve or
deny a right-of-way application depends on another Federal agency's
issuance of a decision or other determination before or in conjunction
with the BLM's right-of-way decision. An example of this can been seen
in the BLM's May 2013 Memorandum of Understanding with the Fish and
Wildlife Service (FWS), where the BLM and FWS have established a
protocol for the BLM to collect and then provide cost recovery funds to
the FWS for Endangered Species Act and other work that the BLM
determines is necessary for it to process right-of-way applications. A
copy of the Secretarial Order and Memorandum of Understanding can be
found at the following Web site: https://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_information/2013/IB_2013-074.html. No other comments were received, and no changes were
made to this section of the final rule.

[[Page 92145]]

Section 2804.18 What provisions do Master Agreements contain and what
are their limitations?
As defined in section 2804.18, a Master Agreement is a written
agreement covering processing and monitoring fees negotiated between
the BLM and a right-of-way applicant that involves multiple BLM rights-
of-way for projects within a defined geographic area. New section
2804.18(a)(6) requires that a Master Agreement also describe existing
agreements between the BLM and other Federal agencies for cost
reimbursement. With the recent authority delegated by Secretarial Order
3327 to collect costs for other Federal agencies, it is important for
the applicant, the BLM, and other Federal agencies to coordinate and
maintain consistency for cost reimbursement. No additional comments
were received, except for those discussed under section 2804.14, and no
changes were made to this section in the final rule.
Section 2804.19 How will BLM process my processing Category 6
application?
Under section 2804.19(a), an applicant for a Category 6 application
must enter into a written agreement with the BLM identifying how such
applications will be processed. Under this final rule, the final
agreement includes a description of any existing agreements the
applicant has with other Federal agencies for cost reimbursement
associated with the application. No comments were received for this
section, and no changes were made from the proposed rule to this
section of the final rule.
Under section 2804.19(e), the BLM may collect reimbursement to the
United States for its reasonable costs for processing applications and
preparation of other documents under this part relating to the public
lands. Adding this language to these regulations clarifies the BLM's
authority when collecting for other agencies. No additional comments
were received, except for those discussed under section 2804.14 and no
changes were made to this section of the final rule.
Section 2804.20 How does BLM determine reasonable costs for processing
Category 6 or monitoring Category 6 applications?
Section 2804.20 is revised to clarify the scope of the BLM's cost
recovery and how the BLM will determine reasonable costs of the United
States when processing and monitoring Category 6 applications. In
paragraph (a)(1) of this section, ``BLM'' is changed to ``the Federal
Government,'' to make it clear that the BLM may collect cost recovery
for other Federal agencies as well. Processing costs include reasonable
costs for processing a right-of-way application, while monitoring costs
include reasonable costs for those actions the Federal Government
performs to ensure compliance with the terms, conditions, and
stipulations of the right-of-way grant. As pre-application requirements
are not included in this final rule, section 2804.20(a)(7) was deleted.
No additional comments were received, except for those discussed under
section 2804.14, and no other changes were made to this section of the
final rule.
Section 2804.23 When will the BLM use a competitive process?
Section 2804.23 was previously titled ``What if there are two or
more competing applications for the same facility or system?'' but is
revised to read, ``When will the BLM use a competitive process?'' This
change is necessary because, under the final rule, the BLM may use a
competitive process even when there are not two competing applications.
Paragraph (a)(1) of this section now requires applicants to
reimburse the Federal Government, as opposed to just the BLM, for
processing costs, consistent with the cost recovery authority in
Sections 304(b) and 504(g) of FLPMA. This means that the BLM could
require applicants to reimburse the BLM for the costs incurred by other
agencies, such as the U.S. Fish and Wildlife Service, in processing the
application.
A new sentence in section 2804.23(c) gives the BLM authority to
offer lands through a competitive process on its own initiative. Under
the existing regulations, the BLM can use a competitive process only
when there were two or more competing applications for a single right-
of-way system. This change gives the BLM more flexibility to offer
lands competitively, and applies to all potential rights-of-way, not
just solar and wind energy development projects.
Throughout the proposed rule, the BLM required publication of a
notice in the Federal Register as well as in a newspaper in general
circulation in the area affected by the potential right-of-way.
Publication in a newspaper is included in the final rule as one of the
``other methods'' of public notification that the BLM may use, but is
no longer a requirement. The potential area affected by a proposed BLM
action may not be covered by a single newspaper. As the BLM considers
issues at a broader scale, such as multi-state transmission lines,
several communities may be affected by a single BLM action. The Federal
Register is a national publication that is available to all interested
parties. In addition, the BLM will make available a copy of all Federal
Register notices on its Web site at www.blm.gov. The BLM may use a
newspaper to notify the public on a case-by-case basis, as appropriate.
The public notification methods throughout this final rule are revised
consistent with this section.
Comments: Some comments expressed concern that the BLM may
determine to hold a competitive offer after an applicant has
substantially progressed in the processing of their non-competitive
application for a right-of-way grant. These comments argued that this
possibility would discourage developers from submitting a solar or wind
energy right-of-way application.
Response: Proposed paragraph (c) of this section has been revised
to state that a competitive process will not be held for public lands
where a right-of-way application for solar or wind development has been
accepted, including the POD and cost recovery agreement. Adding this
criterion provides assurances to prospective applicants that the BLM
will not competitively offer lands after considerable time and
resources have been committed to processing a particular application.
Under section 2804.23(d), lands outside of DLAs are made available
for solar or wind energy applications through the competitive process
outlined in section 2804.30. This provision directs the reader to new
section 2804.30, which explains the competitive process for solar and
wind energy development outside of DLAs. This paragraph is necessary to
differentiate between development inside and development outside of a
DLA. No comments were received on this paragraph, and no changes are
made from the proposed rule to the final rule.
Under section 2804.23(e), lands inside a DLA will now be offered
competitively through the process described in subpart 2809. This new
paragraph directs the reader to revised subpart 2809, which explains
the competitive process for solar and wind energy development inside of
DLAs. This paragraph is necessary to differentiate between development
inside and outside of a DLA. No additional comments were received for
this section, except for those discussed under paragraph (c), and no
other

[[Page 92146]]

changes were made from the proposed to the final rule.
Section 2804.24 Do I always have to submit an application for a grant
using Standard Form 299?
Section 2804.24, which is unchanged from the proposed rule,
explains when you do not have to use Standard Form 299 (SF-299) to
apply for a right-of-way. Under the existing rule, you do not have to
use SF-299 if the BLM determines competition exists under section
2804.23(c). The BLM only determines competition exists when there are
two or more competing applications for the same right-of-way facility
or system.
Due to the changes made to section 2804.23, section 2804.24
specifies when an SF-299 is required. Under both the existing
regulations and this final rule, the BLM will implement a competitive
process if there are two or more competing applications. Under section
2804.24(a), you do not have to submit a SF-299 if the BLM offers lands
competitively and you have already submitted an application for that
facility or system.
Under paragraph (a) of this section, if you have not submitted an
application for that facility or system, you must submit an SF-299, as
specified by the BLM. Under the competitive process for solar or wind
energy in section 2804.30, for example, the successful bidder becomes
the preferred applicant, and may apply for a grant. The preferred
applicant will be required to submit an SF-299, but unsuccessful
bidders will not.
Paragraph (b) explains that an applicant does not have to use an
SF-299 when the BLM is offering lands competitively under subpart 2809.
Under subpart 2809, the BLM will offer lands competitively for solar
and wind energy development inside DLAs. The successful bidder will be
offered a lease if the requirements described in section 2809.15(d) are
met. The successful bidder will not have to submit an application using
SF-299. The following chart explains when the filing of an SF-299 is or
is not required under this final rule:

When a SF-299 Is Required
------------------------------------------------------------------------
Would have to submit a SF
Type of solar or wind right-of-way 299?
------------------------------------------------------------------------
Have two or more competing applications Yes.
for the same area, outside of DLAs.
Lands are offered competitively outside of No.
a DLA and you have already submitted an
application for the parcel before the
Notice of Competitive Offer.
Lands are being offered competitively Yes.
outside of a DLA and you have not
submitted an application.
You are the successful bidder in a Yes.
competitive offer outside of a DLA and
have been declared the preferred
applicant and may apply for a grant.
Lands are being offered competitively No.
within a DLA under subpart 2809.
------------------------------------------------------------------------

No comments were received and, no were other changes are made to
this section of the final rule.
Section 2804.25 How will BLM process my application?
This section of the final rule has been modified from the proposed
rule to reflect the shift of early BLM coordination from pre-
application meetings, under section 2804.10, to preliminary application
review meetings, under section 2804.12. These preliminary application
review meetings are now required after the initial filing of a right-
of-way application for solar or wind projects, or for electric
transmission lines with a capacity of 100 kV or more.
Section 2804.25(a) of this final rule has been modified from the
proposed rule to include a provision from current section 2804.25(b)
that states the BLM will inform you of any other grant applications
that involve any of the lands for which you have applied. This new
provision has been added as paragraph (a)(2). Paragraph (a) has been
reformatted providing an introductory statement and putting the
existing requirement for identifying the processing fee as paragraph
(a)(1). This is an existing provision of the regulations and is only
added to this paragraph as part of formatting revisions that are made
in response to comments submitted concerning confusion with existing
requirements of section 2804.25(b).
Comments: Some comments were received noting confusion over the
proposed section 2804.25(b) and its requirements.
Response: This paragraph has been reformatted into two new separate
paragraphs, (b) and (c).
New section 2804.25(b) contains existing regulatory requirements
that were part of proposed section 2804.25(b). This paragraph helps
explain the existing requirements found in section 2808.12 of the
regulations. In paragraph (b), the BLM will not process your
application if you have any trespass action pending for any activity on
BLM-administered lands or have any unpaid debts owed to the Federal
Government. If you have an outstanding trespass action, the BLM will
only process your application, under part 2800 or part 2920, if it will
resolve the underlying trespass. Similarly, if you have any debts
outstanding, the BLM will only process your application after those
outstanding debts are paid. The requirement in section 2808.12 is often
overlooked by potential right-of-way applicants and this addition to
the regulations would insert the requirement into the application
process and improve applicant understanding of the BLM's process under
subpart 2804.
Comments: Some comments expressed concern with the clarity of this
proposed section and were also unsure whether using an application for
a right-of-way to resolve trespass was appropriate. Further, concern
was raised over what constituted an unpaid debt to the Federal
Government.
Response: In response to the comment about clarity, the BLM revised
the language in paragraph (b) of this section, by adding paragraphs
(b)(1) and (2), discussing when the BLM will not process an
application.
Section 2804.25(b)(1) clarifies that the BLM will not process your
application if you have an outstanding debt to the Federal Government
and then describes what constitutes an outstanding debt to the
government. An additional sentence was added to paragraph (b)(1) of
this section, explaining that unpaid debts are what are owed to the
Federal Government after all administrative collection actions have
occurred, including administrative appeal proceedings under applicable
Federal regulations and review under the Administrative Procedure Act
(APA). Adding this provision to the regulations makes it clear to
right-of-way holders and trespassers that the BLM will evaluate
applications in this manner.

[[Page 92147]]

Paragraph (b)(2) of this section clarifies that if you are in
trespass, the BLM will only process an application that would resolve
that particular trespass. Reformatting this paragraph in this manner
separates the concepts of unpaid debts and existing trespass situations
as they pertain to new applications. Under this final rule, the BLM
will not always issue a right-of-way to resolve a trespass. The BLM
will consider the situation on a case-by-case basis and will evaluate
whether the trespass was knowing and willful. The BLM will also
consider whether issuing a right-of-way to resolve the trespass is
appropriate. If a right-of-way is not an appropriate way to resolve a
trespass, the BLM will consider other options for resolving a trespass,
such as requiring its removal from public lands.
Section 2804.25(c) contains the requirements from section
2804.25(b) of the existing regulations, under which the BLM may require
the submittal of a POD. The POD or other plans must be submitted to the
BLM within the period specified by the BLM.
Under paragraph (c)(1) of this section, the BLM requires an
applicant to commence resource surveys or studies within 1 year of
receiving a request from the BLM. This requirement was identified in
the preamble of the proposed rule and carried forward in this final
rule. The requirement to begin the surveys or studies within 1 year of
the request establishes a default period, which will apply if the BLM
does not specify a different time period within which the survey or
study must begin. The BLM may identify a different time period through
written correspondence with applicants, or by other means, as
appropriate. Generally, these surveys or studies will not require a
permit from the BLM or any other agency. Proponents need only
coordinate the work with the applicable agencies as appropriate.
However, for some surveys or studies, there may be a permit that is
necessary, such as when performing pedestrian archaeological surveys.
In those instances, the BLM will work with applicants to ensure that
the applicable permitting requirements are understood by all parties.
Under paragraph (c)(2) of this section, an applicant could request
an alternative requirement to one of the requirements of this section,
such as the period of time described in paragraph (c)(1) of this
section. However, the applicant must show good cause why it is unable
to meet the requirement. This new paragraph directs the reader to new
section 2804.40, consistent with revisions made from comments received
as discussed under section 2804.40, if the applicant is unable to meet
the requirements of this section. Failure to meet the 1 year
requirement for application due diligence may result in denial of the
application, unless an alternative compliance period has been requested
and agreed to by the BLM. Paragraph (c)(2) of this section gives
applicants the ability to address circumstances outside of their
control with respect to time periods.
Comments: Some comments were received regarding due diligence
requirements for applicants to begin resource studies or provide other
such survey work to the BLM. Comments recommended varying timeframes
for application due diligence ranging from 1 to 3 years after the BLM's
approval of survey protocols or other identified study requirements.
Comments generally agreed with implementing such requirements for
applications.
Response: In consideration of the comments received on application
due diligence requirements, the BLM determined that a longer timeframe
would not be appropriate. Under this final rule, an applicant would be
required to begin surveys or inventories within a year of the BLM's
request date, unless otherwise specified by the BLM. The BLM determined
that a one year default timeframe was adequate to commence surveys and
inventories. This rule does, however, leave the BLM with the discretion
to establish a different timeframe where appropriate.
Section 2804.25(c) of the existing regulations is redesignated as
paragraph (d) of this section. It remains unchanged and is relocated to
make room for the reformatting of this section in response to comments
submitted on the proposed rule.
The introductory text of section 2804.25(e), which is redesignated
from existing paragraph (d), is revised by replacing the words ``before
issuing a grant'' with ``in processing an application.'' This change is
made to account for the situation where the BLM would issue a grant
without accepting applications. For example, lands leased inside DLAs
will be offered through a competitive bidding process under subpart
2809 in situations where no applications for those lands are received.
The provisions in section 2804.25 do not apply to the leases issued
under subpart 2809. However, they will apply to all other rights-of-
way, including solar and wind energy development grants outside of
DLAs. The process for issuing leases inside DLAs is discussed in
subpart 2809. This revision clarifies that the requirements of this
section apply to applications.
Section 2804.25(e) is further revised to incorporate new provisions
for all rights-of-way as well as specific provisions for solar and wind
energy development. Existing section 2804.25(d)(5), which provides the
requirement to hold a public meeting if there is sufficient public
interest, is moved to section 2804.25(e)(1). Revisions are made in this
final rule, consistent with those made in section 2804.23(c). Language
is added specifying that a public notice may also be provided by other
methods, such as publication in a newspaper in the area affected by the
potential right-of-way or the Internet.
Section 2804.25(e)(2) contains three separate requirements for
solar and wind energy development applications. Under section
2804.25(e)(2)(i), the BLM will hold a public meeting in the vicinity of
the lands affected by the potential right-of-way for all solar or wind
energy development applications. Based on the BLM's experience, most
solar and wind energy development projects are large-scale projects
that draw a high level of public interest. This requirement is added to
provide an opportunity for public involvement early in the process.
Under paragraph (e)(2)(ii), the BLM will apply screening criteria when
processing an application outside of DLAs. These screening criteria are
explained further in section 2804.35. The BLM removed the word
``priority'' from this requirement to improve reader understanding that
the screening criteria are used to determine the priority of
applications, not ``resource priorities.''
Under section 2804.25(e)(2)(iii), the BLM will evaluate an
application, based on the input it has received from other government
and tribal entities, as well as information received in the
application, public meetings, and preliminary application review
meetings. The BLM may consider information it has received outside of
these meetings when evaluating an application. This paragraph is
revised in the final rule to remove reference to pre-application
meetings and add preliminary application review meeting requirements,
consistent with other changes in this final rule. The BLM has also
added more detail to this paragraph explaining why it may deny an
application at this point in the process. For example, the BLM may deny
an application if you fail to address known resource values raised
during preliminary application review (see section 2804.12(c)(4)), or
during public meetings (see section 2804.25(e)(2)(i)), or if you
improperly site the project. The BLM made this revision to help

[[Page 92148]]

improve the public's understanding of this process.
Based on its evaluation of an application, the BLM will either deny
or continue processing it. The BLM's denial of an application will be
in writing and is an appealable decision under section 2801.10. The
denial or approval of all grant applications is at the BLM's
discretion.
As noted previously under section 2804.12, you must submit an
application for a solar or wind energy development. Requirements for
submitting this application are noted in section 2804.25(b) and (c),
and these must be fulfilled before an application is ready to be
evaluated by the BLM. Section 2804.25(e)(2)(iii) has been revised to
explain what criteria must be met in order for the BLM to continue
processing your application. These criteria are: Whether the
development application is appropriately sited on the public lands
(e.g. outside of DLAs--where leasing must proceed under Section 2809
rather than 2804--and outside of exclusion areas), and whether you
address known resource values that were discussed in the preliminary
application review meetings. Known resource values must also be
addressed in general project descriptions and in further detail in a
project's POD.
Under section 2804.25(e)(3), the BLM will determine whether the POD
schedule submitted with an application meets the applicable development
schedule and other requirements or whether an applicant must provide
additional information. This is a necessary step that allows the BLM to
evaluate the application requirements under section 2804.12. Those
requirements can be found in section 2804.12(b) and (c). The BLM
determines if the development schedule and other requirements of the
POD templates have been met. The POD templates can be found at https://www.blm.gov.
Under the proposed rule, paragraph (e)(3) of this section applied
to applications for solar and wind energy development, transmission
lines with a capacity of 100 kV or more, and pipelines 10 inches or
greater in diameter. Under this final rule, this paragraph would apply
to all applications for which a POD is required. Although a POD is
mandatory for some types of projects, the BLM may require an applicant
to submit a POD with any type of right-of-way application under section
2804.25(c) of this final rule (section 2804.25(b) of the existing
regulations). Should the BLM require an applicant to submit a POD, the
application would be evaluated under this paragraph based on the POD
schedule submitted with the application.
Section 2804.25(e)(4) of this final rule is revised from the
proposed rule to include a cross-reference to the Department's NEPA
implementation regulations at 43 CFR part 46. The Departmental
regulations reinforce the CEQ's regulations and the requirements to
comply with NEPA. This cross-reference is made to increase the public's
awareness of these requirements and where they may be found, but does
not impose any additional requirements on the public.
Redesignated paragraphs (e)(5), (6), (7), and (8) of this section
are existing provisions that were formerly found in paragraph (d) of
this section. Former paragraph (e) is redesignated as new paragraph
(f). No other comments were received or other changes made to the final
rule, except that references to the ``U.S.'' were changed to read
``United States.''
Section 2804.26 Under what circumstances may BLM deny my application?
Section 2804.26 explains the circumstances in which the BLM may
deny an application. The BLM considers the criteria outlined in this
section during its decision-making process, which for right-of-way
authorizations ends with the issuance of a decision--either a ROD or a
Decision Record (DR), or in the absence of a ROD or DR, the perfection
of a right-of-way instrument or the issuance of a written decision
denying the right-of-way application. Once the BLM issues a ROD or DR
to approve a right-of-way, any subsequent BLM determination that is
inconsistent with that ROD or DR, including any decision to suspend or
terminate the right-of-way, is a separate action that requires the BLM
to complete a separate decision-making process.
Section 2804.26(a)(5) explains one such circumstance. This
provision of the existing regulations is revised to include ``or
operation of facilities'' and now reads, ``when an applicant does not
have or cannot demonstrate the technical or financial capability to
construct the project or operate facilities in the proposed right-of-
way.'' The rule adds text to clarify this requirement, which applies to
all rights-of-way. The added paragraphs explain how an applicant could
provide evidence of the financial and technical capability to be able
to construct, operate, maintain, and decommission a solar or wind
energy development project. The applicant may provide documented
evidence showing prior successful experience in developing similar
projects, provide information of sufficient capitalization to carry out
development, or provide documentation of loan guarantees, a confirmed
PPA, or contracts for the manufacture and/or supply of key components
for solar or wind energy project facilities.
Paragraphs (a)(6), (7), and (8) are added to section 2804.26 to
reiterate the new requirements of the final rule and explain that the
BLM may deny an application should an applicant not comply with these
provisions.
Under section 2804.26(a)(6), the BLM may deny your application if
you do not meet the POD submittal requirements under section
2804.12(a)(8) and (c)(1) and 2804.25(e)(3). The final rule is updated
to ensure that the citations match the reformatted rule, after changes
were made based upon comments received.
Paragraph (a)(7) of section 2804.26 is a new paragraph added to the
final rule that corresponds to the provisions by which the BLM will
require surveys under section 2804.25(c). Under section 2804.26(a)(7),
the BLM may deny your application if you fail to meet its requirements
to commence surveys and studies, or provide plans for permit processing
as required by section 2804.25(c). This paragraph is new in the final
rule and is added to be consistent with the new requirements in section
2804.25(c), which are added based upon public comment.
Section 2804.26(a)(8) references the possible application denial
based on the screening criteria established in section
2804.25(e)(2)(iii).
Comments: Some comments expressed concern regarding the BLM
exercising its authority to deny an application without accounting for
the fact that some circumstances may be outside an applicant's control.
Response: In response to this generalized concern, the BLM added
section 2804.40 to this final rule. Under this new section, an
applicant may request an alternative requirement in place of a
requirement that they are unable to meet. References are made to this
new section in specific parts of the application processing
requirements found under subpart 2804.
No other changes were made to this section and no other comments
were received.
Section 2804.27 What fees must I pay if BLM denies my application or if
I withdraw my application?
The heading of section 2804.27, ``What fees do I owe if BLM denies
my application or if I withdraw my application?'' is revised to read,
``What fees must I pay if BLM denies my

[[Page 92149]]

application or if I withdraw my application?''. With the addition of
application filing fees, the revised title more clearly describes the
requirements of the final rule. A new provision in this paragraph
provides that if the BLM denies your application, or if you withdraw
it, you must still pay any application filing fees submitted or due
under section 2804.12(c)(2), and the processing fee set forth at
section 2804.14. Sections 304(b) and 504(g) of FLPMA provide for the
deposit of payments to reimburse the United States for reasonable costs
with respect to right-of-way applications and other documents relating
to the public lands. In the case of preliminary application review
meetings, the expense could be considerable, depending on the
complexity of the project. The BLM will refund any part of the
application filing fees received that is not used for processing the
application. This paragraph is revised by removing references to pre-
application meetings that were originally proposed for the rule, but
not carried forward in the final rule. These revisions are consistent
with other changes made in the final rule under section 2804.12
regarding the change from pre-application to preliminary application
review meetings. No other comments were received on this section, and
no other changes were made to the final rule.
Section 2804.30 What is the competitive process for solar or wind
development for lands outside of designated leasing areas?
Section 2804.30 explains the process for the BLM to competitively
offer lands outside of DLAs. This bidding process is similar to that
established in subpart 2809 (competitive offers inside DLAs), except
that the end result of the bidding is different. Under paragraph (f) of
this section, the successful bidder will become the preferred right-of-
way applicant. Under this section, the high bidder is not guaranteed a
grant, but is identified as the ``preferred applicant.'' As explained
under paragraph (g) of this section, the preferred applicant is the
only party that may submit an application for the parcel identified by
the BLM, but the BLM must still review and accept the application. This
is different from subpart 2809, which provides that the successful
bidder for a lease inside a DLA may be offered a lease upon
successfully meeting all requirements of section 2809.15.
Comments: Three general comments were received on this section. The
first comment requested that language be added to encourage additional
consultation with members of the public, such as developers, non-
governmental organizations, and stakeholders, during the competitive
process outside of DLAs.
Response: Many opportunities for public engagement are provided
throughout the competitive process for right-of-way applications filed
on public lands outside of DLAs. As part of the competitive processes
outside of DLAs, the BLM may engage the public through a notice seeking
competitive interest in a particular area, which would provide the
public and interested stakeholders with an opportunity to comment on
the potential development of a particular parcel. If the BLM decides to
move forward with a competitive offer for a parcel, a Notice will be
published in the Federal Register and may also be announced through
other means. Upon the completion of the competitive process, the BLM
will process an application for the solar or wind energy development,
following the requirements of this final rule, which include a
mandatory public meeting before the BLM determines whether to deny the
application or continue processing it. If the BLM continues to review
an application, there may be additional opportunities for public
involvement through the NEPA process, including during the notice and
comment period. As a result of these measures, the BLM believes that
there is adequate opportunity for the public to be fully engaged
throughout the competitive process, application review, and NEPA
processes for projects outside of DLAs.
Comments: The second comment on this section stated that only
developers are capable of making a determination of whether development
in a particular area will be economically sound and, therefore, a
worthwhile pursuit for public land use. The comment contended that
developers will not expend the effort necessary to determine the
economic suitability for projects before a competitive process is held
(either inside or outside areas such as DLAs).
Response: While the BLM agrees that only a developer can determine
whether a particular project in a particular area makes sense for them,
that determination does not necessarily apply to all developers, nor is
it the only consideration relevant to the BLM. Each developer may
follow a different business model and may consider different funding,
financing, and procurement opportunities when assessing a potential
project site. In identifying DLAs, the BLM has to consider the
environmental and other resource impacts of a potential development, in
addition to the known solar or wind potential for the area. For these
reasons, the BLM does not make an economic evaluation when identifying
an area for a competitive process. The BLM will rely on developer
interest, among other indications of competitive interest in an area,
to determine whether utilization of a competitive process is
appropriate. Recognizing that determining economic viability for a
particular area may involve site-specific testing information, the
final rule contains provisions allowing for such activities. For wind
or solar energy projects outside of a DLA, interested developers can
apply for testing authorizations as described in section 2804.31 of
this rule, or apply for a testing authorization inside DLAs prior to a
competitive action as described in section 2809.19(d) of this rule.
Comments: The third comment on this section suggested that the
leasing process should be restructured from a local ``electric-
centric'' focus to a macro-level objective to provide the greatest
benefit to ``We the People.'' This comment suggests that the BLM should
explicitly recognize that the available solar and wind resources could
be used to provide most of, and potentially all of, the United States'
fuel, electricity, transportation, and natural resource needs.
Response: FLPMA directs the BLM to generally receive fair market
value for the use of public lands and to utilize and protect public
land resources while balancing the use of the public lands for current
and future generations. The BLM intends for this rule to promote the
development of solar and wind energy on public lands, while also
ensuring a fair return to the Federal Government.
Paragraph (a) of section 2804.30 identifies lands available for
competitive lease; paragraph (b) of this section explains the variety
of competitive procedure options available; and paragraph (c) explains
how the BLM identifies parcels for competitive offers. Under this final
rule, the BLM may identify a parcel for competitive offer if
competition exists or the BLM elects to offer a parcel on its own
initiative. The BLM may include lands in a competitive offer in
response to interest from the public or industry, or to facilitate an
individual State's renewable energy goals. This is a change from
existing regulations, which only allow the BLM to use a competitive
process when there are two competing applications; however, the changes
made to section 2804.23(c) in this rule give the BLM more flexibility.

[[Page 92150]]

Paragraph (d) of this section, ``Notice of competitive offer,''
establishes the content of the materials of a notice of competitive
offer that include the date, time, and location (if any) of the
competitive offer, bidding procedures, qualifications of potential
bidders, and the minimum bid required. The notice also explains that
the successful bidder becomes the preferred applicant, which can then
apply for a grant under this subpart. This is different from the
competitive offers held under subpart 2809, where the successful bidder
is offered a lease.
Paragraph (d)(4) of this section requires that the notice identify
the minimum bid amount, explain how the authorized officer determined
the minimum bid amount, and describe the administrative costs borne by
the Federal agencies involved. As indicated in the general discussion
section of this preamble, administrative costs are not a component of
fair market value, but instead are a cost reimbursement paid to the
Federal Government for its expenses. The BLM will publish a notice
containing all of the identified elements in the Federal Register, and
may also use other notification methods, including newspapers in the
affected area or the internet. Consistent with sections 2804.23(c),
this section's public notice requirements were revised, establishing
notice through a newspaper or internet as an additional optional form
of notice. This change in the final rule is discussed further in
section 2804.23(c) of this preamble. No comments were received on
section 2804.30(a) through (d). However, a cross-reference has been
updated in section 2804.30(d)(6) to include section 2804.12, due to
revisions made to that section based upon comments received.
Under paragraph (e) of this section, the BLM requires that bid
submissions include both the minimum bid amount and at least 20 percent
of the bonus bid. The minimum bid consists of administrative costs and
an amount determined by the authorized officer. Included in the
administrative costs are those expenses pertaining to the development
of environmental analyses and those costs to the Federal Government
associated with holding the competitive offer.
The authorized officer may specifically identify a second component
for the minimum bid(s) submitted for each competitive offer. This
amount will be based on the known or potential values of the offered
parcel. The authorized officer may consider values that include, but
are not limited to, the acreage rent, the MW capacity fee, or other
known or potential values of the parcel. For example, the BLM may use a
percentage of the acreage rent value for the parcel competitively
offered. An explanation of the minimum bid amount and how the BLM
derived it will be provided in the notice of competitive offer.
Comments: Several comments were received pertaining to bidding
under section 2804.30(e). One comment suggested that the BLM: (1)
Establish global objectives to evaluate bids based on the
constitutional greater good for the ``People'' to meet many objectives
of the renewable energy bidding process; (2) Ensure that successful
bidders use energy to meet public objectives; (3) Ensure that
appropriate values are received for the right to develop energy; (4)
Ensure that evaluations of electrical supply include the full costs and
benefits to the public; (5) Ensure that effects from manmade impacts on
global warming shall be based on transient climate sensitivity; and (6)
Focus on ``We the People'' instead of creating processes that incur
higher costs for developments.
Response: The comments submitted are suggesting revisions to the
final rule that are outside of the BLM's authority to consider. FLPMA
directs the BLM to generally receive fair market value for the use of
public lands and to utilize and protect public land resources while
balancing the use of the public lands for current and future
generations. The provisions of this final rule will ensure that the BLM
is receiving fair market value for the uses of the public lands that it
authorizes.
The second comment suggested that the BLM direct where or how
renewable energy that is generated on public lands is deployed. The BLM
could place a requirement on the use of the electricity generated,
through a term or condition of a right-of-way, but the BLM expects that
it would do so only in limited circumstances, if at all, as it is a
land management agency charged with managing the public lands under
principles of multiple use and sustained yield.
The BLM evaluates proposed projects before issuing a decision to
approve, approve with modifications, or deny a project. In general, the
BLM will analyze a project using reasonable scientific or other
methods, to understand the impacts to the public lands and other lands,
uses, resources and other systems outside of its authority to control.
These other lands, uses, resources, and other systems outside of the
BLM's authority to control could include electrical transmission
systems that may be owned or controlled by an Independent System
Operator, or the energy needs of a State or local community as
identified by the State government offices, or lands administered by a
Federal, State, or private entity. When evaluating prospective
projects, the BLM considers their reasonably foreseeable direct,
indirect, and cumulative impact on climate change on a local, regional,
and national scale, as appropriate.
Comment: Another comment suggested that administrative costs
discussed under section 2804.30(e)(2)(i) should not be included as part
of the minimum bid. The initial costs of preparing for and holding a
competitive offer are completed at the volition of the BLM, not an
applicant. The comment suggested that including administrative costs as
part of the minimum bid will discourage development inside and outside
of DLAs. The comment suggested that a successful bidder should
essentially pay for the same administrative and NEPA costs as
noncompetitive applicants for right-of-ways outside of DLAs.
Response: Under the final rule, reimbursement for the reasonable
administrative and other costs is generally required from any
successful bidder. Consistent with Sections 304(b) and 504(g) of FLPMA,
the BLM may recover reasonable administrative and other costs incurred
in processing an application for a right-of-way. Administrative and
other costs associated with the use of a competitive process to
identify a preferred applicant can be recovered because this work
facilitates, and will generally be essential to, the BLM's review of a
right-of-way application. These costs would be paid only by the
preferred applicant. Bidders will be given notice of the administrative
costs portion of the minimum bid prior to their bidding at a
competitive offer. The BLM believes that it is preferable for a
prospective bidder to know these costs, which are required to prepare
and hold a competitive auction, before submitting a bid in a
competitive offer. Prospective applicants would not otherwise be able
to submit an application to the BLM for development of that area
without first being the successful bidder. The BLM considers the
competitive process described in subpart 2809 for lands inside a DLA to
be even more preferable to prospective developers, as a successful
bidder would be issued a lease immediately upon paying the full amount
of their winning bid.
Comments: Comments stated that the mitigation costs identified in
section 2804.30(e)(2)(ii) should not be factored into the minimum bid
because the successful bidder should have to pay separately for
mitigation if and when

[[Page 92151]]

construction commences and not at the time of bidding. A successful
bidder cannot pay twice for the same mitigation. Several other comments
also addressed what should or should not be included as acceptable
factors.
Response: The BLM has removed the reference to mitigation costs
found in proposed section 2804.30(e)(2)(ii), as this may be misleading
and open to interpretation. However, the BLM has maintained the acreage
rent and the megawatt capacity fee as considerations when determining a
minimum bid amount. These factors which are used only to determine the
amount above the administrative costs where bidding will start (see
section 2804.30(e)(2)(ii)). Their inclusion as a potential
consideration in the development of the minimum bid does not count
towards other obligations. For example, if the BLM arrives at a minimum
bid amount using the annual acreage rent for a lease area, a successful
bidder will still be required to pay the first year's acreage rent, as
identified in this rule, before being awarded a grant or lease. No
offset or discount toward future acreage rent will be provided.
Comments: A number of comments expressed concern that requiring
unsuccessful bidders to pay application filing fees would discourage
prospective developers. They suggested that application filing fees
should be refundable if a bidder is not successful.
Response: New section 2804.30(e)(4) has been revised based on these
comments to refund application filing fees for unsuccessful bidders,
except for the reasonable costs incurred by the United States. This
change is consistent with the revisions under section 2804.12(c)(2) and
discussed further under that section of this preamble.
Under section 2804.30(f), the successful bidder is determined by
their submission of the highest total bid for a parcel at a competitive
offer. The successful bidder must fulfill the payment requirements of
the successful bid in order to become the preferred right-of-way
applicant. The preferred applicant must submit the balance of the bid
to the BLM within 15 calendar days after the end of the competitive
offer. No comments were received pertaining to section 2804.30(f), and
no other changes are made from the proposed rule to the final rule.
Under section 2804.30(g), a preferred applicant is the only party
who may submit an application for the parcel that is offered. Unlike
the process under subpart 2809, the approval of a grant under this
paragraph is not guaranteed to a successful bidder. Approval of a grant
is solely at the BLM's discretion. The preferred applicant may also
apply for an energy project-area or site-specific testing grant.
Comments: A comment suggested adding a new provision to the rule
stating that upon making a winning bid, the preferred applicant also
secures site control. Adding such a condition would provide more
certainty to the process for prospective developers, further
incentivizing the competitive bidding.
Response: The BLM agrees with this comment and has revised
paragraph (g) to make it clear that the BLM will not accept
applications on lands where a preferred applicant has been identified,
unless submitted or allowed by the preferred applicant in order to
provide additional certainty with respect to site control. If ancillary
facilities for projects or facilities on adjacent parcels, such as
roads or transmission lines, need to be constructed on the parcel where
a preferred applicant's project would be sited, the companies
constructing the ancillary facilities would need to apply to the BLM
for a right-of-way, and the BLM would consult with the preferred
applicant before processing any such application. This is intended to
provide certainty to the preferred applicant when applying for
renewable energy developments on the public lands that applications
from other entities will not be accepted for the competitively gained
application area unless they are allowed by the preferred applicant.
Section 2804.30(h) describes how the BLM will address certain
situations that could arise from a competitive offer. Under paragraph
(h)(1) of this section, the BLM retains discretion to reject bids,
regardless of the amount offered. For example, the BLM may reject a bid
if there is evidence of conflicts of interest or collusion among
bidders or if there is new information regarding potential
environmental conflicts. The BLM will notify the bidder of the reason
for the rejection and what refunds are available. If the BLM rejects a
bid, the bidder may administratively appeal that decision (see 43 CFR
part 4 for details). Under paragraph (h)(2) of this section, the BLM
may make the next highest bidder the preferred applicant if the first
successful bidder does not satisfy the requirements under section
2804.30(f). This allows the BLM to determine a preferred applicant
without reoffering the land and could save time and money for the BLM
and potential applicants.
The BLM may reoffer lands competitively under section 2804.30(h)(3)
if the BLM cannot identify a successful bidder. If there is a tie, this
re-offer could either be limited to tied bidders or include all
bidders. This provides the BLM with flexibility to resolve ties and
other issues that could arise during a competitive offer process.
Under section 2804.30(h)(4), if the BLM receives no bids, the BLM
may re-offer the lands through the competitive process provided for in
section 2804.30. The BLM may also make the lands available through the
non-competitive process described in subparts 2803, 2804, and 2805, if
doing so is determined to be in the public interest. No other comments
were received, and no additional changes were made to final paragraph
(h) of this section, except those discussed above.
Section 2804.31 How will the BLM call for site testing for solar or
wind energy applications?
This section, which was not in the proposed rule, is added to this
final rule to describe how the BLM will call for site testing for solar
and wind energy. This section also explains how the BLM may create a
new DLA, through the land use planning process described in new section
2802.11, in response to public interest.
Under new paragraph (a) of this section, the BLM may call for site
testing in a DLA by publishing a notice in the Federal Register and may
also use other notification methods, such as a local newspaper or the
Internet. Paragraph (a) also specifies what information will be
included in any public notice issued under the section, including the
following information: (1) The date, time, and location where site
testing applications may be sent; (2) The date by which applicants will
be notified of the BLM's decision on timely submitted site testing
applications; (3) The legal land description of the area for which site
testing applications are being requested; and (4) Qualification
requirements for applicants. The BLM is limiting the testing
authorizations that would be offered under a call for site testing
applications under this section to site-specific grants identified
under section 2801.9(d)(1). This limitation is established to reduce
the potential for multiple interested parties having overlapping
applications. The BLM does not intend to use a competitive process for
the site testing. Rather, the BLM intends to determine whether there is
competitive interest for solar and wind energy development for these
public lands. Should there be overlapping testing applications, the BLM
will notify those applicants of the overlap and may hold a competitive
offer for that site testing location to determine a preferred
applicant.
Paragraph (b) of this section explains that any interested parties
may request that the BLM hold a call for site testing

[[Page 92152]]

for certain public lands. However, how the BLM responds to those
requests is at its sole discretion. The ``call for site testing'' may
be used as a step in the process for lands either inside or outside of
DLAs. A subsequent step would be the competitive offer for an
application for a development grant under section 2804.30, or for a
development lease under subpart 2809, if the area is designated as a
leasing area, as described in section 2804.31(c).
Under paragraph (c) of this section, the BLM may determine that
areas receiving interest from the public may be appropriate to
establish as a DLA. The BLM may turn an area surrounding the site
testing into a DLA as described under section 2802.11. Following the
designation of an area for competitive leasing, the rules described
under subpart 2809 would be used for any subsequent competitive
processes in the area. Establishing such an area would be performed by
following the land use planning process described in the revised
section 2802.11. This process would be completed during the time that
testing is being undertaken, which is typically a 3 year process.
Designating such an area would allow interested developers to benefit
from the incentives provided by development in a DLA. This approach
also provides a mechanism for public interest to drive the
establishment of DLAs.
Comments: Some comments suggested that the BLM retain the
discretion to structure the DLA leasing process for wind in accordance
with a two-phased development approach. The first phase of this
approach would be a competitive process for site testing. The winner of
this offer would receive exclusive rights to the parcel offered. The
BLM would then create a DLA in the area where this competitive offer
was held. The second phase would be a competitive offer for a lease in
this newly established DLA.
Response: The BLM recognizes that potential developers should have
a clear avenue for helping the BLM identify new DLAs. The BLM added the
new section 2804.31 to this final rule in direct response to these
comments. This new section provides another way for developers to
identify and benefit from the competitive process and DLA incentives
established in subpart 2809 of this final rule. Providing a mechanism
for site testing while DLA designation is ongoing will allow developers
to benefit from the specific data they obtain during testing as they
evaluate whether a competitive offer or further development of the
lands is in their interest.
Section 2804.35 How will the BLM prioritize my solar or wind energy
application?
Section 2804.35 explains how the BLM will prioritize review of an
application for a solar or wind energy development right-of-way based
on the screening criteria for projects outside of DLAs. The BLM will
evaluate such applications based on the screening criteria in that
section and categorize the application as high, medium, or low
priority.
Through existing guidance, the BLM has established screening
criteria (see Instruction Memorandum (IM) 2011-061), which identify and
prioritize land use for solar and wind energy development rights-of-
way. In order to facilitate environmentally responsible development the
IM directs BLM to consider resource conflicts, applicable land use
plans, and other statutory and regulatory criteria pertinent to the
applications and the lands in question. Applications with lesser
resource conflicts are anticipated to be less costly and time-consuming
for the BLM to process, and the IM directs that these applications be
prioritized over those with greater resource conflicts. IM 2011-061 may
be found at https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
This rule includes criteria similar to those in the IM. The
codification of these criteria gives certainty to applicants that such
criteria will not change, and therefore provides more certainty as to
how an application might be categorized. By specifying these criteria,
applications could be tailored to fit them in order to streamline the
processing of an application.
Comment: One comment indicated that the BLM should clarify the
proposed rule's application prioritization concept. This comment
indicated that the proposed rule left several questions unanswered,
including: (1) How the BLM's staff time will be allocated within field
staff among projects based on priority and time of submission; (2)
Whether BLM staff working on a medium-conflict priority project will
shift focus if a high-priority application is submitted; and (3)
Whether BLM staff workload will be shifted across different field
offices if certain field offices have a disproportionate number of
high-priority applications as compared to others, which may have more
medium- or low-priority applications.
Response. This final rule provides the criteria that the BLM will
use to prioritize applications it receives. This allows potential
applicants to understand not only how these applications will be
prioritized, but also how they can submit an application that is more
likely to become a high priority for the BLM. The BLM's internal
management and workload processes are not addressed as that is not
appropriate for a rulemaking. The criteria for determining how workload
priorities are addressed are more appropriately handled by the policy
guidance for implementing this final rule. Such guidance will elaborate
on these points. It should be noted that the BLM will continue to
process all applications received, but will prioritize staff workload
based upon these priority categorizations.
Comments: Comments were received requesting clarity over whether
leases awarded under subpart 2809 would be given priority over
applications made outside of DLAs.
Response: New language has been added to the introductory paragraph
of this section to clarify that the BLM generally prioritizes the
processing of leases awarded under subpart 2809 over applications
submitted under subpart 2804. There are some instances where the BLM
may determine that it is in the public interest to prioritize the
processing of an application over the processing of a lease. However,
the BLM generally intends to prioritize the processing of leases first.
Comments: Comments were received requesting that the BLM expand on
the criteria used in the rule and better define and describe the
resource areas and potential conflicts. Some specific recommendations
were made by the commenters. Each comment provided a greater level of
specificity or detail than the proposed rule regarding how the BLM
should prioritize resource conflicts.
Response: The descriptions of the resource conflicts in the final
rule are mostly unchanged, except where noted in this section's
discussion. The BLM determined that the level of specificity and detail
recommended by commenters is not appropriate for this final rule.
Screening applications to prioritize them has only been done by the BLM
recently. Based upon the BLM's experience, it is better to establish
broader criteria in this final rule that can then be further refined in
its internal guidance. National priorities change and BLM continues to
learn more about the resource conflicts associated with solar and wind
energy projects. Therefore, the BLM believes that the specific internal
guidance, rather than regulatory criteria, is more appropriate to
provide a greater level of specificity and detail as recommended

[[Page 92153]]

by commenters. This approach gives the BLM flexibility to make changes
as workload or conditions on the ground or in the wind and solar
industry change. Guidance may need to be updated as national priorities
change and the BLM better understands these resource conflicts with
solar and wind energy projects. As part of the rule's implementation,
the BLM will issue guidance aimed at better describing the BLM's
considerations and prioritization of applications. This guidance is
expected to be issued after this final rule is published.
Section 2804.35(a) identifies criteria for high-priority
applications, which are given processing priority over medium- and low-
priority applications. These criteria include:
1. Lands specifically identified as appropriate for solar or wind
energy development outside DLAs;
2. Previously disturbed sites or areas adjacent to previously
disturbed or developed sites;
3. Lands currently designated as Visual Resource Management (VRM)
Class IV; and
4. Lands identified as suitable for disposal in the BLM's land use
plans.
The BLM may have identified lands that are appropriate for solar or
wind energy development, but are not inside DLAs. These lands may
include areas approved for solar or wind area development for which a
right-of-way was never issued or an existing right-of-way was
relinquished.
The VRM inventory process is a means to determine visual resource
values. The VRM inventory consists of a scenic quality evaluation,
sensitivity level analysis, and a delineation of distance zones. Based
on these three factors, BLM-administered lands are placed into one of
four VRM classes, with Classes I and II being the most valued, Class
III representing a moderate value, and Class IV being of least value.
The BLM assigns VRM classes through the land use planning process, and
these values can range from areas having few scenic qualities to areas
with exceptional scenic quality.
Section 2804.35(b) identifies criteria for medium-priority
applications, which will be considered before low-priority
applications. These criteria include:
1. BLM special management areas that provide for limited
development or where a project may adversely affect lands having value
for conservation purposes, such as historical, cultural, or other
similar values;
2. Areas where a project may adversely affect conservation lands to
include lands with wilderness characteristics that have been identified
in an updated wilderness characteristics inventory;
3. Right-of-way avoidance areas;
4. Areas where a project may adversely affect resources listed
nationally;
5. Sensitive plant or animal habitat areas;
6. Lands designated as VRM Class III;
7. Department of Defense (DOD) operating areas with land use or
operational mission conflicts; and
8. Projects with proposed groundwater uses within groundwater
basins that have been allocated by State water resource agencies.
Comment: One comment suggested for Criterion 5, that BLM's
designated priority sage-grouse areas be a low priority and not a
medium priority.
Response: The BLM removed the reference to sage-grouse habitat in
this final rule. In September 2015, the BLM issued the Greater Sage-
Grouse Plan Amendments and Revisions (80 FR 57633, 80 FR 57639). Those
plans generally excluded priority habitat areas from major right-of-way
developments, including wind energy. General sage-grouse habitat
management areas generally fall into the medium-priority application
category under Criterion 5.
With the removal of priority sage-grouse habitat from this final
rule in criterion 5, the BLM also revised the specificity of
``important eagle use areas'' to read as ``important species use
areas.'' This revision makes the criterion more broad and applicable to
all important species areas, and does not unintentionally exclude other
identified important species areas that are not specifically identified
for eagles.
Comments: Several comments were made concerning the above factors.
For Criterion 2, a comment recommended revising the description of
``conservation lands'' and excluding Alaska from this requirement.
Response: The final rule does not revise the section 2804.35(b)(2)
as recommended in the comment. This final rule does not define
``conservation lands,'' which include areas of critical environmental
concern and lands inventoried and managed for wilderness
characteristics. These lands are often identified for their unique
characteristics by the BLM to protect scenic, historic, cultural, and
other natural values. The status of conservation lands is considered by
the BLM when processing solar and wind energy applications. When the
BLM considers such lands for wind or solar use, it evaluates the
impacts and effects to the resources, including those resources for
which conservation lands are designated. Depending on the proposed
development, the impacts to the resources for which the lands were
designated for conservation purposes may be very small. Applications,
such as those submitted for lands in Alaska, will be reviewed on a
case-by-case basis.
Comment: Another comment suggested that Criterion 7 be moved to low
priority and changed to read ``Areas where the Department of Defense
has testing, training, or operational mission impacts.''
Response: The BLM considered the suggestion, but did not revise the
rule as suggested. The BLM kept this requirement largely unchanged
because the DOD has overlapping interest in some locations with the BLM
lands--e.g., withdrawn lands that are transferred to the DOD or have an
aerial easement--where solar and wind energy development does not pose
significant adverse impacts to the DOD operations. However, we did
revise criterion number 7 to read as follows ``Department of Defense
operating areas with land use or operational mission conflicts.'' The
BLM will coordinate with the DOD on solar and wind energy applications
submitted to the BLM that may affect DOD operations.
Section 2804.35(c) identifies criteria for low priority
applications, which may not be feasible to authorize due to a high
potential for conflict. Examples of applications that may be assigned
low priority would involve:
1. Lands near or adjacent to areas specifically designated by the
Congress, the President, or the Secretary for the conservation of
resource values;
2. Lands near or adjacent to wild, scenic, and recreational river
and river segments determined as suitable for wild or scenic river
status, if project development may have significant adverse effects on
sensitive viewsheds, resources, and values;
3. Lands designated as critical habitat for federally designated
threatened or endangered species under the ESA;
4. Lands currently designated as VRM Class I or II;
5. Right-of-way exclusion areas;
6. Lands currently designated as no surface occupancy areas; and
Comment: One comment recommended that applications within lands
under Criterion 2 not be considered a low priority. This comment
further suggested that an additional criterion be added that would read
as ``Nothing in this section creates a protective perimeter or buffer
zone around the special status conservation lands specified in Sections
2804.35(c)(1) and 2804.35(c)(2). The fact that a proposed activity or
use on BLM-administered lands outside such special

[[Page 92154]]

status conservation lands can be seen or heard within such special
status conservation lands shall not accord an application low-priority
status even if the use or activity is prohibited within the special
status conservation lands.''
Response: Nothing in this criterion creates a protective perimeter
or buffer zone around the areas described in this section and,
therefore, precludes the BLM's approval of an application that is near
or adjacent to such areas. In the BLM's experience, solar and wind
energy development applications are complex and difficult to analyze.
If a proposed right-of-way would affect such areas, the BLM will
consider effects when processing the application. Potential impacts to
these areas and their resources may prove unacceptable, even after
mitigation.
The BLM also revised criterion 3 of this section from the proposed
to final rule, from ``is likely to'' to ``may'' ``. . . result in the
destruction or adverse modification of that critical habitat.'' This
revision is necessary because it is difficult to determine based on an
application what impacts are ``likely.'' However, it is the BLM's
responsibility to protect critical habitat. Therefore, any application
that may destroy or adversely affect critical habitat will be a
categorized as low priority under this final rule.
The low priority status of applications meeting these criteria
relates only to the BLM's management of its workload in processing
applications; it is not a proxy for the BLM's final decision. No other
comments were received, nor were any changes made to section 2804.35.
Section 2804.40 Alternative Requirements
Section 2804.40 is added to this final rule in response to comments
received on the proposed rule.
Comments: Several comments expressed concern that the BLM's
proposed requirements were too strict and would be difficult to meet,
resulting in applications being denied or a holder's authorization
being terminated. They supported the BLM's reference to a showing of
good cause to support why a developer was unable to meet the BLM's
requirement.
Response: The BLM has added this section to the final rule due to
the number of comments received discussing the BLM's requirements that
had no specific provision allowing a developer to show good cause why
an alternative to a regulatory requirement should be approved.
Section 2804.40 expands on the BLM's show of good cause provision
that was in the proposed rule with several different new requirements.
This new provision replaces the specific provisions originally proposed
and now applies to all rights-of-way and to all requirements the BLM
has established under this subpart. An applicant may request an
alternative requirement from the BLM by following the process outlined
in this section. A similar provision is added in section 2805.12(e).
That provision is discussed in that section's preamble discussion.
Paragraph (a) of this section notes that the requester must show
good cause for its inability to meet a particular requirement. An
applicant may request an alternative requirement for any requirement in
this subpart. Requirements include surveys or studies to be completed,
timeframes in which to provide information, development and reclamation
plans, fees, and other appropriate requirements.
Paragraph (b) of this section states that you must suggest an
alternative requirement to the BLM and explain why the alternative
requirement is appropriate. The BLM will not approve an alternative
requirement without an explanation from the right-of-way holder as to
why the current requirement is inappropriate. When implementing this
final rule, the BLM intends to issue guidance on what constitutes an
``appropriate'' alternative requirement.
Paragraph (c) of this section states that a request for an
alternative requirement must be in writing and be received by the BLM
in a timely manner. In order for the request to be timely, the BLM must
have received it prior to the deadline originally given for the
relevant requirement. As explained in the final rule, any such request
is not approved until you receive BLM approval in writing. The BLM may
provide written approval through a letter, email or other written
means.

Subpart 2805--Terms and Conditions of Grants

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?
The heading for section 2805.10 is revised to read as stated above.
This section is updated to reflect the new competitive process for
lands inside DLAs (see subpart 2809) by stating that a successful
bidder for a solar or wind development lease on such lands will not
have to submit a SF-299 application. Instead, in these circumstances,
the successful bidder will have the option to sign the lease offered by
the BLM.
Paragraph (a) of this section contains the language from the
existing regulations explaining how the BLM will notify you about your
application. This paragraph is revised to add a new provision requiring
that the BLM send the successful bidder a written response, including
an unsigned lease for review and signature. The BLM will notify
unsuccessful bidders, and any unused funds submitted with their bids
will be returned. If an application is rejected, the applicant must pay
any processing costs (see section 2804.14).
In paragraph (a) of this section of the final rule, the BLM changed
``will send you an unsigned lease'' to ``may send you an unsigned
lease,'' for consistency with revisions to section 2809.15(a). See the
preamble for that section for more discussion.
Paragraphs (b) introductory text and (b)(1) and (2) of this section
parallel paragraphs (a)(1) and (2) of the existing regulations, and
describe the unsigned grant or lease that the BLM will send to you for
approval and signature.
Paragraph (b)(3) of this section specifies that in accordance with
section 2805.15(e), the BLM may make changes to any grant or lease,
including to leases issued under subpart 2809, as a result of the
periodic review required by this section. This provision is necessary
because it makes clear why the BLM would amend a lease issued under
subpart 2809. The terms and conditions of a right-of-way grant or lease
may be changed in accordance with section 2805.15(e) as a result of
changes in legislation or regulation, or as otherwise necessary to
protect public health or safety or the environment. Because any changes
to the terms and conditions of a right-of-way grant or lease would
occur after the completion of the agency action (the BLM's decision to
approve the right-of-way), the BLM generally anticipates making the
change through a separate action, generally initiated at the BLM's
discretion and requiring its own decision-making process.
Sections 2805.10(c), (d) introductory text, and (d)(1) and (2) and
2805.20(d)(3) contain the language from existing sections 2805.10(b),
(c) introductory text, and (c)(1) and (2) and 2805.20(c)(3). These
provisions remain unchanged from existing regulations. No comments were
received and no changes were made from the proposed rule to the final
rule.
Section 2805.11 What does a grant contain?
Existing section 2805.11(b) explains how the duration of each
potential right-

[[Page 92155]]

of-way is determined. This paragraph is revised to include specific
terms for solar and wind energy authorizations, because they are unique
and different from other right-of-way authorizations. Where the
proposed rule discussed only wind energy testing in some portions, the
final rule is changed to include both solar and wind for each type of
authorization. This revision is made in connection with changes made
under section 2801.9(d), where comments requested that site- and
project-area testing authorizations include solar energy, and not be
exclusive to wind.
Section 2805.11(b)(2)(i) limits the term for a site-specific grant
for testing and monitoring of wind energy potential to 3 years. Under
this rule, this type of grant will be issued only for a single
meteorological tower or study facility and will include any access
necessary to reach the site. This authorization cannot be renewed. If a
holder of a grant wishes to keep its site for additional time, it must
reapply. These authorizations are intended for testing, not energy
generation, and are limited to an area large enough for only a single
tower or study facility. If a developer wishes for a larger study area,
it can apply for a project-area testing grant under paragraph
(b)(2)(ii) of this section.
Section 2805.11(b)(2)(ii) provides for an initial term of 3 years
for project-area energy testing. Such grants may include any number of
meteorological towers or study facilities inside the right-of-way. Any
renewal application must be submitted before the end of the third year
if a proponent wishes to continue the grant. For the BLM to be able to
renew such an authorization, the project-area testing grant holder must
submit two applications, one for renewal of the project-area testing
grant and one for a solar or wind energy development grant, plus a POD
for the facility covered by the development application. Renewals for
project-area testing grants may be authorized for one additional 3-year
term.
Section 2805.11(b)(2)(iii) provides for a short-term grant for all
other associated actions, such as geotechnical testing and other
temporary land-disturbing activities, with a term of 3 years or less. A
renewal of this grant may be issued for an additional 3-year term.
Section 2805.11(b)(2)(iv) provides for an initial grant term of up
to 30 years for solar and wind energy grants outside of DLAs, with a
possibility of renewal in accordance with section 2805.14(g). A holder
must apply for renewal before the end of the authorization term.
Section 2805.11(b)(2)(v) provides for a 30-year term for solar and
wind energy development leases issued under subpart 2809. A holder may
apply for renewal for this term and any subsequent terms of the lease
before the end of the authorization.
Comment: A comment suggested that the standard term be 40 years for
both solar and wind energy grants (outside of DLAs) and up to 100 years
for leases (inside of DLAs), with a condition of the grant or lease
providing for renegotiation every 10 years. Other comments suggested
longer terms for grants and leases.
Response: The final rule remains as proposed. The comment did not
provide any justification for adding the additional years to the term
of the grant or lease or explain why the additional time is necessary.
Generally, it takes 1 year to secure a PPA after a project is
authorized and an additional 2 to 3 years to construct. Since the term
of a PPA is generally 20 to 25 years, the BLM believes that a 30 year
period is sufficient to cover the developer's needs for constructing
and operating a facility, while protecting the public lands from
unnecessary burdens. If a longer term is suitable or desired by a
developer, an application to renew the grant or lease may be submitted
to the BLM pursuant to the applicable requirements.
For all grants and leases under this section with terms greater
than 3 years, the actual term will include the number of full years
specified, plus the initial partial year, if any. This provision
differs from the grant term for rights-of-way authorized under the MLA
(see the discussion of section 2885.11 later in this preamble) as FLPMA
rights-of-way may be issued for terms greater than 30 years, while an
MLA right-of-way may be issued for a maximum term of 30 years and a
partial year would count as the first year of a grant.
Section 2805.11(b)(3) contains the language from section
2805.11(b)(2) of the existing regulations, but further requires that
grants and leases with terms greater than 3 years include the number of
full years specified, plus the partial year, if any. A grant that is
issued for a term of 3 years will expire on its anniversary date, 3
years after it was first issued. This change affects the duration of
all FLPMA right-of-way grants that are issued or amended after the
final rule becomes effective. This change provides specific direction
for consistently calculating the term of a right-of-way grant or lease.
No other comments were received, nor were any changes made to this
section.
Section 2805.12 What terms and conditions must I comply with?
Section 2805.12 lists terms and conditions with which all right-of-
way holders must comply. This section is reorganized to better present
a large amount of information. Paragraph (a) of this section carries
forward, without adjustment, most of the requirements from the existing
regulations found at section 2805.12. Paragraph (b) of this section
refers the reader to new section 2805.20, which explains bonding
requirements for right-of-way holders. Paragraph (c) of this section
contains specific terms and conditions for solar or wind energy right-
of-way authorizations. Paragraph (d) describes specific requirements
for energy site or project testing grants. Paragraph (e) is a show of
good cause condition that is added to the final rule consistent with
the provisions added as new section 2804.40. All requirements of
paragraph (a) are part of the existing regulations and are not
discussed in this preamble unless we received a substantive comment.
Comments: Two general comments were received concerning this
section. One comment stated that terms and conditions for leasing
public lands for power generation should be the same regardless of the
power source. The second comment suggested that the free market should
drive success, not government policy on the terms and conditions of an
authorization.
Response: The BLM processes each development proposal for use of
public lands on a project-by-project basis. All of the terms and
conditions in section 2805.12 would apply to power generation
authorizations, regardless of the technology used. However, based on
the BLM's experience with solar and wind energy developments,
additional terms and conditions are required for such authorizations on
public lands because the different types of technology may have varying
impacts on the public lands and the resources they contain. For
example, a string of wind turbines or an array of solar panels will
have a different footprint, and accordingly will have a different
impact on the lands and resources than other energy generation types.
Separately, the free market alone (a market without oversight),
cannot determine the use of the public lands, as those lands are
managed by the BLM on behalf of the American public. The terms and
conditions of each BLM authorization address the protection of the
public lands and resources, consistent with the BLM's responsibility to
manage the public lands under

[[Page 92156]]

FLPMA's multiple use and sustained yield mandate. Without regulations
that ensure the necessary terms and conditions are put in place,
development of the public lands could result in the unacceptable loss
of the public lands and the resources they contain.
The BLM regularly engages the public, including private businesses,
to seek comments and input on the BLM's administration of the public
lands. The BLM will continue to do so through this rulemaking and its
other decision-making processes.
Section 2805.12(a)(5) contains language from existing section
2805.12(e) with two small changes. The word ``phase'' was changed to
``stage'' to prevent confusion with the use of ``phase-in of the MW
capacity fee'' and similar phrases in this rule.
This paragraph also prohibits discrimination based on sexual
orientation. Adding sexual orientation as a protected class in this
regulation is consistent with the policy of the Department that no
employee or applicant for employment be subjected to discrimination or
harassment because of his or her sexual orientation. See 373
Departmental Manual 7 (June 5, 2013). Several comments were received
either for or against modifying this paragraph.
Comments: One comment recommended that additional language be added
to identify ``pregnancy and gender relations'' as protected classes,
while another recommended deleting ``sexual orientation'' from the
rule.
Response: We did not revise the rule as a result of these comments.
This paragraph refers to existing Federal law prohibiting
discrimination and does not add or expand upon requirements under
existing law.
Comments: Some comments suggested that the BLM include greater
connection between the rule and landscape-level mitigation as described
in Secretarial Order 3330 and subsequent reports, and be consistent
with the BLM's IM 2013-142, interim policy guidance for offsite
mitigation.
Response: Developing landscape-level mitigation policy for use of
the public lands is an ongoing BLM effort. Examples of landscape
mitigation plans are the solar regional mitigation strategies. The BLM
is currently developing regional mitigation strategies for many of the
SEZs established as part of the Western Solar Plan. For an example of a
complete mitigation plan, see the BLM's Dry Lake regional mitigation
strategy known as Technical Note 444, which may be found on the BLM's
Web site at: https://www.blm.gov/style/medialib/blm/wo/blm_library/tech_notes.Par.29872.File.dat/TN_444.pdf. Since more detailed
requirements and guidance will be addressed in the BLM's policies,
handbooks, and other forms of guidance that are currently under
development, the BLM did not make any changes in response to this
comment.
Section 2805.12(a)(8)(iv) is added to the final rule based upon
comments on the proposed rule to incorporate clear measures that are
consistent with landscape-level mitigation and the BLM's IM 2013-142
for offsite mitigation. The added provision clarifies that the BLM can
require offsite mitigation to address residual impacts associated with
a right-of-way. Any compensatory mitigation requirements would be
established through a land use planning decision or implementation
decision, possibly relying on a previously developed strategy, such as
a solar regional mitigation strategy.
Section 2805.12(a)(8)(vi) requires compliance with project-specific
terms, conditions, and stipulations, including proper maintenance and
repair of equipment during the operation of a grant. This is an
existing policy requirement affecting all rights-of-way and in this
rule is expanded to include leases offered under revised subpart 2809.
In addition, this provision requires a holder to comply with the terms
and conditions in the POD. This may include project-specific conditions
to maintain the project in a manner that will not unnecessarily harm
the public land by poor maintenance and operational practices. Any
holder that does not comply with the POD approved by the BLM would be
subject to remedial actions under section 2807.17, which may include
the suspension or termination of the grant or lease
Comment: Another comment suggested adding language that the BLM
implement a condition to begin early coordination with State fish and
wildlife offices.
Response: In the proposed rule, the BLM identified two pre-
application meetings under section 2804.10. One meeting was focused on
early coordination among the BLM, applicant, and other Federal, State,
and tribal authorities. This early coordination requirement has been
carried forward in the final rule under section 2804.12 as part of a
preliminary application review meeting for proposed solar and wind
energy projects and transmission lines with a capacity of 100 kV or
more. No other change has been made in the final rule. Early
coordination among Federal and State wildlife offices has been carried
forward into the final rule.
Paragraph (a)(8)(vii) of this section discusses the use of State
standards and requires the right-of-way holder to comply with such
standards when they are more stringent than Federal standards.
Comment: A comment suggested that we add the word ``environmental''
so that the paragraph would now read, ``When the State [environmental]
standards are more stringent than Federal standards, comply with State
standards for public health and safety, environmental protection, and
siting, constructing, operating, and maintaining any facilities and
improvements on the right-of-way.''
Response: Under FLPMA, the BLM considers an array of State
standards, including those relating to public health and safety. Under
the existing regulations, the BLM may apply State standards when those
standards do not conflict with Federal law or policy for the
administration of the public lands. No revision was made to the text of
this paragraph in response to this comment.
Paragraph (a)(8)(viii) of this section requires that a grantee or
lessee grant the BLM an equivalent authorization for an access road
across the applicant's land if the BLM determines that a reciprocal
authorization is needed in the public interest and the authorization
the BLM issues to you is also for road access.
Comment: One comment was concerned that the BLM was proposing to
revise section 2804.25 rule to read, ``If your application is for a
road, BLM will determine if it is in the public interest to require you
to grant the U.S. an equivalent authorization across land you own.''
The comment raised concern that section 2805.12(a)(8) appeared to be
directed at landowners and not utility companies. The comment expressed
concern about waiving rental payments and who would be responsible for
maintenance and repair of damage caused to the road.
Response: The BLM did not propose to revise section 2804.25 to read
as noted. The quoted text from the comment is from regulations that
were formerly found at existing section 2804.25(d)(3) and are now
identified as section 2804.25(e)(6) of this final rule. The paragraph
was redesignated in this final rule after the rest of the section was
revised. In section 2805.12, the requirement regarding reciprocal
rights-of-way has also been redesignated as section
2805.12(a)(8)(viii).
This text in the final rule, which remains unchanged from the text
in the existing regulation, is used by the BLM for administration of
the public lands. Where there are inter-mixed or

[[Page 92157]]

adjoining private and public lands, the issuance of reciprocal right-
of-way authorizations would allow the BLM to cross your land to inspect
and administer the public lands as well as grant you access across the
public lands for purposes of ingress and egress to your property. The
reciprocal authorization may include use for the public to access your
land, but does not require such an authorization as the intended use is
for the BLM to utilize the right-of-way. A reciprocal right-of-way is
not intended as a public use access, such as those issued by a State's
Department of Transportation or the Federal Highway Administration.
Each reciprocal authorization is evaluated on a case-by-case basis, and
additional questions may be addressed at that time.
Comment: A comment raised further concerns about the proposed
requirements of section 2805.12(a)(3), which read ``Build and maintain
suitable crossings for existing roads and significant trails that
intersect the project,'' noting that this should only be applicable if
the roads or trails are used by the grant holder. The comment also
noted that the grant holder should not be responsible for repairing or
maintaining these roads or trails if they have not caused or
contributed to damages.
Response: The BLM did not propose to revise the terms and
conditions found at section 2805.12 to read as noted in the comment.
The quoted text is from section 2805.12(c) of the existing regulations,
now identified as section 2805.12(a)(3) of this final rule. The
paragraph is redesignated in the final rule for readability, and is not
amended further.
This condition is retained from the existing regulations as the BLM
must allow for multiple-use of the public lands. Should a right-of-way
be granted, it does not displace other uses of the public land,
including use of existing trails and other crossing that may intersect
the project. The BLM will require that such trails and accesses are
maintained by the right-of-way grant holder only to the extent that
they have impacted it. If there is damage to the trail or access that
is not the fault of the grant holder, then they will not be required to
repair or fix it.
Comment: A comment raised concerns over the proposed requirements
of section 2805.12(a)(4), ``Do everything reasonable to prevent and
suppress wildfires on or in the immediate vicinity of the right-of-way
area.'' The comment noted that utilities frequently perform fire
prevention activities as part of regular maintenance, which are
frequently delayed by the BLM. The comment further noted that the grant
holder should not be responsible for performing activities outside of
the right-of-way, and that the fighting of fires should be the
responsibility of the BLM, not the grant holder.
Response: The BLM did not propose to revise the terms and
conditions found at section 2805.12 to read as noted by the comment.
The quoted text is from regulations that were formerly found at
2805.12(d) and are now identified as section 2805.12(a)(4) of this
final rule. The paragraph is redesignated in the final rule for
readability. This condition is retained from the existing regulations
in this final rule without amendment. The condition requires the holder
of an authorization to do everything that is reasonable to prevent or
suppress wildfires. This condition is not intended to require a grant
holder to perform actions outside of a right-of-way, unless the actions
are related to the right-of-way, such as trimming trees as a component
of BLM-authorized regular maintenance on an overhead transmission line.
Other actions outside of the right-of-way, which are not related to the
right-of-way, would not be the holder's responsibility.
Additionally, this condition does not delay actions that are
already permitted in the right-of-way grant, which would be completed
by a grant holder to prevent or suppress wildfires. However, actions
proposed to be taken by a grant holder may be delayed if they are
outside the permission granted by the BLM.
Comment: One comment raised concerns over the BLM proposing to
revise the terms and conditions to read, ``Assume full liability if
third parties are injured or damages occur on or near the right-of-
way.'' The comment raised concerns that this appeared to be an
unreasonable requirement since a grant-holder does not generally have
authority to enforce laws. The comment also said that grant holders
could be responsible for damages related to faulty equipment, but
should not be responsible for actions outside of lands they are
authorized to use, and for actions that are not their own, such as
those by vandals or even the BLM.
Response: The BLM did not propose to revise the terms and
conditions found at section 2805.12 to read as noted. The quoted text
is from regulations that were formerly found at section 2805.12(h) and
are now identified as section 2804.12(a)(7) of this final rule. The
paragraph is redesignated in the final rule for readability.
The condition is retained from existing regulations in this final
rule without amendment. The condition does not require that a holder
should enforce the laws and regulations on public lands. However, the
condition provides notice that, when agreeing to be a right-of-way
holder on the public lands, the grant holder assumes responsibility for
the permitted use. A holder assumes the responsibility for any injury
or damages caused that are associated with their right-of-way. Injury
or damages could be those that are directly caused by the grant holder,
such as by electrocution or collision with a permitted use, or
indirectly, such as those from flood events which can carry objects
outside of the permitted right-of-way, but are still the responsibility
of the grant holder.
Section 2805.12(a)(15) requires that a grant holder or lessee
provide, or make available upon the BLM's direction, any pertinent
environmental, technical, and financial records for inspection and
review. Any confidential or proprietary information will be kept
confidential to the extent allowed by law. Review of the requested
records facilitates the BLM's monitoring and inspection activities
related to the development it authorizes. The records will also be used
to determine if the holder is complying with the requirements for
holding a grant under section 2803.10(b).
Comments: Several comments stated that: (1) The BLM does not have
authority to make such requirements; (2) In the case of a PPA or other
similar type agreements, the BLM has no need to see such documents; and
(3) These documents relate to private party transactions and are
subject to confidentiality provisions.
Response: The BLM does not need all of the documents described in
this paragraph for every right-of-way. However, in some circumstances
the BLM might need these documents when processing an application or
where the BLM may need verification that such an agreement has been put
in place, such as if a variable offset is to be awarded under the
competitive leasing process inside a DLA. Information that is
proprietary or confidential that is submitted to the BLM will be
treated as such to the extent allowed by law. The BLM will require
information under this provision, including PPAs, only if it is
necessary for the BLM's administration of an authorization.
Section 2805.12(b) requires that grant holders and lessees comply
with the bonding requirements of added section 2805.20. The former
bonding requirements were lacking in detail and this new section will
help clarify the requirements of a grant or lease. This paragraph is
revised in this final rule to

[[Page 92158]]

state that the BLM will not issue a Notice to Proceed or give written
approval until the grant holder complies with the bonding requirements
of section 2805.20. This revision clarifies that when required by the
BLM, a bond must be obtained before beginning ground-disturbing
activities. No comments were received and no other changes made from
the proposed rule to the final rule.
Section 2805.12(c) identifies specific terms and conditions for
grants and leases issued for solar or wind energy development,
including those issued under subpart 2809. Several comments were
received on this paragraph and these are discussed at the end of
section 2805.12(c)(6). Minor revisions are made from the proposed to
the final rule to improve readability, but any significant changes are
discussed in detail in this preamble.
Section 2805.12(c)(1) prohibits ground-disturbing activities until
either a notice to proceed is issued under section 2807.10 or the BLM
states in writing that all requirements have been met to allow
construction to begin. Requirements may include the payment of rents,
fees, or monitoring costs, and securing a performance and reclamation
bond. The BLM will generally apply this requirement to all solar and
wind rights-of-way due to the large scale of most of these projects.
Section 2805.12(c)(2) requires that construction be completed
within the timeframes provided in the approved POD. Construction must
begin within 24 months of the effective date of the grant authorization
or within 12 months, if approved as a staged development. This section
is revised from the proposed to final rule to include a ``or as
otherwise authorized by the BLM.'' This revision is consistent with
other sections of this final rule where the BLM retains discretion to
approve or authorize different timeframes or requirements. The BLM may
approve a request for an alternative requirement (see section
2805.12(e)), but the BLM may also authorize a different timeframe in
the approved POD. The BLM made similar revisions to the requirements
described in section 2805.12(c)(3)(ii) and (iii). Further discussion of
a staged development is found under section 2806.50.
Section 2805.12(c)(3) describes the requirements for projects that
include staged development in the POD, unless other agreements have
been made between the developer and the BLM. Minor revisions are made
from the proposed to the final rule to improve readability, but any
significant changes are discussed in detail in this preamble.
Under paragraph (c)(3)(i) of this section, a developer must begin
construction of the initial phase of development within 12 months after
issuance of the Notice to Proceed, but no later than 24 months after
the effective date of the right-of-way authorization.
Paragraph (c)(3)(ii) of this section requires that each stage of
construction after the first begin within 3 years after construction
began for the previous stage of development. Construction must be
completed no later than 24 months after the start of construction for
that stage of development, unless otherwise authorized by the BLM.
These time periods were selected after evaluating the timing of
other completed energy development projects. These timeframes will help
ensure that the public land is not unreasonably encumbered by these
large authorizations, which are exclusive to other rights during the
construction period of the project.
Section 2805.12(c)(3)(iii) limits the number of development stages
to three, unless the BLM specifically approves additional stages. The
BLM will generally approve up to three stages for solar and wind energy
development. An applicant may request approval of additional stages
with a showing of good cause under section 2804.40. This request must
be accompanied by a supporting discussion showing good cause for your
inability to meet the conditions of the right-of-way. A grant holder
may request alternative stipulations, terms, or conditions under
section 2805.12(e). The BLM revised paragraph (c)(3)(iii) of this
section, from the proposed to final rule by removing ``in advance''
when referring to the BLM's approval. The requirement in this section
is unchanged from the proposed rule but is rephrased for consistency
with other sections of the final rule. The addition of 2805.12(e)
provides additional information about the requests for alternative
requirements.
Paragraphs (c)(4), (5), and (6) of this section contain specific
requirements for diligent development and the potential consequences of
not complying with these requirements.
Section 2805.12(c)(4) requires the holder to maintain all onsite
electrical generation equipment and facilities in accordance with the
design standards of the approved POD. This paragraph reiterates the
requirement to comply with the POD that must be submitted as scheduled
under section 2804.12(c)(1).
Section 2805.12(c)(5) provides requirements for repairing or
removing damaged or abandoned equipment and facilities within 30 days
of receipt of a notice from the BLM. The BLM will issue a notice of
noncompliance under this provision only after identifying damaged or
abandoned facilities that present an unnecessary hazard to the public
health or safety or the environment for a continuous period of 3
months. Upon receipt of a notice of noncompliance under this provision,
an operator must take appropriate remedial action within 30 days, or
show good cause for any delays. Failure to comply with these
requirements may result in suspension or termination of a grant or
lease.
Under section 2805.12(c)(6), the BLM may suspend or terminate a
grant if the holder does not comply with the diligent development
requirements of the authorization. The citation in this section is
revised in the final rule from section 2807.17 to sections 2807.17
through 2807.19. Sections 2807.18 and 2807.19 are existing sections of
the regulations, which are not a part of this final rule, that describe
the BLM's processes for suspending or terminating rights-of-way. This
revision does not represent a change in meaning, but provides more
information for the reader.
Comments: Comments disagreed with the proposed rule and suggested
that it would require arbitrary and disparate terms and conditions
between rights-of-way issued under subpart 2804 and those issued under
subpart 2809. The comments stated that the authority granted by FLPMA
does not authorize the BLM to penalize developers who submit an
application for and obtain BLM approval for rights-of-way on other BLM
managed lands (i.e., non-DLAs).
Response: The BLM disagrees. A focus of the proposed and final rule
is to encourage solar and wind energy development inside DLAs.
Encouraging DLA developments is meant to locate large scale
developments in areas with lesser impacts to resources and uses of the
public lands. Incentivizing the use of DLAs is achieved by increasing
certainty, longevity, and reducing some costs in a DLA relative to
other areas. The proposed rule does not increase costs and uncertainty
outside of the DLAs. In areas outside of DLAs, the BLM is simply
incorporating its processes established by policy for solar and wind
energy. The BLM believes that the final rule will reduce costs and
increase certainty inside of DLAs and maintain the streamlined
application process for lands outside of DLAs.
Comments: Some comments stated that a CFR reference cited in
2805.12(c)(6)(iii) was incorrect.

[[Page 92159]]

Response: The comment is correct and this reference is revised to
paragraph (c)(7) of this section. Furthermore, another citation was
updated in this paragraph, referring to submitting a written request
for an extension for a timeline in a POD. The updated reference now
cites paragraph (e) of this section where a right-of-way holder may
request an alternative requirement.
Comment: Some comments opposed the requirement in section
2805.12(c)(7) that a bond include Indian cultural resource
identification, protection, and mitigation. The comments assert this is
in error because there are no distinguishing factors that can justify
requiring cultural resource bonding for non-DLA authorizations, but not
for DLA authorizations.
Response: Paragraph (c) applies to all solar and wind energy
rights-of-way, both leases issued under subpart 2809 and grants issued
under subpart 2804. This requirement does not distinguish between
requirements for grants and leases.
However, the BLM recognizes that these costs are difficult to
determine and revised this section to specifically include ``the
estimated costs of cultural resource and Indian cultural resource
identification, protection, and mitigation for project impacts.'' This
revision helps tie the required costs to the impacts of the project.
Comment: One comment suggested that bonding for cultural, scenic,
and wildlife impacts adds unnecessary risk to a project. The comment
stated that bonding for such impacts is unnecessary for solar
activities, as the majority of mitigation expenses are incurred during
construction, and operation expenses are minimal and easily covered by
fixed PPA revenues in excess of low operational costs.
Response: The bond instrument required by the BLM is necessary to
protect public lands and their resources. A minimum bond and standard
bond amount are provided in sections 2805.20 and 2809.18 of this final
rule. Including these amounts in the rule provide the opportunity for a
developer to incorporate these costs in their project plan, reducing
unexpected and unnecessary risk to a project that may keep it from
proceeding.
The bonding requirement for cultural, scenic, and wildlife impacts
protects the public land resources when developing the land for various
uses. For example, possible damages to the public land that would need
to be covered by a bond could include surface disturbing activities,
recontouring of soils to alter the flow of water, and the removal of
vegetation. Other damages could be those to resources outside the
right-of-way that are diminished, such as water supply or biological
resources. No revision to this paragraph is made as a result of this
comment.
Comment: One comment suggested that the BLM's timeframes are too
restrictive and would be a disincentive to the development of solar and
wind energy on public lands.
Response: No changes were made to this provision; however, the
addition of section 2805.12(e) allows adjustments of the timeframes,
provided that a good cause rationale is submitted by the project
proponent and the BLM approves the request. No other comments were
received or changes made to the paragraphs under section 2805.12(c).
Section 2805.12(d) describes specific requirements for energy site
or project testing grants. Because these are short term grants, for
three years or less, the BLM believes it is appropriate to require
facilities to be installed within 12 months of the effective date of
the grant. All equipment must be maintained and failure to comply with
any terms may result in termination of the authorization.
No comments were received on this paragraph. However, two revisions
have been made as follows. The word ``wind'' has been removed from the
text of the paragraph describing the energy site- and project-area
testing grants, to make it clear that these grants are not limited to
wind project proponents, but are also available to solar project
proponents. This change is consistent with other parts of the final
rule where commenters requested that the BLM make the site- and
project-area testing grants available for both solar and wind energy.
Additionally, the language from the proposed rule that required a
showing of good cause for an extension of project timelines has been
revised to direct the reader to paragraph (e) of this section in the
final rule, which governs reporting requirements for instances of
noncompliance and requests for alternative stipulations, terms, or
conditions. No other comments were received and no additional changes
were made to this section.
Section 2805.12(e) addresses reporting requirements for instances
of noncompliance, and requests by project proponents for alternative
stipulations, terms, or conditions of the approved right-of-way grant
or lease. This provision was added to the final rule based on comments
received. This section is similar to section 2804.40 of the final rule,
but that section applies to subpart 2804 of the final rule and the
application process for a grant, whereas this section applies to grant
and lease holders and applies to the terms, conditions, and
stipulations of all approved authorizations. Under this section, a
holder must notify the BLM of noncompliance, and may request an
alternative requirement during project operation.
Paragraph (e)(1) of this section provides that a holder of a right-
of-way must notify the BLM as soon as the holder either anticipates
noncompliance or learns of its noncompliance with any stipulation,
term, or condition of the approved right-of-way grant or lease.
Notification to the BLM must be in writing and show good cause for the
noncompliance, including an explanation of the reasons for failure.
Comments: As noted previously in the preamble of this final rule,
the BLM participated in stakeholder engagement meetings as part of the
BLM's regular course of business. During some such meetings,
stakeholders clarified the concerns they had previously raised through
written comments on the proposed rule. Specifically, industry
representatives expressed concern that the rule did not include
provisions giving the BLM flexibility to respond to project-specific or
regional circumstances by, for example, adjusting capacity factors
based on technical considerations or adjusting county zone assignments
using land value assessments, which could be more accurate than NASS
land values in a given area.
Industry also provided additional information regarding its concern
that the proposed rule's bonding requirements were too rigorous.
Commenters suggested that the BLM add provisions to the rule that
authorize it to consider other factors when determining a bond amount,
instead of only the reclamation cost estimate.
Response: The BLM agrees that it may be reasonable to set
alternative terms, conditions, and stipulations, and to consider other
factors in setting bond amounts on a project-specific or regional
basis. After considering this comment, the BLM included a new provision
in the final rule, section 2805.12(e)(2), under which a grant or lease
holder may request an alternative to the terms, conditions, and
stipulations of their authorization, including requesting an
alternative bonding requirement. The requested alternative requirement
could include those identified in a project's POD, the right-of-way's
terms and conditions, or other such requirements, such as a request for
an extension of time. A request for an alternative payment

[[Page 92160]]

requirement may include a request for an alternative net capacity
factor or per acre zone rate consideration. Requests may be submitted
after notification has been provided as required in paragraph (e)(1) of
this section or at the holder's request. However, this section
specifically notes that any request for an alternative must comply with
applicable law in order to be considered.
The BLM recognizes that some requests, such as those related to
acreage rent, may be appropriately considered on a larger, regional
scale. Under the authority in section 2806.70 of this final rule,
therefore, the BLM may adjust the acreage rent schedule or MW capacity
fee applicable to a particular project or in a given area, so long as
the BLM determines such changes are based on reasonable methods for
determining appropriate values for the use of public land resources.
With respect to bonding requirements, the BLM recognizes it may be
appropriate to consider other factors in addition to the reclamation
cost estimate, such as the salvage value of project components. The BLM
amended both sections 2805.12(e)(2) and 2805.20(a)(3) to accommodate
that possibility, as discussed further in the section of this preamble
that discusses section 2805.20(a)(3). Any proposed alternative to
bonding must provide the United States with adequate financial security
for the potential liabilities associated with any particular grant or
lease. For example, a request for an alternative bonding requirement
may include a holder's request for consideration of project salvage
values, but must also include the cost for processing and handling
salvage actions.
No alternative requirements request is approved unless and until
you receive BLM approval in writing.
Comments: As discussed in section 2804.40, several comments on
various rule provisions expressed concern that a developer may not be
able to meet BLM requirements. Comments said that failure to meet such
requirements may be due to delays or environmental changes outside a
developer's control, statutory or policy changes, or other
unanticipated situations.
Response: The BLM believes that new paragraph (e) of this section
addresses these concerns. The BLM intends to issue policies to address
how it will implement these provisions following the issuance of this
final rule. Consistent use of the final rule's requirements and clear
expectations will be outlined in these policies, to include the
provisions of this paragraph and those of section 2804.40.
Section 2805.14 What rights does a grant convey?
The BLM has added two new paragraphs to section 2805.14, both
addressing applications for renewal of existing grants or leases.
Paragraph (g) states that a holder of a solar or wind energy
development grant or lease may apply for renewal under section 2807.22.
Paragraph (h) of this section states that a holder of an energy
project-area testing grant may apply for a renewal of such a grant for
up to an additional 3 years, provided that the renewal application also
includes an energy development application. Paragraph (g) is added to
this rule to explain how one may apply for a solar or wind energy
development grant or lease renewal. The BLM added paragraph (h) to
recognize that project-area testing may be necessary for longer than an
initial 3-year term, even after an applicant believes that energy
development at a proposed project site is feasible. Revisions in this
final rule were made consistent with those made in section 2801.9 for
project-area grants.
The proposed rule stated that specific project-area grants were for
only wind energy, but based upon comments received, project-area grants
have been expanded to include project-area testing grants for solar
energy as well. No other comments were received or additional changes
made to this section.
Section 2805.15 What rights does the United States retain?
In section 2805.15, the word ``facilities'' and a reference to
section 2805.14(b) are added to the first sentence of paragraph (b) to
clarify that the BLM may require common use of right-of-way facilities.
The sentence now makes clear that the BLM retains the right to
``require common use of your right-of-way, including facilities (see
section 2805.14(b)), subsurface, and air space, and authorize use of
the right-of-way for compatible uses.'' The term ``facility'' is
defined in the BLM's existing regulations at section 2801.5 and means
an improvement or structure owned and controlled by the grant holder or
lessee. Common use of a right-of-way occurs when more than one entity
uses the same area for their authorization. This revision facilitates
the cooperation and coordination between users of the public lands
managed by the BLM so that resources are not unnecessarily impacted. An
example of common use of a facility is authorization for a roadway and
an adjacent transmission line. In this case, maintenance of the
transmission line would include use of the adjacent roadway. Under
existing section 2805.14(b), the BLM may authorize or require common
use of a facility as a term of the grant and a grant holder may charge
for the use of its facility. Section 2805.15(b) is revised to include a
reference to section 2805.14(b).
Comment: Two comments were received on this proposed change. One
comment suggested clarifying that the change in section 2805.15(b) is
intended to harmonize this paragraph with section 2805.14(b). The
comment made special note that they do not protest this amendment to
include ``facilities,'' so long as this was the only intent of the
requirement.
Response: The BLM agrees with the comment, and believes that the
proposed adjustments to this rule would make the regulations consistent
and not open to interpretation. The intent of this revision is not to
go beyond what is discussed in the preamble for this paragraph. No
changes to the proposed rule are necessary in response to this comment.
Comment: The second comment stated that the rule deletes language
from the existing section that prohibits charges for the common use of
rights-of-way. The comment recommended modifying the section, but not
deleting it, suggesting that the modification should prohibit charges
except for pro-rata, fair-share cost allocations for the shared
construction and/or operation and maintenance of facilities authorized
under a grant or lease. The comment expressed concern that if this
section is not modified, the first holder could intentionally charge a
prohibitively expensive fee for common use.
Response: The proposed rule did not delete this requirement from
the existing regulations. Instead, it added the two words ``including
facilities.'' Requiring a pro-rata, fair-share cost allocation
agreement between private parties is outside BLM's role of
administering the public lands. The BLM believes that two private
parties should reach an agreement without the BLM dictating its
conditions. The BLM did not make any change in response to this comment
since dictating third party contracts is beyond the scope of this rule.
No other comments were received, nor were any additional changes
made to this section.
Section 2805.16 If I hold a grant, what monitoring fees must I pay?
The table of monitoring categories in section 2805.16 no longer has
the outdated dollar amounts for the category

[[Page 92161]]

fees. Paragraph (b) explains that the current year's monitoring cost
schedule is available from any BLM State, district, or field office, or
by writing, and is adjusted annually for inflation using the same
methodology as the table in section 2804.14(b). The table now includes
only the definition of the monitoring categories in terms of hours
worked, instead of providing specific dollar amounts. Also, the word
``application'' found in each category is changed to ``inspecting and
monitoring'' to clarify that the inspecting and monitoring does not
apply to right-of-way applications. This change was made to avoid
either adjusting the table each year through a rulemaking or relying on
outdated material. The current monitoring fee schedule may be found at
https://www.blm.gov.
This paragraph also provides that you may pay directly to another
Federal agency their incurred costs in monitoring your grant instead of
paying the fee to the BLM. As the regulations will no longer identify
the costs by category, the current cost information is provided in the
following table. The monitoring fees and work hours for FY 2015 are as
follows:

Monitoring Categories and Fees for FY 2016
------------------------------------------------------------------------
Monitoring category Federal work hours Fees for FY 2016
------------------------------------------------------------------------
(1) Inspecting and monitoring of Estimated Federal $122.
new grants, renewals, and Work are >1 <=8.
amendments to existing grants.
(2) Inspecting and monitoring of Estimated Federal 428.
new grants, renewals, and Work are >>8 <=24.
amendments to existing grants.
(3) Inspecting and monitoring of Estimated Federal 806.
new grants, renewals, and Work are ><24
amendments to existing grants. <=36.
(4) Monitoring of new grants, Estimated Federal 1,156.
renewals, and amendments to Work are >36 <=50.
existing grants.
(5) Master Agreements........... Varies............ As specified in
the agreement.
(6) Inspecting and monitoring of Estimated Federal As specified in
new grants, renewals, and Work are >50. the agreement.
amendments to existing grants.
------------------------------------------------------------------------

Consistent with revisions made under monitoring fees table in
2805.16(a), the BLM is adding the words ``inspecting and'' to section
2805.16(a). This additional language is not a change from current BLM
practice or policy and will allow the BLM to inspect and monitor the
right-of-way to ensure project compliance with the terms and conditions
of an authorization. Under this provision, if a project is out of
compliance, the BLM could inspect the project to ensure that the
required actions are completed to the satisfaction of the BLM, such as
continued maintenance of the required activity or efficacy of the
requirement.
The BLM added a new sentence to paragraph (a) of this section that
directs the reader to section 2805.17(c), which is an existing section
of the regulations that describes category 6 monitoring fees. The two
sentences preceding this revision describe when the other monitoring
categories are updated, but there was no reference for category 6
monitoring fees. This revision is made for consistency with how the
other monitoring categories are described in this section. No comments
were received and no other changes are made from the proposed rule to
the final rule.
Section 2805.20 Bonding Requirements
Section 2805.20 provides bonding requirements for all grant holders
or lessees. These provisions are moved from existing section 2805.12.
Under the existing regulations, bonds are required only at the BLM's
discretion. This expanded section explains the details of when a bond
is required and what the bond must cover. This is not a change from
existing practice and is intended to provide clarity to the public.
Specific bonding requirements for solar and wind energy development are
outlined in paragraphs (b) and (c) of this section. This final rule
explains requires are for the performance of the terms and conditions
of a grant or lease and reclamation of a right-of-way grant or lease
area.
Comments: One comment indicated that solar facilities should not be
subject to the same bonding framework as surface mining. The proposed
bonding imposes unnecessary costs on the solar industry without
providing any additional land protection. Surface mining operations may
be abandoned and there is often significant surface disturbance, which
is not the case with solar developments. Some comments said that
acceptable bonding instruments should include corporate guarantees
backed by financial tests. Bonding costs could be expensive, even
doubling annual operating costs. The use of letters of credit could
significantly reduce the bond amounts. Also, the BLM could have an
initial lower bond amount until decommissioning is near and at that
time the bond could be increased.
Response: The framework used by surface mining development was a
starting point for the solar and wind energy development process on
what to consider when completing a RCE and determining the bond amount.
However, this framework has been adapted to address circumstances
specific to solar and wind energy development as well as all other
right-of-way developments on the public lands. The bond amounts, as
determined by an RCE or those using a standard bond, are necessary to
ensure the protection of the public lands.
Corporate guarantees are not an acceptable form of bond for the
BLM. They are too risky to accept, even when financial tests are used,
because they require continual confirmation of the quality of the
corporate guarantee. However, irrevocable letters of credit are
accepted by the BLM. Furthermore, the BLM cannot accept a lesser bond
amount until the decommissioning of a grant or lease, because the BLM
cannot be responsible for the financial stability of any company, nor
can it bear the risk that a company may default or go bankrupt during
the term of a grant, before decommissioning. To secure an increased
bond at that time would be difficult if not impossible and having such
a regulatory provision would place the public lands at unnecessary risk
from the impacts of unreclaimed developments.
Section 2805.20(a) provides that, if required by the BLM, you must
obtain or certify that you have obtained a performance and reclamation
bond or other acceptable bond instrument to cover any losses, damages,
or injury to human health or damages to property or the environment in
connection with your use of an authorized right-of-way. This paragraph
also includes the language from existing section

[[Page 92162]]

2805.12(g), which details bonding requirements.
Consistent with other revisions made in the final rule for better
understanding of the rule, section 2805.20(a) is revised to add ``costs
associated with'' when discussing what a bond will cover when
terminating a grant. This added language makes it clear that the bond
covers costs associated with terminating a grant.
Comments: Some comments suggested expanding the language of this
and subsequent bonding paragraphs to include ``certificate of insurance
or other acceptable security'' in appropriate places.
Response: Adding the language ``certificate of insurance or other
acceptable security'' is unnecessary in the text of the regulation as
the definition of acceptable bond instruments includes insurance
policies, and therefore a specific form of insurance does not need to
be included in the text of the regulation. Furthermore, the list of
bond instruments that are acceptable is not an all-inclusive list.
There are other forms of bond instruments, but they are not specified
in the text of the rule because they are not as common as the ones
identified. If the bond instrument list were to be considered as ``all
inclusive'' it could unintentionally exclude acceptable bond
instruments. As a result, the recommended addition to the rule text is
not incorporated in the final rule.
Section 2805.20(a)(1) requires that bonds list the BLM as an
additionally covered party if a State regulatory authority requires a
bond to cover some portion of environmental liabilities. If the BLM
were not named as an additionally covered party for such bonds, the BLM
would not be covered by the instrument. This provision allows the BLM
to accept a State bond to satisfy a portion of the BLM's bonding
requirement, thus, limiting double bonding.
Comment: One comment was received pertaining to this paragraph. The
comment stated that bond requirements are unnecessary for ``regulated
entities'' and that additional bonding requirements are duplicative and
pose additional costs on a public utility's customers.
Response: The BLM disagrees, because regulated utilities present
the same risks as unregulated utilities. Under section 2805.20(a), a
bond is not required for all authorizations. Requirement of a bond for
an authorization is at the discretion of the BLM and is dependent on
the scale of the development and potential for risk to the public
lands. Also, the BLM may accept a bonding instrument submitted to the
State if it meets the criteria identified in paragraphs (i) through
(iii) of section 2805.20(a)(1). The intent of the bonding provisions in
section 2805.20(a)(1)(iii) is to mitigate the potential for duplicative
costs to right-of-way holders using the public lands.
An additional requirement is added to paragraph (a) in this final
rule that requires periodic review of bonds for adequacy. This
provision is added to ensure consistency with the provisions added in
response to comments on section 2805.20(c). This additional requirement
includes bonds held by a State and accepted by the BLM and applies to
all bonds held by the BLM, regardless of the size or complexity of an
authorized project. The frequency of the bond adequacy reviews will be
described in greater detail within BLM guidance issued as part of
implementation of this rule. Review frequency, as described in the
recently issued instruction memorandum 2015-138, will be no less than
once every 5 years, giving review priority to those that pose a greater
risk to the public lands.
Under section 2805.20(a)(1)(i), a State bond must be redeemable by
the BLM. If such instrument is provided to the BLM and it is not
redeemable, the BLM would be unable to use the bond for its intended
purpose(s).
Under section 2805.20(a)(1)(ii), a State bond must be held or
approved by a State agency for the same reclamation requirements as the
BLM requires.
Under section 2805.20(a)(1)(iii), a State bond must provide the
same or greater financial guarantee than the BLM requires for the
portion of environmental liabilities covered by the State's bond.
Comment: One comment concerning this paragraph stated that section
2805.20(a)(3) makes clear that a bond will not be required for solar
energy projects developed inside DLAs, and bonds will be required for
solar projects outside DLAs.
Response: This comment is not correct. Section 2809.18(e) requires
a specific performance bond for leases authorized under subpart 2809,
identified as a standard bond. Standard bonds are not determined by a
RCE, but rather are set as specified in the regulations.
Under section 2805.20(a)(2) a bond must be approved by the BLM's
authorized officer. This approval ensures that the bond meets the BLM's
standards. Under section 2805.20(a)(3), the bond amount is determined
by the BLM based on a RCE, and must also include the BLM's costs for
administering a reclamation contract. As defined in section 2801.5, a
RCE identifies an appropriate amount for financial guarantees for uses
of the public lands. An additional requirement is included in paragraph
(a)(3) requiring periodic review of bonds for adequacy. This
requirement was added to ensure consistency with the provisions added
to section 2805.20(c). Both paragraphs (c)(3) and (4) of this section
contain a stipulation that they do not apply to leases issued under
subpart 2809. Bonds issued under subpart 2809 for leases inside DLAs
have standard amounts. Bond acceptance and amounts for solar and wind
energy facilities outside of DLAs are discussed in paragraphs (b) and
(c) of this section.
Paragraph (a)(3) of this section is revised from the proposed to
final rule to improve readability. Specifically, the BLM removed the
second sentence of the paragraph that stated the BLM may require you to
prepare an acceptable RCE. The first sentence of this paragraph is
revised to include ``, which the BLM may require you to prepare and
submit.'' This revision is intended to improve the reader's
understanding of the final rule and its requirements by streamlining
the text of the rule.
In addition to the changes made for readability, this paragraph is
revised by adding, ``The BLM may also consider other factors, such as
salvage values, when determining the bond amount.'' This revision
responds to concerns raised in stakeholder engagement meetings and is
consistent with section 2805.12(e)(2) of this final rule, which
specifies that a developer may request an alternative requirement for
bonding.
A request for an alternative bonding requirement may include a
holder's request for consideration of project component salvage values.
Such a request may reduce the BLM's bond determination amount, even to
an amount below the minimum or standard bond amount. However, the
request must be fully supported by documentation from the requestor
that includes the costs for processing and handling salvage materials,
such as information about distribution centers for such materials and
other reasonable considerations. Further, as noted under paragraph
2805.12(e)(2), requests for an alternative bonding requirement must
comply with applicable law in order to be considered, and must provide
the United States with adequate financial security for potential
liabilities.
Regardless of the nature of the request, any such request is not
approved until you receive BLM approval in writing.

[[Page 92163]]

Section 2805.20(a)(4) requires that a bond be submitted on or
before the deadline provided by the BLM. Current regulations have no
such provision, and this revision makes it clear what the BLM expects
when it requires a bond instrument. The BLM believes this provision
will improve the timely collection of bonds. The timely submittal of a
bond promotes efficient stewardship of the public lands and ensures
that the bond amount provided is acceptable to the BLM and available
prior to beginning ground-disturbing activities.
Section 2805.20(a)(5) outlines the components to be addressed when
determining a RCE. They include environmental liabilities, maintenance
of equipment and facilities, and reclamation of the right-of-way. This
paragraph consolidates and presents what liabilities the bond must
cover.
Under section 2805.20(a)(6), a holder of a grant or lease may ask
the BLM to accept a replacement bond. The BLM must review and approve
the replacement bond before accepting it. If a replacement bond is
accepted, the surety company for the old bond is not released from
obligations that accrued while the old bond was in effect, unless the
new bond covers such obligations to the BLM's satisfaction. This gives
the grant holder flexibility to find a new bond, potentially reducing
their costs, while ensuring that the right-of-way is adequately bonded.
Under section 2805.20(a)(7), a holder of a grant or lease is
required to notify the BLM that reclamation has occurred. If the BLM
determines reclamation is complete, the BLM may release all or part of
the bond that covers these liabilities. However, section 2805.20(a)(8)
reiterates that a grant holder is still liable in certain circumstances
under section 2807.12. Despite the bonding requirements of this
section, grant holders are still liable for damage done during the term
of the grant or lease even if: The BLM releases all or part of your
bond, the bond amount does not cover the cost of reclamation, or no
bond remains in place.
Section 2805.20(b) and (c) identify specific bond requirements for
solar and wind energy development respectively outside of DLAs. A
holder of a solar or wind energy grant outside of a DLA will be
required to submit a RCE to help the BLM determine the bond amount. For
solar energy development grants outside of DLAs, the bond amount will
be no less than $10,000 per acre. For wind energy development grants
outside of DLAs, the bond amount will be no less than $10,000 per
authorized turbine with a nameplate generating capacity of less than
one MW, and no less than $20,000 per authorized turbine with a
nameplate generating capacity of one MW or greater.
Section 2805.20(d) is new to the final rule. This paragraph
separates site- and project-area testing authorization bond
requirements from section 2805.20(c). This change is consistent with
other provisions that have been modified to expand the wind energy
site- and project-area testing authorizations in the proposed rule to
include solar energy. With this adjustment, meteorological and other
instrumentation facilities are required to be bonded at no less than
$2,000 per location. These bond amounts are the same as standard bond
amounts for leases required under section 2809.18(e)(3).
The BLM recently completed a review of bonded solar and wind energy
projects and based the bond amounts provided in this final rule on the
information found during the review. When determining these bond
amounts, the BLM considered potential liabilities associated with the
lands affected by the rights-of-way, such as potential impacts to
cultural values, wildlife habitat, and scenic values. The range of
costs included in the review represented the cost differences in
performing reclamation activities for solar and wind energy
developments throughout the various geographic regions the BLM manages.
The BLM used the review to determine an appropriate bond amount to
cover potential liabilities associated with solar and wind energy
projects.
Minimum bond amounts are set for solar development for each acre of
authorization because solar energy development encumbers 100 percent of
the lands and excludes them from other uses. The recent review of bonds
showed a range of bond amounts for solar energy development of
approximately $10,000 to $18,000 per acre of the rights-of-way on
public lands. Minimum bond amounts for wind energy development are set
for each wind turbine authorized on public land, rather than per acre,
because the encumbrance is factored at 10 percent and is not exclusive
to other uses. The review showed that the bond amounts for recently
authorized wind energy development ranged between $22,000 and $60,000
per wind turbine. Recently bonded wind energy projects use wind
turbines that are one MW or larger in nameplate capacity, whereas older
projects generally use turbines that are less than one MW.
Comment: Some comments suggested that bonds should not be required
for solar facilities on the public lands because they pose low
environmental risk and that some solar energy generation technologies
have less potential impacts than others and, therefore, less risk.
Response: The BLM agrees that generally, solar facilities do not
pose the same environmental hazards as other energy development
facilities. However, the BLM's requirement for bonding is not only for
the potential environmental risks that a development poses on the
public lands. Rather, a bond is required to cover direct impacts to the
resources and their reclamation to a condition as near as possible to
what they were before development occurred.
This comment is specific to solar energy, but raises the question
of lesser risk for certain developments, which is an issue that arises
with respect to wind energy as well. In the BLM's review of recently
bonded solar and wind energy projects, for example, the range of bond
amounts identified was for newer wind energy turbines, with a nameplate
capacity of one MW or greater. These wind energy turbines are larger,
have a greater footprint, and require larger and more equipment and
materials to install and remove than wind turbines that have a smaller
nameplate capacity. In order to accommodate developments that employ
smaller wind turbines that pose lesser risk to resources, the BLM is
including in the final rule the existing policy requirement of a
$10,000 minimum bond amount for projects utilizing smaller turbines.
Turbines with a nameplate capacity of one MW or greater will have a
minimum bond amount of $20,000, consistent with the proposed rule. A
reclamation cost estimate will still be required for each project on
lands outside of designated leasing areas, as described in section
2805.20(a)(3) of this rule. The BLM's bond amount determination for
wind energy projects using turbines with lesser nameplate capacities
could exceed the minimum bond amount based upon site-specific risks.

Subpart 2806--Annual Rents and Payments

Existing subpart 2806, has been retitled to more clearly and
consistently identify the content of and revisions to this subpart of
the final rule. The content and revisions to this subpart of the final
rule include those requiring a payment of an acreage rent and MW
capacity fee for rights-of-way. Retitling this subpart makes it clear
that the BLM may require payments that are not specifically a rent.

[[Page 92164]]

Section 2806.12 When and where do I pay rents?
The heading of section 2806.12 is revised by adding the words ``and
where.'' This revision is not a change in the BLM's practice or policy,
but is intended to help clarify where rental payments should be made.
Section 2806.12(a) describes the proration of rent for the first
year of a grant. Specific dates are used for proration to prevent any
confusion to grant holders and promote consistent implementation by the
BLM. Rent is prorated for the first partial year of a grant, since the
use of public lands in such situations is for only a partial year.
Paragraph (a)(2) of this section explains that if you have a short-term
grant, you may request that the BLM bill you for the entire duration of
the grant in the first payment. Some short term grant holders may wish
to pay this amount up front. Consistent with other sections of the
final rule, a revision to paragraph (a)(2) has been made to delete the
reference to wind energy in connection with site-specific testing.
Paragraph (b) of this section is revised by removing the word
``other'' from the first sentence. This revision is intended to clarify
that all rental payments must be made in accordance with the payment
plan described in section 2806.24. This revision is made to improve
readability, but does not constitute a change from existing
requirements.
Section 2806.12(d) directs right-of-way grant holders to make
rental payments as instructed by the BLM or as otherwise provided for
by Secretarial Order or legislative authority. This provision
acknowledges that either the Secretary or Congress may take action that
could affect rents and fees. The BLM will provide payment instructions
for grant holders that will include where payments may be made. The
word ``must'' is added into the first sentence of this paragraph to
improve readability and for consistency with the phrasing of other
requirements in this final rule. This revision does not constitute a
change from existing requirements. No comments were received on this
section, and no other changes were made from the proposed rule to the
final rule.
Section 2806.13 What happens if I do not pay rents and fees or if I pay
the rents and fees late?
Section 2806.13 is revised from ``What happens if I pay the rent
late?'' to read ``What happens if I do not pay rents and fees or if I
pay the rents and fees late?'' This change addresses the addition of
paragraph (e) to this section, which specifies that the BLM may
retroactively bill for uncollected or under-collected rents and fees.
The BLM will collect rent retroactively if: (1) A clerical error is
identified; (2) A rental schedule adjustment is not applied; or (3) An
omission or error in complying with the terms and conditions of the
authorized right-of-way is identified.
Paragraph (a) of this section is amended by removing language from
the existing rule that stated a fee for a late rental payment may not
exceed $500 per authorization. The BLM determined that the current $500
limit is not a sufficient financial incentive to ensure the timely
payment of rent. Therefore, under this final rule, late fees will now
be proportional to late rental amounts, to provide more incentive for
the timely payment of rents to the BLM. The BLM also added the term
``fees'' so the MW capacity fees for solar and wind energy development
grants and leases may be collected consistently with any rent due.
New paragraph (g) of this section allows the BLM to condition any
further activities associated with the right-of-way on the payment of
outstanding payments. The BLM believes that this consequence imposed
for outstanding payments is further incentive to timely pay rents and
fees to the BLM.
Comment: A comment suggested that the BLM should be responsible for
clerical and other possible errors, and that the holder should not be
responsible for payment of rents, fees, or late payments if such an
error occurs due to the BLM. Further, the comment suggested a 6 month
time limit for enforcing such corrections that would be retroactive,
and that a late payment fee would be no more than 5 percent of the
total rents and fees.
Response: The BLM considered the 6-month and 5 percent limits
suggested by the comment and decided to not include these limits in the
final rule. When entering into a right-of-way agreement with the BLM, a
holder agrees to the terms and conditions for the use of the public
lands. Included as part of these terms and conditions is the
requirement that a holder pay, in advance, the appropriate amount for
the use of the public lands. Generally, the BLM sends a bill or other
notice to a holder that is a notice of payment due to the BLM, as
agreed to in the right-of-way grant. Even if the BLM were to make a
clerical or administrative error when transmitting a notice of payment
obligations, such an error in a notice would not permanently relieve a
right-of-way grant holder from its independent requirement to pay the
appropriate amount for the use of the public lands as specified in the
grant. No other comments were received for this section, and no changes
were made to the final rule.
Section 2806.20 What is the rent for a linear right-of-way grant?
In section 2806.20, the address to obtain a current rent schedule
for linear rights-of-way is updated. Also, district offices are added
to State and field offices as a location where you may request a rent
schedule. These minor corrections are made to provide current
information to the public. No comments were received on this provision,
and no changes are made from the proposed rule to it in the final rule.
Section 2806.22 When and how does the per acre rent change?
A technical change in section 2806.22 corrects the acronym IPD-GDP,
referring to the Implicit Price Deflator for Gross Domestic Product. No
comments were received and no changes are made from the proposed rule
to the final rule.
Section 2806.23 How will the BLM calculate my rent for linear rights-
of-way the Per Acre Rent Schedule covers?
In the existing regulations, paragraph (b) of this section provides
for phasing in the initial implementation of the Per Acre Rent Schedule
by allowing a one-time reduction of 25 percent of the 2009 acreage rent
for grant holders. This paragraph was flagged for removal in the
proposed rule and is being removed by this final rule because the
phase-in for the updated rent schedule referenced in that provision
ended in 2011 and thus is no longer applicable. No comments were
received and no other changes are made from the proposed rule to the
final rule.
Section 2806.24 How must I make payments for a linear grant?
Section 2806.24(c) explains how the BLM prorates the first year
rental amount. The rule adds an option to pay rent for multiple year
periods. The new language requires payment for the remaining partial
year along with the first year, or multiples thereof, if proration
applies. No comments were received and no other changes are made from
the proposed rule to the final rule.
Section 2806.30 What are the rents for communication site rights-of-
way?
Section 2806.30 is amended by removing paragraph (b), which
contained the communications site rent schedule table. Paragraph (c) is
redesignated as new paragraph (b). Section 2806.30(a) is revised to
remove redundant language referring to the BLM communication site
rights-of-way

[[Page 92165]]

rent schedule. Section 2806.30(a)(1) is revised to update the mailing
address. Section 2806.30(a)(2) is revised by removing references to the
table that has been removed. This paragraph still describes the
methodology for updating the schedule, but directs the reader to the
BLM's Web site or BLM offices instead. No comments were received, and
no other changes are made inform the proposed rule to the final rule.
Section 2806.34 How will BLM calculate the rent for a grant or lease
authorizing a multiple-use communication facility?
Section 2806.34(b)(4) is revised to fix a citation in the existing
regulations that was incorrect. No comments were received, and no other
changes are made from the proposed rule to the final rule.
Section 2806.43 How does BLM calculate rent for passive reflectors and
local exchange networks? and Section 2806.44 How will BLM calculate
rent for a facility owner's or facility manager's grant or lease which
authorizes communication uses?
Sections 2806.43(a) and 2806.44(a) are each revised by changing the
cross-reference from section 2806.50 to section 2806.70. Section
2806.50 is redesignated as section 2806.70, and these citations are
updated to reflect this change.
Section 2806.44 is retitled from ``How will BLM calculate rent for
a facility owner's or facility manager's grant or lease which
authorizes communication uses subject to the communication use rent
schedule and communication uses whose rent BLM determines by other
means?'' to read as above. This section has been retitled to more
clearly identify the content and additions made. The addition is a new
introductory paragraph describing that this section applies to grants
or leases. Such authorizations may include a mixture of communication
uses, some of which are subject to the BLM's communication rent
schedule. Such rent determinations will be made under the provisions of
this section. No comments were received, and no other changes are made
from the proposed rule to the final rule.
Sections 2806.50 Through 2806.68 Rents and Fees for Solar Energy
Rights-of-Way and Wind Energy Rights-of-Way
Sections 2806.50 through 2806.58 and sections 2806.60 through
2806.68 provide new rules for the rents and fees for solar and wind
energy development, respectively. The rents and fees described in these
sections, along with the bidding process, will help the BLM generally
receive fair market value for the use of public lands. There are
similarities between the provisions governing solar and wind energy
grants and leases. For example, each type of project and authorization
instrument is subject to acreage rent and MW capacity fee obligations.
However, there are differences in the final rule with respect to wind
and solar projects (e.g., solar energy projects assume 100% encumbrance
within the project footprint, whereas wind energy projects assume 10%
encumbrance). There are also differences in the way acreage rent and MW
capacity fees are applied to solar energy grants versus leases. These
differences are discussed in sections 2806.52 and 2806.54; wind energy
grants and leases are discussed in sections 2806.62 and 2806.64,
respectively. Section 2806.50 is retitled ``Rents and fees for solar
energy rights-of-way.'' The former regulation at section 2806.50 has
been redesignated as section 2806.70. Section 2806.51 is added to this
final rule in response to comments received regarding potential payment
uncertainty.
Revised section 2806.50 requires a holder of a solar energy right-
of-way authorization to pay annual rents and fees for right-of-way
authorizations issued under subparts 2804 and 2809. Those right-of-way
holders with authorizations issued under subpart 2804 will pay rent for
a grant and those right-of-way holders with authorizations issued under
subpart 2809 will pay rent for a lease. Payment obligations for both
types of right-of-way authorizations now consist of an acreage rent and
MW capacity fee. The acreage rent must be paid in advance, prior to the
issuance of an authorization, and the MW capacity fee will be phased-in
after the start of energy generation. Both the acreage rent and MW
capacity fee must be paid in advance annually during the term of the
authorization. The initial acreage rent and MW capacity fee are
calculated, charged, and prorated consistently with the requirements
found in sections 2806.11 and 2806.12. Rent for solar authorizations
vary depending on the number of acres, technology of the solar
development, and whether the right-of-way authorization is a grant or
lease.
The BLM received some comments that generally applied to its rental
provisions of the final rule. The BLM also revised sections 2806.50
through 2806.68 to improve the readability of these sections.
Comment: One comment on the rental provisions stated that the
proposed rule requires full payment immediately upon the award of an
authorization. The comment suggested that payment should begin at the
time infrastructure is placed in service instead at the time of award.
Response: The BLM does not require full payment immediately upon
award of an authorization. Both an acreage rent and MW capacity fee are
charged for solar and wind energy authorizations, but only the acreage
rent is paid at the time a right-of-way is authorized. Acreage rent is
charged upon the authorization of such developments as the public lands
are being encumbered. The MW capacity fee may be phased-in during the
term of the right-of-way as approved in the POD. This meets the
concerns of the comment because the rules do not require full payment
of rents and fees immediately upon authorization of a right-of-way.
Comments: Some comments stated that the BLM does not have authority
to levy a MW capacity fee. These comments argued that because the
Federal Government lacks an ownership interest in sunlight or the wind,
it cannot sell the rights to use them for profit (unlike the sale of
Federal mineral interests at fair market value), charge a royalty
against sale proceeds (unlike Federal oil and gas rights), or charge
rent for the use of sunlight (unlike Federal land surface occupancy
rights). Aside from the ownership issue, these commenters argued that
the MW capacity fee is an inappropriate element of fair market value
because it is based on the value of electricity generated and sold,
rather than the value of the underlying land itself. For example, the
comments pointed out, if two facilities occupy the same amount of land,
but one has more efficient technology, the more efficient facility
would pay more because of the additional electricity generated, not
because of land rental values. The comments recommended that, for solar
and wind energy generation rights-of-way, the BLM should exclusively
charge rent, through a per acre rent schedule informed only by the
NASS.
Response: FLPMA generally requires the BLM to obtain fair market
value for the use of the public lands, including for rights-of-way. In
accordance with the BLM's authority, and similar to valuation practices
for solar and wind energy development on private lands, the BLM uses
electrical generation capacity as a component of the value it assigns
to the use of the lands by the projects. From information the BLM has
been provided by industry or has otherwise collected, the BLM
determined that private land owners customarily charge a ``royalty,''
typically a percentage of the value of actual production, for the use
of private land. As explained above, the BLM has

[[Page 92166]]

elected in this final rule to charge a fee based on installed MW
capacity rather than a royalty. This fee, when added to the applicable
acreage rent and any minimum and bonus bids received, ensures that the
BLM will obtain an appropriate value for the use of the public lands by
solar and wind energy projects.
The BLM classifies MW capacity payments as ``fees'' rather than
``rent,'' because they reflect the commercial utilization value of the
public's resource, above and beyond the rural or agricultural value of
the land in its unimproved state. In the BLM's experience and
consistent with generally accepted valuation methods, the value of the
public lands for solar or wind energy generation use depends on factors
other than the acreage occupied and the underlying land's unimproved
value. Other key factors include the solar insolation value or wind
speed and density, proximity to demand for electricity, proximity to
transmission lines, and the relative absence of resource conflicts that
tend to inhibit solar and wind energy development. To account for these
elements of land use value that are not intrinsic to the rural value of
the lands in their unimproved state, under this final rule, solar and
wind right-of-way payments include ``MW capacity fees'' in addition to
the ``acreage rent'' as a component of fair market value for these
authorizations.
The acreage payment remains classified as ``rent'' under the final
rule, as it is directly tied to the area of public lands encumbered by
the project and the constraints the project imposes on other uses of
the public lands. Electric or telephone facilities that qualify for
financing under the Rural Electrification Act may be exempt from paying
a ``rental fee,'' which includes the solar or wind energy acreage
rents. However, as explained in IM 2016-122, and consistent with the
BLM's current practice, any such facilities must pay other costs
associated with the fair market value of the land, such as the MW
capacity fee, minimum bid, or bonus bid, because these other payments
are independent of the land acreage and value of the unimproved land,
and therefore are not appropriately termed ``rental fees.''
The use of an acreage rent and MW capacity fee is also intended to
encourage a developer to more efficiently use the public lands
encumbered by a project. In the situation where two parcels with the
same MW capacity for projects have differing technologies, the more
efficient technology (and therefore the higher approved MW capacity)
would be paying more in fees, but less in acreage rent for the same
generation capacity as the more efficient technology would allow a
developer to pay less in acreage rent to achieve the same approved MW
capacity.
The BLM intends to evaluate the adequacy and impact of the
provisions of this final rule after it has had an opportunity to
observe how the payment requirements and rate adjustment methods put in
place affect the BLM's ability to support renewable energy development
and simultaneously collect fair market value from the projects it
authorizes.
Section 2806.50 Rents and Fees for Solar Energy Rights-of-Way
The BLM revised section 2806.50 to include site- and project-area
testing. In the proposed rule, rights-of-way for site-specific and
project-area testing were allowed only for wind energy. The final rule
deletes the word ``wind'', to make the provision generally applicable
to wind or solar energy testing. This change is made in response to a
comment, which will be discussed under section 2806.58 of this
preamble. No other comments were received, and no other changes made to
the final rule.
Section 2806.51 Scheduled Rate Adjustment
Comments: After the comment period of the proposed rule closed, the
BLM continued to hold general meetings with stakeholders about the
BLM's renewable energy program. In some of those meetings, stakeholders
asked questions about the proposed rulemaking and clarified concerns
they had raised through their written comments. Industry
representatives shared additional information regarding their concerns
with the proposed rule's approach to calculating annual payment
requirements, including uncertainty about potential future payment
requirements over the life of the right-of-way authorization.
Specifically, commenters expressed concerns about the potential for
NASS values in certain areas to jump significantly between surveys,
resulting in unexpected and unsustainable changes in the per acre zone
rates for those lands.
The BLM understands that when financing a project, developers must
predict project costs, including for the construction, operation, and
maintenance phases of the project. Included with these costs are
expenses for land use, such as annual payment requirements of a BLM
grant or lease. The BLM also understands that in some areas there is
the potential for NASS land values to change significantly from one 5-
year period to the next in a manner that is unpredictable, and that can
result in significant acreage rent increases or decreases. For lands
that experience those large changes in NASS land values, the standard
rate adjustment method's periodic update to rates may create financial
uncertainty. This may, in turn, complicate project financing and
require a developer to pay a higher cost of capital.
Response: The BLM agrees with these comments and recognizes that
increasing payment certainty over the term of the grant or lease may
help facilitate project financing and even reduce financing costs. To
respond to these comments and concerns, the BLM added section 2806.51
to the final rule. This section allows a grant or lease holder to
choose one of two rate adjustment methods, the ``standard'' rate
adjustment method, or the scheduled rate adjustment method.
Under the standard rate adjustment method, which was described in
the proposed rule and is now named in the final rule, the BLM will
periodically reassess the rates it charges for use of the public lands
and resources based on the latest NASS survey data and the applicable
western hub energy prices, as well as other data discussed in greater
detail in connection with section 2806.52 of this final rule.
By contrast, if the grant or lease holder chooses the scheduled
rate adjustment method, the BLM will implement scheduled, predictable
rate increases over the term of the grant. Under this approach, annual
project costs are easily modeled, which increases the certainty as to
future costs. By selecting the scheduled adjustment method a proponent
would trade the potential upsides of rate adjustments pegged to a
fluctuating national indicator (which may only increase slightly in a
given period, or may even go down) for greater payment certainty.
Based on historical trends, the BLM expects that in some areas, the
rates under the standard rate adjustment method will increase by more
than they would under the scheduled rate adjustment method. However,
the opposite is also true: in other areas, rates under the standard
method may increase by very little, or even decrease, while rates under
the scheduled rate adjustment method will increase by a fixed amount at
fixed intervals. The BLM determined that it is appropriate to allow
developers to choose between these rate adjustment methods, as some
grant or lease holders may want to take advantage of the possibility
that NASS values could stay nearly constant or

[[Page 92167]]

even go down, while other holders may want to increase payment
certainty.
The adjustments contemplated under the scheduled rate increase are
similar to the terms found in many power purchase agreements, which
build in fixed annual increases. The BLM based the scheduled adjustment
approach on an evaluation of market trends over the last 10 years. The
trend over that period is consistent with a longer term trend showing
power pricing has increased generally. The BLM believes that the
scheduled rate adjustment method provides certainty for prospective
developers while also ensuring that the BLM will obtain fair market
value for the use of the public lands.
Paragraph (a) of this section provides that a holder may choose the
standard rate adjustments for a right-of-way, which are detailed in
section 2806.52(a)(5) and (b)(3) for grants, or section 2806.54(a)(4)
and (c) for leases, or the scheduled rate adjustments for a right-of-
way, which are detailed in section 2806.52(d) for grants, or section
2806.54(d) for leases. If a holder selects the standard adjustment
method, the BLM will increase or decrease the per acre zone rate and MW
rate for the authorization, as dictated by the specified calculation
method, at fixed intervals over the term of a grant or lease. If a
holder selects the scheduled rate adjustment method, the BLM will
increase the per acre zone rate and MW rate by a fixed amount,
described in section 2806.52(d) or 2806.54(d), respectively, at those
same intervals. The BLM created the scheduled rate adjustment method
using percentages and values that reflect current market conditions and
trends; if, in the future, the BLM considers it necessary to revise the
applicable rates in the scheduled rate adjustment provisions, it will
do so via rulemaking.
Once a holder selects a rate adjustment method, the holder will not
be able to change the rate adjustment method until the grant or lease
is renewed. This rule clearly articulates the differences between these
methods. As such, a holder will not be able to change its selection in
the future, if one method proves more favorable than another during the
term of the authorization. The rates paid by grant or lease holders
that chose the standard adjustment approach may, in some cases, diverge
from the rates paid by grant or lease holders that chose the scheduled
adjustment approach. The BLM believes, however, that over the length of
the grant or lease both methods will provide fair market value for the
underlying authorization to use the public lands and resources.
Paragraph (b) of this section requires that a holder provide
written notice to the BLM, before a grant or lease is issued, if the
holder wishes to select the scheduled rate adjustment. In the absence
of such a notice, the BLM will continue to use the standard rate
adjustment method for the authorization.
The BLM will generally not consider a request for an alternative
rate structure or terms from holders that select the scheduled rate
adjustment method. The holder knows what their rates will be when
selecting the scheduled rate adjustment method and is committing to
those rates, understanding that they cannot change this selection.
Paragraph (c) of this section explains how the final rule will affect
existing grant holders. Like new grant holders, existing grant holders
also have the option to choose between standard or scheduled rate
adjustments. The holder of a solar or wind energy grant that is in
effect prior to the effective date of this final rule may request that
the BLM apply the scheduled rate adjustment to their grant, rather than
the standard rate adjustment. Any such request must be received by the
BLM in writing within 2 years of this rule's publication in the Federal
Register. The BLM determined that 2 years was a reasonable amount of
time for grant holders to consider the benefits of the different rate
adjustment methods.
For existing grant holders that choose the scheduled rate
adjustment method, the BLM will apply the scheduled rate adjustment in
section 2806.52(d) to the rates in effect prior to the publication of
this final rule.
For existing grant holders that choose the scheduled rate
adjustment method, however, the BLM will first adjust the rates in
existing grants and leases upward by 20%, to account for the fact that
the BLM elected not to undertake the most recent adjustment under its
existing guidance because of the pendency of this rulemaking process.
The scheduled rate adjustment method will then apply, resulting in
fixed rate increases at set intervals thereafter.
The BLM will continue to apply the standard rate adjustments to the
rates for existing grant holders unless and until written notice is
received requesting the scheduled rate adjustment method. As previously
mentioned, the standard rate adjustment is BLM's default method and
current practice, as outlined in existing policy.
Section 2806.52 Rents and Fees for Solar Energy Development Grants
Section 2806.52 requires a grant holder to make annual payments
that include the acreage rent and MW capacity fee.
Comments: Some comments expressed confusion over whether certain
costs in the proposed rule were a ``rent'' or a ``fee.''
Response: The introductory paragraph for section 2806.52 in the
final rule has been revised to clarify what is a ``rent'' and what is a
``fee.'' ``Rent'' is now described as an ``acreage rent,'' and ``fee''
has been clarified as a ``MW capacity fee.'' Paragraph (a) of this
section describes the acreage rent requirements and calculation
methodology, and paragraph (b) of this section describes the MW
capacity fee requirements and calculation methodology.
Section 2806.52(a), ``Acreage rent,'' describes the acreage rent
payment for solar energy grants. ``Acreage rent,'' as defined in
section 2801.5, means rents assessed for solar energy development
grants and leases that are determined by the number of acres authorized
for the grant or lease times the per acre zone rate. Under existing
policy, entities that qualify for financing under the Rural
Electrification Act may be exempted from paying solar acreage rent (IM
2016-122).
Comments: Several comments were concerned about using the values
set for NASS and believed that they would not apply to vacant BLM land.
Comments suggested that solar and wind energy development should be
appraised or assessed differently than other authorization types, such
as linear rights-of-way. To determine the acreage rent for such
developments following the same criteria as linear facilities would
make development cost prohibitive on the public lands due to unfairly
applying a linear acreage rent.
Response: In response to these comments, both sections 2806.52 and
2806.62 are revised to incorporate State-specific reductions from the
baseline NASS values in the calculation of acreage rents. The proposed
rule used the linear rent schedule as the basis for determining acreage
rent values by proposing solar and wind acreage rent as a percentage
factor of the linear rent schedule. Using a percentage factor for
acreage rent allows the BLM to adopt the linear rent calculation and
effectively change the encumbrance factor to be specific for solar or
wind energy.
For the final rule, the BLM has further modified the calculation
used to determine acreage rent for solar and wind energy
authorizations. The BLM recognizes that the NASS agricultural values
may not always be a fair representation of public lands because

[[Page 92168]]

they include the agricultural improvements (e.g., buildings, ditches,
irrigation) to the land. To account for this possibility, the final
rule uses the NASS agricultural values as a baseline for the
determination of acreage rent, then incorporates a 20 percent or
greater State-specific reduction that accounts for the extent to which
the NASS values reflect agricultural improvements to land in each
State. By applying these State-specific reductions to the baseline NASS
values when calculating acreage rent, the BLM more accurately
identifies the value of unimproved land for a project site.
The proposed rule based the acreage rent calculation on the linear
rent schedule, which uses a nationwide reduction of 20 percent. In the
final rule, the State-specific factors will be no less than the 20
percent reduction initially proposed for the rule, but may be greater.
A more detailed discussion on how these values are calculated and a
table showing the specific values for each State is found under section
2806.52(a)(2) of this preamble.
Paragraph (a)(1) summarizes how the BLM identifies a per acre zone
rate using the NASS land values. Paragraph (a)(2) describes how the BLM
adjusts the per acre zone rate, by 20 percent or more, to account for
agricultural improvements to the lands in each State. A State with a
larger calculated reduction than the minimum 20 percent may lower a
particular county's acreage rent. In the case of some States, such as
Utah, the State-specific reduction that applies to unimproved
agricultural land values is approximately 50 percent. This is discussed
in greater detail under section 2806.52(a)(2).
Using this methodology, the BLM is able to establish a method for
calculating acreage rents for solar and wind energy developments that
are appropriate for the location of the development. New section
2806.52(c) is added to this final rule providing the BLM's
implementation of the acreage rent and MW capacity fee for solar energy
developments.
Under section 2806.52(a)(1), the acreage rent for solar energy
rights-of-way is calculated by multiplying the number of acres (rounded
up to the nearest tenth of an acre) within the authorized area times
the per acre zone rate in effect at the time the authorization is
issued. Under section 2806.52(a)(1), the initial per acre zone rate for
solar energy authorizations is now established by considering four
factors; the per acre zone value multiplied by the encumbrance factor
multiplied by the rate of return multiplied by the annual adjustment
factor. This calculation is reflected in the following formula - A x B
x C x D = E, where:
``A'' is the per acre zone value, as described in the linear rent
schedule in section 2806.20(c);
``B'' is the encumbrance, equaling 100 percent;
``C'' is the rate of return, equaling 5.27 percent;
``D'' is the annual adjustment factor, equaling the average annual
change in the IPD-GDP for the 10-year period immediately preceding the
year that the NASS census data becomes available; and
``E'' is the annual per acre zone rate.
The BLM will adjust the per acre zone rates each year, based on the
average annual change in the IPD-GDP, consistent with section
2806.22(a). Adjusted rates are effective each year on January first.
Under new section 2806.52(a)(2), counties (or other geographical
areas) are assigned to a Per Acre Zone Value on the solar energy
acreage rent schedule, based on the State-specific percent of the
average land and building value published in the NASS Census.
The BLM currently uses an acreage rent schedule for linear rights-
of-way to determine annual payments. The rent schedule separates land
values into 15 different zones and establishes values for each zone
ranging from $0 to $1,000,000 per acre. These values are based on the
published agricultural values of the land, as determined by the NASS.
Solar and wind energy acreage rents will be determined using the same
zone values as linear rights-of-way. However, the BLM will use a state
specific reduction when assigning lands to a zone.
The Per Acre Zone Value is a component of calculating the Per Acre
Zone Rate under paragraph (a)(1) of this section. The calculation in
this paragraph establishes a State-specific percent factor that
represents the difference between the improved agricultural land values
provided by NASS and the unimproved rangeland values that represent BLM
land. This calculation is reflected in the following formula--(A/B)-(C/
D) = E, where:
``A'' is the NASS Census statewide average per acre value of non-
irrigated acres;
``B'' is the NASS Census statewide average per acre land and
building value;
``C'' is the NASS Census total statewide acres in farmsteads,
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
``D'' is the total statewide acres in farms; and
``E'' is the State-specific percent factor or 20 percent, whichever
is greater.
The county average per acre land and building values that exceed
the 20 percent threshold for solar and wind energy development are as
follows for BLM managed lands.

Table of State-Specific Factors and Other Data for Applicable States
----------------------------------------------------------------------------------------------------------------
Existing
regulations and Final rule state-
proposed rule: by-state Final rule state-
State Nationwide 20 calculated specific factor
percent factor factor (%) (%)
(%)
----------------------------------------------------------------------------------------------------------------
Alaska................................................. 20 12 20
Arizona................................................ 20 49 49
California............................................. 20 51 51
Colorado............................................... 20 24 24
Idaho.................................................. 20 29 29
Montana................................................ 20 12 20
Nevada................................................. 20 16 20
New Mexico............................................. 20 24 24
North Dakota........................................... 20 5 20
South Dakota........................................... 20 5 20
Oregon................................................. 20 2 20
Texas.................................................. 20 -1 20

[[Page 92169]]

Utah................................................... 20 54 54
Washington............................................. 20 21 21
Wyoming................................................ 20 16 20
Average............................................ 20 21 27
----------------------------------------------------------------------------------------------------------------

Assignment of counties example: This example uses the zone numbers
and values of the acreage rent schedule to assign Clark County, Nevada,
to the appropriate zone. Current NASS land values for Clark County are
$5,611 per acre. The state-specific factor for Nevada is 16 percent,
which is less than the 20 percent minimum established in this rule.
Therefore, the BLM applied a 20 percent reduction to the NASS land
values, which results in a per acre value of $4,489. Based on this,
Clark County is assigned to zone 7 (counties with zone values between
$3,394.01 and $4,746 per acre). For the purposes of calculating the
acreage rent, the BLM will use the value for zone 7, which is $4,746
per acre.
The following paragraph is an acreage rent example describing the
acreage rent for solar energy development.
Acreage rent example: The 2016 acreage rent for a 4,000 acre solar
energy development in Clark County, Nevada (zone 7) would be $1,021,480
(4,000 acres x $255.37 per acre). Please note that the acreage rent
calculation rounds the per acre dollar amount for the county to the
nearest cent. In this example ($4,746/acre x 100% x 5.27% x 1.021%) is
rounded to $255.37 per acre.
As specified in new section 2806.52(a)(3), the initial assignment
of counties to the zones on the solar energy acreage rent schedule is
based upon the NASS Census data from 2012 and is established for year
2016 through 2020. Subsequent reassignments of counties will occur
every 5 years following the publication of the NASS Census as is
described in section 2806.21.
Comment: The BLM received comments expressing concern that the
assignment of some counties or regions to zones on the solar acreage
rent schedule may not accurately reflect the value of those lands.
Response: The BLM recognizes that it may be necessary to adjust the
initial assignment of counties to zones on the solar energy acreage
rent schedule. Section 2806.52(a)(3) of the final rule is revised to
clarify that the BLM may, on its own initiative or in response to
requests, adjust initial NASS survey data-based county assignments on a
regional basis if it determines that assignments based solely on NASS
data do not accurately reflect the values of the BLM lands in question.
A similar clarification was made to section 2806.62(a)(3).
Section 2806.52(a)(4) requires acreage rent payments each year,
regardless of the stage of development or status of operations of a
grant. Acreage rent must be paid for the public land acreage described
in the right-of-way grant prior to issuance of the grant and prior to
the start of each subsequent year of the authorized term. There is no
phase-in period for acreage rent, which must be paid annually and in
full upon issuance of the grant. In the event of undue hardship, a rent
payment plan may be requested and approved by a BLM State director,
consistent with section 2806.15(c), so long as such a plan is in the
public interest.
Section 2806.52(a)(5) states that the BLM will adjust the per acre
zone rates each year based on the average annual change in the IPD-GDP
as determined under section 2806.22(a). The acreage rent also will
adjust each year for solar energy development grants issued under
subpart 2804. The BLM will use the most current per acre zone rates to
calculate the acreage rent for each year of the grant term, unless the
holder selects the scheduled rate adjustment method under section
2806.52(d). The acreage rent for a solar energy development lease is
adjusted under section 2806.54(a)(4).
This paragraph is revised in the final rule by removing ``for
authorizations outside of designated leasing areas, the BLM . . .''
from the first sentence and replacing it with ``We.'' This edit is
consistent with the acreage rent adjustment provision for wind energy
(see section 2806.62(b)(5)). It is necessary because the BLM may issue
a grant inside a DLA in some situations (see section 2809.19) and the
proposed section would have been inaccurate. This paragraph is also
revised in the final rule by including the reference to the scheduled
rate adjustment option, as described in section 2806.51 of this
preamble.
Section 2806.52(a)(6) explains where you may obtain a copy of the
current per acre zone rates for solar energy development (solar energy
acreage rent schedule) from any BLM State, district, or field office or
by writing: U.S. Department of the Interior, Bureau of Land Management,
20 M St SE., Room 2134LM, Attention: Renewable Energy Coordination
Office, Washington, DC 20003. This paragraph is added so the public is
aware of where to obtain a copy of the solar energy acreage rent
schedule described under this section. The BLM also posts the solar
energy acreage rent schedule online at https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
Section 2806.52(b), ``MW capacity fee,'' describes the components
used to calculate this fee. Paragraphs (b)(1), (2), (3), and (4)
explain the MW rate, MW rate schedule, adjustments to the MW rate, and
the phase-in of the MW rate. As explained in IM 2016-122, electric and
telephone facilities that qualify for financing under the Rural
Electrification Act must pay the MW capacity fee and other payments
required under this rule, except the acreage rent.
Comments: Some comments noted uncertainty regarding the meaning or
definition of words in the proposed rule, such as ``MW capacity fee''
and its component parts of the MW rate, MW hour price, net capacity
factor, and rate of return.
Response: The BLM acknowledges that this rule introduces a number
of new terms and concepts. The BLM attempted to clearly define these
terms in section 2801.5(b). Some of the terminology is similar as some
terms relate to the same general subject matter (e.g., MW capacity fee
and MW rate). The BLM has revised the regulations and provided
additional discussion in the preamble to help facilitate a better
understanding of the rule and its requirements. For example, a more
specific citation is provided in section

[[Page 92170]]

2806.52(b)(1) and other locations in the final rule to help readers
better locate and understand the terms of the final rule. These
revisions and terms are discussed in greater detail throughout the
preamble for sections 2806.50 through 2806.68.
The MW capacity fee, as defined in section 2801.5(b), refers to
payment, in addition to the acreage rent, for solar energy development
grants and leases based on the approved MW capacity of the solar energy
authorization. The MW capacity fee is the total authorized MW capacity
approved by the BLM for a project, or an approved stage of development,
multiplied by the appropriate MW rate. The MW capacity fee is prorated
and must be paid for the first partial calendar year in which
generation of electricity starts or when identified within an approved
POD. This fee captures the increased value of the right-of-way for the
particular solar-or wind-project use, above the limited rural or
agricultural land value captured by the acreage rent. The MW capacity
fee will vary, depending on the size and type of solar project and
technology and whether the solar energy right-of-way authorization is a
grant (issued under subpart 2804) or a lease (issued under subpart
2809). The MW capacity fee is paid annually either when electricity
generation begins, or as otherwise stated in the approved POD,
whichever comes first. If electricity generation does not begin on or
before the time approved in the POD, the BLM will begin charging a MW
capacity fee at the time identified in the POD.
The POD submitted to the BLM by the right-of-way applicant must
identify the stages of development for the solar or wind energy
project's energy generation, including the time by which energy
generation is projected to begin. The BLM will generally allow up to
three development stages for a solar energy project. As the facility
becomes operational, the approved MW capacity will increase as
described in the POD. These stages are part of the approved POD and
allow the BLM to enforce the diligence requirements associated with the
grant.
Comments: Other comments suggested that a bid could include an
alternative payment structure to the BLM over the life of the project.
This alternative payment structure would replace the acreage rent and
MW capacity fee described in this final rule. The comments further
suggested that the BLM reduce costs to developers by eliminating the MW
capacity fee, conducting regional mitigation planning for DLAs, and
performing a majority of the work necessary for the NEPA and Section 7
(endangered species) reviews early in the process inside DLAs.
Response: As explained elsewhere in this preamble, the BLM has
determined that the rule's multi-component payment structure, involving
both an ``acreage rent'' and ``MW capacity fee'' constitute the full
fair market value for the use of the public lands by a wind and solar
energy project. An alternative payment structure may not provide a fair
return for the use of the public lands, and therefore, would be
inconsistent with the BLM's obligations under FLPMA. The rule's
structure is consistent with existing policy. That said, the final rule
does allow the BLM to establish alternate fiscal terms for an
individual project or region upon sufficient showing by an applicant
that such alternative terms are justified. These alternative terms, if
approved by the BLM, would be used in lieu of the default terms
established by the rule inside and outside of designated leasing areas.
Under the rule's multi-component structure, the ``acreage rent''
represents the value of the raw undeveloped land, while the MW capacity
fee represents the value for this particular commercial use of the
public lands above and beyond the rural or agricultural value of the
land in its unimproved state. Both are necessary components of
obtaining the fair market value for the use of the public lands for
wind and solar energy development. As explained above, this multi-
component structure bears similarities to private land leases, which
typically involve a land rent and royalty rate.
As suggested by the comments, the BLM does perform a majority of
the work up front for the NEPA and Section 7 compliance processes for
right-of-way leases inside DLAs. Mitigation work and costs may be
identified in some cases before a competitive process occurs, such as
in Dry Lake Valley solar energy zone in Nevada. The BLM held a
competitive process in 2014 and reached a decision within 10 months of
the auction. This was less than half the time it generally takes to
process the project applications.
The BLM had great success in the Dry Lake Valley solar auction, at
least in part, because there was a regional mitigation strategy in
place. However, there may be instances in the future where a mitigation
strategy is not appropriate or necessary. The BLM will not include a
requirement for mitigation strategies in this final rule, but will be
consistent with its interim policy guidance for offsite mitigation (IM
2013-142).
Comments: Some comments argue that the value of land for purposes
of renewable energy development should be determined exclusively by MW
capacity fees or by fees based on the number of MWs actually produced
and delivered, not by the right-of-way's acreage value.
Response: Under the final rule, the BLM does not calculate annual
charges for solar and wind energy development by using only a MW
capacity fee, as suggested by the comments. The BLM has determined that
requiring an acreage rent and MW capacity fee is the best method,
consistent with applicable legal authorities, for determining the
appropriate value of a solar or wind energy development right-of-way.
The BLM also notes that the MW capacity fee and acreage rent in the
final rule have been discounted from comparable costs that are
typically charged in the private sector to account for the cost to
comply with the terms and conditions of the BLM's authorization
(bonding, due diligence, etc.).
Comments: A comment suggested that the BLM treat solar and wind
energy technologies the same when setting acreage rents and MW capacity
fees. Another comment suggested that the BLM give additional
consideration to the use of energy storage technologies when setting
acreage rents and MW capacity fees.
Response: In the BLM's examination of the different energy
generation technologies it was determined that some technologies, such
as CSP, are generally more efficient (i.e., generate more energy using
the same amount of sunlight) than other technology types and often
require that the site selected for development include certain specific
characteristics, such as limited grade. This is evidenced by the
average efficiencies of the various solar technologies as reflected in
the capacity factors on the EIA's Web site. Since the efficiencies of
PV and CSP technologies are inherent to the technologies and are, in
part, related to the particular conditions of the land to be used, the
BLM maintained this distinction in the final rule and did not implement
the comment's suggestion on limiting the various solar technology MW
capacity fees to a single non-distinct fee.
The BLM did reconsider how it considers storage when charging a MW
capacity fee. The BLM will maintain the proposed net capacity factor
for CSP with storage capacity of 3 hours or more. CSP is a technology
which is generally engineered with storage, which increases the
efficiency, but decreases overall net capacity. The BLM is confident,
based on its experience,

[[Page 92171]]

that this is the appropriate net capacity factor for this technology
based on the technology currently deployed and available information.
However, the BLM does recognize that storage could have
implications for other technology types as well. Based upon the premise
that storage increases the efficiency of a project, the BLM requested
that the National Renewable Energy Laboratory (NREL) provide a report
on the status of energy storage in the United States. The BLM hoped to
use this report to establish in the regulations an appropriate
methodology for determining the value of storage for solar and wind
projects on public lands. However, NREL's report noted that energy
storage is an emerging and rapidly growing market, so there is not
enough empirical data and commercial experience on storage to support
an accurate calculation for valuing storage. Therefore, the BLM
determined that it would be premature to add energy storage values to
the regulations at this time beyond the one provided for CSP with 3
hours of storage.
In this final rule, the BLM adds a new sentence under the
definition of MW rate to explain that in the future, the BLM may
establish a different net capacity factor on a case-by-case basis, such
as when a project uses storage, and the BLM determines that the
efficiency rating varies from the established net capacity factors in
this final rule. For example, if a wind energy project includes storage
in its design, the BLM may determine an appropriate net capacity factor
for that project.
Section 2806.52(b)(1) identifies the ``MW rate'' as a formula that
is the product of four components: The hours per year, multiplied by
the net capacity factor, multiplied by the MWh price, multiplied by the
rate of return. This can be represented by the following equation: MW
Rate = H (8,760 hrs.) x N (net capacity factor) x MWh (Megawatt Hour
price) x R (rate of return). The components of this formula are
discussed here at greater length.
Hours per year. This component of the MW rate formula is the fixed
number of hours in a year (8,760). The BLM uses this number of hours
per year for both standard and leap years.
Net capacity factor. The net capacity factor is the average
operational time divided by the average potential operational time of a
solar or wind energy development, multiplied by the current technology
efficiency rates. A net capacity factor is used to identify the
efficiency at which a project operates. The net capacity factor is
influenced by several common factors such as geographic location and
topography and the technology employed. Other factors can influence a
project's net capacity factor. For example, placement of a solar panel
in the direction that captures the most sun may increase the efficiency
at which a project operates. These other factors tend to be
specifically related to a project and its design and layout. An
increase in the net capacity factor is most readily seen when a
developer sites a project geographically for the energy source they are
seeking and utilizes the best technology for harnessing the power. An
example of this is placing wind turbines in a steady wind speed
location using a wind turbine designed for optimal performance at those
wind speeds.
The efficiency rates may vary by location for each specific
project, but the BLM will use the national average for each technology.
Efficiency rates for solar and wind energy technology can be found in
the market reports provided by the Department of Energy through its
Lawrence Berkeley National Laboratory. For solar energy see ``Utility-
Scale Solar 2012'' at https://emp.lbl.gov/sites/all/files/lbnl-6408e_0.pdf and for wind energy, please see ``2012 Wind Technologies
Market Report'' at https://emp.lbl.gov/sites/all/files/lbnl-6356e.pdf.
This rule establishes the net capacity factor for each technology as
follows:

------------------------------------------------------------------------
Net capacity
Technology type factor (%)
------------------------------------------------------------------------
Photovoltaic (PV)....................................... 20
Concentrated Photovoltaic (CPV) or Concentrated Solar 25
Power (CSP)............................................
CSP w/Storage Capacity of 3 Hours or More............... 30
Wind Energy............................................. 35
------------------------------------------------------------------------

As previously discussed in this preamble, the BLM has revised the
proposed description of net capacity factor in this final rule. This
final rule maintains the proposed net capacity factor for CSP with
storage capacity of 3 hours or more at 30 percent. The BLM adds in this
final rule a description of the net capacity factor in the definition
recognizing that as technology evolves, the BLM may determine a net
capacity factor for a specific project on a case-by-case basis in the
future, as appropriate. This will better allow the BLM to receive fair
market value payment for use of the public lands in the rapidly
changing storage market.
The BLM intends to periodically review the efficiency factors for
the various solar and wind technologies.
In the proposed rule, the BLM considered basing the net capacity
factors for these technologies on an average of the annual capacity
factors listed by the EIA. The EIA posts an average of the capacity
factors on its Web site at https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_07_b. However, the BLM decided not to go
forward with this provision and removed it from the final rule because
those annual capacity factors are not reviewed or confirmed by
technical experts, such as those at the National Laboratories, and
therefore, they are not a sufficiently reliable source of information
on which to base the net capacity factor. Further, EIA may not continue
to maintain and update this information in the future, and therefore,
it may not be a viable source of information in the future.
MWh price. This component of the MW rate formula is the full 5
calendar-year average of the annual weighted average wholesale prices
of electricity per MWh for the major trading hubs serving the 11
Western States of the continental United States. This wholesale price
of the trading hubs is the price paid for energy on the open market
between power purchasers and is an indication of current pricing for
the purchase of power. Several comments were submitted concerning the
MWh price.
Comment: One comment suggested that this component not be rounded
to the nearest half cent.
Response: The BLM proposed to round the MWh price to the nearest 5-
dollar increment. In other portions of the regulations the BLM rounds
to the nearest cent. The proposed rule was explicit that the MWh price
would be rounded to the nearest 5-dollar increment, but the final rule
has been adjusted to round the MWh price to the nearest dollar
increment. Rounding to the nearest dollar increment is consistent with
current BLM practices for calculating annual payments. The BLM
declined, however, to adopt the commenter's suggestion and round to the
nearest half cent, because the MWh price is an estimated 5-year average
of wholesale prices. Providing a more specific calculated MWh price
could give a false precision to the actual rates provided by the BLM.
Comment: Another comment stated that we should not rely on the ICE
trading hub as our source for data. Relying on a single vendor for
determining the MWh price may lead to inaccurate fees if the vendor's
data is inaccurate. There are other vendors that have current data
available for the major trading hubs in the West as well.

[[Page 92172]]

Response: The proposed rule identified the ICE as the source of
data to be used in calculating the MWh price. However, the final rule
is revised to remove ICE as the only source of the major trading hub
data in section 2806.52(b)(3)(i). Removing the specific source of data
from the final rule is consistent with the proposed rule, in that the
BLM has indicated that other sources may be used in the future should
ICE stop providing such data. Furthermore, since publication of the
proposed rule, the BLM became aware that the ICE no longer provides
such market data for free to the public, but now offers these data
under a paid subscription. Future updates to the MWh price may use ICE
or other similar purveyors of market data to determine the major
trading hubs and the wholesale market prices of electricity. Under this
final rule, the BLM is using market data from SNL Financial to
calculate the 5-year average of the annual weighted average wholesale
price per MWh.
Comments: Several comments requested an update of the MWh price and
stated that any update being made should include language to identify
the most recent full calendar year data and to remove the uncertainty
of how the BLM will determine the most recent 5-year data with future
updates. Commenters further indicated that the data used in calculating
the MWh price were skewed to numbers higher than the true recent market
average since market pricing for the year 2008 were much higher than
the years preceding or following it.
Response: The BLM understands the concern regarding the intent to
establish the MWh price using current market data. In the proposed
rule, market data from calendar years 2008 through 2012 were used to
determine the MWh price. In the final rule section 2806.52(b)(3)(i),
the BLM updated the MWh price to reflect the most recent full 5
calendar-year data (that is, data from 2010-2014) from the major
trading hubs located in the West.
In addition, the BLM adjusted provisions governing revisions to the
MWh price to account for the fact that under section 2806.50, the BLM
bills customers in advance for the following year. Specifically, the
BLM revised the final rule so that the next update to the MWh price
will occur for 2021, not 2020. This will allow the BLM to set the new
price during 2020 using the most current market data for the previous
five full years (2015-2019) without using the 2014 data twice. Market
data for 2019 are not expected to be available until early 2020. Once
data are available, the BLM will calculate the new, 2021-2025 MW
capacity fee using the full five calendar-year average of the market
data for 2015-2019, and notify existing right-of-way holders of the new
fee.
In addition to using years 2010 through 2014 in calculating the MWh
price, and adjusting the provisions governing revisions to that price,
the BLM also revised the final rule to require that the MWh price be
rounded to the nearest dollar increment, as opposed to the proposed
rule's approach of rounding up to the nearest five-dollar increment.
The BLM made this change to avoid imposing a surcharge due solely to
rounding. The BLM found that at the current MWh price, rounding to the
nearest five-dollar increment could impose a surcharge of up to 5
percent, or $158 per MW of project capacity. Rounding to the nearest
dollar increment will limit the surcharge without implying false
precision.
Note that the current MW rate is $38 per MWh as calculated using
wholesale market data from SNL Financial for the major trading hubs in
the west. The calculation for the MWh price is described in more detail
in following paragraphs with a table provided showing the averages for
the trading hubs used in the calculation.
When calculating the MWh price, the BLM used the yearly average
value for each of the major trading hubs that cover the BLM public
lands in the West. The BLM then calculated the overall annual average
yearly hub value for each of the years 2010-2014, and then averaged
these five annual values to establish the MWh price. The average of the
five annual average values for 2010 through 2014 is $38.07, so the BLM
set the MWh price at $38.00.

--------------------------------------------------------------------------------------------------------------------------------------------------------
Mid-
Year Columbia Palo- Verde Four Mead Hub SP15-EZ CA NP15 Hub CA-OR West US Avg.
Hub Hub Corners Hub Hub * Border Hub
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010............................... $35.86 $38.79 $40.13 $40.07 $39.86 $39.81 $38.80 $39.05 $39.05
2011............................... 29.48 36.43 36.66 37.02 36.78 36.00 32.93 35.04 35.04
2012............................... 22.90 29.68 30.59 30.87 34.86 32.03 27.09 29.72 29.72
2013............................... 37.59 37.66 ........... 39.84 48.34 43.97 40.19 41.27 41.27
2014............................... 38.67 42.42 ........... 44.84 51.13 51.06 43.48 45.27 45.27
--------------------------------------------------------------------------------------------------------------------
2010-2015 Avg.................. ........... ........... ........... ........... ........... ........... ........... 38.07
--------------------------------------------------------------------------------------------------------------------------------------------------------

Rate of return. The rate of return component used in the MW rate
schedule reflects the relationship of income (to the property owner) to
revenue generated from authorized solar or wind energy development
facilities on the encumbered property. A rate of return for the
developed land can range from 2 to 12 percent, but is typically around
5 percent, as identified in the appraisal consultation report completed
by the Office of Valuation Services. These rates take into account
certain risk considerations, i.e., the possibility of not receiving or
losing future income benefits, and do not normally include an allowance
for inflation.
An applicant seeking a right-of-way from the BLM must show that it
is financially able to construct and operate the facility. In addition,
the BLM may require surety or performance bonds from the holder to
facilitate compliance with the terms and conditions of the
authorization, including any payment obligations. This reduces the
BLM's risk and should allow the BLM to use a ``safe rate'' of return,
i.e., the prevailing rate on guaranteed government securities that
includes an allowance for inflation. The BLM has established a rate of
return that adjusts every 5 years to reflect the preceding 10-year
average of the 20-year U.S. Treasury bond yield, rounded to the nearest
one-tenth percent, with a minimum rate of 4 percent. Applying this
criterion, the initial rate of return is 4 and 3 tenths percent (the
10-year average of the 20-year U.S. Treasury bond yield (4.32 percent),
rounded to the nearest one-tenth percent).
This final rule is revised to round the rate of return to the
nearest one-tenth percent to address a commenter's concern that BLM's
usual rounding convention (rounding to the nearest one half percent)
could result in rate jumps due only to rounding; rounding to the
nearest one-tenth percent will limit the change in BLM's rates without
giving a false impression of precision.
As provided under paragraph (b)(2) of this section, the MW rate
schedule is

[[Page 92173]]

made available to the public in the MW rate schedule for Solar and Wind
Energy Development. The current MW rate schedule is available to the
public at any BLM office, via mail by request, or at https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.

MW Rate Schedule for Solar and Wind Energy Development
[2016-2020]
----------------------------------------------------------------------------------------------------------------
Net capacity MW rate 2016-
Type of energy technology Hours per year factor MWh price Rate of return 2020
----------------------------------------------------------------------------------------------------------------
Solar--Photovoltaic (PV)........ 8,760 0.20 $38 0.043 $2,863
Solar--Concentrated photovoltaic 8,760 0.25 38 0.043 3,578
(CPV) and concentrated solar
power (CSP)....................
CSP with storage capacity of 3 8,760 0.30 38 0.043 4,294
hours or more..................
Wind--All technologies.......... 8,760 0.35 38 0.043 5,010
----------------------------------------------------------------------------------------------------------------

For lease holders that choose the standard rate adjustment method,
the periodic adjustments in the MW rate are discussed in connection
with section 2806.52(b)(3). Under that section, adjustments to the MW
rate will occur every 5 years, beginning with the 2021 rate, by
recalculating the MWh price and rate of return, as provided in section
2806.52(b)(3)(i) and (ii), respectively.
Section 2806.52(b)(3)(i) requires that the MW rate be adjusted
using the full 5 calendar-year 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. The next update for
the MW rate will use years 2015 through 2019, rounded to the nearest
dollar increment. Following this methodology, the resulting MWh price
will be used to determine the MW rate for each subsequent 5-year
interval. The availability of data to establish the MWh price is
described in this preamble in the discussion of the definition of MWh
price, a component of the MW rate in section 2801.5(b).
As noted above, section 2806.52(b)(3)(ii) provides that when
adjusting the rate of return, the BLM will use the 10-year average of
the 20-year U.S. Treasury bond yield for the full 10 calendar-year
period preceding the rate of return adjustment. The rate of return is
rounded to the nearest one-tenth percent, and must be no less than 4
percent. In the final rule, the rate of return was calculated using
years 2003 through 2012 of the 20-year U.S. Treasury bond yield (4.32
percent), rounded to the nearest one-tenth percent (4.3 percent). The
rate of 4.3 percent will be used for calendar years 2016 through 2020.
The rate of return will be recalculated every 5 years beginning in
2020, by determining the 10-year average of the 20-year U.S. Treasury
bond yield for the previous ten calendar years (2010 through 2019, for
2020) rounded to the nearest one-tenth percent. The resulting rate of
return, if not less than 4 percent, will be used to determine the MW
rate for calendar years 2020 through 2024, and so forth. The 20-year
U.S. Treasury bond yields are tracked daily and are accessible at
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=longtermrateAll.
To allow for a reasonable and diligent testing and operational
period, under section 2806.52(b)(4)(i), the BLM will provide for a 3-
year phase-in of the MW capacity fee for solar energy development
grants issued under subpart 2804 of 25 percent for the first year, 50
percent the second year, and 100 percent the third and subsequent years
of operations. The first year is the first partial calendar year of
operations and the second year is the first full year. For example, if
a facility begins producing electricity in June 2016, 25 percent of the
capacity fee would be assessed for July through December of 2016 and 50
percent of the capacity fee would be assessed for January through
December of 2017. One hundred percent would be assessed thereafter.
This BLM will apply the phase-in after electricity generation
begins, or is scheduled to begin in the approved POD, whichever comes
first. The proposed rule stated that the BLM would apply the phase-in
``. . . after the generation of electricity starts.'' The BLM revised
section 2806.52(b)(4)(i), from the proposed to final rule, for
consistency with other sections, including section 2806.52(b). The BLM
made a corresponding revision to section 2806.62(b)(4)(i).
Under section 2806.52(b)(4)(ii), this rule explains the staged
development of a right-of-way. Such staged development, consistent with
the rule in section 2805.12(c)(3)(iii), can have no more than three
development stages, unless the BLM approves in advance additional
development stages. The 3-year phase-in of the MW rate applies
individually to each stage of the solar development. The MW capacity
fee is calculated using the authorized MW capacity approved for that
stage multiplied by the MW rate for that year of the phase-in, plus any
previously approved stages multiplied by the MW rate.
Section 2806.52(b)(5) is added to this final rule to explain that
the general payment provisions of subpart 2806, except for section
2804.14(a)(4), apply to the MW capacity fee. For example, section
2806.12 explains when and where a grant holder must pay rent. These
requirements would also apply to the MW capacity fee. Although the MW
capacity fee is charged to reflect the commercial utilization value of
the public's resource, it is an annual payment required to the BLM and
these general payment provisions will apply.
The final rule specifies that section 2804.14(a)(4) does not apply
to the MW capacity fee. As explained in IM 2016-122, the MW capacity
fee is not a rental fee, and therefore must be paid by electric and
telephone facilities that qualify for financing under the Rural
Electrification Act. A new section (see section 2806.62(b)(4)) that
parallels this requirement is added into the wind energy provisions for
consistency.
Section 2806.52(c) is included in the final rule in support of
revisions the BLM has made to charge fairly for the use of solar and
wind energy authorizations. See the comment discussion under section
2806.52(a) for further information.
Section 2806.52(c) describes how the BLM will reduce the acreage
rent and the MW capacity fee. The BLM will compare the total annual
payment of the acreage rent and MW capacity fee for 2017 to the base
rent and MW capacity fee currently established by policy for the 2016
billing year. Any net increase in costs to a right-of-way holder will
be

[[Page 92174]]

reduced by 50 percent for the 2017 billing year. This one-year
reduction is intended to ease the transition for grant holders from the
current policies to this final rule. If 2017 is the first year for
which you make an annual payment, the phase-in described under section
2806.52(b)(4) will apply without the BLM implementation reduction of 50
percent. The rates established by policy will remain in effect until
2017 for rights-of-way that are not issued under subpart 2809 of this
final rule in order to provide notice of the adjusted rent and fees to
existing holders.
Section 2806.52(d) is added to this final rule to establish the
method by which the BLM will perform scheduled rate adjustments for
solar and wind energy grants. In order for scheduled rate adjustments
to be applied to a grant, a grant holder must have selected the
scheduled rate adjustment method and notified the BLM, as provided in
section 2806.51 of the final rule.
Paragraph 2806.52(d)(1) specifies which rates will be used
initially for the scheduled rate adjustments. For new grants, the BLM
will use the per acre zone rate (see section 2806.52(a)(1)) and MW rate
(see section 2806.52(b)(1)) in place when your grant is issued. For
existing grants that are in place prior to the publication of this
final rule, the BLM will use the per acre zone rate and MW rate in
place prior to this rule's publication, as adjusted in paragraph (d)(6)
of this section and discussed further in corresponding section
2806.52(d)(6) of this preamble.
Section 2806.52(d)(2) specifies that the per acre zone rate will be
adjusted in two ways: Annually, the rate will adjust upward by the
current average change in the IPD-GDP, as described in section
2806.22(b); and every five years, the rate will adjust upward by an
additional 20 percent. In other words, under the scheduled rate
adjustment method, per acre zone rates will be adjusted in years 1
through 5 by the IPD-GDP; in year 6, the BLM will apply a 20 percent
increase to the year-5 rate. The same two-part adjustment process will
then repeat itself in years 6-10 (IPD-GDP) and year 11 (20%); years 11-
15 (IPD-GDP) and year 16 (20%); years 16-20 (IPD-GDP) and year 21
(20%); years 21-25 (IPD-GDP) and year 26 (20%); and finally, years 26-
30 (IPD-GDP). If the grant is renewed, the rates in place at the time
of renewal, as identified in section 2806.52(d)(1), will be used to
establish the initial rates for the term of the renewed right-of-way.
As explained previously in connection with section 2806.51, the BLM
developed the scheduled rate adjustment method in response to concerns
that NASS values in certain areas have the potential to jump
significantly. To address this concern while ensuring the BLM obtains
fair market value for these uses of the public lands, the BLM reviewed
changes in national per acre land values in NASS and determined that
making fixed rate adjustments of 20 percent every 5 years would reflect
historical trends.
The BLM reached this conclusion as follows. The NASS values are
released every 5 years, reflecting the increases and decreases in land
values. Over a period of 10 years, land values could change drastically
in some counties, but the national and western state average changes in
land values over the 10-year period from 2003 and ending 2012 were an
80 percent and a 65 percent increase, respectively. For the BLM lands
in the west, the range in land value changes were increases of 33 to
253 percent. The BLM determined from these findings that the scheduled
rate adjustment method, including both the annual IPD-GDP adjustment
and the every-five-year scheduled adjustment, should target an upwards
adjustment of about 60 percent for every 10 year period.
To achieve this outcome, over the term of a grant, the BLM will
make five 20-percent adjustments to the per acre zone rates, in years
6, 11, 16, 21, and 26. Compounded, these five 20-percent adjustments
will result in a 150 percent increase in the per acre zone rate over
the 30-year life of the grant (on top of whatever increases are
dictated by the annual change in IPD-GDP). This adjustment is within
the identified historic range of changes in land values from NASS,
which reflect a change between 99 and 759 percent over a 30-year
period, and is also in line with industry's recommended rate increase
of 4 percent per year (which amounts to 324 percent over a 30 year
period, if compounded annually).
Section 2806.52(d)(3) specifies that the MW rate will also increase
by 20 percent every 5 years. The BLM reviewed national changes in power
pricing since 1960 and determined that adjusting the MW rate by 20
percent every 5 years is appropriate. Since 1960, power pricing has
increased by over 450 percent, but over the last 30 years, it has
increased approximately 90 percent. Pricing trends show that power
pricing seldom drops on an annual basis. The BLM will make 5 20-percent
adjustments to the MW rate, which amounts to a 150 percent increase
when compounded over the 30-year life of the grant. This 150 percent
adjustment is in line with the 4 percent annual rate increase indicated
by industry representatives. It is also in line with historical changes
in power prices.
Section 2806.52(d)(4) makes it clear that the scheduled rate
adjustment option will enter into effect in year 1 of the rule, for
both the acreage rent and MW capacity fee. The phase-in (see section
2806.52(b)(4)) and initial implementation (see section 2806.52(c))
sections apply only for grants to which the standard rate adjustment
applies. Grant holders that select the scheduled rate adjustment method
choose a defined payment stream over the variable rates that may be
applied with the standard rate adjustment method. As such, phase-ins
are not included with the scheduled rate adjustment method.
Section 2806.52(d)(5) explains that if the approved POD provides
for staged development of the project, the BLM will calculate the MW
capacity fee in each year using the MW capacity approved for that
stage.
Section 2806.52(d)(6) specifies that the existing rates for grant
holders that select the scheduled rate adjustment method will be
adjusted for year 1. The adjustment reflects the fact that, due to this
rulemaking process, the BLM did not make the rate adjustments called
for under existing policy in either 2008 (for wind energy) or 2010 (for
solar energy). If the BLM does not update the rates for existing grant
holders as specified in this section, it could be as long as 12 years
between rate updates. Accordingly, in year 1 of this rule, the BLM will
increase the per acre zone rate for these grant holders by 20 percent
plus the annual change in the IPD-GDP, as described in section
2806.22(b), and increase the MW rate by 20 percent. The scheduled rate
adjustments will then be based off of these adjusted, year-1 rates.
No additional comments were received, nor were other changes made
to this section of the final rule, except for minor changes to improve
readability.
Section 2806.54 Rents and Fees for Solar Energy Development Leases
The title of this section is revised by removing ``inside
designated leasing areas.'' In conjunction with a previous comment, the
BLM has made various edits to the final rule to improve readability.
The difference between grants and leases is explained earlier in this
preamble, so this language is unnecessary and potentially confusing.
The introductory paragraph to section 2806.54 requires a holder of
a solar energy lease obtained through the competitive process under
subpart 2809 to pay an annual acreage rent and MW capacity fee. The
first-year of acreage rent must be paid in advance, prior to

[[Page 92175]]

BLM's issuance of a lease, and the MW capacity fee will be phased-in
and calculated based on the total authorized MW capacity of the solar
energy development. Rents or fees for solar authorizations will vary
depending on the number of acres, technology employed by the solar
development, and whether the right-of-way authorization is a grant or
lease.
There are many similarities in the rent and MW capacity fee for
leases and grants for solar development. This section references the
rent and MW capacity fee of grants under subpart 2804, as appropriate,
and provides further discussion on how the rent MW capacity fee for a
lease differs from that of a grant. Unlike grants, leases issued under
subpart 2809 will be charged the full amount of the acreage rent and MW
capacity fee schedules once this final rule is effective as there are
no existing solar energy development leases. Although the BLM held a
competitive offer relating to solar energy development in the Dry Lake
SEZ, the successful bidders submitted applications and received right-
of-way grants.
Paragraph (a) of this section identifies the acreage rent for a
solar lease, which will be calculated in the same way as acreage rent
for solar grants outside a DLA (see section 2806.52(a)). The acreage
rent for the first year of a lease must be calculated and paid prior to
BLM's issuance of a lease. Zone rates and payment of the acreage rent
are the same for leases as they are for grants. For the per acre zone
rates, see section 2806.52(a)(1). For the assignment of counties, see
section 2806.52(a)(2) and (3). For the acreage rent payment, see
section 2806.52(a)(4).
Consistent with other revisions in this final rule, the BLM added
``This acreage rent will be based on the following:'' at the end of
section 2806.54(a). This revision makes it clear that the following
paragraphs will be the basis for BLM's acreage rent for leases in DLAs.
Section 2806.54(a)(4) describes the adjustments to the acreage rent
that may be made for a lease. Once an acreage rent is determined for a
lease under paragraph (a) of this section, any adjustments in the
annual acreage rent will be made at 10-year intervals thereafter--the
first adjustment would be made in year 11 of the lease term and the
next in year 21. During the 10-year periods, the acreage rent for a
lease will remain constant and not be adjusted.
The BLM will, however, adjust the per acre zone rates of the
acreage rent schedule each year based on the average annual change in
the IPD-GDP, as described in section 2806.22(a). This annual adjustment
will not be applied to the acreage rent payments for a lease until the
next 10-year interval, where the payment will be recalculated using the
current acreage rent schedule. The BLM will use the most current per
acre zone rates to calculate the acreage rent when first determining a
new lease's acreage rent or when recalculating the acreage rent for the
next 10-year period of a lease, unless the holder selected the
scheduled rate adjustment method under section 2806.54(d).
Section 2806.54(b) identifies the MW capacity fee for solar
development leases, which will be calculated in the same way as the MW
capacity fee for solar grants outside of a DLA. The phase-in of the MW
capacity fee is different from grants. For an explanation of when the
BLM requires payment of the MW capacity fee, see section 2806.52(b).
For the MW rate, see section 2806.52(b)(1). For the MW rate schedule,
see section 2806.52(b)(2). For periodic adjustments in the MW rate, see
section 2806.52(b)(3).
Reference to section 2806.52(b) has been added to the final rule.
In conjunction with a previous comment, the BLM has made various edits
to the final rule to improve readability. The BLM has explained when
and how it will require payment and adding this specific citation will
make this section more understandable.
Section 2806.54(c) describes the MW rate phase-in for solar energy
development leases. Unless the holder selected the scheduled rate
adjustment method under section 2806.54(d), the MW rate in effect at
the time the lease is issued will be used for the first 20 years of the
lease. The MW rate in effect in year 21 of the lease will be used for
years 21-30 of the lease.
In order to improve readability in this section, the BLM provided a
more specific citation to section 2806.52(b)(2). This should help
direct the reader to the appropriate section of this final rule.
Section 2806.54(c)(1) provides for a 10-year phase-in of the MW
capacity fee, plus the initial partial year, if any. For the first ten
years of a lease, the MW capacity fee is calculated by multiplying the
authorized MW capacity by 50 percent of the MW rate for the applicable
type of solar technology employed by the project. The MW rate schedule
is provided for under section 2806.52(b)(2). The phase-in applies to
the MW rate for either solar or wind energy leases (see section
2806.64(c)).
Section 2806.54(c)(2) applies to the MW rate phase-in for years 11
through 20 of a lease. The MW capacity fee for years 11 through 20 will
be calculated by multiplying the MW capacity by 100 percent of the MW
rate.
Section 2806.54(c)(3) applies to the MW rate for years 21 through
30 of a lease. The MW capacity fee for years 21 through 30 will be
calculated by multiplying the MW capacity by 100 percent of the MW
rate. If the POD requires that electricity generation will begin after
year 10 of the lease, the MW capacity fee will be calculated using
section 2806.54(c)(2) or (3), as appropriate.
Comments: Some comments suggested establishing a low cost payment
structure, which is different from that proposed. The suggested payment
structure would include a phase-in during the first half of a project's
life and then raise fees to regular (full) rates for all solar and wind
leases. The payment structure could require an upfront cost payment,
and then full costs only when financial costs are being incurred by the
developer. An example would be to reduce payments to 10 percent of the
gross lease rate for the first 15 years for a lease within a designated
solar energy development leasing area.
Response: The BLM did not change the payment structure as suggested
by the commenter. FLPMA requires that the BLM generally receive fair
market value for the use of the public lands. The suggested low cost
payment structure may not provide fair market value.
Comments: Some comments suggested removing the distinction between
solar or wind technologies and their respective base rent or fees
(i.e., wind is 30 percent and solar is 25 percent without
differentiation between technologies). The comment also suggested that
the BLM incentivize storage for solar facilities, to promote grid
stability, by offering a reduced rate.
Response: The BLM's methodology for collecting fair market value
through rents and fees is similar to market comparable practices from
non-Federal lands. Use of a technology-specific net capacity factor is
appropriate for determining the MW rate for solar and wind energy
development. Further, the BLM is not responsible for directing a
technology's costs or its success in the energy market. Intentionally
setting rates below market values or without market support, such as by
establishing a net capacity factor, is not appropriate for this final
rule. These suggestions have not been incorporated into the final rule,
and the language in the proposed rule is carried forward to the final
rule, with some revision as noted in the discussion of section
2806.52(b).

[[Page 92176]]

Comment: Another comment recommends that if a MW capacity fee is
adopted in the final rule for leases (issued under subpart 2809), the
MW rate should be phased-in at 50 percent for the life of the lease;
for grants (issued under subpart 2804), the MW rate should be phased-in
over a 5-year period. The comment also recommends using the MW rate in
effect when the lease or grant is issued without adjustment. PPAs are
generally fixed for a term, usually 20 years. A developer places a
higher premium on certainty and stability of the MW capacity fee over
the potential for reduced rates in the future in case of a long-term
downward trend in prices.
Response: The BLM is aware that certainty and stability are factors
to consider when developing and establishing its rules. However, based
on the BLM's experience, most solar and wind energy developments break
even with the costs of constructing and operating a facility within 15
to 20 years after the start of generation of electricity. The BLM has
taken this into account as part of its formulation of the MW rate
updates and phase-in.
The MW rate is set when a lease is issued, and not updated until
year 21 of the lease. The MW rate is phased-in for the first 10 years
at 50 percent of the full rate, after which the MW rate is no longer
phased-in. Any updates to the MW rate schedule will not result in an
adjustment to leases during the 10-year phase-in or the first 20 years
of the lease. Only at year 21 and each following 10-year interval will
the MW rate adjust, using the currently established MW rate schedule.
A grant's MW rate, however, is set each year, beginning when a
project starts generating electricity. The MW rate is phased-in for the
first 3 years at 25/50/100 percent of the MW rate, respectively. The
BLM will recalculate the MW rate schedule once every 5 years, at which
time the next year's payment by a developer will adjust consistent with
the updated MW rate schedule.
Section 2806.54(c)(4) describes the MW capacity fee of the lease if
it were to be renewed. The MW capacity fee is calculated using the
then-current MW rates at the beginning of the new lease period and
remain at that rate through the initial 10-year period of the renewal
term. The MW capacity fee will be adjusted using the then-current MW
rate at the beginning of each subsequent 10-year period of the renewed
lease term.
Under section 2806.54(c)(5), the rule provides for the staged
development of leases. Such staged development, consistent with section
2805.12(c)(3)(iii), will have no more than three development stages,
unless the BLM approved more development stages in advance. The MW
capacity fee is calculated using the authorized MW capacity approved
for that stage multiplied by the MW rate for that year of the phase-in,
plus any previously approved stages multiplied by the MW rate as
described in section 2806.54(c).
Section 2806.54(d) is added to this final rule to establish the
method by which the BLM will perform scheduled rate adjustments for
leases, similar to the scheduled rate adjustments for grants in section
2806.52(d). In order for scheduled rate adjustments to be applied to a
lease, a lease holder must have selected the scheduled rate adjustment
method, as required in section 2806.51.
Section 2806.54(d)(1) specifies which rates will be used initially
for the scheduled rate adjustments. The BLM will use the per acre zone
rate (see section 2806.52(a)(1)) and MW rate (see Sec. 2806.52(b)(1))
that are in place when your lease is issued.
Section 2806.54(d)(2) specifies that the per acre zone rate will be
increased every 10 years by the change in the IPD-GDP for the preceding
10-year period. (In contrast, the per acre zone rate for grants is
adjusted every 5 years.) The 10-year average IPD-GDP change used for
this increase is the same that is used to adjust the per acre rent
schedule annually for linear rights-of-way under section 2806.22(b),
except that it will be adjusted once cumulatively every ten years,
rather than annually. For example, the current annual change in IPD-GDP
is 2.1 percent, which would result in a roughly 21 percent change in
year ten. In addition to the IPD-GDP change, a 40 percent increase
every 10 years will be applied as part of the scheduled rate adjustment
(in contrast to a 20 percent increase every 5 years for grants). The
BLM will continue to apply this adjustment every 10 years (that is, in
years 11 and 21 for the 30-year lease).
Similar to the approach taken for grants, the BLM reviewed changes
in national per acre land values in NASS when establishing the 40
percent adjustment. Over the term of a lease, the BLM would make two
adjustments to the per acre zone rates. These two adjustments would
compound on each other, for a cumulative increase of 96% over the 30-
year life of the lease. This adjustment is within the identified change
in land values from NASS and is also in line with industry's
recommendation of an annual change in rates limited to no more than 4
percent. (A 4 percent annual increase, compounded annually over 30
years, amounts to a 324 percent increase over the life of the lease.)
For further discussion on this, see the preamble discussion of section
2806.52(d)(2).
Section 2806.52(d)(3) specifies that likewise, the MW rate will
increase by 40 percent every 10 years. The BLM reviewed national
changes in power pricing since 1960 and determined that 40 percent
adjustments to the MW rate every 10 years are appropriate. Over the
term of the lease, the BLM would make 2 adjustments to the MW rate (in
years 11 and 21). These 2 adjustments would compound on each other for
a cumulative increase of 96% over the 30-year life of the lease. This
adjustment is within the identified range of power pricing changes and
is also in line with industry's recommendation of an annual change in
rates limited to no more than 4 percent. (A 4 percent annual increase,
compounded annually over 30 years, amounts to a 324 percent increase
over the life of the lease.) For further discussion on this, see the
preamble discussion of section 2806.52(d)(3).
Section 2806.54(d)(4) specifies that the phase in of the MW rate
for standard rate adjustments in section 2806.54(c) does not apply to
authorizations that are using the scheduled rate adjustments. Instead,
for years 1 through 5 of a lease, plus any initial partial year, the MW
capacity fee is 50 percent of the otherwise applicable solar rate. This
reduction is applied only to new leases and only during the initial
term; the phase-in will not be applied to leases when renewed.
Like the phase-in period under the standard rate adjustment method,
the initial MW capacity is also subject to a phase-in; however, it is
shorter (a 5-year period instead of a 10-year period). Again, the
purpose of the phase-in period is to provide a financial incentive to
developers to use the public lands within their grant earlier (since
the clock on the phase-in starts running at lease issuance, even though
the obligation to pay the MW capacity fee does not attach until power
generation commences). The BLM selected a 5-year phase-in under the
scheduled rate adjustment method instead of the 10-year phase-in from
section 2806.54(c) because of the difference in rate structures. Under
the standard rate adjustment, the MW capacity fee will not adjust for
the first 20 years of a lease term, and that initial rate is phased-in
for the first half of that period (10 years). Under the scheduled rate
adjustments, the rate adjusts every 10 years and the phase-in is
provided for half of the initial rate period (5 years). Both the 10-
year and 5-year phase-in are consistent with market practices.

[[Page 92177]]

Section 2806.54(d)(5) explains that if the approved POD provides
for staged development of the project, the BLM will calculate the MW
capacity fee using the MW capacity approved for that stage. Only
development stages in operation during the first 5 years of a lease
will be phased-in.
MW capacity fee-example 1: The MW capacity fee for a 400-MW
photovoltaic solar energy right-of-way grant would be $1,145,200 per
year (400 MWs x $2,863 per MW), implemented over a 3-year period after
the start of electricity generation. In the first partial year after
start of generation in July for a solar energy right-of-way, the MW
capacity fee would be $143,150 (400 MWs x $2,863 per MW x 25 percent x
0.5 year); in the second year after the start of electricity
generation, the MW capacity fee would be $572,600 (400 MWs x $2,863 per
MW x 50 percent x 1 year); and in the third year after the start of
electricity generation, and each year thereafter, the MW capacity fee
would be $1,145,200 per year (400 MWs x $2,863 per MW x 1 year).
MW capacity fee-example 2: The MW capacity fee for a 400 MW
concentrated PV or concentrated solar power right-of-way grant would be
$1,431,200 per year (400 MWs x $3,578 per MW), implemented over a 3-
year period after the start of electricity generation. In the first
partial year assuming the start of electricity generation in January
for a solar energy right-of-way, the MW capacity fee would be $357,800
(400 MWs x $3,578 per MW x 25 percent x 1 year); in the second year
after the start of electricity generation, the MW capacity fee would be
$715,600 (400 MWs x $3,578 per MW x 50 percent x 1 year); and in the
third year after start of generation and each year thereafter, the MW
capacity fee would be $1,431,200 per year (400 MWs x $3,578 per MW x 1
year).
MW capacity fee-example 3: The MW capacity fee for a 400 MW solar
power right-of-way grant with a storage capacity of 3 hours or more
would be $1,717,600 per year (400 MWs x $4,294 per MW), implemented
over a 3-year period after the start of electricity generation.
Assuming generation began in January, in the first partial year after
the start of electricity generation, the MW capacity fee would be
$429,400 for a solar energy right-of-way (400 MWs x $4,294 per MW x 25
percent x 1 year); in the second year after the start of electricity
generation, the MW capacity fee would be $858,800 (400 MW x $4,294 per
MWs x 50 percent x 1 year); and in the third year after the start of
electricity generation, and each year thereafter, the MW capacity fee
would be $1,717,600 per year (400 MW x $4,294 per MWs x 1 year).
Acreage rent and MW capacity fee example for a solar energy
development grant: The annual acreage rent and MW capacity fee for 2016
for a 400 MW photovoltaic solar energy development grant located on
4,000 acres in Clark County, NV after the phase-in period would be
approximately $2,231,480. (The acreage rent of $1,021,480 (4,000 acres
x $255.37 per acre) plus the MW capacity fee of $1,261,600 (400 MWs x
$3,154 per MW) equals $2,283,080).
No comments were received and no changes are made from the proposed
rule to the final rule.
Section 2806.56 Rent for Support Facilities Authorized Under Separate
Grant(s)
Under this section, support facilities for solar development will
be authorized under a grant. Support facilities may include
administration buildings, groundwater wells, and construction laydown
and staging areas. Rent for support facilities authorized under
separate grants is determined using the Per Acre Rent Schedule for
linear facilities under existing section 2806.20(c). No comments were
received and no changes are made from the proposed rule to the final
rule.
Section 2806.58 Rent for Energy Development Testing Grant(s)
Comments: Several comments suggested that site- and project-area
testing should be allowed for both solar and wind energy.
Response: The final rule now includes site- and project-area
testing authorizations for both solar energy and wind energy. New
section 2806.58 has been added in this final rule to incorporate this
change. Changes in this section are consistent with section 2806.68,
which did not receive any comments, but was modified to remove the word
``wind'' from the naming of the type of grants to remain consistent
with the types of authorizations that the BLM will issue.
Section 2806.58(a) describes the rent for any energy site-specific
testing grant. A minimum rent is established as $100 per year for each
grant issued. Under this paragraph rent is set by incorporating into
the final rule the site-specific rent amount found in the BLM's IM No.
2009-043, as follows: Site-specific grants are authorized only for one
site and do not allow multiple sites to be authorized under a single
grant; however, a single entity may hold more than one site-area
testing grant. If a BLM office has an approved small site rental
schedule, that office may use the rents, so long as the rent exceeds
the $100 minimum. Small site rental schedules are provided to the BLM
from the Department's Office of Valuation Services and reflect accurate
determination of market value. In lieu of annual payments for a site-
specific testing grant, a grant holder may pay for the entire 3-year
term of the grant. See sections 2801.9(d)(1) and 2805.11(b)(2)(i) of
this preamble for further discussion of site-specific energy testing
grants.
Section 2806.58(b) describes the rent for any energy project-area
testing grant. A per-year minimum rent is established at $2,000 per
authorization or $2 per acre for the lands authorized by the grant,
whichever is greater. The appraisal consultation report by the Office
of Valuation Services supports the rent established in this final rule.
Project-area grants may authorize multiple meteorological or
instrumentation testing sites. There is no additional charge or rent
for an increased number of sites authorized under such grants. See
sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for
further discussion of project-area energy testing grants.
Section 2806.60 Rents and Fees for Wind Energy Rights-of-Way
Section 2806.60 requires a holder of a wind energy right-of-way
authorization to pay annual rent and MW capacity fees for right-of-way
grants issued under subpart 2804 and leases issued under subpart 2809.
As noted earlier in this preamble, there are similarities between
rents and MW capacity fees for solar and wind energy, as well as
between rents and MW capacity fees for authorizations issued under
subparts 2804 and 2809. The BLM intentionally designed the rents and
fees for solar and wind energy development projects to match as closely
as possible in order to reduce the potential for confusion and
misunderstanding of the requirements. The methodology for calculating
rents, fees, phase-ins, adjustments, and rate proration is the same for
wind as for solar. Many of the terms and conditions of a lease issued
under this subpart will also be the same. No comments were received on
this section, and no changes were made between the proposed and final
versions of this section, other than those discussed in connection with
section 2806.50 of this preamble.
Section 2806.61 Scheduled Rate Adjustment
Section 2806.61 is added to the final rule, consistent with section
2806.51 of this final rule. This section parallels

[[Page 92178]]

2806.51 with no substantive differences, except that this section
applies to wind energy grants and leases instead of solar energy grants
and leases. See section 2806.51 of this preamble for further
discussion. Parallel changes are also made in sections 2806.62(d) and
2806.64(d) of this preamble. See sections 2806.52(d) and 2806.54(d) of
this preamble for further discussion of those sections.
Section 2806.62 Rents and Fees for Wind Energy Development Grants
Section 2806.62 parallels section 2806.52, which discusses rents
and MW capacity fees for solar energy development grants. The
discussion on all components of the wind energy development grants
duplicates the provisions for solar rents and fees, except for
paragraph (a)(1) of this section which discusses the per acre zone
rates and paragraphs (a)(6) and (7) and (b)(4)(iii) of this section,
which discuss the BLM implementation of the new acreage rent and MW
capacity fee. Revisions have been made to the requirements of this
section consistent with comments on the proposed rule. See comments
discussed under section 2806.52 for further information and details
regarding the revisions made to the final rule.
Section 2806.62(a) addresses the acreage rent for wind energy
development. See section 2806.52(a) for a discussion of acreage rent.
The acreage rent is calculated by multiplying the number of acres
(rounded up to the nearest tenth of an acre) within the authorized area
times the per acre zone rate in effect at the time the authorization is
issued. The annual zone rate is derived from the wind energy acreage
rent schedule in effect at the time the authorization is issued.
Section 2806.62(a)(1) addresses per acre zone rates for wind energy
development grants. The methodology for calculating the acreage rent is
the same for wind as it is for solar, but wind and solar energy have
different encumbrance factors. Solar energy projects encumber
approximately 100 percent of the land, while wind energy projects
encumber approximately 10 percent of the land. Therefore, for wind, the
per acre zone rate is calculated using a 10 percent encumbrance factor
instead of 100 percent encumbrance factor.
Under section 2806.62(a)(1), the initial per acre zone rate for
wind energy projects is now established by considering four factors:
the per acre zone value multiplied by the encumbrance factor multiplied
by the rate of return multiplied by the annual adjustment factor. This
calculation is reflected in the following formula - A x B x C x D = E,
where:
``A'' is the per acre zone value are the same per acre zone values
described in the linear rent schedule in section 2806.20(c);
``B'' is the encumbrance equaling 10 percent;
``C'' is the rate of return equaling 5.27 percent;
``D'' is the annual adjustment factor equaling the average annual
change in the IPD-GDP for the 10-year period immediately preceding the
year that the NASS census data becomes available; and
``E'' is the annual per acre zone rate. The BLM will adjust the per
acre zone rates each year, based on the average annual change in the
IPD-GDP, as described in section 2806.22(a). Adjusted rates are
effective each year on January first.
Under section 2806.62(a)(2), counties (or other geographical areas)
are assigned a Per Acre Zone Value on the wind energy acreage rent
schedule, based on the State-specific percent of the average land and
building value published in the NASS Census. The Per Acre Zone Value is
a component of calculating the Per Acre Zone Rate under paragraph
(a)(1) of this section. As specified in new section 2806.62(a)(3), the
initial assignment of counties to the zones on the wind energy acreage
rent schedule will be based upon the NASS Census data from 2012 and be
established for calendar years 2016 through 2020. Subsequent
reassignments of counties will occur every 5 years following the
publication of the NASS Census, as described in section 2806.21. State-
specific percentage factors will be recalculated once every 10 years at
the same time the linear rent schedule is updated, as described in
section 2806.22(b).
Section 2806.62(a)(2) provides the calculation to establish a
State-specific percent factor that represents the difference between
the improved agricultural land values provided by NASS and the
unimproved rangeland values that represent BLM land. The calculation
for determining the State-specific percent factor is (A/B) - (C/D) = E,
where:
``A'' is the NASS Census statewide average per acre value of non-
irrigated acres;
``B'' is the NASS Census statewide average per acre land and
building value;
``C'' is the NASS Census total statewide acres in farmsteads,
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
``D'' is the total statewide acres in farms; and
``E'' is the State-specific percent factor or 20 percent, whichever
is greater.
The county average per acre land and building values that exceed
the 20 percent threshold for solar and wind energy development are as
follows for the BLM managed lands:

Table of State-Specific Factors and Other Data for Applicable States
----------------------------------------------------------------------------------------------------------------
Existing regulations
and proposed rule: Final rule state-by- Final rule state-
State nationwide 20 percent state calculated specific factors (%)
factors (%) factors (%)
----------------------------------------------------------------------------------------------------------------
Alaska............................... 20 12 20
Arizona.............................. 20 49 49
California........................... 20 51 51
Colorado............................. 20 24 24
Idaho................................ 20 29 29
Montana.............................. 20 12 20
Nevada............................... 20 16 20
New Mexico........................... 20 24 24
North Dakota......................... 20 5 20
South Dakota......................... 20 5 20
Oregon............................... 20 2 20
Texas................................ 20 -1 20
Utah................................. 20 54 54

[[Page 92179]]

Washington........................... 20 21 21
Wyoming.............................. 20 16 20
Average.............................. 20 21 27
----------------------------------------------------------------------------------------------------------------

The following table lists the paragraphs where the wind energy
grant provision parallels the solar energy provision for the same
topic. The discussion for each relevant wind energy provision is found
in this preamble under the associated solar energy provision.

----------------------------------------------------------------------------------------------------------------
Topic Wind Solar
----------------------------------------------------------------------------------------------------------------
Acreage Rent........................... 43 CFR 2806.62(a)......... 43 CFR 2806.52(a).
Per acre Zone Rate..................... 43 CFR 2806.62(a)(1)...... 43 CFR 2806.52(a)(1).
Assignment of Counties................. 43 CFR 2806.62(a)(2)...... 43 CFR 2806.52(a)(2).
Initial Assignment of Counties......... 43 CFR 2806.62(a)(3)...... 43 CFR 2806.52(a)(3).
Acreage Rent Payment................... 43 CFR 2806.62(a)(4)...... 43 CFR 2806.52(a)(4).
Acreage Rent Adjustments............... 43 CFR 2806.62(a)(5)...... 43 CFR 2806.52(a)(5).
Obtain a Copy of Rent Schedule......... 43 CFR 2806.62(a)(7)...... 43 CFR 2806.52(a)(6).
MW Capacity Fee........................ 43 CFR 2806.62(b)......... 43 CFR 2806.52(b).
MW Rate................................ 43 CFR 2806.62(b)(1)...... 43 CFR 2806.52(b)(1).
MW Rate Schedule....................... 43 CFR 2806.62(b)(2)...... 43 CFR 2806.52(b)(2).
MW Rate Adjustments.................... 43 CFR 2806.62(b)(3)...... 43 CFR 2806.52(b)(3).
MW Rate Formula........................ 43 CFR 2806.62(b)(3)(i)... 43 CFR 2806.52(b)(3)(i).
Rate of Return......................... 43 CFR 2806.62(b(3)(ii)... 43 CFR 2806.52(b)(3)(ii).
MW Rate Phase-in....................... 43 CFR 2806.62(b)(4)...... 43 CFR 2806.52(b)(4).
Scheduled Rate Adjustment.............. 43 CFR 2806.62(d)......... 43 CFR 2806.52(d).
Initial Rates Used..................... 43 CFR 2806.62(d)(1)...... 43 CFR 2806.52(d)(1).
Acreage Rate Adjustment................ 43 CFR 2806.62(d)(2)...... 43 CFR 2806.52(d)(2).
MW Rate Adjustment..................... 43 CFR 2806.62(d)(3)...... 43 CFR 2806.52(d)(3).
MW Rate Phase-in....................... 43 CFR 2806.62(d)(4)...... 43 CFR 2806.52(d)(4).
Stage of Development................... 43 CFR 2806.62(d)(5)...... 43 CFR 2806.52(d)(5).
Existing Grants........................ 43 CFR 2806.62(d)(6)...... 43 CFR 2806.52(d)(6).
----------------------------------------------------------------------------------------------------------------

Section 2806.62(a)(6) is added to this final rule to explain that
holders of wind energy development grants must pay acreage rent as
described in section 2806.62(a), except that for holders of wind energy
development grants, the acreage rent will be phased in as described in
section 2806.62(c).
Section 2806.62(b)(4)(i) addresses the term of the MW rate phase-
in. Paragraphs (b)(4)(i)(A), (B), and (C) of this section address the
percentages of the phase-in. See section 2806.52(b)(4)(i) for a
discussion of the term of the MW rate phase-in and paragraphs
(b)(4)(i)(A), (B), and (C) for the percentages of the phase-in. No
change is made to the final rule, other than the change made for
consistency with section 2806.52(b)(4)(i).
New section 2806.62(b)(4)(ii) addresses the MW rate phase-in for a
staged development. Paragraph (b)(4)(ii)(A) of this section addresses
the percentages of the phase-in and paragraph (b)(4)(ii)(B) addresses
the calculation of the rent for the phase-in of a staged development.
See section 2806.52(b)(4)(ii) for a discussion of the MW rate phase-in
for a staged development, paragraph (b)(4)(ii)(A) for the percentages
of the phase-in, and paragraph (b)(4)(ii)(B) for the calculation of the
rent for the phase-in of a staged development.
New section 2806.62(b)(4)(iii) states that the MW rate will be
implemented as described in section 2806.62(c).
Comment: A comment noted that the BLM has not yet designated any
wind energy zones or other preferred wind energy development areas that
would become a DLA. Without any such areas designated for wind energy,
the BLM's rule would put wind energy at a disadvantage in comparison to
solar energy since wind energy would not be able to benefit from the
incentives available for development in such areas.
Response: The BLM agrees that there are currently no wind energy
development areas and that wind energy developers cannot yet benefit
from the incentives provide for DLAs in subpart 2809 of this final
rule. The BLM intends to establish wind energy DLAs in the future.
However, this would be done through amending or revising a land use
plan, which can take several years. Therefore, the BLM has added
section 2806.62(c) to this final rule to explain how the BLM will
implement the acreage rent and MW capacity fee for wind energy grants.
Developers that submitted an application prior to the publication
of the proposed rule would not have known the potential incentives for
developing inside a DLA. This final rule provides a payment reduction
to developers that had committed to a project on the public lands
before this rule was proposed. However, developers that submitted
applications after the publication of the proposed rule were aware of
the BLM's proposed rule and incentives and knew that they did not
qualify for these incentives.
Section 2806.62(c) implements this payment reduction. Specifically,
section 2806.62(c) applies to all wind energy development grants that
have made a payment for billing year 2016, or for which an application
to the BLM was filed before September 30, 2014. This is explained in
the following paragraphs.

[[Page 92180]]

Under paragraph 2806.62(c)(1) of this section, the BLM will reduce
the acreage rent and the MW capacity fee. The BLM will compare the
total annual payment of the acreage rent and MW capacity fee for 2017
to the total annual payment currently required by policy for the 2016
billing year. Any net increase in costs to a right-of-way holder will
be reduced by 50 percent for 2017 billing year. This one-year reduction
is intended to ease the transition for grant holders from the current
policies to this final rule. If 2017 is the first year for which you
make an annual payment, the phase-in described under section
2806.52(b)(4) will apply without an implementation reduction of 50
percent. The rates established by policy will remain in effect until
2017 for rights-of-way that are not issued under subpart 2809 of this
final rule in order to provide notice to existing holders of the
adjusted rent and fees.
Section 2806.62(c)(2) explains how the BLM will implement the
acreage rent and MW capacity fee for wind energy grants for which an
application to the BLM was filed before September 30, 2014. In addition
to the timely filing requirement, a grant holder must also have an
accepted POD and cost recovery agreement established before September
30, 2014.
The BLM intends for this section to apply to applications that were
filed before the BLM issued the proposed rule on September 30, 2014.
Anyone who submitted an application before this date would not have
known about the proposed requirements of the final rule, including
updates to the payment requirements and the incentives for developing
inside a DLA.
Under paragraph (c)(2)(i) of this section, the BLM will reduce the
acreage rent of the grant for the first year by 50 percent. This
reduction applies only to the first year's annual payment, even if it
is for a partial year. If the BLM requires an upfront payment for the
first partial year and next full calendar year, only the partial year
will be reduced by 50 percent. The BLM may require such payment for the
year in advance for rights-of-way authorized consistent with section
2806.12 of this final rule. No reduction will be applied to the acreage
rent for the subsequent years of the grant.
Under paragraph (c)(2)(ii) of this section when the project has
reached a point where the BLM requires a MW capacity fee payment, the
MW capacity fee will be reduced by 75 percent for the first and second
year and 50 percent for the third and fourth year of the grant. The
first year is the initial partial year, if any, after electricity
generation begins. The fifth and subsequent years will be charged at
100 percent of the MW capacity fee. This reduction applies to each
approved stage of development.
No further comments were received and no other changes were made to
this section, beyond those that were already discussed in this preamble
in connection with section 2806.52.
Section 2806.64 Rents and Fees for Wind Energy Development Leases
The title of this section was revised by adding ``and fees'' and
removing ``inside designated leasing areas.'' This was done to be
consistent with the title of section 2806.54.
See section 2806.54 for a discussion of all components of rent for
a wind energy development lease, except for section 2806.54(a)(1),
which discusses the per acre zone rates. Section 2806.54(a)(1) does not
apply to wind energy development grants and leases because solar and
wind energy acreage rents are calculated using different encumbrance
factors. Section 2806.64(a)(1) addresses the per acre zone rate for
wind energy leases. See section 2806.54(a)(1) for a discussion of
acreage rent.
Section 2806.64(a)(1) addresses per acre zone rates for wind energy
leases. See section 2806.62(a)(1) for a discussion of acreage rent,
which differs from solar energy development. The per acre rents are
calculated using the methodology discussed in section 2806.62(a)(1),
which reflects the 10 percent encumbrance factor for wind energy
development.
The following chart lists the paragraphs where the wind energy
lease provisions parallel the solar energy provisions for the same
topic. The discussions for each relevant wind energy provision are
found in the preamble under the associated solar energy provision.

----------------------------------------------------------------------------------------------------------------
Topic Wind Solar
----------------------------------------------------------------------------------------------------------------
Acreage Rent........................... 43 CFR 2806.64(a)......... 43 CFR 2806.54(a)
Per acre Zone Rate..................... 43 CFR 2806.64(a)(1)...... 43 CFR 2806.54(a)(1)
Assignment of Counties................. 43 CFR 2806.64(a)(2)...... 43 CFR 2806.54(a)(2)
Acreage Rent Payments.................. 43 CFR 2806.64(a)(3)...... 43 CFR 2806.54(a)(3)
Acreage Rent Adjustments............... 43 CFR 2806.64(a)(4)...... 43 CFR 2806.54(a)(4)
MW Capacity Fee........................ 43 CFR 2806.64(b)......... 43 CFR 2806.54(b)
MW Rate................................ 43 CFR 2806.64(b)(1)...... 43 CFR 2806.54(b)(1)
MW Rate Schedule....................... 43 CFR 2806.64(b)(2)...... 43 CFR 2806.54(b)(2)
MW Rate Adjustments.................... 43 CFR 2806.64(b)(3)...... 43 CFR 2806.54(b)(3)
MW Rate Phase-in....................... 43 CFR 2806.64(c)......... 43 CFR 2806.54(c)
Years 1-10............................. 43 CFR 2806.64(c)(1)...... 43 CFR 2806.54(c)(1)
Years 11-20............................ 43 CFR 2806.64(c)(2)...... 43 CFR 2806.54(c)(2)
Years 21-30............................ 43 CFR 2806.64(c)(3)...... 43 CFR 2806.54(c)(3)
MW Capacity Fee if Renewed............. 43 CFR 2806.64(c)(4)...... 43 CFR 2806.54(c)(4)
Scheduled Rate Adjustment.............. 43 CFR 2806.64(d)......... 43 CFR 2806.54(d)
Initial Rates Used..................... 43 CFR 2806.64(d)(1)...... 43 CFR 2806.54(d)(1)
Acreage Rate Adjustment................ 43 CFR 2806.64(d)(2)...... 43 CFR 2806.54(d)(2)
MW Rate Adjustment..................... 43 CFR 2806.64(d)(3)...... 43 CFR 2806.54(d)(3)
MW Rate Phase-in....................... 43 CFR 2806.64(d)(4)...... 43 CFR 2806.54(d)(4)
Stage of Development................... 43 CFR 2806.64d)(5)....... 43 CFR 2806.54(d)(5)
MW Capacity for a Staged Development... 43 CFR 2806.64(c)(5)...... 43 CFR 2806.54(c)(5)
Rent for Support Facilities............ 43 CFR 2806.66............ 43 CFR 2806.56
----------------------------------------------------------------------------------------------------------------

[[Page 92181]]

No comments were received on this section, and no changes were made
from the proposed to the final version of this section, beyond those
discussed in connection with section 2806.54.
Section 2806.66 Rent for Support Facilities Authorized Under Separate
Grants
This section states that if a wind energy development project
includes separate right-of-way authorizations for support facilities
such as wells, control structures, staging areas, or linear rights-of-
way (e.g., roads, pipelines, transmission lines, etc.), then the rent
schedule will be determined using the Per Acre Rent Schedule for linear
facilities found at section 2806.20(c). No comments were received on
this section, and no changes were made from the proposed to the final
version of this section, beyond those discussed in connection with
section 2806.56.
Section 2806.68 Rent for Energy Development Testing Grant(s)
Section 2806.68(a) describes the rent for any energy site-specific
testing grant. A minimum rent is established as $100 per year for each
grant issued. Under this section, rent is set by incorporating in this
final rule the site-specific rent amount from IM 2009-043, Wind Energy
Development Policy. Site-specific grants are authorized only for one
site and do not allow multiple sites to be authorized under a single
grant; however, a single entity may hold more than one grant. If a BLM
office has an approved small site rental schedule, that office may use
the rent amount established in the small site rental schedule, so long
as the rent schedule charges more than the $100 minimum rent per year
found in the regulations. Since small site rental schedules are
provided to the BLM by the Department's Office of Valuation Services,
they represent a third party determination of market value. In lieu of
annual payments for a site-specific testing grant, a grant holder may
pay for the entire 3-year term of the grant. See sections 2801.9(d)(1)
and 2805.11(b)(2)(i) of this preamble for further discussion of site-
specific energy testing grants.
Consistent with comments received and discussed under section
2801.9 of this preamble, the title of this section is changed from the
proposed rule to read as shown above. A similar change was made for the
title of paragraphs (a) and (b) of this section. These changes are made
in order to ensure the headings of the rule are consistent with
revisions to the final rule that will allow site-specific and project-
area testing to be available for both solar and wind energy testing.
Section 2806.68(b) describes the rent for a wind energy project-
area testing grant. A per-year minimum rent is established at $2,000
per authorization or $2 per acre for the lands authorized by the grant,
whichever is greater. The appraisal consultation report by the Office
of Valuation Services supports the rent amounts established in this
final rule. Project-area grants may authorize multiple meteorological
or instrumentation testing sites. There is no additional charge or rent
for an increased number of sites authorized under such grants. See
sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for
further discussion of project-area energy testing grants.
No further comments were received on this section and no additional
changes were made in the final rule.
Section 2806.70 How will the BLM determine the payment for a grant or
lease when the linear, communication use, solar energy, or wind energy
payment schedules do not apply?
Section 2806.70 is redesignated from existing section 2806.50 and
is retitled as shown above. This section provides guidance on how the
BLM determines the payment for a grant or lease when the linear rent
schedule, the communication use rent schedule, the solar acreage rent
and MW capacity fee provisions, or the wind acreage rent and MW
capacity fee provisions are not applicable.
The title of this section is amended by replacing ``rent'' with
``payment'' in two places. This final rule introduces the concept of MW
capacity fees, which are a payment to the BLM for the commercial
utilization value of the public lands, above the rural land values. The
term ``payment'' includes both rents and fees, which is why it was
selected. No other change is intended by this revision.
The only other change to this redesignated section is that solar
and wind energy rights-of-way are now included in the listed rent
schedules. No comments were received and no other changes are made from
the proposed rule to the final rule.

Subpart 2807--Grant Administration and Operation

Section 2807.11 When must I contact BLM during operations?
This section is revised to make it clear that you must notify the
BLM when your use requires a substantial deviation from the issued
grant. Under the changes made to section 2807.11(b), ``substantial
deviations'' from the right-of-way grant now require an amendment to
the grant. ``Substantial deviations'' include changing the boundaries
of the right-of-way, major improvements not previously approved by the
BLM, or a change in use for the right-of-way. Substantial deviations to
a grant may require adjustment to a grant or lease rent and fees under
subpart 2806, or bonding requirements under subparts 2805 and 2809.
Consistent with other revisions to the final rule intended to
improve readability, the BLM revised paragraph (b) of this section to
read as ``the BLM's'' instead of ``our.'' This revision is intended to
improve understanding of who the BLM is referring to in the final rule.
Comment: One comment asked the BLM to narrow the circumstances
under which a right-of-way holder must notify the BLM, suggesting that
these reporting requirements be limited to changes that necessitate an
assignment under the standards identified in section 2807.21(h).
Response: The requirement to report changes in partners, financial
conditions, or business or corporate status is a requirement of the
existing regulations found under section 2807.11(c). Section 2807.11(c)
was not proposed for revision and is not revised or redesignated by
this final rule. In addition, the BLM must have accurate and up-to-date
information about right-of-way holders in order to facilitate its
management of the public lands.
Paragraph (d) of this section requires you to contact the BLM when
site-specific circumstances or conditions result in the need for you to
propose changes to an approved right-of-way grant, POD, site plan, or
other procedures that are not substantial deviations in location or
use. Examples of proposed ``minor deviations'' include changes in
location of improvements in the POD or design of facilities that are
all within the existing boundaries of an approved right-of-way. Other
such proposed non-substantial deviations might include the modification
of mitigation measures or project materials. For purposes of this
provision, project materials include the POD, site plan, and other
documents that are created or provided by a grant holder. These project
materials are a basis for the BLM's inspection and monitoring
activities and are often appended to a right-of-way grant, which is why
the BLM needs to understand any changes to those materials. The
requested changes may be considered as grant or lease modification
requests. Proposals for non-substantial deviations

[[Page 92182]]

will require review and approval by the authorized officer or other
appropriate personnel. The preliminary application review meetings
found under section 2804.12 and public meetings found under section
2804.25 are not required for an assignment.
Paragraph (e) requires that right-of-way holders contact the BLM to
correct discrepancies or inconsistencies.
Section 2807.17 Under what conditions may the BLM suspend or terminate
my grant?
Section 2807.17(d) contains the provisions formerly located at
section 2809.10. This section was redesignated in order to make room
for the renewable energy right-of-way leasing provisions. No comments
were received and no changes are made from the proposed rule to the
final rule.
Section 2807.21 May I assign or make other changes to my grant or
lease?
Some revisions were made to this section in response to comments,
which are discussed in the following paragraphs. A summary of other
revisions to this section is included after these comments and
responses.
Comments: Some comments noted confusion over the BLM's requirements
for name changes and assignments, specifically, what constitutes a name
change or assignment. Additionally, comments noted that mergers and
acquisitions are not assignments and that a name change or assignment
should not be the basis for or occasion on which the BLM redrafts the
terms and conditions of right-of-way agreements.
Response: Section 2807.21 is revised to provide clarity on the
BLM's requirements for assignments and name changes. Section 2807.21(b)
and (c) of the proposed rule have been combined into section 2807.21(b)
in this final rule. As a result of these changes, several paragraphs
are also redesignated in the final rule. The BLM agrees with commenters
that name changes should not necessitate the rewriting of the terms and
conditions of a right-of-way agreement.
The BLM disagrees with the commenter equating mergers and
acquisitions with name changes. A merger or acquisition is different in
character as they can result in material changes to the corporate
structure under which a right-of-way grantee or leaseholder operators.
Such changes can affect financial positions or the technical capability
of a parent company. As a result, the BLM determined that it was
appropriate to expand the definition of assignment in both the final
and proposed rules to include changes in ownership and other related
change in control transactions, including ``mergers or acquisitions.''
However, recognizing that there are changes in corporate structure
within the same corporate family that may technically constitute change
in control transactions, but that do not implicate BLM's concern about
technical and financial capability of a grant- or lease-holder's
parent, the BLM has revised section 2807.21(a)(2) and (b)(2) to clarify
that change in control transaction within the scope of that provision
do not include transactions or restructurings within the same corporate
family.
When a right or interest in a right-of-way grant or lease is
assigned from one party to another, the involved parties are identified
as the assignor and assignee. The BLM generally evaluates the assignee,
the party that is intended to receive the right or interest, as if they
were a new applicant. The BLM may determine that additional terms and
conditions are required when assigning the right or interest and would
include them as a term or condition of the grant at the time of
assignment. New terms and conditions could include the requirement to
bond the authorized facility, such as in the case when a potential
assignee of a grant has a poor history of meeting the terms and
conditions of a BLM grant, that may have not applied to the assignor.
The evaluation and determination of whether new terms and conditions
should be applied would occur when the BLM considers the proposed
conveyance of a right-of-way.
Other revisions to the terms and conditions that may occur with
assignments are those which the BLM retains authority to revise, such
as rents, fees, bonding, and other revisions identified under section
2805.15(e). Section 2805.15(e) allows the BLM to amend the terms and
conditions of a right-of-way grant or lease as a result of changes in
legislation, regulation, or as otherwise necessary to protect public
health or safety or the environment. Because any changes to the terms
and conditions of a right-of-way grant or lease would occur after the
completion of the agency action (the BLM's decision to approve the
right-of-way), the BLM anticipates doing so through a separate action,
generally initiated at the BLM's discretion and requiring its own
decision-making process.
Updating corporate or individual filings within a State where only
a name is changed, but the filing does not transfer a right or interest
to another party, qualifies as a name change. Name changes for a right-
of-way grantee or lessee do not require a NEPA analysis and the right-
of-way would not be subject to revision. When changing a name, the BLM
does not issue a new right-of-way grant or lease, but would re-issue
the same right-of-way grant or lease with the new name on it. This is
because the BLM would be dealing with the same entity to which it had
originally authorized the right-of-way. Name changes are an
administrative action taken by the BLM to update its records showing
the proper name of the entity it has authorized. In the case of a name
change, there is no assignment, in whole or part, of any right or
interest in a grant or lease.
A name change would occur if an entity had filed paperwork with a
State for a name change. Re-issuing a grant or lease with the new name
would only provide the BLM an opportunity to notify the right-of-way
holder of updated rent, bonding, or other such revised provisions made
under section 2805.15(e).
Section 2807.21 is amended by revising the section heading and
existing paragraphs (a), (d), and (f); adding paragraphs (b), (g), and
(h); and making other appropriate redesignations of the remaining
paragraphs. We are further revising this section with a few changes
made in the final rule in response to comments, which will be explained
in greater detail in the discussion of each specific paragraph. The
heading for this section is changed from ``May I assign my grant?'' to
read as ``May I assign or make other changes to my grant or lease?''
The existing regulations do not cover all instances where an assignment
is necessary and the section is revised to address situations where
assignments may not be required. The changes are necessary to: (1) Add
and describe additional changes to a grant other than assignments; (2)
Clarify what changes require an assignment; and (3) Specify that right-
of-way leases issued under part 2809 are subject to the regulations in
this section.
Without the BLM's approval of a right-of-way assignment, a private
party's business transaction would not be recognized by the BLM and
this lack of recognition could hinder a new holder's management and
administration of the right-of-way. This rule also clarifies the
responsibilities of a grant holder should such private party
transactions occur.
Paragraph (a) of this section is revised to describe two events
that may necessitate an assignment: (1) A transfer by the holder of any
right or interest in the right-of-way grant or lease to a third

[[Page 92183]]

party (e.g., a change in ownership); and (2) A change in control
involving the right-of-way grant or lease holder such as a corporate
merger or acquisition.
Paragraph (a)(1) in this final rule is revised by removing the word
``voluntary'' when describing a transfer. There are some situations,
such as bankruptcy, when a transfer may be involuntary. The BLM did not
intend to exclude those circumstances from this section.
Paragraph (a)(2) is revised to remove reference to changes in
status as a ``wholly owned subsidiary.'' That provision created
confusion and was removed. No additional comments were received and no
further changes were made to this paragraph.
New paragraph (b) of this section is revised to clarify and remove
ambiguities in this section of the rule that explains the circumstances
that do not constitute an assignment, but may necessitate filing new or
revised information. A change in the holder's name only does not
require an assignment nor do changes in a holder's articles of
incorporation. However, sometimes a change in a holder's name or
articles of incorporation may indicate that an assignment occurred. The
BLM will review the documentation filed with it in order to determine
if a transfer in part or whole of the right-of-way has occurred or a
change in control transaction of the grant-holder or lease holder has
occurred.
This section is revised from the proposed to the final rule to help
further explain these situations more clearly to the public. The
introductory text of paragraph (b) of this section is revised to
clarify that even though an assignment may not be necessary, some
circumstances may necessitate filing new or revised information.
Paragraphs (b)(1), (2) and (3) of this section provide examples for
when this filing may be necessary. Paragraph (b)(1) of this section is
added to this final rule to explain that transactions within the same
corporate family do not constitute an assignment. Paragraphs (b)(2) and
(3) of this section contain the provisions of proposed paragraphs (b)
and (c) of this section with some minor revisions.
Existing paragraph (b) of this section is revised and redesignated
as paragraph (c). As revised, this paragraph requires the payment of
application filing fees in addition to processing fees. This revision
promotes consistency between applications for assignments and other
applications for rights-of-way. For example, the rule (at section
2804.12(c)(2)) now requires an application filing fee for solar and
wind energy applications. As revised, new paragraph (c) also provides
that the BLM will not approve any assignment until the assignor makes
any outstanding payments that are due. This paragraph is revised from
the proposed to final rule by adding a provision stating that
preliminary application review meetings are not required for an
assignment.
Comments: Some comments stated that the pre-application
requirements for would be burdensome for an assignments, name changes
or even renewals and suggested excluding those requirements for
assignments, name changes and renewals.
Response: Section 2807.21(c) and (h)(1) are revised to make clear
that the pre-application (now known as preliminary application review)
meetings are not required for assignments and name changes. No other
revisions have been made to these paragraphs in response to this
comment.
Existing paragraph (c) of this section is redesignated, unchanged,
as paragraph (d) and is included in the final rule. Existing paragraph
(d) of this section is revised and redesignated as paragraph (e). As
revised, new paragraph (e) will except leases issued under revised 43
CFR subpart 2809 (i.e., right-of-way authorizations inside a DLA) from
the BLM's authority to modify terms and conditions when it recognizes
an assignment. This provision provides incentives for potential right-
of-way lessee to develop lands inside DLAs.
The BLM revised the first sentence in paragraph (e) of this section
from the proposed to final rule to clarify how an assignment is
recognized. The BLM will approve an assignment in writing.
Comment: A comment requested clarification of the BLM's right to
modify terms of a lease issued under subpart 2809. As written, the
proposed rule would have prohibited the BLM from modifying a lease
issued under subpart 2809 when approving an assignment. In addition,
the comment requested clarification of the relationship between section
2805.15(e) and sections 2807.21 and 2887.11.
Response: The BLM agrees with this suggestion and in the final rule
further clarification has been provided to show the relationship
between section 2805.15(e) and this provision for leases issued under
subpart 2809. Revised section 2807.21(e) now includes an additional
statement to make clear that a lease will not be modified to include
additional terms and conditions when approving an assignment, unless a
modification is required under section 2805.15(e).
The BLM may, however, ``require that you obtain, or certify that
you have obtained, a performance and reclamation bond or other
acceptable bond instrument'' (see section 2805.20(a)) when approving an
assignment. A bond is required for a right-of-way at the BLM's
discretion and is always required for a solar or wind energy grant or
lease. If a bond is required, the BLM must be certain that a bond is in
place to ensure the protection of the public lands before approving an
assignment.
In addition, section 2809.18(f) has been modified to be consistent
with this provision. The statement that a lease will not be modified to
include additional terms and conditions is specific to when the BLM
completes an assignment. Under a separate action which may occur at the
same time an assignment is completed, the terms and conditions may be
modified if requested by a lessee pursuant to section 2805.12(e).
No revision has been made under section 2887.11 on this matter
since leases issued under subpart 2809 cannot be assigned under section
2887.11.
Redesignated section 2807.21(f) provides that the BLM will process
assignment applications according to the same time and conditions as in
section 2804.25(d). This provision was formerly identified in the
regulations as paragraph (e) of this same section. This provision
applies the BLM's customer service standard to processing assignment
applications. This paragraph has been revised to update the referenced
citation, consistent with the revisions made to the final rule under
section 2804.25.
Section 2807.21(g) explains that only interests in right-of-way
grants or leases are assignable. A pending right-of-way application
cannot be assigned. A revision is made to the second sentence of this
paragraph, to be consistent with changes made under section 2804.30(g),
that clarifies that competitively gained applications held by a
preferred applicant do provide a right and interest in the public
lands. This revision is made here to be consistent with similar changes
made under section 2804.30(g).
Section 2807.21(h) addresses how a holder informs the BLM of a name
change when the name change is not the result of an underlying change
in control of a grant. These procedures are necessary to ensure that
the BLM can send rent bills or other correspondence to the appropriate
party. This new provision addresses several specific circumstances. For
example, it requires any corporation requesting a name change to
supply: (1) A copy of the

[[Page 92184]]

corporate resolution(s) proposing and approving the name change; (2) A
copy of the acceptance of the change in name by the State or Territory
in which it is incorporated; and (3) A copy of the appropriate
resolution(s), order(s), or other documentation that shows the name
change. Under this provision, the BLM could also modify a grant, or add
bonding and other requirements, including additional terms and
conditions when recognizing such changes. However, the only way that
the BLM may modify a lease issued under subpart 2809 would be in
accordance with section 2805.15(e), or as otherwise described in the
regulations. Such modifications under section 2805.15(e) would be a
result of changes in legislation, regulation, or to protect public
health, safety, or the environment. Any such name change would be
recognized in writing by the BLM.
Section 2807.21(h)(1) was modified from the proposed to final rule
to improve readability. The first and second sentences were combined
and ``preliminary application review and public meetings'' were added
to the list of exempted requirements during a name change only. This
change was made to remain consistent with revisions made under section
2807.21(b), which excludes applications for assignments from
preliminary application review meetings and public meetings for solar
or wind energy development projects and transmission lines with a
capacity of 100 kV or more.
The BLM revised paragraph (h)(2) of this section from the proposed
to final rule in order to clarify the differences in how a grant and
lease may be modified during a name change. The BLM added new
paragraphs (h)(2)(i) and (ii) in order to more clearly separate these
situations. Paragraph (h)(2)(i) of this section explains that the BLM
may modify a grant to add bonding and other requirements when
processing a name change only. However, under paragraph (h)(2)(ii) of
this section, the BLM may modify a lease issued under subpart 2809 in
accordance with section 2805.15(e). This is not a change from the
requirements proposed rule, but it may not have been clear from the way
it was phrased. The final rule is intended to prevent any possible
confusion.
Generally, the BLM intends to make changes to a grant or lease
during a name change only to reflect relevant changes consistent with
section 2805.15 (e). This existing section explains the BLM's right to
``[c]hange the terms and conditions of your grant as a result of
changes in legislation, regulation, or as otherwise necessary to
protect public health or safety or the environment.'' The BLM will not
make any other changes to lease issued under subpart 2809 as part of a
name change only.
However, the BLM may take this opportunity to update other aspects
of a grant, as appropriate. For example, under section 2805.20(a), the
BLM will periodically review your bond for adequacy and may require a
new bond, an increase or decrease in the value of an existing bond, or
other acceptable security at any time during the term of the grant or
lease. The BLM may determine that additional actions are necessary,
such as updates to the bond (see section 2805.20(a)) or the 10-year
updates to the payment provisions (see sections 2806.54 or 2806.64. If
the BLM determines that these actions are necessary, they will be taken
separate from the name change only as appropriate.
Paragraph (h)(3) of this section is revised in this final rule to
read: ``Your name change is not recognized until the BLM approves it in
writing.'' As proposed, the rule was not clear whether a name change
would be recognized if submitted in writing to the BLM, or if approved
in writing by the BLM. This revision makes it clear to readers of the
final rule that it must be the BLM's approval in writing to recognize a
name change.
Comments: Some comments recommend that the financial information of
the original owner or its subsidiary may be used to meet financial
qualification requirements of the grantee when assigning or changing
the name on a grant or lease.
Response: The BLM will only accept the financial or technical
information of the holder of the authorization. The holder is the
legally responsible party for the right-of-way and will be held as such
under the regulations and any subsequent authorization. However,
substitution of one entity's financial and technical capabilities may
be acceptable, provided that documentation showing the two entities are
linked, such as in the case of a subsidiary company where the parent
company asserts the technical or financial responsibilities of the
subsidiary. No revision to the rule was made in response to this
comment. No other comments were received or changes made to the final
rule.
Section 2807.22 How do I renew my grant or lease?
The title for section 2807.22 is revised by adding ``or lease'' to
the end of the sentence so that leases issued under subpart 2809 are
covered by this section. Likewise, paragraphs (a), (b), and (d) of this
section are revised to include leases. Paragraphs (c) and (e) remain
unchanged. A new paragraph (f) is also added to this section.
Paragraph (f) of this section explains how the BLM would ensure
continued operations of a right-of-way during the renewal process. If a
holder makes a timely and sufficient application for renewal, the grant
or lease does not expire until the BLM acts upon the application for
renewal.
The second part of this paragraph describes the circumstances in
which the BLM would ``reissue'' a grant or lease instead of ``renew''
it. Most of the authorizations managed by the BLM are issued under
FLPMA's authority, but some remaining authorizations were issued before
FLPMA was enacted. In this situation, the BLM would reissue the grant
under FLPMA's authority. Minor revisions are made to paragraph (f) to
improve readability of this new paragraph.
This paragraph protects the interests of holders of rights-of-way
who have timely and sufficiently made an application for the continued
use of an authorization (see 5 U.S.C. 558(c)(1)), and is consistent
with policy. In this situation, the authorized activity will not expire
until the BLM evaluates the application and issues a decision. No
comments were received and no other changes are made to the final rule.
Subpart 2809 Competitive Process for Leasing Public Lands for Solar and
Wind Energy Development Inside Designated Leasing Areas
Existing subpart 2809, which formerly consisted of a single
regulation (section 2809.10) pertaining to Federal agency right-of-way
grants, is revised and redesignated as new paragraph (d) of section
2807.17. Existing section 2809.10(b) explains that Federal agencies are
generally not required to pay rent for a grant. This paragraph is
removed, not redesignated, since existing section 2806.14(a)(2) already
addresses rental exemptions for Federal agencies and, therefore,
section 2809.10(b) is no longer necessary.
Revised subpart 2809 is now dedicated to the competitive process
for leasing public lands for solar and wind energy development.
Comment: Several comments raised concerns that the priority for
handling solar or wind energy leases was unclear when compared to solar
and wind grant applications under part 2804.
Response: Application prioritization is discussed under section
2804.35 of this rule, which specifically states that leases issued
under this subpart having priority over grant applications. A new

[[Page 92185]]

section 2809.10(d) is added to the final rule, consistent with comments
received and revisions made in section 2804.35, that clearly identifies
the handling of leases issued under subpart 2809 have the highest
priority with respect to solar and wind energy on the public lands.
Comment: Several comments suggest that regional mitigation
strategies should be used for every designated leasing area and should
be part of the land use planning process.
Response: BLM development of a regional mitigation strategy is not
necessary prior to holding a competitive auction inside a DLA or
otherwise authorizing solar or wind energy development. However,
regional mitigation strategies further increase certainty to developers
and stakeholders when considering a solar or wind energy development.
The BLM believes that the regional mitigation strategies are a good
tool to use when making decisions that would affect resources in
certain areas, such as a DLA. Regional mitigations strategies provide a
durable basis to evaluate mitigation for the impacted lands and the BLM
may use such strategies when making land use planning decisions. The
BLM is in the process of developing regional mitigation strategies for
many SEZs, which qualify as DLAs under this final rule.
The BLM is currently in the process of establishing its mitigation
policies and guidance, which include guidance for regional mitigation
strategies. Consistent with this guidance, the BLM generally intends to
prepare regional mitigation strategies, with opportunities for public
review and engagement, before authorizing wind or solar energy
development in DLAs, potentially including when the BLM designates DLAs
in the future through land use planning.
Comment: One comment suggested that the BLM incorporate the FWS's
Wind Energy Guidelines (WEG), which can be found on the Internet at
https://www.fws.gov/ecological-services/es-library/pdfs/WEG_final.pdf,
into the rule for pre-construction due diligence.
Response: The BLM did not revise the rule as a result of this
comment. The BLM has a different scope of authority and responsibility
in administering the public lands than the FWS and must take into
account biological resources, cultural resources, and land uses
consistent with FLPMA's mandate that public lands be used for multiple
use and sustained yield for current and future generations. This is
different than the FWS's authority and objectives which do not have a
multiple use mandate and generally require limited review for cultural
resources. However, the BLM uses processes similar to the WEGs in the
review and analysis of resources on the public lands. For wind energy
site testing actions similar to steps 2 and 3 of the WEGs are completed
prior to a BLM decision. Actions similar to steps 1 through 3 are
incorporated into the BLM's processing of a development grant, as well
as monitoring protocols that address similar issues as those in the
steps of the WEGs.
Comments: Some comments suggest that all final granted right-of-way
instrument terms and conditions, regardless of location, should be
substantially the same, unless sufficiently justified.
Response: The BLM believes that it has adequate reason for
differences in terms and conditions of the energy development projects
issued as leases under subpart 2809, as compared to those issued as
grants under subpart 2804. There are limited differences in leases and
grants, which have been explained in great detail in this preamble.
These differences are intended to incentivize development in DLAs,
which the BLM has identified as preferred areas for solar or wind
energy development, based on a high potential for energy development
and lesser resource impacts. Consistent with SO 3285, which describes
the need for strategic planning and a balanced approach to domestic
resource development, the BLM believes that focusing solar and wind
energy development in preferred areas would provide a benefit to the
public by reducing potential resource conflicts.
The BLM identifies DLAs through its land use planning process,
which requires the BLM to consider the effects of solar or wind energy
developments in the area. Due to this prior planning process, the BLM
is able to issue a lease almost immediately after holding an auction,
because that type of use has already been approved for the area.
Subsequent tiered NEPA analysis will generally be necessary for the BLM
to evaluate the lease-holder's POD to ensure that it fits within the
BLM's decisions before allowing development of the land.
Additionally, the rent and fee payment for leases issued under
subpart 2809 are phased in over a longer period of time or updated less
frequently than those issued under subpart 2804. The rent and fee
payment structure is explained in more detail in sections 2806.50
through 2806.68 of this preamble. This difference in payment of the
rent and fee allows the BLM to collect the determined fair market value
of the public lands while incentivizing solar and wind energy
development in DLAs over other public lands.
No other comments were received or changes made to the final rule
for this section.
Section 2809.10 General
Under section 2809.10, only lands inside DLAs will be available for
solar and wind competitive leasing using the procedures under this
subpart. Lands outside of DLAs may be offered competitively using the
procedures under section 2804.35 of this rule. Under section 2809.10,
the BLM may either include lands in a competitive offer on its own
initiative or solicit nominations through a call for nominations (see
section 2809.11).
A new paragraph (d) is added to this section in the final rule in
response to comments on the proposed rule. Paragraph (d) states that
the processing of leases awarded under this part will generally be
prioritized ahead of grant applications, consistent with revisions made
to section 2804.35, clarifying that leases generally have priority over
grant applications. This revision is to show how the BLM will
prioritize its handling of solar and wind energy development on the
public lands. The BLM will generally prioritize leases because they are
issued inside DLAs, which are the BLM's preferred areas for solar and
wind energy development. The BLM recognizes that only a few wind energy
DLAs have been identified to date, and therefore there are only limited
opportunities for project proponents to obtain wind energy leases as
opposed to grants. The BLM intends to consider this when prioritizing
wind energy applications during this transition period, as the BLM
develops additional wind energy DLAs. No other changes are made to the
final rule for this section and no other comments were received.
Section 2809.11 How will BLM solicit nominations?
This section explains the process by which the BLM will request
nominations for parcels of lands inside DLAs to be offered
competitively for solar or wind energy development.
Under paragraph (a) of this section, ``Call for nominations,'' the
BLM requests expressions of interest and nominations for parcels of
land located in a DLA. The BLM will publish a notice in the Federal
Register for solar and wind energy development and may use other
notification methods, such as a newspaper of general circulation in the
area affected by a potential offer or the Internet. This final rule is
revised to make notice in a newspaper an optional

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form of public notice. This section's public notice requirements are
consistent with revisions to other sections of this final rule and are
described more fully in section 2804.23(c) of this preamble.
Paragraph (b) of this section, ``Nomination submission,'' outlines
the requirements for nominating a parcel of land for a competitive
offer.
Paragraph (b)(1) of this section requires a payment of $5 per acre
for the parcel(s) nominated. This payment is nonrefundable, except when
submitted by an individual or company that does not meet the
qualifications identified in section 2809.11(d). The average area of
solar and wind grant or lease ranges between 4,000 and 6,000 acres. The
$5 per acre fee is derived from an appraisal consultation report
prepared by the Department's Office of Valuation Services and will be
adjusted for inflation once every 10 years, using the change in the
IPD-GDP for the preceding 10-year period. The appraisal consultation
report provided a range of $10-$27 per acre per year with the nominal
range being $15-$17 per acre as the fair market value for these uses of
the public lands. The BLM is establishing the nomination fee below the
indicated range in the analysis since the submission of a nomination
does not ensure that the nominator would be the successful bidder.
The average annual change in the IPD-GDP from 2004-2013 is about
2.1 percent, which will be applied through 2025. The fee will be
required only with a nomination and not on a yearly basis and this is
noted under section 2809.11(b)(1). The nomination fee is lower than an
application filing fee for grants issued under subpart 2804 in order to
increase interest and encourage nominators to propose efficient use of
the public lands inside DLAs. Payment of fair market value will be
received through a combination of the bids (not including Federal
administrative costs) received during a competitive process and the
rents and MW capacity fees described in sections 2806.50 through
2806.68 of this final rule.
Nomination fees are collected under Sections 304(b) and 504(g) of
FLPMA as cost recovery fees. The nomination fees will reimburse the BLM
for the expense of preparing and holding the competitive process for
lands inside a DLA. Furthermore, the nomination allows the BLM to see
specifically what parcel of land is of interest to a developer and
would inform the BLM of parcel configurations for a competitive
process. A variable offset may be offered for qualified bidders who
submitted nominations. Variable offsets are discussed further in
section 2809.16.
The BLM revised paragraph (b) of this section from the proposed to
final rule to prevent confusion over how the BLM uses the IPD-GDP to
adjust the nomination fees. This revision is consistent with the
revision to section 2804.12(c)(2), which describes application filing
fees. Both application filing fees and nomination fees may be adjusted
once every 10 years. See the preamble discussion for section
2804.12(c)(2) for more information on this revision.
Paragraph (b)(2) of this section requires the nomination to include
the nominator's name and address of record. This information is
necessary for the BLM to communicate with the nominator about future
leasing issues.
Paragraph (b)(3) of this section requires that a nomination be
accompanied by a legal land description and map of the parcel of land
in a DLA. This information will help the BLM in identifying parcels in
the competitive offer.
Under paragraph (c) of this section, the BLM may consider informal
expressions of interest. An expression of interest is an informal
submission to the BLM, suggesting that a parcel inside a designated
leasing area be considered for a competitive offer. An expression of
interest only provides a tentative bidder's interest in a parcel(s) of
land located inside a DLA. If the expression of interest identifies a
specific parcel, it must be submitted in writing, include the legal
land description of the parcel, and a rationale for its inclusion in a
competitive offer. There is no fee required to make an expression of
interest, but submission does not qualify a potential bidder for a
variable offset, as would formal nominations.
Under paragraph (d) of this section, you must qualify to hold a
grant or lease under section 2803.10 in order to submit a nomination.
Under paragraph (e) of this section, a nomination cannot be
withdrawn, except by the BLM for cause, in which case nomination monies
would be refunded. This clause parallels language in the BLM's other
competitive process regulations and encourages serious nominations for
parcels on public lands.
Comments: Some comments stated that nomination fees, as discussed
under section 2809.11(b)(1), should reflect the cost for the BLM to
plan and conduct a competitive lease process. In addition, one comment
recommended that the nomination fee be set at $5 per acre and be
adjusted downward to a minimum of $2 per acre for large parcels. In the
event the entity that nominates the parcel is not the successful
bidder, then the nomination should be refunded to that party and
assessed to the successful bidder.
Response: The BLM will maintain a flat rate fee for nominations. A
tiered or sliding scale approach to such fees would create an
unnecessarily complicated system. A flat fee ensures that such costs
are consistent for each action and the expectation to meet the
requirements are clear. In addition, nomination fees are kept as a non-
refundable fee because they are a cost recovery payment to the BLM for
expenses the agency incurs. These fees would be used by the BLM to
prepare and hold a competitive offer. Submission of a nomination
demonstrates a developer's seriousness for use of an area. No other
comments were received and nor changes are made from the proposed rule
to the final rule.
Section 2809.12 How will BLM select and prepare parcels?
This section provides that the BLM will identify parcels suitable
for leasing based on either nominations, expressions of interest, or
its own initiative. Before offering the selected lands competitively,
the BLM and as appropriate, other Federal or State entities, will
conduct studies, comply with NEPA and other applicable laws, and
complete other necessary site preparation work. This work is necessary
to ensure that the parcels are ready for competitive leasing, to
provide appropriate terms and conditions for any issued lease, to
appropriately protect valuable resources, and to be consistent with the
BLM's plan(s) for the area.
Paragraph (b) of this section is revised from the proposed to final
rule by adding ``as applicable'' after ``other Federal agencies.'' This
revision clarifies that other Federal agencies will be involved, as
applicable, but may not be involved on all projects. It may not always
be necessary to include other Federal agencies and those agencies may
not want to participate.
Comments: Some comments recommended that the BLM should include a
procedural requirement in the regulation that a regional mitigation
strategy must be completed before the initiation of a competitive
leasing process. It is also suggested that this approach would benefit
the project proponents with enhanced certainty regarding compensatory
mitigation costs. One comment specifically recommended the addition of
the following text, ``b) work, including applicable environmental
reviews and public meetings and publish the

[[Page 92187]]

availability of a final regional mitigation strategy, before . . . .''
Response: The BLM considered including a requirement to complete a
regional mitigation strategy; however, the BLM did not revise the rule
as a result of the comment because each competitive offer will vary
based upon resource concerns, public, tribal, and developer issues, and
government interests. The BLM is currently in the process of
establishing its mitigation policies and guidance, which include
guidance for regional mitigation strategies. Consistent with this
guidance, the BLM intends to prepare regional mitigation strategies,
with opportunities for public review and engagement, before authorizing
wind or solar energy development in DLAs, potentially including when
the BLM designates DLAs in the future through land use planning.
Section 2809.13 How will the BLM conduct competitive offers?
Under this section, the BLM may use any type of competitive process
or procedure to conduct its competitive offer. Several options, such as
oral auctions, sealed bidding, a combination of oral and sealed
bidding, and others are identified in section 2809.13(a). Oral auctions
are planned events where bidders are asked to orally bid for a lease at
a predetermined time and location. Sealed bidding would occur when
bidders are asked to submit bids in writing by a certain date and time.
Combination bidding is when sealed bids are first opened and then
afterward an oral auction would occur, with oral bids having to exceed
the highest sealed bid.
Under paragraph (b) of this section, the BLM would publish a notice
of competitive offer at least 30 days before bidding takes place in the
Federal Register and through other notification methods, such as a
newspaper of general circulation in the area affected by the potential
right-of-way or the Internet. This section of the final rule is
revised, consistent with revisions to other sections of this final
rule, to make notice in a newspaper an optional method for public
notice. See section 2804.23(c) of this preamble for further discussion
of these revisions. Minor revisions are also made from the proposed to
the final rule to paragraph (b)(5) of this section to improve
readability. The word ``factor'' is added throughout paragraph (b)(6)
of this section for the final rule. This is intended to help the reader
understand that an offset factor is part of the variable offset that
may be presented in the notice of competitive offer. A notice of
competitive offer must include:
1. The date, time, and location (if any) of the competitive offer;
2. The legal land description of the parcel to be offered;
3. The bidding methodology and procedures that will be used in
conducting the competitive offer, including any of the applicable
competitive procedures identified in section 2809.13(a);
4. The required minimum bid (see section 2809.14(a));
5. The qualification requirements for potential bidders (see
section 2809.11(d));
6. If applicable, the variable offset (see section 2809.16),
including:
i. The percent of each offset factor;
ii. How bidders may pre-qualify for each offset factor; and
iii. The documentation required to pre-qualify for each offset
factor; and
7. The terms and conditions to be contained in the lease, including
requirements for the successful bidder to submit a POD for the lands
involved in the competitive offer (see section 2809.18) and the lease
mitigation requirements.
Section 2809.13(b)(7) is revised in the final rule to include in
the terms and conditions of a notice of competitive offer any
mitigation requirements, including those for compensatory mitigation to
address residual impacts associated with the right-of-way. This
revision is made to clarify where the BLM will incorporate mitigation
in its administrative processes. Including mitigation requirements in
this final rule is discussed in greater detail in the general comment
and responses portion of this preamble.
Under paragraph (c) of this section, the BLM will notify you of its
decision to conduct a competitive offer at least 30 days in advance of
the bidding if you nominated lands and paid the nomination fees
required by section 2809.11(b)(1). No comments were received and no
other changes are made from the proposed rule to the final rule.
Section 2809.14 What types of bids are acceptable?
Section 2809.14 explains the requirements for bids submitted under
the competitive process outlined in this subpart.
Paragraph (a) of this section provides that your bid submission
will be accepted by the BLM only if it included the minimum bid
established in the competitive offer, plus at least 20 percent of your
bonus bid, and you are able to demonstrate that you are qualified to
hold a right-of-way by meeting the requirements in section 2803.10.
Consistent with comments received and revisions made to the final rule,
the words, ``or lease'' are added to this paragraph of the final rule
to help improve its clarity. As proposed, the rule only referenced a
grant, which is defined in these regulations to include the term lease.
For the final rule, language was added to make it clear that the
qualifications to hold a lease are the same as to hold a grant.
Paragraph (b) of this section provides that a minimum bid will
consist of three components. The first component is the amount required
for reimbursement of administrative costs incurred by the BLM and other
Federal agencies in preparing and conducting the competitive offer.
Administrative costs include all costs required for the BLM to comply
with NEPA plus any other associated costs, including costs identified
by other Federal agencies. As mentioned in the general discussion
section of this preamble, administrative costs are not a component of
fair market value, but are used to reimburse the Federal Government for
its work in processing a competitive offer and performing other
necessary work.
The second component of the minimum bid is an amount determined by
the authorized officer for each competitive offer. The BLM will
consider known values of the parcel when determining this amount, which
include, but are not limited to, the acreage rent and a megawatt
capacity fee. The authorized officer will identify these factors and
explain how they were used to determine this amount. The third
component is a bonus bid submitted by the bidder as part of a bid
package. This amount will be determined by the bidder.
Consistent with section 2804.30(e)(2)(ii) for notice of competitive
offers outside of DLAs, the BLM has removed the reference to mitigation
costs from section 2809.14(b)(2). Please see section 2804.30 of this
preamble for further discussion on this topic.
In other BLM programs, the minimum bid is often a statutory
requirement or is based on fair market value of the resource, but there
are no statutory requirements for a minimum bid for the right-of-way
renewable energy program. The acreage rent is based on the value of the
land and the MW capacity fee is based on the value of the commercial
use of the land. The BLM plans to base this minimum bid on factors such
as these that are known values of the parcel. The minimum bid amount,
how it was determined, and the factors used in this determination will
be clearly

[[Page 92188]]

articulated in the notice of competitive offer for each parcel.
A minimum bid is not a determination of fair market value, but a
point at which bidding may start. Fair market value will be received
through a combination of rent, MW capacity fees, and competitive
bidding and this process will determine what the market is willing and
able to pay for the parcel. Payment of cost recovery fees is also
required, but is not considered a part of the minimum bid. The minimum
bid is paid only by the successful bidder and is not prorated among all
of the bidders.
As described in paragraph (c) of this section, a bonus bid consists
of any dollar amount that a bidder wishes to bid, beyond the minimum
bid. The total bid equals the minimum bid plus any additional bonus bid
amount offered. If you are not the successful bidder, as defined in
section 2809.15(a), your bid will be refunded.
Comments: Two comments were received pertaining to this section.
The first comment states that the proposed rule does not provide an
effective mechanism for incentivizing solar development in SEZs by
eliminating or significantly reducing developer costs associated with
NEPA compliance.
Response: There are significant incentives to developers for leases
issued under subpart 2809, including the up-front land use planning and
other environmental work that the BLM will complete and the certainty
that after winning a competitive auction inside a DLA, a successful
bidder would be awarded a lease. In addition, the BLM offers variable
offsets, longer phase-ins for MW capacity fees, and greater time
between acreage rent and MW capacity fees rate updates for leases
issued under subpart 2809 that are not available for grants issued
under subpart 2804.
Comment: The second comment stated that the BLM should not include
the potential for lands to be developed for solar energy generation
when determining the minimum bid for a competitive offer.
Response: Section 2809.14(b)(2) describes how the BLM will consider
known and potential land values. While other competitive processes,
such as the BLM's coal program, include a statutory requirement for the
minimum bid, the BLM has no such requirement for the solar or wind
energy programs. Therefore, the BLM determined that it would be
appropriate to tie the minimum bid to the known values of the parcel
being auctioned. These known values, such as the acreage rent, would
reflect the potential for lands to be developed for solar energy. This
minimum bid component will be explained in each notice of competitive
offer.
Section 2809.15 How will the BLM select the successful bidder?
This section explains how the successful bidder is determined and
what requirements they must meet in order to be offered a lease. The
bidder with the highest total bid, prior to any variable offset, will
be declared the successful bidder and may be offered a lease in
accordance with section 2805.10. In paragraph (a) of this section,
``will'' is changed to ``may.'' The BLM will not offer a lease if the
successful bidder does not meet the requirements described in paragraph
(d) of this section. As written, paragraphs (a) and (d) of this section
were inconsistent with each other and this revision is intended to
resolve this inconsistency.
The BLM will determine the appropriate variable offset percentage
by applying the appropriate factors identified in section 2809.16,
before issuing final payment terms. The specific factors will be
identified in the competitive offer. If you are the successful bidder,
your payment must be submitted to the BLM by the close of official
business hours on the day of the offer or at such other time as the BLM
may have specified in the offer notice. Your payment must be made by
personal check, cashier's check, certified check, bank draft, or money
order, or by any other means the BLM deemed acceptable. Your remittance
must be payable to the ``Department of the Interior--Bureau of Land
Management.'' Your payment must include at least 20 percent of the
bonus bid prior to application of the variable offset described in
section 2809.16, and the total amount of the minimum bid specified in
section 2809.14(b). Within 15 calendar days after the day of the offer,
you must submit to the BLM the balance of the bonus bid less the
variable offset (see section 2809.16) and the acreage rent for the
first full year of the solar or wind energy lease as provided for in
sections 2806.54(a) or 2806.64(a), respectively. Submit these payments
to the BLM office conducting the offer or as otherwise directed by the
BLM in the offer notice.
In section 2809.15(d) of this final rule, the BLM revised ``will
approve your right-of-way lease'' to ``will offer you a right-of-way-
lease.'' This change is for consistency in terminology with paragraphs
(a) and (e) of this section, which refer to the offering of a lease and
not its approval. Under paragraph (e) of this section, the BLM will not
offer a lease if the requirements of section (d) are not met. The BLM
does not intend for this revision to change how it offers a lease to
successful bidders.
Under section 2809.15(e), the BLM will not offer the successful
bidder a lease, and will keep all money submitted, if the requirements
of section 2809.15(d) are not met. In this circumstance, the BLM may
offer the lease to the next highest bidder under section 2809.17(b) or
re-offer the lands under section 2809.17(d). No comments were received
and no changes are made from the proposed rule to the final rule.
Section 2809.16 When do variable offsets apply?
Section 2809.16 provides that a successful bidder inside a DLA may
be eligible for a variable offset of the bonus bid (in essence, a
bidding credit), based on the factors identified in the notice of
competitive offer. Variable offsets are not available outside of DLAs.
In providing for these offsets, the BLM intends to promote
thoughtful and reasonable development based upon known environmental
factors and impacts of different technologies. The BLM believes
providing these offsets will increase the likelihood that a project is
developed, expedite the development of that project, and encourage
development that will result in lesser resource impacts from the right-
of-way. Overall, the BLM believes the structure of these offsets will
help encourage the production of clean renewable energy on public
lands, which is a benefit to the general public.
Pre-qualified bidders may be eligible for offsets limited to no
more than 20 percent of the high bid. Factors for a bidder to pre-
qualify may vary from one competitive lease offer to another and may
include offsets for bidders with an approved PPA or Interconnect
Agreement, among other factors.
For example, the BLM may apply a 5 percent offset factor to a
bidder that has a PPA. This offset factor could encourage a bidder to
secure an agreement before the offer, which could increase the
likelihood of a project being developed and expedite the completion of
such development. In the BLM's experience with solar and wind energy
developments, a project is not always developed after a right-of-way is
issued. Based on this experience, the BLM believes that it is
appropriate to award an offset to a bidder with an agreement in place
to sell power, because that bidder will be more likely to develop a
project on the right-of-way. This could prevent the unnecessary
encumbrance of a right-of-way being issued to a holder who never
develops the intended project.

[[Page 92189]]

The BLM may also identify as an offset factor the submission of a
plan showing a reasonable development scenario. For example, the BLM
may apply a 5 percent offset factor to a bidder that would use a
particular technology. The BLM may identify a preferred technology type
that would reduce impacts to identified environmental or cultural
resources on the proposed parcel.
The BLM anticipates selected factors for the offsets to be in
increments of 5 percent. These will be reviewed at the BLM Washington
Office for consistency and relevance prior to each competitive offer
made in the first several years after publication of the final rule.
The BLM intends to provide additional guidance on the use of these
individual factors to ensure consistency between individual notices of
competitive offer.
The BLM may offer a different percentage for each offset factor
based on how qualified the bidder is for a specific offset factor. For
example, the BLM may offer a 3 percent offset for an interim step in
the PPA process or a 5 percent offset for a signed PPA. The BLM
acknowledges that in some circumstances qualifying for these offsets
may be difficult. For this reason, the BLM may offer incremental offset
percentages to bidders that are working toward such qualifications.
These offset factors (and their various increments) will be identified
in the notice of competitive offer (see section 2809.13(b)(6)).
The notice of competitive offer will identify each factor for which
BLM may grant a variable offset, and the corresponding maximum
percentage offset that would be applied to a qualified bidder's bonus
bid. The notice will also identify the documentation a bidder must
submit to pre-qualify for the offset. The authorized officer will
determine the total offset for each competitive offer, based on the
parcel(s) to be offered and any associated environmental concerns or
technological limitations.
As identified under paragraph (c) of this section, the factors for
which the BLM may grant a variable offset in a particular lease sale
include:
1. Power purchase agreement. This could be a signed agreement
between the potential lessee and an entity that agrees to purchase the
power generated from the solar or wind energy facility;
2. Large generator interconnect agreement. This would consist of a
signed agreement from the holder of an electrical transmission facility
and the potential lessee that power would be accepted on the grid
controlled by the holder to be transported to a power receiving source;
3. Preferred solar or wind energy technologies. This would be an
incentive to use technologies for generating or storing solar or wind
energy that would efficiently use public lands or reduce impacts to
identified resources such as water;
4. Prior site testing and monitoring inside the DLA. This would
consist of evidence that the potential lessee or others associated with
the lessee had previously performed appropriate testing or monitoring
to determine the suitability and capability of the site for
establishment of a successful solar or wind energy generating facility;
5. Pending applications inside the DLA. This would be a situation
where the potential lessee had previously filed for authorization to
construct facilities inside the DLA;
6. Submission of nomination fees. These are required when
submitting a formal nomination (see section 2809.11(b));
7. Submission of biological opinions, strategies, or plans. This
could include biological opinions, bird and bat conservation
strategies, and habitat conservation plans;
8. Environmental benefits. This factor would include any positive
environmental considerations such as identifying and salvaging
archaeological or historical artifacts, additional protection for
protected plant or animal species, or similar factors;
9. Holding a solar or wind energy grant or lease on adjacent or
mixed land ownership. This could show the bidder's vested interest in
developing the right-of-way;
10. Public benefits. These could include documented commitments or
agreements to provide jobs or other support for local communities or
supporting local public purposes projects; or
11. Other similar factors. These could include support for other
Federal Government programs or national security by providing power for
defense purposes or meeting government purchase contracts.
The only changes made in the listed variable offset factors between
the proposed and final rule is for Factor Number 7, and those made for
clarity and consistency in the final rule, are described in greater
detail in the response to comments.
Comment: One comment requested that the BLM not use the variable
offset concept, as it is unworkable and would result in appeals by
rejected bidders.
Response: Throughout the preambles to the proposed and final rules,
the BLM has explained DLAs and the various aspects of the competitive
process for solar and wind energy in these areas. By creating
incentives for prospective developers and encouraging various
conditions that would lead to environmental and other public benefits,
the use of a variable offset is an integral aspect of this process.
The BLM manages the public land under the principles of multiple
use and sustained yield, but does not expect all interested
stakeholders to agree with all of the BLM's decisions. This is, in
part, the reason for the BLM's appeal process, allowing the public to
seek an administrative remedy for the BLM's decisions by which they
have been adversely affected. The BLM expects that there will be
appeals or protests on decisions that are made regarding management of
the public lands.
For each notice of competitive offer, the BLM will include the
factor(s) of a variable offset, as well as the requirements a bidder
must meet to qualify for each incremental percentage. Bidders, as well
as the public, will have this information made available to them
through the notice of competitive offer and be able to act according to
their interests or concerns over the proposed actions. The variable
offset is carried forward in the final rule.
Comment: A comment expressed confusion over how the BLM would
implement the proposed factor Number 7 (Timeliness of project
development, financing and economic factors), and if the potential for
meeting project timelines was even possible as a variable offset factor
since the reduction in bid money would precede the demonstration of
meeting agreed-upon time frames. Acts of God and other such influences
that are outside the bidder's control were noted as possible reasons a
bidder that received such a factor offset may not be able to meet it.
Response: Proposed factor number 7 for timeliness is removed from
the final rule. The BLM agrees with the comment that implementing a
timeliness factor would be difficult. There are many reasons outside of
a winning bidder's control that may cause a delay to the development of
a project. The proposed criteria for timeliness offset factor is a
desired objective for an incentive, but was determined too difficult to
enforce.
Comment: Another comment stated that the BLM must not shortchange
taxpayers or other landowners through a discount that unjustly
encourages development of public lands rather than comparable private
lands. The BLM must ensure fair market value for the use of public
lands.

[[Page 92190]]

Response: The variable offset is not a discount to a developer for
the use of public lands. It is an incentive provided to a developer of
the public lands, that accounts for certain steps a developer has
already taken in a particular designated leasing area. Factors of the
variable offset may also address the reduction of resource impacts,
such as when a less water intensive technology is used. The variable
offsets recognize these early developer steps that could increase the
certainty of the successful development of a lease area and assist the
BLM in its management of the public lands under the multiple use and
sustained yield principles. This increased certainty benefits the
public by not having public lands unnecessarily encumbered by a lease
that may not be developed and increases the likelihood that solar or
wind power generation would occur on public lands.
Comment: A third comment believes that incentives for DLAs should
be reached exclusively by reducing rents rather than a complicated
structure of variable offsets, time limits, bonding provisions,
authorization terms, and MW capacity fees, and that the BLM proposed
incentives should be removed from the final rule. This comment
specifically addressed some of the proposed factors as follows:
Comment (1): Factors 1 (Power purchase agreement) and 2 (Large
generator interconnect agreement) cannot be attained without
demonstrated site control.
Response (1): Although securing a PPA or large generator
interconnect agreement (LGIA) may not be attainable without site
control, the notice may identify interim steps toward meeting the
requirements of the offset factor. The final rule allows for interim
steps in each of these identified offset factors. The text of the rule
cites that the ``variable offset may be based on any of the following
factors.'' The notice of competitive offer would include the specific
criteria required to qualify for a factor of the variable offset under
paragraphs (c)(1) and (2) of this section, including any interim steps
toward those factors.
Comment (2): Factor 3 (Preferred solar or wind energy technologies)
for preferred technologies should be removed as it could discriminate
against certain technologies without having the expertise of an energy
regulatory body (outside of the BLM's authority and expertise).
Response (2): The BLM has expertise in many areas, including the
impacts that a certain a technology type may have on the public lands
and its resources. This may include technologies with fewer impacts to
wildlife or visual resources, or technologies that consume less water.
The BLM may choose to provide a variable offset factor for a preferred
technology that reduces impacts to the public lands and resources.
However, in some cases, the BLM may choose to consult with one of the
national laboratories or State authorities for their expertise for some
technologies which may be outside of the BLM's expertise to determine
as a preferred technology.
Comment (3): The comment asserts that under section 2809.19(a)(1),
applications that are filed prior to the publication of the draft land
use plan amendment that establishes a DLA should not make a bidder
eligible for factors (4) (prior site testing in a DLA) and (5) (pending
applications in a DLA). This would only encourage the strategic filing
of speculative applications after publication of the draft land use
plan amendment in order to qualify for factors (4) and (5).
Response (3): Applications that are filed on public lands before
the publication of a notice of intent or other form of public notice by
the BLM for a land use plan amendment that are later designated as a
DLA will continue to be processed by the BLM and not subject to the
competitive offer process of subpart 2809. The filing of speculative
applications will not prevent the BLM from holding competitive offers
in a particular area.
If the BLM elects to hold a competitive offer for the DLA, the
applicant may qualify for offset factors (4) or (5) if they chose to
participate. The BLM believes that submitting an application after a
notice of intent or other public notice, paying the application filing
fee, and waiting for the BLM to hold a competitive offer, should
qualify an applicant for variable offset factor 4 or 5.
Comment (4): Factor 6 (submission of nomination fees) is not an
incentive if a bidder can submit an expression of interest, which
requires no fee, and increase their bonus bid by the amount of the
nomination fee that they would have paid, thereby increasing their
chances of being the winning bidder.
Response (4): Neither submitting an expression of interest nor
submitting a nomination will guarantee that the BLM selects that parcel
for a competitive offer. However, if a developer has a particular
parcel in mind, the payment of a nomination fee may be preferable so
that they may qualify for a variable offset factor. In addition, 5
percent of the bonus bid may result in greater savings to the bidder
than the amount submitted for the nomination fees.
Comment (5): Factors 8 (environmental benefits) and 10 (public
benefits) are open to distortion and variability across field offices.
Response (5): The BLM intends that in each notice of competitive
offer it will identify each applicable variable offset factor offered
and specify how a bidder may qualify for each factor. The criteria
listed in the final rule are intended to be broad and varied so that
they can be adapted for each competitive offer.
Factor 9 is revised from the proposed to the final rule to include
grants. As proposed, the factor could appear to only apply for adjacent
leases. In this final rule, the BLM may authorize a grant under subpart
2804 inside a DLA, which may be adjacent to a parcel which is bid on.
The parcel may also be adjacent to a grant that is outside the DLA.
This revision clarifies that the BLM would consider the site control of
adjacent lands, regardless of the instrument.
Comment: One comment suggests the following variable offsets be
added: (1) A bird and bat conservation strategy for the project site;
(2) A commitment to a specific right-of-way lease condition to obtain a
bald and golden eagle protection act permit; (3) A plan to employ best
available operation minimization strategies; and (4) agreement to: (a)
Conduct monitoring and research with land-based WEG and Eagle
Conservation Plan Guidance; (b) Provide this monitoring data to the
public to facilitate a greater understanding to the wildlife impacts;
and (c) implement avoidance measures to avoid impacts.
Response: A variable offset factor has been added in the final rule
to account for biological opinions, strategies and plans. This factor
has been added in the place of offset factor 7 which, as noted in an
earlier response to comment, has been removed from this rule. New
variable offset factor 7 reads as ``Submission of biological opinions,
strategies, or plans.'' This will encourage the early and thoughtful
development of the public lands. To have such a plan or opinion
completed at this point could lead to fewer biological resource impacts
and quicker NEPA review of the project POD. The BLM does not expect
many projects to complete a biological opinion at this point in the
process, but interim steps toward such a plan would demonstrate the
developer's commitment to protecting resources on public lands. Such
interim steps could qualify a developer for this factor of a variable
offset, which would be described in the notice of competitive offer.

[[Page 92191]]

No other comments were received and no other changes are made to
this section.
Section 2809.17 Will the BLM ever reject bids or re-conduct a
competitive offer?
This section identifies situations where the BLM may reject a bid,
offer a lease to another bidder, re-offer a parcel, and take other
appropriate actions when no bids are received. Under section
2809.17(a), the BLM could reject bids regardless of the amount offered.
Bid rejection could be for various reasons, such as discovery of
resource values that cannot adequately be mitigated through
stipulations (e.g., the only known site of a rare or endangered plant
or for security purposes). If this occurs, the bidder will be notified
and the notice will explain the reason(s) for the rejection and whether
you are entitled to any refunds. If the BLM rejects a bid, the bidder
may appeal that decision under section 2801.10. Minor revisions are
made from the proposed to the final rule to improve readability of this
section's title by adding the word ``the'' before BLM.
The BLM could offer the lease to the next highest qualified bidder
if the first successful bidder is later disqualified or does not sign
and accept the offered lease (see section 2809.17(b)).
Under paragraph (c) of this section, the BLM could re-offer a
parcel if it cannot determine a successful bidder. This may happen in
the case of a tie or if a successful bidder is later determined to be
unqualified to hold a lease.
Under paragraph (d) of this section, if public lands offered
competitively under this subpart receive no bids, the BLM could either
reoffer the parcels through the competitive process under section
2809.13 or make the lands available through the non-competitive process
found in subparts 2803, 2804, and 2805. If the lands are offered on a
noncompetitive basis, the successful applicant would receive a right-
of-way grant issued under subpart 2804, rather than a lease issued
under subpart 2809, and the offsets described in section 2809.16 would
not apply.
Comment: A comment stated that the right to appeal a rejected bid
must be qualified (i.e., not be a spurious appeal). The comment goes on
to say that this may be remedied by the BLM: (1) Prohibiting the
issuance of a stay against a lease award while there is a pending
appeal filed under section 2801.10; and (2) Specifying that a
successful appeal would not rescind a lease award, but instead result
in an automatic 20 percent offset for the next DLA competitive process
in which the successful appellant participates.
Response: The BLM agrees that appeals should not be spurious or
intended to disrupt the BLM's administration of the public lands.
However, the BLM does not agree that it should prohibit the issuance of
a stay in its regulations. The right to appeal a BLM decision,
including the issuance of a stay, is an important part of the BLM's
orderly administration of the public lands.
Should an appeal be successful in the IBLA, the BLM would not award
a 20 percent variable offset to the appellant. A successful appeal may
be grounds for a re-offer of the parcels or other similar action that
would be consistent with the administrative status of the BLM decision
that was appealed. Also, should a variable offset be awarded to
successful appellants, it would likely incite further appeals from
other unsuccessful bidders in the hopes to secure such a future credit.
Therefore, the BLM will not provide for such variable offset awards in
the rule for successful appellants. No other comments were received or
changes made to the final rule for this section.
Section 2809.18 What terms and conditions apply to leases?
Section 2809.18 lists the terms and conditions of solar and wind
energy leases issued inside DLAs.
Under paragraph (a) of this section, the term of a lease issued
under subpart 2809 will be 30 years and the lessee may apply for
renewal under section 2805.14(g). While the BLM will issue grants under
subpart 2804 for a term up to 30 years (see section 2805.11), leases
issued under subpart 2809 are guaranteed a lease term of 30 years.
Under paragraph (b) of this section, a lessee must pay rent and MW
capacity fees as specified in section 2806.54, if the lease is for
solar energy development or as specified in section 2806.64, if the
lease is for wind energy development. Rent and MW capacity fees are
discussed in greater detail in sections 2806.50 through 2806.68 of the
section-by-section analysis. Minor revisions are made from the proposed
to the final rule to improve readability, but any significant changes
are discussed in detail in this preamble.
Under paragraph (c) of this section, a lessee must submit, within 2
years of the lease issuance date, a POD that: (1) Is consistent with
the development schedule and other requirements in the POD template
posted on the BLM's Web site https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html; and (2) Addresses all pre-development and
development activities. A POD is often required for rights-of-way under
section 2804.25(c) of this final rule and is currently required for all
renewable energy projects through policy. Due to their complexity,
solar and wind energy development projects will always require a POD.
The POD must provide site-specific information that will be reviewed by
the BLM and other Federal agencies in accordance with NEPA and other
relevant laws.
Under paragraph (d) of this section, a lessee must pay the
reasonable costs for the BLM or other Federal agencies to review and
process the POD and to monitor the lease. The authority for collecting
costs is derived from Sections 304(b) and 504(g) of FLPMA that
authorize reimbursement to the United States of all reasonable and
administrative costs associated with processing right-of-way
applications and other documents relating to the public lands, and in
the inspection and monitoring of construction, operation, and
termination of right-of-way facilities. Such costs may be determined
based on consideration of actual costs. A lessee may choose to pay full
actual costs for the review of the POD and the monitoring activities of
the lease. Through the BLM's experience, a lessee is more likely to
choose payment of full actual costs as this expedites the BLM's review
and monitoring actions by removing administrative steps in cost
estimations and verifying estimated account balances.
Under paragraph (e) of this section, a lessee must provide a
performance and reclamation bond for a solar or wind energy project.
Bond amounts for leases issued under subpart 2809 will be set at a
standard dollar amount (per acre for solar, or per turbine for wind)
for either solar or wind energy development. See section 2805.20 of
this preamble for additional information on the determination of these
bond amounts. As explained in the general discussion section of this
preamble, the BLM does not intend to change the amount of a standard
bond after the lease is issued unless there is a change in use. As
previously discussed, these bond amounts were determined based on a
review of recently bonded solar and wind energy projects.
Comments: Several comments were received on paragraph (e) of this
section. One comment suggested that the BLM should require bonds that
are tied to the actual cost of reclamation and mitigation of the
project, rather than an arbitrary per acre or per project figure.
Response: It is the intent that these standard bond amounts would
incentivize solar and wind energy

[[Page 92192]]

development in DLAs. Reclamation of the lands in these DLAs is
anticipated to be less than other locations outside of DLAs as the
resource impacts are not expected to be as great, and the land could,
in turn, be used for solar or wind development again if a developer
failed to complete their lease obligation in developing the land.
Additionally, consistent with its interim policy guidance for offsite
mitigation (IM 2013-142)consistent with the recently issued mitigation
manual and handbook guidance, the BLM intends to prepare regional
mitigation strategies before authorizing wind or solar energy
development in DLAs. These plans may identify additional costs for
mitigating residual impacts of the right-of-way.
As noted in the preamble for section 2805.20, the minimum and
standard bond amounts are the same. The BLM recently completed a review
of existing bonded solar and wind energy projects and based the
standard bond amounts provided in this final rule on the information
found during this review. When determining these bond amounts, the BLM
considered potential liabilities associated with the lands affected by
the rights-of-way, such as cultural values, wildlife habitat, and
scenic values, and the mitigation and reclamation of the project site.
The BLM used this review to determine an appropriate standard bond
amount to cover the potential liabilities associated with solar and
wind energy projects.
Comment: Another comment stated that both DLA and non-DLA bonding
requirements should be the same. The BLM should use differences in rent
to encourage development of DLAs.
Response: Bonding requirements for both grants issued under subpart
2804 and leases issued under subpart 2809 are established to protect
the public lands. The requirements for leases are established using the
same methodology as those minimum amounts established outside of a DLA.
However, the standard bond amount recognizes that the impacts to
resources and uses are likely to be less inside of a DLA than outside
of a DLA, due to the BLM's effort to establish DLAs in areas where
resource conflicts are expected to be lower. Furthermore, standard bond
amounts increase the certainty for developers of costs when planning
for and developing their project.
Comment: A comment recommended that the BLM reevaluate the standard
bond amounts and identify a range commensurate with actual costs of
decommissioning. The comment noted that the preamble to the proposed
rule stated the range of solar bonding costs of $10,000 to $20,000 and
wind bonding costs of $22,000 to $60,000. This comment asked if the
minimum and standard bond amounts chosen at the bottom or below the
stated ranges were adequate.
Response: The BLM has considered the recommendation to identify a
range of standard bond amounts, but intends to keep these amounts as
proposed. In order to accommodate the wind turbines that pose lesser
risk to resources, and consistent with revisions made in section
2805.20, the BLM is including in the final rule a $10,000 standard bond
amount for projects utilizing smaller turbines. Turbines with a
nameplate capacity of one MW or greater will have a standard bond
amount of $20,000, consistent with the proposed rule. This is because
these amounts represent bond figures that are representative of the
impacts to the resources of the public lands and the intended
management decisions of DLAs for solar or wind energy development.
Should a developer default or fail to fulfill the lease terms, the BLM
may pursue a competitive offer to lease those lands again. The full
amount of the bond may not be used in this situation. The balance will
be returned to the previous leaseholder upon the completion of
reclamation activities. See section 2805.20(d) comment responses of
this preamble for further discussion on the added $10,000 bond amount.
BLM has determined that establishing the proposed standard bond
amounts as proposed is appropriate. Using the proposed bond amounts
reduces the potential for the BLM to secure bonds in amounts beyond
what is necessary for the project. If a higher bond amount were
selected, the BLM might over-bond the project, especially considering
that the BLM has already identified these areas as having lower
potential for resource impacts. Grant holders are still liable for
damage done during the term of the grant or lease even if the bond
amount does not cover the cost of reclamation.
The bonds collected for a project issued under subpart 2809
consider hazardous material liabilities, reclamation, and project site
restoration. In addition to the required bond, BLM may require a
mitigation fee to address adverse impacts resulting from the right-of-
way authorization. Between securing the bond and collection of
mitigation fees, the BLM believes that the impacts to the public lands
are adequately protected.
A new provision (section 2809.18(e)(3)) has been added to this
final rule to explain that lease holders for the testing sites that
will be authorized under a lease in a DLA will provide a standard bond
amount of $2,000 per site. This addition to the final rule is to make
this section consistent with revisions to section 2801.9(d), which open
up the site-specific and project-area testing authorizations to solar
and wind energy. The standard bond amount for a lease issued under
subpart 2809 is the same as a minimum bond amount in the proposed rule.
Grants issued in a DLA for testing purposes will have a minimum bond
amount as determined under section 2805.20. Testing and monitoring
facilities include meteorological towers and instrumentation
facilities.
For a solar energy development project, a lessee must provide a
bond in the amount of $10,000 per acre at the time the BLM approves the
POD. See the discussion at section 2805.20(b) for additional
information. For a wind energy development project, a lessee must
provide a bond in the amount of $10,000 or $20,000 per authorized
turbine before the BLM issues a Notice to Proceed or otherwise gives
permission to begin construction on of the development. See section
2805.20(c) and (d) of this preamble for additional information.
The BLM will adjust the solar or wind energy development bond
amounts for inflation every 10 years by the average annual change in
the IPD-GDP for the preceding 10-year period, and round the bond amount
to the nearest $100. This adjustment would be made at the same time
that the Per Acre Rent Schedule for linear rights-of-way is adjusted
under section 2806.22.
The BLM revised paragraph (e)(4) of this section from the proposed
to final rule for consistency with other sections of this final rule
where the BLM uses the IPD-GDP to adjust an amount every 10 years. See
the preamble discussion of section 2804.12(c)(2) for further
information about this revision.
Under paragraph (f) of this section, a lessee may assign a lease
under section 2807.21, and if an assignment is approved, the BLM would
not make any changes to the lease terms or conditions, as provided in
section 2807.21(e). See section 2807.21(e) of this preamble for further
discussion of this topic, in response to a comment asking that we
clarify the BLM's right to modify the terms of a lease issued under
subpart 2809. We added language in paragraph (e) of this section to be
consistent with section 2807.21(e) to state that changes made to a
lease issued under this subpart will be made only when there is a
danger to the public health and safety, environment, or a change to the
statutory authority and other

[[Page 92193]]

responsibilities of the BLM. These changes would only be made in
coordination with the lessee.
Under paragraph (g) of this section, a lessee must start
construction of a project within 5 years and begin generating
electricity no later than 7 years from the date of lease issuance, as
specified in the approved POD. The approved POD will outline the
specific development requirements for the project, but all PODs require
a lessee to start generating electricity within 7 years. The 5 years to
start construction and 7 years to begin generating electricity
contained in the rule should allow leaseholders time to construct and
start generation of electricity and give a leaseholder time to address
any concerns that are outside of the BLM's authority. Such concerns
include PPAs or private land permitting or site control transactions. A
request for an extension may be granted for up to 3 years with a show
of good cause and BLM approval. If a leaseholder is unable to meet this
timeframe, and does not obtain an extension, the BLM may terminate the
lease. No other comments were received or changes made to the final
rule for this section.
Section 2809.19 Applications in DLAs or on Lands That Later Become DLAs
Section 2809.19 explains how the BLM processes applications for
lands located inside DLAs or on lands that later become DLAs. Under the
rule, lands inside DLAs will be offered through the competitive bidding
process described in this subpart, and applications may not be filed
inside these areas after the lands have been offered for competitive
bid.
Section 2809.19 is revised from proposed to the final rule by
adding a paragraph (a)(3) and redesignating proposed paragraphs (b) and
(c) as paragraphs (c) and (d), respectively. The BLM also moved some
provisions of proposed paragraph (a)(2) to a new paragraph (b). These
changes are made to clarify how the BLM handles applications in areas
that later become designated leasing areas. There is no change from the
proposed requirements in the final rule.
Paragraph (a) of this section explains how the BLM will process
applications filed for solar or wind energy development on lands
outside of DLAs that subsequently become DLAs.
Under paragraph (a)(1) of this section, if an application is filed
before the BLM publishes a notice of intent or other public
announcement of intent for a land use plan amendment that considers
designating an area for solar or wind energy, the BLM would continue to
process the application, which would not be subject to the competitive
leasing offer process found in this subpart. After publication of this
notice, the public will have been notified of the BLM's intent to
create a DLA.
Under paragraph (a)(2) of this section, if an application is filed
after the notice of the proposed land use plan amendment, the
application will remain in a pending status, unless it is withdrawn by
the applicant or the BLM denies it or issues a grant. The BLM made a
minor revision to this section from the proposed rule by adding ``or
issues a grant.'' This revision gives the BLM the option to approve a
grant in pending status, if it chooses. This revision is made because
the proposed rule inadvertently omitted the possibility that a pending
application could be approved, instead of only being withdrawn or
denied.
New paragraph (a)(3) of this section is added in this final rule to
explain that applications may resume being processed by the BLM if
lands in a DLA later become available for application. Under paragraph
2809.17(d)(2), the BLM may make the lands in a DLA available for
application in some circumstances. For example, the BLM may hold a
competitive offer and receive no bids. In this situation, the BLM may
make these lands available for application and would resume processing
any applications that are pending on these lands. This is consistent
with the proposed rule but is added to the final rule to clarify how
the BLM will handle such applications in these circumstances.
Some provisions of proposed paragraph (a)(2) of this section are
moved into new paragraph (b) in this final rule. These provisions
remain mostly unchanged and are discussed as follows.
Under new paragraph (b) of this section, if the subject lands
become available for leasing under this subpart, an applicant could
submit a bid for the lands. Under new paragraph (b)(1) of this section,
any entity with an application pending on a parcel that submits a bid
on such parcel may qualify for a variable offset as provided for under
section 2809.16.
Under paragraph (b)(2) of this section, the applicant may receive a
refund for any unused application fees or processing costs if the lands
described in the application are later leased to another entity under
section 2809.15. This provision is revised consistent with changes made
for application filing fees in this final rule, which are now a cost
recovery payment. The BLM may use some of these fees in processing an
application and will refund any unused fees to the applicant.
Proposed paragraph (b) of this section is redesignated as paragraph
(c) in this final rule. Under paragraph (c) of this section, the BLM
will not accept a new application for solar or wind energy development
inside DLAs after the effective date of this rule (see sections
2804.12(b)(1) and 2804.23(e), except as provided for by section
2809.17(d)(2).
Proposed paragraph (c) of this section is redesignated as paragraph
(d) in this final rule. Under paragraph (d) of this section, the BLM
can authorize short term (3-year) grants for testing and monitoring
purposes inside DLAs. These would be processed in accordance with
sections 2805.11(b)(2)(i) or 2805.11(b)(2)(ii). These testing grants
may qualify an entity for a variable offset under section
2809.16(b)(4).
Comment: One comment was received pertaining to paragraph (a)(1) of
this section. The comment stated that the pending application exception
in the paragraph requires clarification. A pending project exemption
should be tied to a notice of intent rather than a notice of
availability (NOA) to avoid a number of filings made immediately after
publication of a notice of intent. Also, a pending project exemption
should apply to the potential competitive leasing of non-DLA lands
under section 2804.30. In addition, the BLM should clarify that the
rule would not apply to applications accepted and serialized or a grant
issued before the rule takes effect.
Response: The BLM agrees in part with these suggestions. In this
final rule, this section has been modified so that a notice of intent
or other public notice will be the point at which the BLM determines
that your application qualifies as a pending application. The notice of
intent is specific to land use plan amendments that use an EIS for the
analysis. Because a plan amendment may also be using an environmental
assessment, which does not require a notice of intent, the BLM added
the language, ``other public announcement'' into this section. The BLM
believes that it is appropriate to continue processing applications
that were submitted before the BLM provided public notice (e.g.,
through a notice of intent).
The final rule will apply to applications that are accepted and
serialized as well as grants that are issued before this rule is
effective. There may be exceptions to whether the rule will fully apply
to an application or right-of-way grant. For example, application
filing fees and preliminary application review meetings may not be

[[Page 92194]]

required for some pending applications. Applications do not confer land
use rights to an applicant, and other provisions of the rule such as
rent and fees may be determined at the time a right-of-way is
authorized, not at the time an application is submitted. Therefore,
under the provisions of new sections 2804.40 and 2805.12(e), you may
request alternative requirements, stipulations, terms, and conditions
from the BLM with a showing of good cause, and an explanation or reason
for an alternative requirements, stipulations, terms, and conditions.

V. Section-by-Section Analysis for Part 2880

In addition to the revisions to its regulations governing rights-
of-way for solar and wind energy development, the BLM is also revising
several subparts of part 2880. These revisions are necessary to make
rights-of-way administered under part 2880 consistent, where possible,
with the policies, processes, and procedures for those administered
under part 2800. Specific areas where we are making consistency changes
include: Bonding requirements; determination of initial rental payment
periods; and when you must contact the BLM, including grant, lease, and
temporary use permit (TUP) modification requests, assignments, and
renewal requests. The BLM has removed the provision found in the
proposed rule regarding pre application requirements and fees for any
pipeline 10 inches or more in diameter from this final rule. This is
because, based on further analysis and comments received, the use of a
10-inch diameter pipeline was found not to be an appropriate measure
that could readily provide a basis for additional requirements.
This final rule adds Section 310 of FLPMA to the authority citation
for this part to clarify that FLPMA authority may be used in processing
a pipeline right-of-way. The MLA authorizes the Secretary to approve
MLA pipeline rights-of-way that cross Federal lands when those pipeline
rights-of-way are administered by the Secretary or by two or more
Federal agencies. Where the Secretary authorizes a pipeline right-of-
way across lands managed by the Secretary, including any bureaus or
offices of the Department, other authorities applicable to the
management of those lands would generally apply to the authorization.
We have cited FLPMA specifically because that authority, governing the
management of the public lands generally, is the authority most
commonly relied upon in such authorizations.

Subpart 2884--Applying for MLA Grants or TUPs

Section 2884.10 What should I do before I file my application?
In the proposed rule, this section included requirements for pre-
application meetings when applying for a right-of-way for an oil or gas
pipeline having a diameter exceeding 10 inches. Many comments were
received concerning this proposal, including many comments stating that
it was not a reasonable criterion to use in determining the need for
pre-application meetings. After considering these comments and upon
further evaluation of the proposal the BLM decided to not require these
pre-application meetings. As a result, the proposed changes were not
made to the regulations in this section.
Section 2884.11 What information must I submit with my application?
Section 2884.11 includes requirements for submitting applications.
This section has been retitled from ``What information must I submit in
my application?'' to read as shown above. This revision is consistent
with the title revision of section 2804.12. Proposed requirements for
pipelines with a diameter of 10 inches or more have been removed from
this section in the final rule.
Section 2884.11(c)(5) is amended by adding a second sentence that
further explains that your POD must be consistent with the development
schedule and other requirements that are noted on the POD template for
oil or gas pipelines at https://www.blm.gov.
Comment: One comment suggested that paragraph (c)(5) of this
section be revised to read as follows: ``The estimated schedule for
constructing, operating, maintaining, and terminating the project (a
POD). Your POD must address the elements specified on the POD template
for oil and gas pipelines at https://www.blm.gov.'' This suggestion
would remove the requirement for the POD to be consistent with the
development schedule in the POD template.
Response: The BLM did not make the suggested changes. The suggested
revision to the rule would require that the applicant address each
element of a POD, but would not require consistency with the POD
template. This could allow a developer to acknowledge the development
timeline, but not provide it to the BLM. It is important that
applicants provide the necessary information to the BLM for the orderly
administration of public lands, including the development schedule for
the POD. No other comments were received and no changes are made from
the proposed to the final rule.
Section 2884.12 What is the processing fee for a grant or TUP
application?
Section 2884.12 explains the fees associated with an application,
including those that involve Federal agencies other than the BLM. The
applicant may either pay the BLM for work done by those Federal
agencies or pay those Federal agencies directly for their work. This
authority was recently delegated to the BLM by the Secretary by
Secretarial Order 3327.
Paragraph (b) of this section revises the processing fee schedule
to remove the 2005 category fees. Paragraph (c) of this section
provides instructions on where you may obtain a copy of the current
processing fee schedule. These changes parallel those made to section
2804.14, which describe processing fees for grant applications. A
further analysis of these changes can be found in that part of the
section-by-section analysis. No comments were received and no, changes
are made from the proposed rule to the final rule.
Section 2884.16 What provisions do Master Agreements contain and what
are their limitations?
Section 2884.16 is revised to require that Master Agreements
describe existing agreements with other Federal agencies for cost
reimbursement associated with the application. This change parallels
changes made in section 2804.18, which describes Master Agreements for
all other rights-of-way. With the authority recently delegated by
Secretarial Order 3327 to collect costs for other Federal agencies, it
is important for the applicant, the BLM, and other Federal agencies to
coordinate and be consistent regarding cost reimbursement. No comments
were received and no changes are made from the proposed rule to the
final rule.
Section 2884.17 How will BLM process my Processing Category 6
Application?
Section 2884.17 explains how the BLM processes Category 6
applications and these changes parallel changes in section 2804.19.
Under paragraph (e) of this section, the BLM may collect reimbursement
for the United States for actual costs with respect to right-of-way
applications and other document processing relating to Federal lands.
No comments were received and no changes are made from the proposed
rule to the final rule.

[[Page 92195]]

Section 2884.18 What if there are two or more competing applications
for the same pipeline?
Section 2884.18 parallels section 2804.23. Under paragraph (a)(1)
of this section, the requirement to reimburse the BLM is expanded to
allow for cost reimbursement from all Federal agencies for the
processing of these right-of-way authorizations.
Under paragraph (c) of this section, the BLM may offer lands
through a competitive process on its own initiative. Language is added
to this paragraph to include ``other notification methods, such as a
newspaper of general circulation in the area affected by the potential
right-of-way or the Internet.'' This revision is consistent with other
public notice sections of this rule. See section 2804.23(c) of this
preamble for further discussion. No comments were received and no other
changes are made from the proposed rule to the final rule.
Section 2884.20 What are the public notification requirements for my
application?
Under section 2884.20, the phrase ``and may use other notification
methods, such as a newspaper of general circulation in the vicinity of
the lands involved or the Internet'' is added to paragraphs (a) and (d)
to provide for additional methods to notify the public of a pending
application or to announce any public hearings or meetings. This final
rule is revised, consistent with changes made to other notification
language throughout this rule, to make notice in a newspaper an
optional method of notice. See section 2804.23(c) of this preamble for
further discussion. No comments were received and no changes are made
from the proposed rule to the final rule.
Section 2884.21 How will BLM process my application?
Under section 2884.21, the BLM will not process your application if
you have any trespass action pending for any activity on BLM
administered lands (see section 2888.11) or have any unpaid debts owed
to the Federal Government. The only application the BLM will process to
resolve the trespass is for a right-of-way as authorized in this part,
or a lease or permit under the regulations found at 43 CFR part 2920,
but only after all outstanding debts are paid. This provision is added
to provide incentives for the applicant to resolve outstanding debts or
other infractions involving the Federal Government and parallels
section 2804.25.
New language is added to paragraph (b) of this section stating that
outstanding debts are those currently unpaid debts owed to the Federal
Government after all administrative collection actions have occurred,
including administrative appeal proceedings under applicable Federal
regulations and review under the APA. This language is added to be
consistent with section 2804.25(d). No comments were received for
section 2884.21, but comments were received and addressed under section
2804.25. The notification language contained in paragraph (d)(4) of
this section is amended by adding the phrase ``and may use other
notification methods, such as a newspaper of general circulation in the
vicinity of the lands involved or the Internet.'' This section is
revised, consistent with changes made to other notification language
throughout this rule, to make notice in a newspaper an optional method
of notice. See section 2804.23(c) of this preamble for further
discussion.
Section 2884.22 Can BLM ask me for additional information?
Section 2884.22 describes what information the BLM may require in
processing an application. This section was revised by changing the
reference found in paragraph (a) from section 2804.25(b) to section
2804.25(c). This change was not proposed, but is made to be consistent
with other changes made in this final rule. No other changes were made
to this section.
Section 2884.23 Under what circumstances may BLM deny my application?
Section 2884.23 describes the circumstances when the BLM may deny
an application. In the proposed rule, section 2884.23(a)(6), stated
that the BLM may deny an application if the required POD fails to meet
the development schedule and other requirements for oil and gas
pipelines.
Comment: Several comments suggested that the BLM remove the 10-inch
pipeline threshold requirement in the proposed rule.
Response: As noted previously in the preamble, the BLM removed the
proposed requirements for pipelines ``10 inch or larger in diameter''
from the final rule. This includes requirements such as the pre-
application meetings, the POD timeline, and other such requirements
that are specific to pipelines 10 inches in diameter or larger. The
timeliness requirement, among others associated with the large-scale
pipeline projects description has been removed from the final rule.
Comment: One comment stated that the BLM should account for
instances when a developer does not meet the timeframe due to reasons
outside of their control.
Response: The final rule adds a new section 2884.30 that parallels
section 2804.40, both of which address situations in which a developer
misses a timeframe or is unable to meet a requirement because of
circumstances beyond its control. The preamble for section 2804.40
explains in greater detail the circumstances when an applicant may be
unable to meet a requirement.
No other comments were received and no other changes made from the
proposed rule to the final rule.
Section 2884.24 What fees do I owe if BLM denies my application or if I
withdraw my application?
In the proposed rule, this section was consistent with section
2804.27. The proposed section would have required an applicant to pay
any pre-application costs submitted under section 2884.10(b)(4). The
BLM removed the ``10 inches or larger in diameter'' criteria used for
determining large-scale pipeline projects from the final rule and as a
result, requirements that are specific to large-scale pipeline projects
are not carried forward in the final rule. This includes requirements
such as the pre-application meetings, application submission, POD and
other such requirements.
Section 2884.30 Showing of Good Cause
This section was not in the proposed rule. It is added here to
clarify that if you cannot meet one or more of the right-of-way process
requirements for a MLA application, then you may: (a) Show good cause
as to why you cannot meet a requirement; and (b) Suggest an alternative
requirement and explain why that requirement is appropriate. This
request must be in writing and received by the BLM before your deadline
to meet a requirement(s) has passed. This section is added to respond
to comments requesting a way to meet the intent of the regulation if an
applicant believes that a requirement(s) cannot be met. Additional
discussion can be found in section 2804.40 of this preamble.

Subpart 2885--Terms and Conditions of MLA Grants and TUPs

Section 2885.11 What terms and conditions must I comply with?
Section 2885.11 explains the terms and conditions of a grant.
Paragraph (a) of this section is revised by adding the phrase ``with
the initial year of the grant considered to be the first year of the

[[Page 92196]]

term.'' This revision clarifies what BLM considers to be the first year
of a grant. For example, a 30-year grant issued on September 1, 2015,
will expire on December 31, 2044, and have an effective term of 29
years and 4 months. This is consistent with law, policy, and
procedures. For all grants issued under parts 2800 and 2880 with terms
greater than 3 years, the actual term will include the number of full
years, including any partial year. The term for a MLA grant differs
from the term for rights-of-way authorized under FLPMA, as FLPMA
rights-of-way may be issued for periods greater than 30 years, while a
MLA right-of-way may be issued for a maximum period of 30 years. If a
30 year FLPMA grant is issued on a date other than the first of a
calendar year, that partial year will count as additional time of the
grant (see discussion of section 2805.11 earlier in this preamble
section).
A new sentence is added to the end of section 2885.11(b)(7)
referencing new section 2805.20 that explains the bonding requirements
for all rights-of-way. The introduction of this paragraph is revised
consistent with the introduction made to paragraph 2805.20(a) that has
the similar provision by which the BLM may require a bond. The
introduction of this paragraph now reads: ``The BLM may require that
you obtain,'' instead of ``If we require it. . . .'' This revision is
for consistency within the final rule and its regulations.
Comments: Several concerns were raised about bonding requirements.
One comment suggested that bonding should focus only on large scale
operations (e.g., use a 60 acre or greater criterion), that right-of-
way holders should be able to use liability insurance to satisfy
bonding requirements, and asked that the rule make it clear that the
new requirements would not affect existing operations.
Response: This final rule does not require bonding for any rights-
of-way, except for solar and wind energy developments. As previously
noted, the BLM has removed the criteria for large scale projects from
this final rule. The BLM will continue to determine whether a bond is
necessary and what the bond amount will be on a case-by-case basis.
In this final rule, the BLM accepts many bond instruments,
including insurance policies. Insurance policies would include those
that are issued for general liabilities of a company, individual, or
organization.
The bonding provisions in the final rule apply to the grants that
were issued before the effective date of this rule. The existing
regulations require that a holder obtain or certify that they have
obtained a bond or other acceptable security to cover any losses,
damages, or injury to human health, the environment, and property
incurred in connection with the use and occupancy of the right-of-way
or TUP area. The current regulations allow the BLM to adjust the bond
requirements for any right-of-way grant or lease when a situation
warrants it. These requirements in the existing rule are incorporated
in this final rule and will continue to apply to existing and future
grant holders.
Comments: Another comment suggested copying the bonding
requirements from part 2800 into part 2880, instead of referring to the
relevant requirements.
Response: The BLM intends to maintain the continuity of the
regulations, as they currently exist. Section 2885.11(b)(7) refers to
the terms and conditions in section 2805.12. This creates a consistent
use of the regulations for the public as well as the BLM in its
administration of the public lands. It is not necessary to duplicate
the subpart 2805 regulations in part 2880. No other comments were
received and no other changes made from the proposed rule to the final
rule.
Section 2885.15 How will BLM charge me rent?
Section 2885.15 discusses how the BLM will prorate and charge rent
for rights-of-way. Revisions to section 2885.15 clarify that there are
no reductions of rents for grants or TUPs, except as provided under
section 2885.20(b). Section 2885.20(b) is an existing provision under
which a grant holder can qualify for phased-in rent. This section is
revised to clarify existing requirements and add a cross-reference to
another section of these regulations. No comments were received and no
changes are made from the proposed rule to the final rule.
Section 2885.16 When do I pay rent?
Revisions to section 2885.16 clarify that the BLM prorates the
initial rental amount based on the number of full months left in the
calendar year after the effective date of the grant or TUP. If your
grant qualifies for annual payments, the initial rent bill consists of
the beginning partial year plus the next full year. For example, the
initial rent payment required for a 10-year grant issued on September 1
would be for 1 year and 3 months if the grant qualifies for annual
billing. The initial rental bill for the same grant would be for 9
years and 3months if the grant does not qualify for annual billing.
This is a new provision that parallels section 2806.24(c) and creates
consistency in how all rights-of-way are prorated. No comments were
received and no changes are made from the proposed rule to the final
rule.
Section 2885.17 What happens if I do not pay rents and fees or if I pay
the rents or fees late?
Section 2885.17(e) parallels section 2806.13(e), which identifies
when the BLM would retroactively bill for uncollected or under-
collected rent, late payments, and administrative fees. The BLM will
collect such rents if: (1) A clerical error is identified; (2) A rental
schedule adjustment is not applied; or (3) An omission or error in
complying with the terms and conditions of the authorized right-of-way
is identified.
Comment: One comment pointed out that the titles of sections
2806.13(e) and 2885.17(e) were not consistent and also questioned the
location of the new subject matter within these paragraphs.
Response: The BLM agrees with the comment that the titles of the
two paragraphs identified are not consistent, therefore we revised the
section heading to read as above. However, we did not revise the
placement of the subject matter within the final regulations. After
revisions to this section heading, the provisions for retroactive
billing and unpaid or under collected rents are appropriately placed in
this section. No other comments were received and no other changes made
from the proposed rule to the final rule.
Section 2885.19 What is the rent for a linear right-of-way grant?
Section 2885.19 is revised by updating the addresses in paragraph
(b). No comments were received and no changes are made from the
proposed rule to the final rule.
Section 2885.20 How will the BLM calculate my rent for linear rights-
of-way the Per Acre Rent Schedule covers?
Section 2885.20 is amended by removing paragraph (b)(1) that
discussed the phase-in of the Per Acre Rent Schedule and the 2009 per
acre rent, because this provision is no longer applicable. Paragraph
(b) now consists of the language formerly found at paragraph (b)(2). No
comments were received and no changes are made from the proposed rule
to the final rule.
Section 2885.24 If I hold a grant or TUP what monitoring fees must I
pay?
The changes in section 2885.24 parallel the changes made to other
sections of this rule that contained tables with outdated numbers.
Specific numbers are removed from the table.

[[Page 92197]]

However, the monitoring fee amounts are available to the public either
from BLM offices or on the BLM Web site. The rule adds the methodology
for adjusting these fees on an annual basis to paragraph (a) of this
section. Since this methodology has been added to paragraph (a), a
description of how the BLM updates the schedule has been removed from
paragraph (b) of this section.
Consistent with revisions made under section 2805.16, the BLM is
adding the words ``inspecting and'' to section 2885.24. This additional
language codifies current practice or policy. It will allow the BLM to
inspect and monitor the right-of-way to ensure a project's compliance
with the terms and conditions of an authorization. Under this
provision, if a project is out of compliance, the BLM could inspect the
project to ensure that the required actions are completed to the
satisfaction of the BLM, such as continued maintenance of the required
activity. No comments were received and no other changes are made from
the proposed rule to the final rule.

Subpart 2886--Operations on MLA Grants and TUPs

Section 2886.12 When must I contact BLM during operations?
Section 2886.12 describes when a right-of-way grant holder must
contact the BLM during operations. The changes in this section parallel
the changes made to section 2807.11. A grant holder is required to
contact the BLM when site-specific circumstances require changes to an
approved right-of-way grant, POD, site plan, or other procedures, even
when the changes are not substantial deviations in location or use.
These types of changes are considered to be grant or TUP modification
requests. Paragraph (e) is added to conform to similar provisions found
at section 2807.11(e), which requires you to contact the BLM if your
authorization requires submission of a certificate of construction. See
section 2807.11 for further discussion of these topics.
Comment: One comment stated that requiring grant holders to contact
the BLM prior to making non-substantial deviations in location or use,
including operational changes, project materials, and mitigation
measures, is overly burdensome.
Response: Unless a grant provides for non-substantial deviations, a
grant holder must contact the BLM and request approval of non-
substantial deviations for an authorization. Should a holder not
receive approval from the BLM, they could be found to be in
noncompliance with the terms and conditions of the grant. The
requirements of this section are required in order for the BLM to
review and approve a non-substantial deviation and to ensure that the
BLM is meeting its responsibilities under the MLA and any other
applicable authorities, including FLPMA. It is the BLM's responsibility
to determine if a deviation is substantial, not a grant holder's. No
other comments were received and nor changes are made from the proposed
rule to the final rule.

Subpart 2887--Amending, Assigning, or Renewing MLA Grants and TUPs

Section 2887.11 May I assign or make other changes to my grant or TUP?
The final rule revises section 2887.11 to parallel the revisions
made to section 2807.21, which describes assigning or making other
changes to a FLPMA grant or lease. We received comments to sections
2807.21 and 2887.11 that apply to both sections. Sections 2807.21 and
2887.11 are consistent with each other in formatting and content,
except where cross-references are made to their respective regulatory
provisions.
The section heading for section 2887.11 is changed to be consistent
with the section heading for section 2807.21 and the text in the final
section. The existing regulations do not cover all instances when an
assignment is necessary and also do not address situations when
assignments are not required. The revisions to this section are
necessary to: (1) Add and describe additional changes to a grant other
than assignments; (2) Clarify what changes require an assignment; and
(3) Make right-of-way grants or TUPs subject to the regulations in this
section.
Paragraph (a) is revised to include two events that may require the
filing of an assignment: (1) The transfer by the holder of any right or
interest in the right-of-way grant to a third party, e.g., a change in
ownership; and (2) A change in control transactions involving the
right-of-way grantee. See section 2807.21 of this preamble for further
discussion.
Revised paragraph (b) clarifies that a change in the holder's name
only does not require an assignment. It also clarifies that changes in
a holder's articles of incorporation do not trigger an assignment.
Revised paragraph (c) pertains to payments for assignments and adds
a requirement to pay application fees in addition to processing fees.
Also, the BLM may now condition a grant assignment on payment of
outstanding cost recovery fees to the BLM.
Added paragraph (g) clarifies that only interests in right-of-way
grants or TUPs are assignable. A pending right-of-way application is
not a property right or other interest that can be assigned. No
comments were received and no other changes made from the proposed rule
to the final rule.
Section 2887.12 How do I renew my grant?
Section 2887.12 adds paragraph (d), to be consistent with the
revisions made to section 2807.22, explaining that if a holder makes a
timely and sufficient application for renewal, the existing grant or
lease does not expire until BLM issues a decision on the application
for renewal. This provision is derived from the APA (5 U.S.C.
558(c)(1)), and it protects the interests of existing right-of-way
holders who have timely and sufficiently made an application for the
continued use of an existing authorization. In this situation, the
authorized activity does not expire until the application for continued
use has been evaluated and a decision on the extension is made by the
agency. This reiterates and clarifies existing policy and procedures.
Under section 2887.12(e), you may appeal the BLM's decision to deny
your application under section 2881.10. This paragraph parallels the
language under proposed section 2807.22(f), which is redesignated as
section 2807.22(g). No comments were received and no changes are made
from the proposed rule to the final rule.

VI. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563)

Executive Order 12866 provides that the Office of Information and
Regulatory Affairs (OIRA) will review all significant rules. OIRA has
determined that this rule is significant because it could raise novel
legal or policy issues.
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. This Executive Order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible and
consistent with regulatory objectives. Executive Order 13563 emphasizes
further that regulations must be based on the best available science
and that the rulemaking process

[[Page 92198]]

must allow for public participation and an open exchange of ideas. We
have developed this rule in a manner consistent with these
requirements.
This rule includes provisions intended to facilitate responsible
solar and wind energy development and to receive fair market value for
such development. These provisions are designed to:
1. Promote the use of preferred areas for solar and wind energy
development (i.e., DLAs); and
2. Establish competitive processes, terms, and conditions
(including rental and bonding requirements) for solar and wind energy
development rights-of-way both inside and outside of DLAs.
These provisions also will assist the BLM in: (a) Meeting goals
established in Section 211 of the EPAct of 2005, Secretarial Order
3285A1, and the President's Climate Action Plan; and (b) Implementing
recommendations from the GAO and OIG regarding renewable energy
development.
In addition to provisions that would affect renewable energy
specifically, this rule also includes some provisions that affect all
rights-of-way, and some that affect only transmission lines with a
capacity of 100 kV or more. These provisions clarify existing
regulations and codify existing policies.

Economic Impacts

The rule does not have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities. The BLM anticipates this rule will reduce
total costs to all applicants, lessees, and operators by up to
approximately 17.9 million per year. The change in rents and fees from
those currently set by policy primarily reflect changing market
conditions. Increases in the minimum bond amounts also reflect
increases in estimated reclamation costs. These impacts are discussed
in detail in the Economic and Threshold Analysis for the rule.

Other Agencies

This rule does not create a serious inconsistency or otherwise
interfere with another agency's actions or plans. The BLM is the only
agency that may promulgate regulations for rights-of-way on public
lands.

Budgetary Impacts

This rule does not materially alter the budgetary effects of
entitlements, grants, user fees, loan programs, or the rights or
obligations of their recipients.

Novel Legal or Policy Issues

This rule may raise novel legal or policy issues. It codifies
existing BLM policies and provides additional detail about submitting
applications for solar or wind energy development grants, and for
transmission lines with a capacity of 100 kV or more. In addition, the
rule provides for a competitive process for those entities seeking
solar and wind energy development leases inside of DLAs.

National Environmental Policy Act (NEPA)

These regulatory amendments are of an administrative or procedural
nature and thus are eligible to be categorically excluded from the
requirement to prepare an environmental assessment (EA) or EIS. See 43
CFR 46.205 and 46.210(i). They do not present any of the extraordinary
circumstances listed at 43 CFR 46.215.
Nonetheless, the BLM prepared an EA and Finding of No Significant
Impact (FONSI) analyzing the final rule to inform agency decision-
makers and the public. The EA/FONSI incorporates by reference the Final
Solar Energy Development Programmatic Environmental Impact Statement
(July 2012) and the Final Programmatic Environmental Impact Statement
on Wind Energy Development on BLM-Administered Lands in the Western
United States (June 2005). The EA concludes that this rule does not
constitute a major Federal action significantly affecting the quality
of the human environment under Section 102(2)(C) of NEPA (42 U.S.C.
4332(2)(C)). A detailed statement under NEPA is not required. To obtain
single copies of the Programmatic EISs or the EA/FONSI, you may contact
the person listed under the section of this rule titled, FOR FURTHER
INFORMATION CONTACT. You may also view the EA/FONSI and Programmatic
Environmental Impact Statements at, respectively, https://windeis.anl.gov/, https://solareis.anl.gov/, and https://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.

Regulatory Flexibility Act

Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not
unnecessarily or disproportionately burden small entities. The RFA
requires a regulatory flexibility analysis if a rule would have a
significant economic impact, either detrimental or beneficial, on a
substantial number of small entities. For the purposes of this
analysis, the BLM assumes that all entities (all grant holders,
lessees, and applicants for rights-of-way for solar or wind energy
projects, pipelines, or transmission lines with a capacity of 100 kV or
more) that may be affected by this rule are small entities, even though
that is not actually the case.
This rule does not have a significant economic effect on a
substantial number of small entities under the RFA.
The rule does affect new applicants or bidders for authorizations
of solar or wind energy development and transmission lines with a
capacity of 100 kV or more. The BLM reviewed current holders of such
authorizations to determine whether they are small businesses as
defined by the SBA. The BLM was unable to find financial reports or
other information for all potentially affected entities, so this
analysis assumes that the rule could potentially affect a substantial
number of small entities.
To determine the extent to which this rule will impact these small
entities, we took two approaches. First, we attempted to measure the
direct costs of the rule as a portion of the net incomes of affected
small entities. However, we were unable to obtain the financial records
for a representative sample. Next, we estimated the direct costs of the
rule as a portion of the total costs of a project.
The analysis showed that a range of potential impacts on the total
cost of a project varied from a savings of 0.08 percent to a cost of
1.45 percent of the total project cost. The BLM determined that this
was an insignificant impact in the context of developing a project and,
therefore, not a significant economic impact on a substantial number of
small businesses. For a more detailed discussion, please see the
economic analysis.

Small Business Regulatory Enforcement Fairness Act

For the same reasons as discussed under the Executive Order 12866,
Regulatory Planning and Review section of this preamble, this rule is
not a ``major rule'' as defined at 5 U.S.C. 804(2). That is, it would
not have an annual effect on the economy of $100 million or more; it
would not result in major cost or price increases for consumers,
industries, government agencies, or regions; and it would not have
significant adverse effects on competition, employment, investment,
productivity, innovation, or the ability of U.S.-based enterprises to
compete with foreign-based enterprises.

[[Page 92199]]

Unfunded Mandates Reform Act

This rule does not impose an unfunded mandate on State, local, or
tribal governments, or on the private sector of $100 million or more
per year; nor would it have a significant or unique effect on State,
local, or tribal governments. This rule amends portions of the
regulations found at 43 CFR parts 2800 and 2880, redesignates existing
43 CFR part 2809 in its entirety to a new paragraph found at
2801.6(a)(2), adds new 43 CFR part 2809, and modifies the MLA pipeline
regulations in 43 CFR part 2880, but does not result in any unfunded
mandates. Therefore, the BLM does not need to prepare a statement
containing the information required by Sections 202 or 205 of the
Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531 et seq. The rule is
also not subject to the requirements of Section 203 of UMRA because it
contains no regulatory requirements that might uniquely affect small
governments, nor does it contain requirements that either apply to such
governments or impose obligations upon them.

Executive Order 12630, Governmental Actions and Interference With
Constitutionally Protected Property Rights (Takings)

This rule is not a government action that interferes with
constitutionally protected property rights. This rule sets out
competitive processes for solar and wind energy development and revises
some requirements for pipelines and electric transmission facilities on
BLM-managed public lands. It establishes rent and fee schedules for
various components of the development of such facilities inside DLAs
that are conducive to competitive right-of-way leasing and clarifies a
process that would rely on the BLM's existing land use planning system
to allow for these types of uses. Because any land use authorizations
and resulting development of facilities under this rule are subject to
valid existing rights, it does not interfere with constitutionally
protected property rights. Therefore, the Department determined that
this rule does not have significant takings implications and does not
require further discussion of takings implications under this Executive
Order.

Executive Order 13132, Federalism

The BLM determined that this rule does not have a substantial
direct effect on the States, or the relationship between the national
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. It does not
apply to State or local governments or State or local government
entities. Therefore, in accordance with Executive Order 13132, the BLM
determined that this rule does not have sufficient Federalism
implications to warrant preparation of a Federalism Assessment.

Executive Order 12988, Civil Justice Reform

Under Executive Order 12988, the Department determined that this
rule does not unduly burden the judicial system and that it meets the
requirements of sections 3(a) and 3(b)(2) of the Order. The
Department's Office of the Solicitor has reviewed this rule to
eliminate drafting errors and ambiguity. It has been written to
minimize litigation, provide clear legal standards for affected conduct
rather than general standards, promote simplification, and avoid
unnecessary burdens.

Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments

In accordance with Executive Order 13175, the BLM found that this
rule does not have significant tribal implications. Additionally,
because the rulemaking itself is administrative in nature and does not
establish any DLAs or approve any specific projects, the BLM has
determined that it does not require tribal consultation.
Moreover, in the future when additional DLAs are established or
projects are approved, the rule calls for further tribal consultation
by the BLM and right-of-way applicants. Specifically, DLAs will be
identified through the BLM's land use planning process. Tribal
consultation is an important component of that process and will be
undertaken when DLAs are identified. In addition to the preliminary
review covered in the planning process, existing BLM regulations
require site-specific analysis for specific projects. As part of that
site-specific analysis, right-of-way applicants must consult with
affected tribes to discuss the proposed action and other aspects of the
proposed project. For example, site-specific requirements for
applications for a grant issued under subpart 2804 include application
review, public meetings, and tribal consultation. The BLM would be able
to deny an application after these meetings based on a variety of
criteria, including tribal concerns.

Data Quality Act

In promulgating this rule, the BLM did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Section 515 of Public Law 106-554). In accordance with the Data
Quality Act, the Department has issued guidance regarding the quality
of information that it relies upon for regulatory decisions. This
guidance is available at the Department's Web site at: https://www.doi.gov/archive/ocio/iq.html.

Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

Executive Order 13211 requires Federal agencies to prepare and
submit to OMB a Statement of Energy Effects for any proposed
significant energy action. A ``significant energy action'' is defined
as any action by an agency that: (1) Is a significant regulatory action
under Executive Order 12866, or any successor order; (2) Is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) Is designated by the Administrator of OIRA as a
significant energy action.
This rule could raise novel legal or policy issues within the
meaning of Executive Order 12866 or any successor order. However, the
BLM believes this rule is unlikely to have a significant adverse effect
on the supply, distribution, or use of energy, and may in fact have a
positive impact on energy supply, distribution, or use. In fact, its
intent is to facilitate such development. The rule codifies BLM
policies and provides additional detail about the process for
submitting applications for solar or wind energy development grants
issued under subpart 2804, or for solar or wind energy development
leases issued under subpart 2809.

Executive Order 13352, Facilitation of Cooperative Conservation

In accordance with Executive Order 13352, the BLM determined that
this rule will not impede the facilitation of cooperative conservation.
The rule takes appropriate account of and respects the interests of
persons with ownership or other legally recognized interests in land or
other natural resources; properly accommodates local participation in
the Federal decision-making process; and provides that the programs,
projects, and activities are consistent with protecting public health
and safety.

Paperwork Reduction Act

The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides
that an agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information, unless it displays a
currently valid OMB control number. Collections of information include
requests and requirements that

[[Page 92200]]

an individual, partnership, or corporation obtain information, and
report it to a Federal agency. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c)
and (k).
This rule contains information collection activities that require
approval by the OMB under the Paperwork Reduction Act. The BLM included
an information collection request in the proposed rule. OMB has
approved the information collection for the final rule under control
number 1004-0206.
Some of the information collection activities in the final rule
require the use of Standard Form 299 (SF-299), Application for
Transportation and Utility Systems and Facilities on Federal Lands. SF-
299 is approved for use by the BLM and other Federal agencies under
control number 0596-0082. The U.S. Forest Service administers control
number 0596-0082. The OMB has approved the information collection
activities in this final rule under control number 1004-0206.
The information collection activities in this rule are described
below along with estimates of the annual burdens. Included in the
burden estimates are the time for reviewing instruction, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing each component of the proposed information
collection.
The following features of the final rule pertain to more than one
information collection activity.
Designated leasing areas: As defined in an amendment to 43 CFR
2801.5, a designated leasing area is a parcel of land identified in a
BLM land use plan as a preferred location for solar or wind energy
development. Regulations at 43 CFR subpart 2809 provide for the
issuance of solar or wind right-of-way development ``leases'' inside a
designated leasing area. Regulations at subpart 2804 provide for right-
of-way development ``grants'' for solar or wind energy projects outside
of any designated leasing area. Regulations at subpart 2804 also
provide for testing grants for solar or wind energy inside or outside
designated leasing areas.
Competitive process for solar or wind energy outside any designated
leasing area: Section 2804.30 provides that the BLM may invite bids for
land outside any designated leasing area for solar or wind energy
testing and development. Section 2804.30(g) allows only one applicant
(i.e., a ``preferred applicant'') to apply for a right-of-way grant for
solar or wind energy testing or development outside any designated
leasing area. The preferred applicant is the successful bidder in the
competitive process outlined in subpart 2804.
Competitive process for solar or wind energy inside a designated
leasing area: Subpart 2809 outlines a competitive process for land
inside a designated leasing area, which provides for a parcel
nomination and competitive offer instead of an application process.
Application filing fees: Section 2804.12(c)(2) requires an
``application filing fee'' as follows:
(1) $15 per acre for applications for solar or wind energy
development outside any designated leasing area; and
(2) $2 per acre for applications for energy project-area testing
inside or outside designated leasing areas.
As defined in an amendment to section 2801.5, an application filing
fee is specific to solar and wind energy right-of-way applications.
Section 2804.30(e)(4) provides that the BLM will refund the fee, except
for the reasonable costs incurred on behalf of the applicant, if the
applicant is not a successful bidder under subpart 2804 or subpart
2809. The proposed rule would have required an application filing fee
for energy site-specific testing grants. On consideration of comments
questioning whether site-specific testing should be subject to an
application filing fee, the BLM has removed that requirement from the
final rule. The $2 per acre filing fee applies to applications for
energy project-area testing, but not to energy site-specific testing.
Applications: Section 2804.12(b) refers to applications in the
context of large-scale projects. In the BLM's experience, most
applications and plans of development for large-scale projects evolve
from several iterations of the first application that is submitted.
Some requirements in the final rule (for example, application filing
fees) apply to the first time an application is submitted but not to
subsequent submissions of an application for the same project.
The information collection activities in the final rule are
discussed below.
Application for a Solar or Wind Energy Development Project Outside Any
Designated Leasing Area (43 CFR 2804.12 and 2804.30(g)); and
Application for an Electric Transmission Line with a Capacity of 100 kV
or More (43 CFR 2804.12)
New requirements at section 2804.12(b) apply to the following types
of applications:
Solar and wind energy development grants outside any
designated leasing area; and
Electric transmission lines with a capacity of 100 kV or
more.
In addition to these categories of applications, the proposed rule
would have made these new requirements applicable to applications for
pipelines 10 inches or greater. The rationale was that these
applications, as well as the other 2 types of applications, were for
large-scale operations that warrant their own procedures. Some comments
questioned the BLM's description of pipelines 10 inches or greater in
diameter as a measure for large-scale pipeline projects, and suggested
that the scale of pipeline projects is better measured by acreage than
pipeline diameter. The BLM agrees. Rights-of-way for pipelines 10
inches or greater in diameter are not subject to section 2804.12 of the
final rule.
Section 2804.12(b) includes the following requirements for
applications for a solar or wind energy development project outside a
designated leasing area, and to applications for a transmission line
project with a capacity of 100 kV or more:
A discussion of all known potential resource conflicts
with sensitive resources and values, including special designations or
protections; and
Applicant-proposed measures to avoid, minimize, and
compensate for such resource conflicts, if any.
Section 2804.12(b) also requires applicants to initiate early
discussions with any grazing permittees that may be affected by the
proposed project. This requirement stems from FLPMA Section 402(g) (43
U.S.C. 1752(g)) and a BLM grazing regulation (43 CFR 4110.4-2(b)) that
require 2 years' prior notice to grazing permittees and lessees before
cancellation of their grazing privileges.
In addition to the information listed at 43 CFR 2804.12(b), an
application for a solar or wind project, or for a transmission line of
at least 100 kV, must include the information listed at 43 CFR
2804.12(a)(1) through (7). These provisions are not amended in the
final rule. The requirements at section 2804.12(e) (formerly section
2804.12(b)) apply to applicants that are business entities. These
requirements are not amended substantively in the final rule. The
burdens for all of these regulations are already included in the
burdens associated with the BLM for SF-299 and control number 0596-
0082, and therefore are not included in the burdens for the final rule.
Applications for solar or wind energy development outside any
designated leasing area, but not applications for large-scale
transmission lines, are subject to a requirement (at 43 CFR
2804.12(c)(2)) to submit an ``application

[[Page 92201]]

filing fee'' of $15 per acre. As defined in an amendment to section
2801.5, an application filing fee is specific to solar and wind energy
right-of-way applications. Section 2804.30(e)(4) provides that the BLM
will refund the fee, except for the reasonable costs incurred on behalf
of the applicant, if the applicant is not a successful bidder in the
competitive process outlined in subpart 2804.
General Description of a Proposed Project and Schedule for Submittal of
a POD (2804.12(b)(1) and (2))
Paragraph 2804.12(b)(1) and (2) require applicants for a solar or
wind development project outside a designated leasing area to submit
the following information, using Form SF-299:
A general description of the proposed project and a
schedule for the submission of a POD conforming to the POD template at
https://www.blm.gov;
A discussion of all known potential resource conflicts
with sensitive resources and values, including special designations or
protections; and
Proposals to avoid, minimize, and compensate for such
resource conflicts, if any.
Preliminary Application Review Meetings for a Large-Scale Right-of-Way
(43 CFR 2804.12 (b)(4))
The proposed rule would have required pre-application meetings for
each large-scale project (defined in the proposed rule as an
application for a solar or wind energy development project outside a
designated leasing area, a transmission line project with a capacity of
100 kV or more, or a pipeline 10 inches or more in diameter). Several
comments suggested that the BLM lacks authority to impose requirements
on a developer before submission of an application without an
application being submitted to the BLM.
The BLM agrees with these comments and has revised the proposed
rule. Instead of pre-application meetings, the final rule requires
``preliminary application review meetings'' that will be held after an
application for a large-scale right-of-way has been filed with the BLM.
As discussed above, the BLM also has decided to remove 10-inch
pipelines from the final rule, in response to comments questioning the
characterization of pipelines 10 inches or greater in diameter as
large-scale projects.
Within 6 months from the time the BLM receives the cost recovery
fee for an application for a large-scale project (i.e., for solar or
wind energy development outside a designated leasing area or for a
transmission line with a capacity of 100 kV or more), the applicant
must schedule and hold at least two preliminary application review
meetings.
In the first meeting, the BLM will collect information from the
applicant to supplement the application on subjects such as the general
project proposal. The BLM will also discuss with the applicant subjects
such as the status of BLM land use planning for the lands involved,
potential siting issues or concerns, potential environmental issues or
concerns, potential alternative site locations, and the right-of-way
application process.
In the second meeting, the applicant and the BLM will meet with
appropriate Federal and State agencies and tribal and local governments
to facilitate coordination of potential environmental and siting issues
and concerns.
The applicant and the BLM may agree to hold additional preliminary
application review meetings.
Application for an Energy Site-Specific Testing Grant (43 CFR 2804.30,
2805.11(b)(2)(i), and 2809.19(c));
Application for an Energy Project-Area Testing Grant (43 CFR 2804.30,
2805.11(b)(2)(ii), and 2809.19(c)); and
Application for a Short-Term Grant (43 CFR 2805.11(b)(2)(iii))
Section 2804.30(g) authorizes only one applicant (i.e., a
``preferred applicant'') to apply for an energy project-area testing
grant or an energy site-specific testing grant for land outside any
designated leasing area. Section 2809.19(c) authorizes only one
applicant (i.e., the successful bidder in the competitive process
outlined at 43 CFR subpart 2809) to apply for an energy project-area
testing grant or an energy site-specific testing grant for land inside
a designated leasing area. Section 2805.11(b) authorizes applications
for short-term grants for other purposes (such as geotechnical testing
and temporary land-disturbing activities) either inside or outside a
designated leasing area.
Each of these grants is for 3 years or less. All of these
applications must be submitted on an SF-299. Applications for project-
area grants (but not site-specific grants) are subject to a $2 per-acre
application filing fee in accordance with section 2804.12(c)(2).
Applicants for short-term grants for other purposes (such as
geotechnical testing and temporary land-disturbing activities) are
subject to a processing fee in accordance with section 2804.14.
The proposed rule would have limited testing grants to wind energy.
Some comments suggested that these authorizations should be made
available for solar energy. The BLM has adopted this suggestion in the
final rule.
Showing of Good Cause (43 CFR 2805.12(c)(6))
Any authorization for a solar and wind energy right-of-way requires
due diligence in development. In accordance with section 2805.12(c)(6),
the BLM will notify the holder before suspending or terminating a
right-of-way for lack of due diligence. This notice will provide the
holder with a reasonable opportunity to correct any noncompliance or to
start or resume use of the right-of-way. A showing of good cause will
be required in response. That showing must include:
Reasonable justification for any delays in construction
(for example, delays in equipment delivery, legal challenges, and acts
of God);
The anticipated date for the completion of construction
and evidence of progress toward the start or resumption of
construction; and
A request for extension of the timelines in the approved
POD.
The BLM will use the information to determine whether or not to
suspend or terminate the right-of-way for failure to comply with due
diligence requirements.
Reclamation Cost Estimate for Lands Outside Any Designated Leasing Area
(43 CFR 2805.20(a)(3) and (5))
New section 2805.20(a)(3) provides that the bond amount for
projects other than a solar or wind energy lease under subpart 2809
(i.e., inside a designated leasing area) will be determined based on
the preparation of a reclamation cost estimate that includes the cost
to the BLM to administer a reclamation contract and review it
periodically for adequacy.
New section 2805.20(a)(5) provides that reclamation cost estimate
must include at minimum:
Remediation of environmental liabilities such as use of
hazardous materials waste and hazardous substances, herbicide use, the
use of petroleum-based fluids, and dust control or soil stabilization
materials;
The decommissioning, removal, and proper disposal, as
appropriate, of any improvements and facilities; and
Interim and final reclamation, re-vegetation,
recontouring, and soil stabilization. This component must address the
potential for flood events and downstream sedimentation from the site
that may result in offsite impacts.

[[Page 92202]]

Request To Assign a Solar or Wind Energy Development Right-of-Way (43
CFR 2807.21)
Section 2807.21, as amended, provides for assignment, in whole or
in part, of any right or interest in a grant or lease for a solar or
wind development right-of-way. Actions that may require an assignment
include the transfer by the holder (assignor) of any right or interest
in the grant or lease to a third party (assignee) or any change in
control transaction involving the grant holder or lease holder,
including corporate mergers or acquisitions.
The proposed assignee must file an assignment application, using
SF-299, and pay application and processing fees. No preliminary
application review meetings and or public meetings are required.
The assignment application must include:
Documentation that the assignor agrees to the assignment;
and
A signed statement that the proposed assignee agrees to
comply with and be bound by the terms and conditions of the grant that
is being assigned and all applicable laws and regulations.
Application for Renewal of an Energy Project-Area Testing Grant or
Short-Term Grant (43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22)
Section 2805.11(b)(2), as amended, provides that holders of some
types of grants may seek renewal of those grants. For an energy site-
specific testing grant, the term is 3 years or less, without the option
of renewal. However, for an energy project-area testing grant, the
initial term is 3 years or less, with the option to renew for one
additional 3-year period when the renewal application is also
accompanied by a solar or wind energy development application and a
POD. For short-term grants, such as for geotechnical testing and
temporary land-disturbing activities, the term is 3 years or less with
an option for renewal.
Applications for renewal of testing grants (except site-specific
testing grants) may be filed, using SF-299, under sections 2805.14(h)
and 2807.22. Processing fees in accordance with section 2804.14, as
amended, apply to these renewal applications.
Section 2807.22 provides that an application for renewal of any
right-of-way grant or lease must be submitted at least 120 calendar
days before the grant or lease expires. The application must show that
the grantee or lessee is in compliance with the renewal terms and
conditions (if any), with the other terms, conditions, and stipulations
of the grant or lease, and with other applicable laws and regulations.
The application also must explain why a renewal of the grant or lease
is necessary.
Environmental, Technical, and Financial Records, Reports, and Other
Information (43 CFR 2805.12(a)(15))
Section 2805.12(a)(15) authorizes the BLM to require a holder of
any type of right-of-way to provide, or give the BLM access to, any
pertinent environmental, technical, and financial records, reports, and
other information. The use of SF-299 is required. The BLM will use the
information for monitoring and inspection activities.
Application for Renewal of a Solar or Wind Energy Development Grant or
Lease (43 CFR 2805.14(g) and 2807.22)
Amendments to sections 2805.14 and 2807.22 authorize holders of
leases and grants to apply for renewal of their rights-of-way. A
renewal requires submission of the same information, on SF-299, that is
necessary for a new application. Processing fees, in accordance with 43
CFR 2804.14, as amended, will apply to these renewal applications. The
BLM will use the information submitted by the applicant to decide
whether or not to renew the right-of-way.
Request for an Amendment or Name Change, Amendment, or Assignment
(FLPMA) (43 CFR 2807.11(b) and (d)) and 2807.21)
New section 2807.11(b) requires a holder of any type of right-of-
way grant to contact the BLM, seek an amendment to the grant under
section 2807.20 (a regulation that is not amended in this final rule),
and obtain the BLM's approval before beginning any activity that is a
``substantial deviation'' from what is authorized.
New section 2807.11(d) requires contact with the BLM, a request for
an amendment to the pertinent right-of-way grant or lease, and prior
approval whenever site-specific circumstances or conditions result in
the need for changes to an approved right-of-way grant or lease, plan
of development, site plan, mitigation measures, or construction,
operation, or termination procedures that are not ``substantial
deviations.''
New section 2807.21 authorizes assignment of a grant or leased with
the BLM's approval. It also authorizes the BLM to require a grant or
lease holder to file new or revised information in circumstances that
include, but are not limited to:
Transactions within the same corporate family;
Changes in the holder's name only; and
Changes in the holder's articles of incorporation.
A request for an amendment of a right-of-way, using SF-299, is
required in cases of a substantial deviation (for example, a change in
the boundaries of the right-of-way, major improvements not previously
approved by the BLM, or a change in the use of the right-of-way). Other
changes, such as changes in project materials, or changes in mitigation
measures within the existing, approved right-of-way area, must be
submitted to the BLM for review and approval. In order to assign a
grant, the proposed assignee must file an assignment application and
follow the same procedures and standards as for a new grant or lease,
as well as pay application and processing fees. In order to request a
name change, the holder will be required to file an application and
follow the same procedures and standards as for a new grant or lease
and pay processing fees, but no application fee is required. The
following documents are also required in the case of a name change:
A copy of the court order or legal document effectuating
the name change of an individual; or
If the name change is for a corporation, a copy of the
corporate resolution proposing and approving the name change, a copy of
a document showing acceptance of the name change by the State in which
incorporated, and a copy of the appropriate resolution, order, or other
document showing the name change.
In all these cases, the BLM will use the information to monitor and
inspect rights-of-way, and to maintain current data.
Nomination of a Parcel of Land Inside a Designated Leasing Area (43 CFR
2809.10 and 2809.11)
Sections 2809.10 and 2809.11 authorize the BLM to offer land
competitively inside a designated leasing area for solar or wind energy
development on its own initiative. These regulations also authorize the
BLM to solicit nominations for such development. In order to nominate a
parcel under this process, the nominator must be qualified to hold a
right-of-way under 43 CFR 2803.10. After publication of a notice by the
BLM, anyone meeting the qualifications may submit a nomination for a
specific parcel of land to be developed for solar or wind energy. There
is a fee of $5 per acre for

[[Page 92203]]

each nomination. The following information is required:
The nominator's name and personal or business address;
The legal land description; and
A map of the nominated lands.
The BLM will use the information to communicate with the nominator
and to determine whether or not to proceed with a competitive offer.
Expression of Interest in Parcel of Land Inside a Designated Leasing
Area (43 CFR 2809.11(c))
Section 2809.11(c) authorizes the BLM to consider informal
expressions of interest suggesting specific lands inside a designated
leasing area to be included in a competitive offer. The expression of
interest must include a description of the suggested lands and a
rationale for their inclusion in a competitive offer. The information
will assist the BLM in determining whether or not to proceed with a
competitive offer.
Plan of Development for a Solar or Wind Energy Development Lease Inside
a Designated Leasing Area (43 CFR 2809.18)
Section 2809.18(c) requires the holder of a solar or wind energy
development lease for land inside a designated leasing area to submit a
plan of development, using SF-299, within 2 years of the lease issuance
date. The plan must address all pre-development and development
activities. This collection activity is necessary to ensure diligent
development.
This new provision will be a new use of Item #7 of SF-299, which
calls for the following information:

Project description (describe in detail): (a) Type of system or
facility (e.g., canal, pipeline, road); (b) related structures and
facilities; (c) physical specifications (length, width, grading,
etc.); (d) term of years needed; (e) time of year of use or
operation; (f) volume or amount of product to be transported; (g)
duration and timing of construction; and (h) temporary work areas
needed for construction.

This collection has been justified and authorized under control
number 0596-0082. In addition, section 2809.18(c) provides that the
minimum requirements for either a ``Wind Energy Plan of Development''
or ``Solar Energy Plan of Development'' can be found at a link to a
template at www.blm.gov. To some extent, that template duplicates the
information required by Item #7 of SF-299. The following requirements
do not duplicate the elements listed in SF-299:
Financial Operations and maintenance. This information
will assist the BLM in verifying the right-of-way holder's compliance
with terms and conditions regarding all aspects of operations and
maintenance, including road maintenance and workplace safety;
Environmental considerations. This information will assist
the BLM in monitoring compliance with terms and conditions regarding
mitigation measures and site-specific issues such as protection of
sensitive species and avoidance of conflicts with recreation uses of
nearby lands;
Maps and drawings. This information will assist the BLM in
monitoring compliance with all terms and conditions; and
Supplementary information. This information, which will be
required after submission of the holder's initial POD, will assist the
BLM in reviewing possible alternative designs and mitigation measures
for a final POD.
Section 2809.18(d) requires the holder of a solar or wind energy
development lease for land inside a designated leasing area to pay
reasonable costs for the BLM or other Federal agencies to review and
approve the plan of development and to monitor the lease. To expedite
review and monitoring, the holder may notify BLM in writing of an
intention to pay the full actual costs incurred by the BLM.
Request for an Amendment, Assignment, or Name Change (MLA) (43 CFR
2886.12(b) and (d) and 2887.11)
Sections 2886.12 and 2887.11 pertain to holders of rights-of-way
and temporary use permits authorized under the Mineral Leasing Act
(MLA). A temporary use permit authorizes a holder of a MLA right-of-way
to use land temporarily in order to construct, operate, maintain, or
terminate a pipeline, or for purposes of environmental protection or
public safety. See 43 CFR 2881.12. The regulations require these
holders to contact the BLM:
Before engaging in any activity that is a ``substantial
deviation'' from what is authorized;
Whenever site-specific circumstances or conditions arise
that result in the need for changes that are not substantial
deviations;
When the holder submits a certification of construction;
Before assigning, in whole or in part, any right or
interest in a grant or lease;
Before any change in control transaction involving the
grant- or lease- holder; and
Before changing the name of a holder (i.e., when the name
change is not the result of an underlying change in control of the
right-of-way).
A request for an amendment of a right-of-way or temporary use
permit is required in cases of a substantial deviation (e.g., a change
in the boundaries of the right-of-way, major improvements not
previously approved by the BLM, or a change in the use of the right-of-
way). Other changes, such as changes in project materials, or changes
in mitigation measures within the existing, approved right-of-way area,
are required to be submitted to the BLM for review and approval. In
order to assign a grant, the proposed assignee must file an assignment
application and follow the same procedures and standards as for a new
grant or lease, as well as pay processing fees. In order to request a
name change, the holder will be required to file an application and
follow the same procedures and standards as for a new grant or lease
and pay processing fees, but no application fee is required. The
following documents are also required in the case of a name change:
A copy of the court order or legal document effectuating
the name change of an individual; or
If the name change is for a corporation, a copy of the
corporate resolution proposing and approving the name change, a copy of
a document showing acceptance of the name change by the State in which
incorporated, and a copy of the appropriate resolution, order, or other
document showing the name change.
The use of SF-299 is required. In all these cases, the BLM will use
the information for monitoring and inspection purposes, and to maintain
current data on rights-of-way.
Certification of Construction (43 CFR 2886.12(f))
A certification of construction is a document a holder of an MLA
right-of-way must submit, using SF-299, to the BLM after finishing
construction of a facility, but before operations begin. The BLM will
use the information to verify that the holder has constructed and
tested the facility to ensure that it complies with the terms of the
right-of-way and is in accordance with applicable Federal and State
laws and regulations.
Estimated Hour Burdens
The estimated hour burdens of the proposed supplemental collection
requirements are shown in the following table.

[[Page 92204]]

Information Collection Requirements: Estimated Annual Hour Burdens
----------------------------------------------------------------------------------------------------------------
Total hours
Type of response Number of Hours per (column B x
responses response column C)
A. B. C. D.
----------------------------------------------------------------------------------------------------------------
Application for a Solar or Wind Energy Development Project 10 8 80
Outside Any Designated Leasing Area............................
43 CFR 2804.12 and 2804.30(g)...................................
Form SF-299.....................................................
Application for an Electric Transmission Line with a Capacity of 10 8 80
100 kV or More.................................................
43 CFR 2804.12..................................................
Form SF-299.....................................................
General Description of a Proposed Project and Schedule for 20 2 40
Submittal of a Plan of Development.............................
43 CFR 2804.12(b)(1) and (2)....................................
Form SF-299.....................................................
Preliminary Application Review Meetings for a Large-Scale Right- 20 2 40
of-Way.........................................................
43 CFR 2804.12(b)(4)............................................
Application for an Energy Site-Specific Testing Grant........... 20 8 160
43 CFR 2804.30, 2805.11(b)(2)(i), and 2809.19(c)................
Form SF-299.....................................................
Application for an Energy Project-Area Testing Grant............ 20 8 160
43 CFR 2804.30, 2805.11(b)(2)(ii), and 2809.19(c)...............
Form SF-299.....................................................
Application for a Short-Term Grant.............................. 1 8 8
43 CFR 2805.11(b)(2)(iii).......................................
Form SF-299.....................................................
Showing of good cause........................................... 1 2 2
43 CFR 2805.12(c)(6)............................................
Reclamation Cost Estimate for Lands Outside Any Designated 1 10 10
Leasing Area...................................................
43 CFR 2805.20(a)(3) and (a)(5).................................
Request to Assign a Solar or Wind Energy Development Right-of- 11 8 88
Way............................................................
43 CFR 2807.21..................................................
Form SF-299.....................................................
Application for Renewal of an Energy Project-Area Testing Grant 6 6 36
or Short-Term Grant............................................
43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22...................
Form SF-299.....................................................
Environmental, Technical, and Financial Records, Reports, and 20 4 80
Other Information..............................................
43 CFR 2805.12(a)(15)...........................................
Form SF-299.....................................................
Application for Renewal of a Solar or Wind Energy Development 1 12 12
Grant or Lease.................................................
43 CFR 2805.14(g) and 2807.22...................................
Form SF-299.....................................................
Request for an Amendment or Name Change (FLPMA)................. 30 16 480
43 CFR 2807.11(b) and (d) and 2807.21...........................
Form SF-299.....................................................
Nomination of a Parcel of Land Inside a Designated Leasing Area. 1 4 4
43 CFR 2809.10 and 2809.11......................................
Expression of Interest in a Parcel of Land Inside a Designated 1 4 4
Leasing Area...................................................
43 CFR 2809.11(c)...............................................
Plan of Development for a Solar or Wind Energy Development Lease 2 8 16
Inside a Designated Leasing Area...............................
43 CFR 2809.18(c)...............................................
Form SF-299.....................................................
Request for an Amendment, Assignment, or Name Change (MLA)...... 2,862 16 45,792
43 CFR 2886.12(b) and (d) and 2887.11...........................
Form SF-299.....................................................
Certification of Construction................................... 5 4 20
43 CFR 2886.12(f)...............................................
Form SF-299.....................................................
-----------------------------------------------
Totals...................................................... 3,042 130 47,112
----------------------------------------------------------------------------------------------------------------

Estimated Non-Hour Burdens
The non-hour burdens of this final rule consist of fees authorized
by Sections 304 and 504(g) of FLPMA (43 U.S.C. 1734 and 1764(g)).
Section 1734 authorizes the Secretary of the Interior to establish
reasonable filing and service fees and reasonable charges with respect
to applications and other documents relating to the public lands.
Section 504(g) authorizes the Secretary to promulgate regulations that
require, as a condition of a right-of-way, that an applicant for or
holder of a right-of-way reimburse the United States for all reasonable
administrative and other costs incurred with respect to right-of-way
applications and with respect to inspection and monitoring of
construction, operation, and termination

[[Page 92205]]

of a facility pursuant to such right-of-way.
The fees (i.e., non-hour burdens) are itemized in the following
table.

Information Collection Requirements--Estimated Annual Non-Hour Burdens
----------------------------------------------------------------------------------------------------------------
Total amount
Number of Amount of fee per of fees
Type of response Regulatory authority for fee responses response (column C x
column D)
A. B........................... C. D................ E.
----------------------------------------------------------------------------------------------------------------
Application for a Solar or Wind 43 CFR 2804.12(c)(2)........ 10 $15 per acre x $900,000
Energy Development Project average of 6,000
Outside Any Designated Leasing acres per
Area. application =
43 CFR 2804.12 and 2804.30(g).. $90,000.
Form SF-299....................
Application for an Electric 43 CFR 2804.14.............. 10 $1,156 \1\....... 11,560
Transmission Line with a
Capacity of 100 kV or More.
43 CFR 2804.12.................
Form SF-299....................
Application for an Energy 43 CFR 2804.12(c)(2)........ 20 $2 per acre x 240,000
Project-Area Testing Grant. average of 6,000
43 CFR 2804.30, acres per
2805.11(b)(2)(ii), and application =
2809.19(c). $12,000.
Form SF-299....................
Application for a Short-Term 43 CFR 2804.14.............. 1 $1,156 \2\....... 1,156
Grant.
43 CFR 2805.11(b)(2)(iii)......
Form SF-299....................
Request to Assign a Solar or 43 CFR 2804.14.............. 11 $15 per acre x 990,000
Wind Energy Development Right- average of 6,000
of-Way. acres per
43 CFR 2807.21................. application =
Form SF-299.................... $90,000.
Application for Renewal of an 43 CFR 2804.14.............. 6 $1,156 \3\....... 6,936
Energy Project-Area Testing
Grant or Short-Term Grant.
43 CFR 2805.11(b)(2),
2805.14(h), and 2807.22.
Form SF-299....................
Application for Renewal of a 43 CFR 2804.14.............. 1 $1,156 \4\....... 1,156
Solar or Wind Energy
Development Grant or Lease.
43 CFR 2805.14(g) and 2807.22..
Form SF-299....................
Nomination of a Parcel of Land 43 CFR 2809.11(b)(1)........ 1 $5 per acre x 30,000
Inside a Designated Leasing average of 6,000
Area. acres per
43 CFR 2809.10 and 2809.11..... nomination =
$30,000.
---------------
Total...................... ............................ .............. ................. 2,180,808
----------------------------------------------------------------------------------------------------------------

Authors
The principal author of this rule is Jayme Lopez, Program Lead,
National Renewable Energy Coordination Office Washington Office, Bureau
of Land Management, Department of the Interior, assisted by Charles
Yudson, Jean Sonneman and Ian Senio, Office of Regulatory Affairs, BLM
Washington Office; Michael Ford, Economist, BLM Washington Office;
Michael Hildner, Planning and Environmental Analyst; Dylan Fuge,
Counselor to the Director, BLM Washington Office; and Gregory Russell,
Attorney Advisor, Office of the Solicitor, Department of the Interior.
---------------------------------------------------------------------------

\1\ In the BLM's experience, this collection activity usually
falls under Category Four of the Processing Fee Schedule at 43 CFR
2804.14. The amount shown is for Processing Category Four for
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way
Management and Land Use Authorization Management'').
\2\ In the BLM's experience, this collection activity usually
falls under Category Four of the Processing Fee Schedule at 43 CFR
2804.14. The amount shown is for Processing Category Four for
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way
Management and Land Use Authorization Management'').
\3\ In the BLM's experience, this collection activity usually
falls under Category Four of the Processing Fee Schedule at 43 CFR
2804.14. The amount shown is for Processing Category Four for
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way
Management and Land Use Authorization Management'').
\4\ In the BLM's experience, this collection activity usually
falls under Category Four of the Processing Fee Schedule at 43 CFR
2804.14. The amount shown is for Processing Category Four for
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way
Management and Land Use Authorization Management'').
---------------------------------------------------------------------------

List of Subjects

43 CFR Part 2800

Communications, Electric power, Highways and roads, Penalties,
Public lands and rights-of-way, Reporting and recordkeeping
requirements.

43 CFR Part 2880

Administrative practice and procedures, Common carriers, Pipelines,
Federal lands and rights-of-way, Reporting and recordkeeping
requirements.

0
Accordingly, for the reasons stated in the preamble, the BLM amends 43
CFR parts 2800 and 2880 as set forth below:

PART 2800--RIGHTS-OF-WAY UNDER THE FEDERAL LAND POLICY AND
MANAGEMENT ACT

0
1. The authority citation for part 2800 continues to read as follows:

Authority: 43 U.S.C. 1733, 1740, 1763, and 1764.

0
2. Revise the heading of part 2800 to read as set forth above.

Subpart 2801--General Information

0
3. Amend Sec. 2801.5(b) by:

[[Page 92206]]

0
a. Adding, in alphabetical order, definitions of ``Acreage rent,''
``Application filing fee,'' ``Assignment,'' ``Designated leasing
area,'' ``Megawatt (MW) capacity fee,'' ``Megawatt rate,''
``Performance and reclamation bond,'' ``Reclamation cost estimate
(RCE),'' ``Screening criteria for solar and wind energy development,''
and ``Short-term right-of-way grant;'' and
0
b. Revising the definitions of ``Designated right-of-way corridor,''
``Management overhead costs,'' and ``Right-of-way.''
The additions and revisions read as follows:

Sec. 2801.5 What acronyms and terms are used in the regulations in
this part?

(b) * * *
Acreage rent means rent assessed for solar and wind energy
development grants and leases that is determined by the number of acres
authorized for the grant or lease.
* * * * *
Application filing fee means a filing fee specific to solar and
wind energy applications. This fee is an initial payment for the
reasonable costs for processing, inspecting, and monitoring a right-of-
way.
Assignment means the transfer, in whole or in part, of any right or
interest in a right-of-way grant or lease from the holder (assignor) to
a subsequent party (assignee) with the BLM's written approval. A change
in ownership of the grant or lease, or other related change-in-control
transaction involving the holder, including a merger or acquisition,
also constitutes an assignment for purposes of these regulations
requiring the BLM's written approval, unless applicable statutory
authority provides otherwise.
* * * * *
Designated leasing area means a parcel of land with specific
boundaries identified by the BLM land use planning process as being a
preferred location for solar or wind energy development that may be
offered competitively.
Designated right-of-way corridor means a parcel of land with
specific boundaries identified by law, Secretarial order, the land use
planning process, or other management decision, as being a preferred
location for existing and future linear rights-of-way and facilities.
The corridor may be suitable to accommodate more than one right-of-way
use or facility, provided that they are compatible with one another and
the corridor designation.
* * * * *
Management overhead costs means Federal expenditures associated
with a particular Federal agency's directorate. The BLM's directorate
includes all State Directors and the entire Washington Office staff,
except where a State Director or Washington Office staff member is
required to perform work on a specific right-of-way case.
Megawatt (MW) capacity fee means the fee paid in addition to the
acreage rent for solar and wind energy development grants and leases.
The MW capacity fee is the approved MW capacity of the solar or wind
energy grant or lease multiplied by the appropriate MW rate. A grant or
lease may provide for stages of development, and the grantee or lessee
will be charged a fee for each stage by multiplying the MW rate by the
approved MW capacity for the stage of the project.
Megawatt rate means the price of each MW of capacity for various
solar and wind energy technologies as determined by the MW rate
formula. Current MW rates are found on the BLM's MW rate schedule,
which can be obtained at any BLM office or at https://www.blm.gov. The
MW rate is calculated by multiplying the total hours per year by the
net capacity factor, by the MW hour (MWh) price, and by the rate of
return, where:
(1) Net capacity factor means the average operational time divided
by the average potential operational time of a solar or wind energy
development, multiplied by the current technology efficiency rates. The
BLM establishes net capacity factors for different technology types but
may determine another net capacity factor to be more appropriate, on a
case-by-case or regional basis, to reflect changes in technology, such
as a solar or wind project that employs energy storage technologies, or
if a grant or lease holder or applicant is able to demonstrate that
another net capacity factor is appropriate for a particular project or
region. The net capacity factor for each technology type is:
(i) Photovoltaic (PV)--20 percent;
(ii) Concentrated photovoltaic (CPV) and concentrated solar power
(CSP)--25 percent;
(iii) CSP with storage capacity of 3 hours or more--30 percent; and
(iv) Wind energy--35 percent;
(2) Megawatt hour (MWh) price means the 5 calendar-year average of
the annual weighted average wholesale prices per MWh for the major
trading hubs serving the 11 western States of the continental United
States (U.S.);
(3) Rate of return means the relationship of income (to the
property owner) to revenue generated from authorized solar and wind
energy development facilities based on the 10-year average of the 20-
year U.S. Treasury bond yield rounded to the nearest one-tenth percent;
and
(4) Hours per year means the total number of hours in a year,
which, for purposes of this part, means 8,760 hours.
* * * * *
Performance and reclamation bond means the document provided by the
holder of a right-of-way grant or lease that provides the appropriate
financial guarantees, including cash, to cover potential liabilities or
specific requirements identified by the BLM for the construction,
operation, decommissioning, and reclamation of an authorized right-of-
way on public lands.
(1) Acceptable bond instruments. The BLM will accept cash,
cashier's or certified check, certificate or book entry deposits,
negotiable U.S. Treasury securities, and surety bonds from the approved
list of sureties (U.S. Treasury Circular 570) payable to the BLM.
Irrevocable letters of credit payable to the BLM and issued by banks or
financial institutions organized or authorized to transact business in
the United States are also acceptable bond instruments. An insurance
policy can also qualify as an acceptable bond instrument, provided that
the BLM is a named beneficiary of the policy, and the BLM determines
that the insurance policy will guarantee performance of financial
obligations and was issued by an insurance carrier that has the
authority to issue policies in the applicable jurisdiction and whose
insurance operations are organized or authorized to transact business
in the United States.
(2) Unacceptable bond instruments. The BLM will not accept a
corporate guarantee as an acceptable form of bond instrument.
* * * * *
Reclamation cost estimate (RCE) means the estimate of costs to
restore the land to a condition that will support pre-disturbance land
uses. This includes the cost to remove all improvements made under the
right-of-way authorization, return the land to approximate original
contour, and establish a sustainable vegetative community, as required
by the BLM. The RCE will be used to establish the appropriate amount
for financial guarantees of land uses on the public lands, including
those uses authorized by right-of-way grants or leases issued under
this part.
* * * * *
Right-of-way means the public lands that the BLM authorizes a
holder to use

[[Page 92207]]

or occupy under a particular grant or lease.
Screening criteria for solar and wind energy development refers to
the policies and procedures that the BLM uses to prioritize how it
processes solar and wind energy development right-of-way applications
to facilitate the environmentally responsible development of such
facilities through the consideration of resource conflicts, land use
plans, and applicable statutory and regulatory requirements.
Applications for projects with lesser resource conflicts are
anticipated to be less costly and time-consuming for the BLM to process
and will be prioritized over those with greater resource conflicts.
Short-term right-of-way grant means any grant issued for a term of
3 years or less for such uses as storage sites, construction areas, and
site testing and monitoring activities, including site characterization
studies and environmental monitoring.
* * * * *

0
4. In Sec. 2801.6, revise paragraph (a)(2) to read as follows:

Sec. 2801.6 Scope.

(a) * * *
(2) Grants to Federal departments or agencies for all systems and
facilities identified in Sec. 2801.9(a), including grants for
transporting by pipeline and related facilities, commodities such as
oil, natural gas, synthetic liquid or gaseous fuels, and any refined
products produced from them; and
* * * * *

0
5. Amend Sec. 2801.9 by revising paragraphs (a)(4) and (7) and adding
paragraph (d) to read as follows:

Sec. 2801.9 When do I need a grant?

(a) * * *
(4) Systems for generating, transmitting, and distributing
electricity, including solar and wind energy development facilities and
associated short-term actions, such as site and geotechnical testing
for solar and wind energy projects;
* * * * *
(7) Such other necessary transportation or other systems or
facilities, including any temporary or short-term surface disturbing
activities associated with approved systems or facilities, which are in
the public interest and which require rights-of-way.
* * * * *
(d) All systems, facilities, and related activities for solar and
wind energy projects are specifically authorized as follows:
(1) Energy site-specific testing activities, including those with
individual meteorological towers and instrumentation facilities, are
authorized with a short-term right-of-way grant issued for 3 years or
less;
(2) Energy project-area testing activities are authorized with a
short-term right-of-way grant for an initial term of 3 years or less
with the option to renew for one additional 3-year period under Sec.
2805.14(h) when the renewal application is accompanied by an energy
development application;
(3) Solar and wind energy development facilities located outside
designated leasing areas, and those facilities located inside
designated leasing areas under Sec. 2809.17(d)(2), are authorized with
a right-of-way grant issued for up to 30 years (plus the initial
partial year of issuance). An application for renewal of the grant may
be submitted under Sec. 2805.14(g);
(4) Solar and wind energy development facilities located inside
designated leasing areas are authorized with a solar or wind energy
development lease when issued competitively under subpart 2809. The
term is fixed for 30 years (plus the initial partial year of issuance).
An application for renewal of the lease may be submitted under Sec.
2805.14(g); and
(5) Other associated actions not specifically included in Sec.
2801.9(d)(1) through (4), such as geotechnical testing and other
temporary land disturbing activities, are authorized with a short-term
right-of-way grant issued for 3 years or less.

Subpart 2802--Lands Available for FLPMA Grants

0
6. In Sec. 2802.11, revise the section heading and paragraphs (a), (b)
introductory text, (b)(3), (4), (6), and (7), and (d) to read as
follows:

Sec. 2802.11 How does the BLM designate right-of-way corridors and
designated leasing areas?

(a) The BLM may determine the locations and boundaries of right-of-
way corridors or designated leasing areas during the land use planning
process described in part 1600 of this chapter. During this process,
the BLM coordinates with other Federal agencies, State, local, and
tribal governments, and the public to identify resource-related issues,
concerns, and needs. The process results in a resource management plan
or plan amendment, which addresses the extent to which you may use
public lands and resources for specific purposes.
(b) When determining which lands may be suitable for right-of-way
corridors or designated leasing areas, the factors the BLM considers
include, but are not limited to, the following:
* * * * *
(3) Physical effects and constraints on corridor placement or
leasing areas due to geology, hydrology, meteorology, soil, or land
forms;
(4) Costs of construction, operation, and maintenance and costs of
modifying or relocating existing facilities in a proposed right-of-way
corridor or designated leasing area (i.e., the economic efficiency of
placing a right-of-way within a proposed corridor or providing a lease
inside a designated leasing area);
* * * * *
(6) Potential health and safety hazards imposed on the public by
facilities or activities located within the proposed right-of-way
corridor or designated leasing area;
(7) Social and economic impacts of the right-of-way corridor or
designated leasing area on public land users, adjacent landowners, and
other groups or individuals;
* * * * *
(d) The resource management plan or plan amendment may also
identify areas where the BLM will not allow right-of-way corridors or
designated leasing areas for environmental, safety, or other reasons.

Subpart 2804--Applying for FLPMA Grants

0
7. Amend Sec. 2804.10 by revising paragraph (a)(2) to read as follows:

Sec. 2804.10 What should I do before I file my application?

(a) * * *
(2) Determine whether the lands are located inside a designated or
existing right-of-way corridor or a designated leasing area;
* * * * *

0
8. Revise Sec. 2804.12 to read as follows:

Sec. 2804.12 What must I do when submitting my application?

(a) File your application on Standard Form 299, available from any
BLM office or at https://www.blm.gov, and fill in the required
information as completely as possible. Your completed application must
include the following:
(1) A description of the project and the scope of the facilities;
(2) The estimated schedule for constructing, operating,
maintaining, and terminating the project;
(3) The estimated life of the project and the proposed construction
and reclamation techniques;

[[Page 92208]]

(4) A map of the project, showing its proposed location and
existing facilities adjacent to the proposal;
(5) A statement of your financial and technical capability to
construct, operate, maintain, and terminate the project;
(6) Any plans, contracts, agreements, or other information
concerning your use of the right-of-way and its effect on competition;
(7) A statement certifying that you are of legal age and authorized
to do business in the State(s) where the right-of-way would be located
and that you have submitted correct information to the best of your
knowledge; and
(8) A schedule for the submission of a plan of development (POD)
conforming to the POD template at https://www.blm.gov, should the BLM
require you to submit a POD under Sec. 2804.25(c).
(b) When submitting an application for a solar or wind energy
development project or for a transmission line project with a capacity
of 100 kV or more, in addition to the information required in paragraph
(a) of this section, you must:
(1) Include a general description of the proposed project and a
schedule for the submission of a POD conforming to the POD template at
https://www.blm.gov;
(2) Address all known potential resource conflicts with sensitive
resources and values, including special designations or protections,
and include applicant-proposed measures to avoid, minimize, and
compensate for such resource conflicts, if any;
(3) Initiate early discussions with any grazing permittees that may
be affected by the proposed project in accordance with 43 CFR 4110.4-
2(b); and
(4) Within 6 months from the time the BLM receives the cost
recovery fee under Sec. 2804.14, schedule and hold two preliminary
application review meetings as follows:
(i) The first meeting will be with the BLM to discuss the general
project proposal, the status of BLM land use planning for the lands
involved, potential siting issues or concerns, potential environmental
issues or concerns, potential alternative site locations and the right-
of-way application process;
(ii) The second meeting will be with appropriate Federal and State
agencies and tribal and local governments to facilitate coordination of
potential environmental and siting issues and concerns; and
(iii) You and the BLM may agree to hold additional preliminary
application review meetings.
(c) When submitting an application for a solar or wind energy
project under this subpart rather than subpart 2809, you must:
(1) Propose a project sited on lands outside a designated leasing
area, except as provided for by Sec. 2809.19; and
(2) Pay an application filing fee of $15 per acre for solar or wind
energy development applications and $2 per acre for energy project-area
testing applications. The BLM will refund your fee, except for the
reasonable costs incurred on your behalf, if you are the unsuccessful
bidder in a competitive offer held under Sec. 2804.30 or subpart 2809.
The BLM will adjust the application filing fee at least once every 10
years using the change in the Implicit Price Deflator, Gross Domestic
Product (IPD-GDP) for the preceding 10-year period and round it to the
nearest one-half dollar. This 10-year average will be adjusted at the
same time as the Per Acre Rent Schedule for linear rights-of-way under
Sec. 2806.22.
(d) If you are unable to meet a requirement of the application
outlined in this section, you may submit a request for an alternative
requirement under Sec. 2804.40.
(e) If you are a business entity, you must also submit the
following information:
(1) Copies of the formal documents creating the entity, such as
articles of incorporation, and including the corporate bylaws;
(2) Evidence that the party signing the application has the
authority to bind the applicant;
(3) The name and address of each participant in the business;
(4) The name and address of each shareholder owning 3 percent or
more of the shares and the number and percentage of any class of voting
shares of the entity which such shareholder is authorized to vote;
(5) The name and address of each affiliate of the business;
(6) The number of shares and the percentage of any class of voting
stock owned by the business, directly or indirectly, in any affiliate
controlled by the business;
(7) The number of shares and the percentage of any class of voting
stock owned by an affiliate, directly or indirectly, in the business
controlled by the affiliate; and
(8) If you have already provided the information in paragraphs
(b)(1) through (7) of this section to the BLM and the information
remains accurate, you need only reference the BLM serial number under
which you previously filed it.
(f) The BLM may require you to submit additional information at any
time while processing your application. See Sec. 2884.11(c) of this
chapter for the type of information we may require.
(g) If you are a Federal oil and gas lessee or operator and you
need a right-of-way for access to your production facilities or oil and
gas lease, you may include your right-of-way requirements with your
Application for Permit to Drill or Sundry Notice required under parts
3160 through 3190 of this chapter.
(h) If you are filing with another Federal agency for a license,
certificate of public convenience and necessity, or other authorization
for a project involving a right-of-way on public lands, simultaneously
file an application with the BLM for a grant. Include a copy of the
materials, or reference all the information, you filed with the other
Federal agency.
(i) Inter-agency coordination. You may request, in writing, an
exemption from the requirements of this section if you can demonstrate
to the BLM that you have satisfied similar requirements by
participating in an inter-agency coordination process with another
Federal, State, local, or Tribal authority. No exemption is approved
until you receive BLM approval in writing.

0
9. In Sec. 2804.14, revise paragraphs (a), (b), and (c) to read as
follows:

Sec. 2804.14 What is the processing fee for a grant application?

(a) Unless you are exempt under Sec. 2804.16, you must pay a fee
to the BLM for the reasonable costs of processing your application.
Subject to applicable laws and regulations, if processing your
application involves Federal agencies other than the BLM, your fee may
also include the reasonable costs estimated to be incurred by those
Federal agencies. Instead of paying the BLM a fee for the reasonable
costs incurred by other Federal agencies in processing your
application, you may pay other Federal agencies directly for such
costs. Reasonable costs are those costs as defined in Section 304(b) of
FLPMA (43 U.S.C. 1734(b)). The fees for Processing Categories 1 through
4 (see paragraph (b) of this section) are one-time fees and are not
refundable. The fees are categorized based on an estimate of the amount
of time that the Federal Government will expend to process your
application and issue a decision granting or denying the application.
(b) There is no processing fee if the Federal Government's work is
estimated to take 1 hour or less. Processing fees are based on
categories. The BLM will update the processing fees for Categories 1
through 4 in the schedule each calendar year, based on the previous

[[Page 92209]]

year's change in the IPD-GDP, as measured second quarter to second
quarter, rounded to the nearest dollar. The BLM will update Category 5
processing fees as specified in the Master Agreement. These categories
and the estimated range of Federal work hours for each category are:

Processing Categories
------------------------------------------------------------------------
Processing category Federal work hours involved
------------------------------------------------------------------------
(1) Applications for new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >1 <= 8
existing grants.
(2) Applications for new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >8 <= 24
existing grants.
(3) Applications for new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >24 <= 36
existing grants.
(4) Applications for new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >36 <= 50
existing grants.
(5) Master agreements...................... Varies
(6) Applications for new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >50
existing grants.
------------------------------------------------------------------------

(c) You may obtain a copy of the current year's processing fee
schedule from any BLM State, district, or field office or by writing:
U.S. Department of the Interior, Bureau of Land Management, 20 M Street
SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current
processing fee schedule at https://www.blm.gov.
* * * * *

0
10. Amend Sec. 2804.18 by redesignating paragraphs (a)(6) through (8)
as paragraphs (a)(7) through (9) and adding new paragraph (a)(6) to
read as follows:

Sec. 2804.18 What provisions do Master Agreements contain and what
are their limitations?

(a) * * *
(6) Describes existing agreements between the BLM and other Federal
agencies for cost reimbursement;
* * * * *

0
11. Amend Sec. 2804.19 by revising paragraph (a) and adding paragraph
(e) to read as follows:

Sec. 2804.19 How will BLM process my Processing Category 6
application?

(a) For Processing Category 6 applications, you and the BLM must
enter into a written agreement that describes how the BLM will process
your application. The final agreement consists of a work plan, a
financial plan, and a description of any existing agreements you have
with other Federal agencies for cost reimbursement associated with your
application.
* * * * *
(e) We may collect reimbursement for reasonable costs to the United
States for processing applications and other documents under this part
relating to the public lands.

0
12. Amend Sec. 2804.20 by revising paragraphs (a)(1) and (5),
redesignating paragraph (a)(6) as paragraph (a)(7), and adding new
paragraph (a)(6) to read as follows:

Sec. 2804.20 How does BLM determine reasonable costs for Processing
Category 6 or Monitoring Category 6 applications?

* * * * *
(a) * * *
(1) Actual costs to the Federal Government (exclusive of management
overhead costs) of processing your application and of monitoring
construction, operation, maintenance, and termination of a facility
authorized by the right-of-way grant;
* * * * *
(5) Any tangible improvements, such as roads, trails, and
recreation facilities, which provide significant public service and are
expected in connection with constructing and operating the facility;
(6) Existing agreements between the BLM and other Federal agencies
for cost reimbursement associated with such application; and
* * * * *

0
13. Amend Sec. 2804.23 by revising the section heading and paragraphs
(a)(1) and (c) and adding paragraphs (d) and (e) to read as follows:

Sec. 2804.23 When will the BLM use a competitive process?

(a) * * *
(1) Processing Category 1 through 4. You must reimburse the Federal
Government for processing costs as if the other application or
applications had not been filed.
* * * * *
(c) If we determine that competition exists, we will describe the
procedures for a competitive bid through a bid announcement in the
Federal Register. We may also provide notice by other methods, such as
a newspaper of general circulation in the area affected by the
potential right-of-way, or the Internet. We may offer lands through a
competitive process on our own initiative. The BLM will not
competitively offer lands for which the BLM has accepted an application
and received a plan of development and cost recovery agreement.
(d) Competitive process for solar and wind energy development
outside designated leasing areas. Lands outside designated leasing
areas may be made available for solar and wind energy applications
through a competitive application process established by the BLM under
Sec. 2804.30.
(e) Competitive process for solar and wind energy development
inside designated leasing areas. Lands inside designated leasing areas
may be offered competitively under subpart 2809.

0
14. Amend Sec. 2804.24 by revising paragraph (a), redesignating
paragraph (b) as paragraph (c), and adding new paragraph (b) to read as
follows:

Sec. 2804.24 Do I always have to submit an application for a grant
using Standard Form 299?

* * * * *
(a) The BLM offers lands competitively under Sec. 2804.23(c) and
you have already submitted an application for the facility or system;
(b) The BLM offers lands for competitive lease under subpart 2809
of this part; or
* * * * *

0
15. Revise Sec. 2804.25 to read as follows:

Sec. 2804.25 How will BLM process my application?

(a) The BLM will notify you in writing when it receives your
application. This notification will also:
(1) Identify your processing fee described at Sec. 2804.14; and
(2) Inform you of any other grant applications which involve all or
part of the lands for which you applied.

[[Page 92210]]

(b) The BLM will not process your application if you have any:
(1) Outstanding unpaid debts owed to the Federal Government.
Outstanding debts are those currently unpaid debts owed to the Federal
Government after all administrative collection actions have occurred,
including any appeal proceedings under applicable Federal regulations
and the Administrative Procedure Act; or
(2) Trespass action pending against you for any activity on BLM-
administered lands (see Sec. 2808.12), except those to resolve the
trespass with a right-of-way as authorized in this part, or a lease or
permit under the regulations found at 43 CFR part 2920, but only after
outstanding unpaid debts are paid.
(c) The BLM may require you to submit additional information
necessary to process the application. This information may include a
detailed construction, operation, rehabilitation, and environmental
protection plan (i.e., a POD), and any needed cultural resource surveys
or inventories for threatened or endangered species. If the BLM needs
more information, the BLM will identify this information in a written
deficiency notice asking you to provide the additional information
within a specified period of time.
(1) For solar or wind energy development projects, and transmission
lines with a capacity of 100 kV or more, you must commence any required
resource surveys or inventories within one year of the request date,
unless otherwise specified by the BLM; or
(2) If you are unable to meet any of the requirements of this
section, you must show good cause and submit a request for an
alternative under Sec. 2804.40.
(d) Customer service standard. The BLM will process your completed
application as follows:

------------------------------------------------------------------------
Processing category Processing time Conditions
------------------------------------------------------------------------
1-4........................... 60 calendar days. If processing your
application will
take longer than 60
calendar days, the
BLM will notify you
in writing of this
fact prior to the
30th calendar day
and inform you of
when you can expect
a final decision on
your application.
5............................. As specified in The BLM will process
the Master applications as
Agreement. specified in the
Agreement.
6............................. Over 60 calendar The BLM will notify
days. you in writing
within the initial
60-day processing
period of the
estimated processing
time.
------------------------------------------------------------------------

(e) In processing an application, the BLM will:
(1) Hold public meetings if sufficient public interest exists to
warrant their time and expense. The BLM will publish a notice in the
Federal Register and may use other notification methods, such as a
newspaper of general circulation in the vicinity of the lands involved
in the area affected by the potential right-of-way or the Internet, to
announce in advance any public hearings or meetings;
(2) If your application is for solar or wind energy development:
(i) Hold a public meeting in the area affected by the potential
right-of-way;
(ii) Apply screening criteria to prioritize processing applications
with lesser resource conflicts over applications with greater resource
conflicts and categorize screened applications according to the
criteria listed in Sec. 2804.35; and
(iii) Evaluate the application based on the information provided by
the applicant and input from other parties, such as Federal, State, and
local government agencies, and tribes, as well as comments received in
preliminary application review meetings held under Sec. 2804.12(b)(4)
and the public meeting held under paragraph (e)(2)(i) of this section.
The BLM will also evaluate your application based on whether you
propose to site the development appropriately (e.g. outside of a
designated leasing area or exclusion area) and whether you address
known resource values discussed in the preliminary application review
meetings. Based on these evaluations, the BLM will either deny your
application or continue processing it.
(3) Determine whether a POD schedule submitted with your
application meets the development schedule or other requirements
described by the BLM, such as in Sec. 2804.12(b);
(4) Complete appropriate National Environmental Policy Act (NEPA)
compliance for the application, as required by 43 CFR part 46 and 40
CFR parts 1500 through 1508;
(5) Determine whether your proposed use complies with applicable
Federal and State laws;
(6) If your application is for a road, determine whether it is in
the public interest to require you to grant the United States an
equivalent authorization across lands that you own;
(7) Consult, as necessary, on a government-to-government basis with
tribes and other governmental entities; and
(8) Take any other action necessary to fully evaluate and decide
whether to approve or deny your application.
(f)(1) The BLM may segregate, if it finds it necessary for the
orderly administration of the public lands, lands included in a right-
of-way application under this subpart for the generation of electrical
energy from wind or solar sources. In addition, the BLM may also
segregate lands that it identifies for potential rights-of-way for
electricity generation from wind or solar sources when initiating a
competitive process for solar or wind development on particular lands.
Upon segregation, such lands would not be subject to appropriation
under the public land laws, including location under the Mining Law of
1872 (30 U.S.C. 22 et seq.), but would remain open under the Mineral
Leasing Act of 1920 (30 U.S.C. 181 et seq.) or the Materials Act of
1947 (30 U.S.C. 601 et seq.). The BLM would effect a segregation by
publishing a Federal Register notice that includes a description of the
lands being segregated. The BLM may effect segregation in this way for
both pending and new right-of-way applications.
(2) The effective date of segregation is the date of publication of
the notice in the Federal Register. Consistent with 43 CFR 2091-3.2,
the segregation terminates and the lands automatically open on the date
that is the earliest of the following:
(i) When the BLM issues a decision granting, granting with
modifications, or denying the application for a right-of-way;
(ii) Automatically at the end of the segregation period stated in
the Federal Register notice initiating the segregation; or
(iii) Upon publication of a Federal Register notice terminating the
segregation and opening the lands.
(3) The segregation period may not exceed 2 years from the date of
publication in the Federal Register of the notice initiating the
segregation, unless the State Director determines and documents in
writing, prior to the

[[Page 92211]]

expiration of the segregation period, that an extension is necessary
for the orderly administration of the public lands. If the State
Director determines an extension is necessary, the BLM will extend the
segregation for up to 2 years by publishing a notice in the Federal
Register, prior to the expiration of the initial segregation period.
Segregations under this part may only be extended once and the total
segregation period may not exceed 4 years.

0
16. Amend Sec. 2804.26 by revising paragraph (a)(5), redesignating
paragraph (a)(6) as paragraph (a)(8), revising newly redesignated
paragraph (a)(8), and adding new paragraphs (a)(6), (a)(7), and (c) to
read as follows:

Sec. 2804.26 Under what circumstances may BLM deny my application?

(a) * * *
(5) You do not have or cannot demonstrate the technical or
financial capability to construct the project or operate facilities
within the right-of-way.
(i) Applicants must have or be able to demonstrate technical and
financial capability to construct, operate, maintain, and terminate a
project throughout the application process and authorization period.
You can demonstrate your financial and technical capability to
construct, operate, maintain, and terminate a project by:
(A) Documenting any previous successful experience in construction,
operation, and maintenance of similar facilities on either public or
non-public lands;
(B) Providing information on the availability of sufficient
capitalization to carry out development, including the preliminary
study stage of the project and the environmental review and clearance
process; or
(C) Providing written copies of conditional commitments of Federal
and other loan guarantees; confirmed power purchase agreements;
engineering, procurement, and construction contracts; and supply
contracts with credible third-party vendors for the manufacture or
supply of key components for the project facilities.
(ii) Failure to demonstrate and sustain technical and financial
capability is grounds for denying an application or terminating an
authorization;
(6) The PODs required by Sec. Sec. 2804.25(e)(3) and 2804.12(a)(8)
and (c)(1) do not meet the development schedule or other requirements
in the POD template and the applicant is unable to demonstrate why the
POD should be approved;
(7) Failure to commence necessary surveys and studies, or plans for
permit processing as required by Sec. 2804.25(c); or
(8) The BLM's evaluation of your solar or wind application made
under Sec. 2804.25(e)(2)(iii) provides a basis for a denial.
* * * * *
(c) If you are unable to meet any of the requirements in this
section you may request an alternative from the BLM (see Sec.
2804.40).

0
17. In Sec. 2804.27, revise the section heading and introductory text
to read as follows:

Sec. 2804.27 What fees must I pay if BLM denies my application or if
I withdraw my application?

If the BLM denies your application or you withdraw it, you must
still pay any application filing fees under Sec. 2804.12(b)(2), and
any processing fee set forth at Sec. 2804.14, unless you have a
Processing Category 5 or 6 application. Then, the following conditions
apply:
* * * * *

0
18. Add Sec. 2804.30 to subpart 2804 to read as follows:

Sec. 2804.30 What is the competitive process for solar or wind energy
development for lands outside of designated leasing areas?

(a) Available land. The BLM may offer through a competitive process
any land not inside a designated leasing area and open to right-of-way
applications under Sec. 2802.10.
(b) Variety of competitive procedures available. The BLM may use
any type of competitive process or procedure to conduct its competitive
offer and any method, including the use of the Internet, to conduct the
actual auction or competitive bid procedure. Possible bid procedures
could include, but are not limited to: Sealed bidding, oral auctions,
modified competitive bidding, electronic bidding, and any combination
thereof.
(c) Competitive offer. The BLM may identify a parcel for
competitive offer if competition exists or may include land in a
competitive offer on its own initiative.
(d) Notice of competitive offer. The BLM will publish a notice in
the Federal Register at least 30 days prior to the competitive offer
and may use other notification methods, such as a newspaper of general
circulation in the area affected by the potential right-of-way or the
Internet. The notice would explain that the successful bidder would
become the preferred applicant (see paragraph (g) of this section) and
may then apply for a grant. The Federal Register and other notices must
also include:
(1) The date, time, and location, if any, of the competitive offer;
(2) The legal land description of the parcel to be offered;
(3) The bidding methodology and procedures to be used in conducting
the competitive offer, which may include any of the competitive
procedures identified in Sec. 2804.30(b);
(4) The minimum bid required (see Sec. 2804.30(e)(2));
(5) The qualification requirements for potential bidders (see Sec.
2803.10); and
(6) The requirements for the successful bidder to submit a schedule
for the submission of a POD for the lands involved in the competitive
offer (see Sec. 2804.12(c)(1)).
(e) Bidding--(1) Bid submissions. The BLM will accept your bid only
if it includes payment for the minimum bid and at least 20 percent of
the bonus bid.
(2) Minimum bid. The minimum bid is not prorated among all bidders,
but paid entirely by the successful bidder. The minimum bid consists
of:
(i) The administrative costs incurred by the BLM and other Federal
agencies in preparing for and conducting the competitive offer,
including required environmental reviews; and
(ii) An amount determined by the authorizing officer and disclosed
in the notice of competitive offer. This amount will be based on known
or potential values of the parcel. In setting this amount, the BLM will
consider factors that include, but are not limited to, the acreage rent
and megawatt capacity fee.
(3) Bonus bid. The bonus bid consists of any dollar amount that a
bidder wishes to bid in addition to the minimum bid.
(4) If you are not the successful bidder, as defined in paragraph
(f) of this section, the BLM will refund your bid and any application
filing fees, less the reasonable costs incurred by the United States in
connection with your application, under Sec. 2804.12(c)(2).
(f) Successful bidder. The successful bidder is determined by the
highest total bid. If you are the successful bidder, you become the
preferred applicant only if, within 15 calendar days after the day of
the offer, you submit the balance of the bonus bid to the BLM office
conducting the competitive offer. You must make payments by personal
check, cashier's check, certified check, bank draft, money order, or by
other means deemed acceptable by the BLM, payable to the ``Department
of the Interior--Bureau of Land Management.''
(g) Preferred applicant. The preferred applicant may apply for an
energy project-area testing grant, an energy site-

[[Page 92212]]

specific testing grant, or a solar or wind energy development grant for
the parcel identified in the offer. Grant approval is not guaranteed by
winning the subject bid and is solely at the BLM's discretion. The BLM
will not accept applications on lands where a preferred applicant has
been identified, unless allowed by the preferred applicant.
(h) Reservations. (1) The BLM may reject bids regardless of the
amount offered. If the BLM rejects your bid under this provision, you
will be notified in writing and such notice will include the reasons
for the rejection and any refunds to which you are entitled.
(2) The BLM may make the next highest bidder the preferred
applicant if the first successful bidder fails to satisfy the
requirements under paragraph (f) of this section.
(3) If the BLM is unable to determine the successful bidder, such
as in the case of a tie, the BLM may re-offer the lands competitively
to the tied bidders, or to all bidders.
(4) If lands offered under this section receive no bids the BLM
may:
(i) Re-offer the lands through the competitive process under this
section; or
(ii) Make the lands available through the non-competitive
application process found in subparts 2803, 2804, and 2805 of this
part, if the BLM determines that doing so is in the public interest.

0
19. Add Sec. 2804.31 to subpart 2804 to read as follows:

Sec. 2804.31 How will the BLM call for site testing for solar and
wind energy?

(a) Call for site testing. The BLM may, at its own discretion,
initiate a call for site testing. The BLM will publish this call for
site testing in the Federal Register and may also use other
notification methods, such as a newspaper of general circulation in the
area affected by the potential right-of-way, or the Internet. The
Federal Register and any other notices will include:
(1) The date, time, and location that site testing applications
identified under Sec. 2801.9(d)(1) of this part may be submitted;
(2) The date by which applicants will be notified of the BLM's
decision on timely submitted site testing applications;
(3) The legal land description of the area for which site testing
applications are being requested; and
(4) The qualification requirements for applicants (see Sec.
2803.10).
(b) You may request that the BLM hold a call for site testing for
certain public lands. The BLM may proceed with a call for site testing
at its own discretion.
(c) The BLM may identify lands surrounding the site testing as
designated leasing areas under Sec. 2802.11. If a designated leasing
area is established, a competitive offer for a development lease under
subpart 2809 may be held at the discretion of the BLM.

0
20. Add Sec. 2804.35 to subpart 2804 to read as follows:

Sec. 2804.35 How will the BLM prioritize my solar or wind energy
application?

The BLM will prioritize your application by placing it into one of
three categories and may re-categorize your application based on new
information received through surveys, public meetings, or other data
collection, or after any changes to the application. The BLM will
generally prioritize the processing of leases awarded under subpart
2809 before applications submitted under subpart 2804. For applications
submitted under subpart 2804, the BLM will categorize your application
based on the following screening criteria.
(a) High-priority applications are given processing priority over
medium- and low-priority applications and may include lands that meet
the following criteria:
(1) Lands specifically identified as appropriate for solar or wind
energy development, other than designated leasing areas;
(2) Previously disturbed sites or areas adjacent to previously
disturbed or developed sites;
(3) Lands currently designated as Visual Resource Management Class
IV; or
(4) Lands identified as suitable for disposal in BLM land use
plans.
(b) Medium-priority applications are given priority over low-
priority applications and may include lands that meet the following
criteria:
(1) BLM special management areas that provide for limited
development, including recreation sites and facilities;
(2) Areas where a project may adversely affect conservation lands,
including lands with wilderness characteristics that have been
identified in an updated wilderness characteristics inventory;
(3) Right-of-way avoidance areas;
(4) Areas where project development may adversely affect resources
and properties listed nationally such as the National Register of
Historic Places, National Natural Landmarks, or National Historic
Landmarks;
(5) Sensitive habitat areas, including important species use areas,
riparian areas, or areas of importance for Federal or State sensitive
species;
(6) Lands currently designated as Visual Resource Management Class
III;
(7) Department of Defense operating areas with land use or
operational mission conflicts; or
(8) Projects with proposed groundwater uses within groundwater
basins that have been allocated by State water resource agencies.
(c) Low-priority applications may not be feasible to authorize.
These applications may include lands that meet the following criteria:
(1) Lands near or adjacent to lands designated by Congress, the
President, or the Secretary for the protection of sensitive viewsheds,
resources, and values (e.g., units of the National Park System, Fish
and Wildlife Service Refuge System, some National Forest System units,
and the BLM National Landscape Conservation System), which may be
adversely affected by development;
(2) Lands near or adjacent to Wild, Scenic, and Recreational Rivers
and river segments determined suitable for Wild or Scenic River status,
if project development may have significant adverse effects on
sensitive viewsheds, resources, and values;
(3) Designated critical habitat for federally threatened or
endangered species, if project development may result in the
destruction or adverse modification of that critical habitat;
(4) Lands currently designated as Visual Resource Management Class
I or Class II;
(5) Right-of-way exclusion areas; or
(6) Lands currently designated as no surface occupancy for oil and
gas development in BLM land use plans.

0
21. Add Sec. 2804.40 to subpart 2804 to read as follows:

Sec. 2804.40 Alternative requirements.

If you are unable to meet any of the requirements in this subpart
you may request approval for an alternative requirement from the BLM.
Any such request is not approved until you receive BLM approval in
writing. Your request to the BLM must:
(a) Show good cause for your inability to meet a requirement;
(b) Suggest an alternative requirement and explain why that
requirement is appropriate; and
(c) Be received in writing by the BLM in a timely manner, before
the deadline to meet a particular requirement has passed.

Subpart 2805--Terms and Conditions of Grants

0
22. Amend Sec. 2805.10 as follows:
0
a. Revise the section heading and paragraph (a);

[[Page 92213]]

0
b. Redesignate paragraph (b) and (c) as paragraphs (c) and (d),
respectively; and
0
c. Add new paragraph (b).
The revisions and addition read as follows:

Sec. 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?

(a) The BLM will send you a written response when it has made a
decision on your application or if you are the successful bidder for a
solar or wind energy development grant or lease. If we approve your
application, we will send you an unsigned grant for your review and
signature. If you are the successful bidder for a solar or wind energy
lease inside a designated leasing area under Sec. 2809.15, we may send
you an unsigned lease for your review and signature. If your bid is
unsuccessful, it will be refunded under Sec. 2804.30(e)(4) or Sec.
2809.14(d) and you will receive written notice from us.
(b) Your unsigned grant or lease document:
(1) Will include any terms, conditions, and stipulations that we
determine to be in the public interest, such as modifying your proposed
use or changing the route or location of the facilities;
(2) May include terms that prevent your use of the right-of-way
until you have an approved Plan of Development (POD) and BLM has issued
a Notice to Proceed; and
(3) Will impose a specific term for the grant or lease. Each grant
or lease that we issue for 20 or more years will contain a provision
requiring periodic review at the end of the twentieth year and
subsequently at 10-year intervals. We may change the terms and
conditions of the grant or lease, including leases issued under subpart
2809, as a result of these reviews in accordance with Sec. 2805.15(e).
* * * * *

0
23. Amend Sec. 2805.11 by redesignating paragraph (b)(2) as paragraph
(b)(3), adding new paragraph (b)(2), and revising newly redesignated
paragraph (b)(3) to read as follows:

Sec. 2805.11 What does a grant contain?

* * * * *
(b) * * *
(2) Specific terms for solar and wind energy grants and leases are
as follows:
(i) For an energy site-specific testing grant, the term is 3 years
or less, without the option of renewal;
(ii) For an energy project-area testing grant, the initial term is
3 years or less, with the option to renew for one additional 3-year
period when the renewal application is also accompanied by a solar or
wind energy development application and a POD as required by Sec.
2804.25(e)(3);
(iii) For a short-term grant for all other associated actions not
specifically included in paragraphs (b)(2)(i) and (ii) of this section,
such as geotechnical testing and other temporary land disturbing
activities, the term is 3 years or less;
(iv) For solar and wind energy development grants, the term is up
to 30 years (plus the initial partial year of issuance) with adjustable
terms and conditions. The grantee may submit an application for renewal
under Sec. 2805.14(g); and
(v) For solar and wind energy development leases located inside
designated leasing areas, the term is fixed for 30 years (plus the
initial partial year of issuance). The lessee may submit an application
for renewal under Sec. 2805.14(g).
(3) All grants and leases, except those issued for a term of 3
years or less and those issued in perpetuity, will expire on December
31 of the final year of the grant or lease. For grants and leases with
terms greater than 3 years, the actual term includes the number of full
years specified, plus the initial partial year, if any.
* * * * *

0
24. Revise Sec. 2805.12 to read as follows:

Sec. 2805.12 What terms and conditions must I comply with?

(a) By accepting a grant or lease, you agree to comply with and be
bound by the following terms and conditions. During construction,
operation, maintenance, and termination of the project you must:
(1) To the extent practicable, comply with all existing and
subsequently enacted, issued, or amended Federal laws and regulations
and State laws and regulations applicable to the authorized use;
(2) Rebuild and repair roads, fences, and established trails
destroyed or damaged by the project;
(3) Build and maintain suitable crossings for existing roads and
significant trails that intersect the project;
(4) Do everything reasonable to prevent and suppress wildfires on
or in the immediate vicinity of the right-of-way area;
(5) Not discriminate against any employee or applicant for
employment during any stage of the project because of race, creed,
color, sex, sexual orientation, or national origin. You must also
require subcontractors to not discriminate;
(6) Pay monitoring fees and rent described in Sec. 2805.16 and
subpart 2806;
(7) Assume full liability if third parties are injured or damages
occur to property on or near the right-of-way (see Sec. 2807.12);
(8) Comply with project-specific terms, conditions, and
stipulations, including requirements to:
(i) Restore, revegetate, and curtail erosion or conduct any other
rehabilitation measure the BLM determines necessary;
(ii) Ensure that activities in connection with the grant comply
with air and water quality standards or related facility siting
standards contained in applicable Federal or State law or regulations;
(iii) Control or prevent damage to:
(A) Scenic, aesthetic, cultural, and environmental values,
including fish and wildlife habitat;
(B) Public and private property; and
(C) Public health and safety;
(iv) Provide for compensatory mitigation for residual impacts
associated with the right-of-way;
(v) Protect the interests of individuals living in the general area
who rely on the area for subsistence uses as that term is used in Title
VIII of Alaska National Interest Lands Conservation Act (ANILCA) (16
U.S.C. 3111 et seq.);
(vi) Ensure that you construct, operate, maintain, and terminate
the facilities on the lands in the right-of-way in a manner consistent
with the grant or lease, including the approved POD, if one was
required;
(vii) When the State standards are more stringent than Federal
standards, comply with State standards for public health and safety,
environmental protection, and siting, constructing, operating, and
maintaining any facilities and improvements on the right-of-way; and
(viii) Grant the BLM an equivalent authorization for an access road
across your land if the BLM determines that a reciprocal authorization
is needed in the public interest and the authorization the BLM issues
to you is also for road access;
(9) Immediately notify all Federal, State, tribal, and local
agencies of any release or discharge of hazardous material reportable
to such entity under applicable law. You must also notify the BLM at
the same time and send the BLM a copy of any written notification you
prepared;
(10) Not dispose of or store hazardous material on your right-of-
way, except as provided by the terms, conditions, and stipulations of
your grant;

[[Page 92214]]

(11) Certify your compliance with all requirements of the Emergency
Planning and Community Right-to-Know Act of 1986, (42 U.S.C. 11001 et
seq.), when you receive, assign, renew, amend, or terminate your grant;
(12) Control and remove any release or discharge of hazardous
material on or near the right-of-way arising in connection with your
use and occupancy of the right-of-way, whether or not the release or
discharge is authorized under the grant. You must also remediate and
restore lands and resources affected by the release or discharge to the
BLM's satisfaction and to the satisfaction of any other Federal, State,
tribal, or local agency having jurisdiction over the land, resource, or
hazardous material;
(13) Comply with all liability and indemnification provisions and
stipulations in the grant;
(14) As the BLM directs, provide diagrams or maps showing the
location of any constructed facility;
(15) As the BLM directs, provide, or give access to, any pertinent
environmental, technical, and financial records, reports, and other
information, such as Power Purchase and Interconnection Agreements or
the production and sale data for electricity generated from the
approved facilities on public lands. Failure to comply with such
requirements may, at the discretion of the BLM, result in suspension or
termination of the right-of-way authorization. The BLM may use this and
similar information for the purpose of monitoring your authorization
and for periodic evaluation of financial obligations under the
authorization, as appropriate. Any records the BLM obtains will be made
available to the public subject to all applicable legal requirements
and limitations for inspection and duplication under the Freedom of
Information Act. Any information marked confidential or proprietary
will be kept confidential to the extent allowed by law; and
(16) Comply with all other stipulations that the BLM may require.
(b) You must comply with the bonding requirements under Sec.
2805.20. The BLM will not issue a Notice to Proceed or give written
approval to proceed with ground disturbing activities until you comply
with this requirement.
(c) By accepting a grant or lease for solar or wind energy
development, you also agree to comply with and be bound by the
following terms and conditions. You must:
(1) Not begin any ground disturbing activities until the BLM issues
a Notice to Proceed (see Sec. 2807.10) or written approval to proceed
with ground disturbing activities;
(2) Complete construction within the timeframes in the approved
POD, but no later than 24 months after the start of construction,
unless the project has been approved for staged development, or as
otherwise authorized by the BLM;
(3) If an approved POD provides for staged development, unless
otherwise approved by the BLM:
(i) Begin construction of the initial phase of development within
12 months after issuance of the Notice to Proceed, but no later than 24
months after the effective date of the right-of-way authorization;
(ii) Begin construction of each stage of development (following the
first) within 3 years of the start of construction of the previous
stage of development, and complete construction of that stage no later
than 24 months after the start of construction of that stage, unless
otherwise authorized by the BLM; and
(iii) Have no more than 3 development stages, unless otherwise
authorized by the BLM;
(4) Maintain all onsite electrical generation equipment and
facilities in accordance with the design standards in the approved POD;
(5) Repair and place into service, or remove from the site, damaged
or abandoned facilities that have been inoperative for any continuous
period of 3 months and that present an unnecessary hazard to the public
lands. You must take appropriate remedial action within 30 days after
receipt of a written noncompliance notice, unless you have been
provided an extension of time by the BLM. Alternatively, you must show
good cause for any delays in repairs, use, or removal; estimate when
corrective action will be completed; provide evidence of diligent
operation of the facilities; and submit a written request for an
extension of the 30-day deadline. If you do not comply with this
provision, the BLM may suspend or terminate the authorization under
Sec. Sec. 2807.17 through 2807.19; and
(6) Comply with the diligent development provisions of the
authorization or the BLM may suspend or terminate your grant or lease
under Sec. Sec. 2807.17 through 2807.19. Before suspending or
terminating the authorization, the BLM will send you a notice that
gives you a reasonable opportunity to correct any noncompliance or to
start or resume use of the right-of-way (see Sec. 2807.18). In
response to this notice, you must:
(i) Provide reasonable justification for any delays in construction
(for example, delays in equipment delivery, legal challenges, and acts
of God);
(ii) Provide the anticipated date of completion of construction and
evidence of progress toward the start or resumption of construction;
and
(iii) Submit a written request under paragraph (e) of this section
for extension of the timelines in the approved POD. If you do not
comply with the requirements of paragraph (c)(7) of this section, the
BLM may deny your request for an extension of the timelines in the
approved POD.
(7) In addition to the RCE requirements of Sec. 2805.20(a)(5) for
a grant, the bond secured for a grant or lease must cover the estimated
costs of cultural resource and Indian cultural resource identification,
protection, and mitigation for project impacts.
(d) For energy site or project testing grants:
(1) You must install all monitoring facilities within 12 months
after the effective date of the grant or other authorization. If
monitoring facilities under a site testing and monitoring right-of-way
authorization have not been installed within 12 months after the
effective date of the authorization or consistent with the timeframe of
the approved POD, you must request an extension pursuant to paragraph
(e) of this section;
(2) You must maintain all onsite equipment and facilities in
accordance with the approved design standards;
(3) You must repair and place into service, or remove from the
site, damaged or abandoned facilities that have been inoperative for
any continuous period of 3 months and that present an unnecessary
hazard to the public lands; and
(4) If you do not comply with the diligent development provisions
of either the site testing and monitoring authorization or the project
testing and monitoring authorization, the BLM may terminate your
authorization under Sec. 2807.17.
(e) Notification of noncompliance and request for alternative
requirements. (1) As soon as you anticipate that you will not meet any
stipulation, term, or condition of the approved right-of-way grant or
lease, or in the event of your noncompliance with any such stipulation,
term, or condition, you must notify the BLM in writing and show good
cause for the noncompliance, including an explanation of the reasons
for the failure.
(2) You may also request that the BLM consider alternative
stipulations, terms, or conditions. Any request for an alternative
stipulation, term, or

[[Page 92215]]

condition must comply with applicable law in order to be considered.
Any proposed alternative to applicable bonding requirements must
provide the United States with adequate financial assurance for
potential liabilities associated with your right-of-way grant or lease.
Any such request is not approved until you receive BLM approval in
writing.

0
25. Amend Sec. 2805.14 by removing ``and'' from the end of paragraph
(e), removing the period from the end of paragraph (f) and adding ``;
and'' in its place, and adding paragraphs (g) and (h) to read as
follows:

Sec. 2805.14 What rights does a grant convey?

* * * * *
(g) Apply to renew your solar or wind energy development grant or
lease, under Sec. 2807.22; and
(h) Apply to renew your energy project-area testing grant for one
additional term of 3 years or less when the renewal application also
includes an energy development application under Sec. 2801.9(d)(2).

0
26. In Sec. 2805.15, revise the first sentence of paragraph (b) to
read as follows:

Sec. 2805.15 What rights does the United States retain?

* * * * *
(b) Require common use of your right-of-way, including facilities
(see Sec. 2805.14(b)), subsurface, and air space, and authorize use of
the right-of-way for compatible uses. * * *
* * * * *

0
27. Revise Sec. 2805.16 to read as follows:

Sec. 2805.16 If I hold a grant, what monitoring fees must I pay?

(a) You must pay a fee to the BLM for the reasonable costs the
Federal Government incurs in inspecting and monitoring the
construction, operation, maintenance, and termination of the project
and protection and rehabilitation of the public lands your grant
covers. Instead of paying the BLM a fee for the reasonable costs
incurred by other Federal agencies in monitoring your grant, you may
pay the other Federal agencies directly for such costs. The BLM will
annually adjust the Category 1 through 4 monitoring fees in the manner
described at Sec. 2804.14(b). The BLM will update Category 5
monitoring fees as specified in the Master Agreement. Category 6
monitoring fees are addressed at Sec. 2805.17(c). The BLM categorizes
the monitoring fees based on the estimated number of work hours
necessary to monitor your grant. Category 1 through 4 monitoring fees
are one-time fees and are not refundable. The monitoring categories and
work hours are as follows:

Monitoring Categories
------------------------------------------------------------------------
Federal work hours
Monitoring category involved
------------------------------------------------------------------------
(1) Inspecting and monitoring of new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >1 <=8.
existing grants.
(2) Inspecting and monitoring of new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >8 <=24.
existing grants.
(3) Inspecting and monitoring of new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >24 <=36.
existing grants.
(4) Inspecting and monitoring of new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >36 <=50.
existing grants.
(5) Master Agreements........................... Varies.
(6) Inspecting and monitoring of new grants, Estimated Federal work
assignments, renewals, and amendments to hours are >50.
existing grants.
------------------------------------------------------------------------

(b) The monitoring cost schedule is available from any BLM State,
district, or field office or by writing: U.S. Department of the
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM,
Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov.

0
28. Add Sec. 2805.20 to subpart 2805 to read as follows:

Sec. 2805.20 Bonding requirements.

If you hold a grant or lease under this part, you must comply with
the following bonding requirements:
(a) The BLM may require that you obtain, or certify that you have
obtained, a performance and reclamation bond or other acceptable bond
instrument to cover any losses, damages, or injury to human health, the
environment, or property in connection with your use and occupancy of
the right-of-way, including costs associated with terminating the
grant, and to secure all obligations imposed by the grant and
applicable laws and regulations. If you plan to use hazardous materials
in the operation of your grant, you must provide a bond that covers
liability for damages or injuries resulting from releases or discharges
of hazardous materials. The BLM will periodically review your bond for
adequacy and may require a new bond, an increase or decrease in the
value of an existing bond, or other acceptable security at any time
during the term of the grant or lease.
(1) The BLM must be listed as an additionally named insured on the
bond instrument if a State regulatory authority requires a bond to
cover some portion of environmental liabilities, such as hazardous
material damages or releases, reclamation, or other requirements for
the project. The bond must:
(i) Be redeemable by the BLM;
(ii) Be held or approved by a State agency for the same reclamation
requirements as specified by our right-of-way authorization; and
(iii) Provide the same or greater financial guarantee that we
require for the portion of environmental liabilities covered by the
State's bond.
(2) Bond acceptance. The BLM authorized officer must review and
approve all bonds, including any State bonds, prior to acceptance, and
at the time of any right-of-way assignment, amendment, or renewal.
(3) Bond amount. Unless you hold a solar or wind energy lease under
subpart 2809, the bond amount will be determined based on the
preparation of a RCE, which the BLM may require you to prepare and
submit. The estimate must include our cost to administer a reclamation
contract and will be reviewed periodically for adequacy. The BLM may
also consider other factors, such as salvage value, when determining
the bond amount.
(4) You must post a bond on or before the deadline that we give
you.

[[Page 92216]]

(5) Bond components that must be addressed when determining the RCE
amount include, but are not limited to:
(i) Environmental liabilities such as use of hazardous materials
waste and hazardous substances, herbicide use, the use of petroleum-
based fluids, and dust control or soil stabilization materials;
(ii) The decommissioning, removal, and proper disposal, as
appropriate, of any improvements and facilities; and
(iii) Interim and final reclamation, re-vegetation, recontouring,
and soil stabilization. This component must address the potential for
flood events and downstream sedimentation from the site that may result
in offsite impacts.
(6) You may ask us to accept a replacement performance and
reclamation bond at any time after the approval of the initial bond. We
will review the replacement bond for adequacy. A surety company is not
released from obligations that accrued while the surety bond was in
effect unless the replacement bond covers those obligations to our
satisfaction.
(7) You must notify us that reclamation has occurred and you may
request that the BLM reevaluate your bond. If we determine that you
have completed reclamation, we may release all or part of your bond.
(8) If you hold a grant, you are still liable under Sec. 2807.12
if:
(i) We release all or part of your bond;
(ii) The bond amount does not cover the cost of reclamation; or
(iii) There is no bond in place;
(b) If you hold a grant for solar energy development outside of
designated leasing areas, you must provide a performance and
reclamation bond (see paragraph (a) of this section) prior to the BLM
issuing a Notice to Proceed (see Sec. 2805.12(c)(1)). We will
determine the bond amount based on the RCE (see paragraph (a)(3) of
this section) and it must be no less than $10,000 per acre that will be
disturbed;
(c) If you hold a grant for wind energy development outside of
designated leasing areas, you must provide a performance and
reclamation bond (see paragraph (a) of this section) prior to the BLM
issuing a Notice to Proceed (see Sec. 2805.12(c)(1)). We will
determine the bond amount based on the RCE (see paragraph (a)(3) of
this section) and it must be no less than $10,000 per authorized
turbine less than 1 MW in nameplate capacity or $20,000 per authorized
turbine equal to or greater than 1 MW in nameplate capacity; and
(d) For short-term right-of-way grants for energy site or project-
area testing, the bond amount must be no less than $2,000 per
authorized meteorological tower or instrumentation facility location
and must be provided before the written approval to proceed with ground
disturbing activities (see Sec. 2805.12(c)(1)).

0
29. Revise the heading for subpart 2806 to read as follows:

Subpart 2806--Annual Rents and Payments

0
30. Amend Sec. 2806.12 by revising the section heading and paragraphs
(a) and (b) and adding paragraph (d) to read as follows:

Sec. 2806.12 When and where do I pay rent?

(a) You must pay rent for the initial rental period before the BLM
issues you a grant or lease.
(1) If your non-linear grant or lease is effective on:
(i) January 1 through September 30 and qualifies for annual
payments, your initial rent bill is pro-rated to include only the
remaining full months in the initial year; or
(ii) October 1 through December 31 and qualifies for annual
payments, your initial rent bill is pro-rated to include the remaining
full months in the initial year plus the next full year.
(2) If your non-linear grant allows for multi-year payments, such
as a short term grant issued for energy site-specific testing, you may
request that your initial rent bill be for the full term of the grant
instead of the initial rent bill periods provided under paragraph
(a)(1)(i) or (ii) of this section.
(b) You must make all rental payments for linear rights-of-way
according to the payment plan described in Sec. 2806.24.
* * * * *
(d) You must make all rental payments as instructed by us or as
provided for by Secretarial order or legislative authority.

0
31. Amend Sec. 2806.13 by:
0
a. Revising the section heading and paragraph (a);
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding new paragraphs (e) and (g).
The revisions and additions read as follows:

Sec. 2806.13 What happens if I do not pay rents and fees or if I pay
the rents or fees late?

(a) If the BLM does not receive the rent or fee payment required in
subpart 2806 within 15 calendar days after the payment was due under
Sec. 2806.12, we will charge you a late payment fee of $25 or 10
percent of the amount you owe, whichever is greater, per authorization.
* * * * *
(e) Subject to applicable laws and regulations, we will
retroactively bill for uncollected or under-collected rent, fees, and
late payments, if:
(1) A clerical error is identified;
(2) An adjustment to rental schedules is not applied; or
(3) An omission or error in complying with the terms and conditions
of the authorized right-of-way is identified.
* * * * *
(g) We will not approve any further activities associated with your
right-of-way until we receive any outstanding payments that are due.

0
32. In Sec. 2806.20, revise paragraph (c) to read as follows:

Sec. 2806.20 What is the rent for a linear right-of-way grant?

* * * * *
(c) You may obtain a copy of the current Per Acre Rent Schedule
from any BLM State, district, or field office or by writing: U.S.
Department of the Interior, Bureau of Land Management, 20 M Street SE.,
Room 2134LM, Washington, DC 20003. We also post the current rent
schedule at https://www.blm.gov.

0
33. In Sec. 2806.22, revise the second sentence of paragraph (a) to
read as follows:

Sec. 2806.22 When and how does the Per Acre Rent Schedule change?

(a) * * * For example, the average annual change in the IPD-GDP
from 1994 to 2003 (the 10-year period immediately preceding the year
(2004) that the 2002 National Agricultural Statistics Service Census
data became available) was 1.9 percent. * * *
* * * * *

Sec. 2806.23 [Amended]

0
34. Amend Sec. 2806.23 by removing paragraph (b) and redesignating
paragraph (c) as paragraph (b).

0
35. In Sec. 2806.24, revise paragraph (c) to read as follows:

Sec. 2806.24 How must I make rental payments for a linear grant?

* * * * *
(c) Proration of payments. The BLM prorates the first year rental
amount based on the number of months left in the calendar year after
the effective date of the grant. If your grant requires, or you chose a
10-year payment term, or multiples thereof, the initial rent bill
consists of the remaining partial year plus the next 10 years, or
multiple thereof.

0
36. Amend Sec. 2806.30 by:
0
a. Revising paragraphs (a)(1) and (2);
0
b. Removing paragraph (b); and
0
c. Redesignating paragraph (c) as paragraph (b).

[[Page 92217]]

The revisions read as follows:

Sec. 2806.30 What are the rents for communication site rights-of-way?

(a) Rent schedule. (1) The BLM uses a rent schedule to calculate
the rent for communication site rights-of-way. The schedule is based on
nine population strata (the population served), as depicted in the most
recent version of the Ranally Metro Area (RMA) Population Ranking, and
the type of communication use or uses for which we normally grant
communication site rights-of-way. These uses are listed as part of the
definition of ``communication use rent schedule,'' set out at Sec.
2801.5(b). You may obtain a copy of the current schedule from any BLM
State, district, or field office or by writing: U.S. Department of the
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM,
Washington, DC 20003. We also post the current communication use rent
schedule at https://www.blm.gov.
(2) We update the schedule annually based on two sources: The U.S.
Department of Labor Consumer Price Index for All Urban Consumers, U.S.
City Average (CPI-U), as of July of each year (difference in CPI-U from
July of one year to July of the following year), and the RMA population
rankings.
* * * * *

0
37. In Sec. 2806.34, revise the second sentence of paragraph (b)(4) to
read as follows:

Sec. 2806.34 How will BLM calculate the rent for a grant or lease
authorizing a multiple-use communication facility?

* * * * *
(b) * * *
(4) * * * This paragraph (b)(4) does not apply to facilities exempt
from rent under Sec. 2806.14(a)(4) except when the facility also
includes ineligible facilities.

0
38. In Sec. 2806.43, revise the third sentence of paragraph (a) to
read as follows:

Sec. 2806.43 How does BLM calculate rent for passive reflectors and
local exchange networks?

(a) * * * For passive reflectors and local exchange networks not
covered by a Forest Service regional schedule, we use the provisions in
Sec. 2806.70 to determine rent. * * *
* * * * *

0
39. Amend Sec. 2806.44 by revising the section heading, adding
introductory text, and revising paragraph (a) to read as follows:

Sec. 2806.44 How will BLM calculate rent for a facility owner's or
facility manager's grant or lease which authorizes communication uses?

This section applies to a grant or lease that authorizes a mixture
of communication uses, some of which are subject to the communication
use rent schedule and some of which are not. We will determine rent for
these leases under the provisions of this section.
(a) The BLM establishes the rent for each of the uses in the
facility that are not covered by the communication use rent schedule
using Sec. 2806.70.
* * * * *

0
40. Remove the undesignated centered heading preceding Sec. 2806.50.

Sec. 2806.50 [Redesignated as Sec. 2806.70]

0
41. Redesignate Sec. 2806.50 as Sec. 2806.70.

0
42. Add an undesignated centered heading and Sec. Sec. 2806.50,
2806.51, 2806.52, 2806.54, 2806.56, and 2806.58 to read as follows:

Solar Energy Rights-of-Way

Sec.
2806.50 Rents and fees for solar energy rights-of-way.
2806.51 Scheduled Rate Adjustment.
2806.52 Rents and fees for solar energy development grants.
2806.54 Rents and fees for solar energy development leases.
2806.56 Rent for support facilities authorized under separate
grant(s).
2806.58 Rent for energy development testing grants.

Sec. 2806.50 Rents and fees for solar energy rights-of-way.

If you hold a right-of-way authorizing solar energy site-specific
or project-area testing, or solar energy development, you must pay an
annual rent and fee in accordance with this section and subpart. Your
solar energy right-of-way authorization will either be a grant (if
issued under subpart 2804) or a lease (if issued under subpart 2809).
Rents and fees for either type of authorization consist of an acreage
rent that must be paid prior to issuance of the authorization and a
phased-in MW capacity fee. Both the acreage rent and the phased-in MW
capacity fee are charged and calculated consistent with Sec. 2806.11
and prorated consistent with Sec. 2806.12(a). The MW capacity fee will
vary depending on the size and technology of the solar energy
development project.

Sec. 2806.51 Scheduled Rate Adjustment.

(a) The BLM will adjust your acreage rent and MW capacity fee over
the course of your authorization as described in these regulations. For
new grants or leases, you may choose either the standard rate
adjustment method (see Sec. 2806.52(a)(5) and (b)(3) for grants; see
Sec. 2806.54(a)(4) or (c) for leases) or the scheduled rate adjustment
method (see Sec. 2806.52(d) for grants; see Sec. 2806.54(d) for
leases). Once you select a rate adjustment method, that method will be
fixed until you renew your grant or lease (see Sec. 2807.22).
(b) For new grants or leases, if you select the scheduled rate
adjustment method you must notify the BLM of your decision in writing.
Your decision must be received by the BLM before your grant or lease is
issued. If you do not select the scheduled rate adjustment method, the
standard rate adjustment method will apply.
(c) If you hold a grant that is in effect prior to January 18,
2017, you may either accept the standard rate adjustment method or
request in writing that the BLM apply the scheduled rate adjustment
method, as set forth in Sec. 2806.52(d), to your grant. To take
advantage of the scheduled rate adjustment option, your request must be
received by the BLM before December 19, 2018. The BLM will continue to
apply the standard rate adjustment method to adjust your rates unless
and until it receives your request to use the scheduled rate adjustment
method.

Sec. 2806.52 Rents and fees for solar energy development grants.

You must pay an annual acreage rent and MW capacity fee for your
solar energy development grant as follows:
(a) Acreage rent. The BLM will calculate the acreage rent by
multiplying the number of acres (rounded up to the nearest tenth of an
acre) within the authorized area times the annual per acre zone rate
from the solar energy acreage rent schedule in effect at the time the
authorization is issued.
(1) Per acre zone rate. The annual per acre zone rate from the
solar energy acreage rent schedule is calculated using the per acre
zone value (as assigned under paragraph (a)(2) of this section),
encumbrance factor, rate of return, and the annual adjustment factor.
The calculation for determining the annual per acre zone rate is A x B
x C x D = E where:
(i) A is the per acre zone value = the same per acre zone values
described in the linear rent schedule in Sec. 2806.20(c);
(ii) B is the encumbrance factor = 100 percent;
(iii) C is the rate of return = 5.27 percent;
(iv) D is the annual adjustment factor = the average annual change
in the IPD-GDP for the 10-year period immediately preceding the year
that the NASS

[[Page 92218]]

Census data becomes available (see Sec. 2806.22(a)). The BLM will
adjust the per acre zone rates each year based on the average annual
change in the IPD-GDP as determined under Sec. 2806.22(a). Adjusted
rates are effective each year on January 1; and
(v) E is the annual per acre zone rate.
(2) Assignment of counties. The BLM will calculate the per acre
zone rate in paragraph (a)(1) of this section by using a State-specific
factor to assign a county to a zone in the solar energy acreage rent
schedule. The BLM will calculate a State-specific factor and apply it
to the NASS data (county average per acre land and building value) to
determine the per acre value and assign a county (or other geographical
area) to a zone. The State-specific factor represents the percent
difference between improved agricultural land and unimproved rangeland
values, using NASS data. The calculation for determining the State-
specific factor is (A/B)-(C/D) = E where:
(i) A = the NASS Census statewide average per acre value of non-
irrigated acres;
(ii) B = the NASS Census statewide average per acre land and
building value;
(iii) C = the NASS Census total statewide acres in farmsteads,
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
(iv) D = the total statewide acres in farms; and
(v) E = the State-specific percent factor or 20 percent, whichever
is greater.
(3) The initial assignment of counties to the zones on the solar
energy acreage rent schedule will be based upon the most recent NASS
Census data (2012) for years 2016 through 2020. The BLM may on its own
or in response to requests consider making regional adjustments to
those initial assignments, based on evidence that the NASS Census
values do not accurately reflect the value of the BLM-managed lands in
a given area. The BLM will update this rent schedule once every 5 years
by re-assigning counties to reflect the updated NASS Census values as
described in Sec. 2806.21 and recalculate the State-specific percent
factor once every 10 years as described in Sec. 2806.22(b).
(4) Acreage rent payment. You must pay the acreage rent regardless
of the stage of development or operations on the entire public land
acreage described in the right-of-way authorization. The BLM State
Director may approve a rental payment plan consistent with Sec.
2806.15(c).
(5) Acreage rent adjustments. This paragraph (a)(5) applies unless
you selected the scheduled rate adjustment method (see Sec. 2806.51).
The BLM will adjust the acreage rent annually to reflect the change in
the per acre zone rates as specified in paragraph (a)(1) of this
section. The BLM will use the most current per acre zone rates to
calculate the acreage rent for each year of the grant term.
(6) You may obtain a copy of the current per acre zone rates for
solar energy development (solar energy acreage rent schedule) from any
BLM State, district, or field office or by writing: U.S. Department of
the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM,
Attention: Renewable Energy Coordination Office, Washington, DC 20003.
The BLM also posts the current solar energy acreage rent schedule for
solar energy development at https://www.blm.gov.
(b) MW capacity fee. The MW capacity fee is calculated by
multiplying the approved MW capacity by the MW rate (for the applicable
type of technology employed by the project) from the MW rate schedule
(see paragraph (b)(2) of this section). You must pay the MW capacity
fee annually when electricity generation begins or is scheduled to
begin in the approved POD, whichever comes first:
(1) MW rate. The MW rate is calculated by multiplying the total
hours per year, by the net capacity factor, by the MWh price, by the
rate of return. For an explanation of each of these terms, see the
definition of MW rate in Sec. 2801.5(b).
(2) MW rate schedule. You may obtain a copy of the current MW rate
schedule for solar energy development from any BLM State, district, or
field office or by writing: U.S. Department of the Interior, Bureau of
Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable
Energy Coordination Office, Washington, DC 20003. The BLM also posts
the current MW rate schedule for solar energy development at https://www.blm.gov.
(3) Periodic adjustments in the MW rate. This paragraph (b)(3)
applies unless you selected the scheduled rate adjustment method (see
Sec. 2806.51). The BLM will adjust the MW rate applicable to your
grant every 5 years, beginning in 2021, by recalculating the following
two components of the MW rate formula:
(i) The adjusted MWh price is 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 for the full 5
calendar-year period preceding the adjustment, rounded to the nearest
dollar increment; and
(ii) The adjusted rate of return is the 10-year average of the 20-
year U.S. Treasury bond yield for the full 10 calendar-year period
preceding the adjustment, rounded to the nearest one-tenth percent,
with a minimum rate of return of 4 percent.
(4) MW rate phase-in. This paragraph (b)(4) applies unless you
selected the scheduled rate adjustment method (see Sec. 2806.51). If
you hold a solar energy development grant, the MW rate will be phased
in as follows:
(i) There is a 3-year phase-in of the MW rate when electricity
generation begins or is scheduled to begin in the approved POD,
whichever comes first, at the rates of:
(A) 25 percent for the first year. This rate applies for the first
partial calendar year of operations, from the date electricity
generation begins until Dec. 31 of that year;
(B) 50 percent for the second year; and
(C) 100 percent for the third and subsequent years of operations.
(ii) After generation of electricity starts and an approved POD
provides for staged development:
(A) The 3-year phase-in of the MW rate applies to each stage of
development; and
(B) The MW capacity fee is calculated using the authorized MW
capacity approved for that stage plus any previously approved stages,
multiplied by the MW rate.
(5) The general payment provisions for rents described in this
subpart, except for Sec. 2806.14(a)(4), also apply to the MW capacity
fee.
(c) Initial implementation of the acreage rent and MW capacity fee.
This paragraph (c) applies unless you selected the scheduled rate
adjustment method (see Sec. 2806.51). If you hold a solar energy grant
and made payments for billing year 2016, the BLM will reduce by 50
percent the net increase in annual costs between billing year 2017 and
billing year 2016. The net increase will be calculated based on a full
calendar year.
(d) Scheduled rate adjustment. Under the scheduled rate adjustment
method (see Sec. 2806.51), the BLM will update your per acre zone rate
and MW rate as follows:
(1) The BLM will calculate your payments using the per acre zone
rate (see Sec. 2806.52(a)(1)) and MW rate (see Sec. 2806.52(b)(1)) in
place when your grant is issued, or for existing grants, the per acre
zone rate and MW rate in place prior to December 19, 2016, as adjusted
under paragraph (d)(6) of this section;
(2) The per acre zone rate will increase:

[[Page 92219]]

(i) Annually, beginning after the first full calendar year plus any
initial partial year following issuance of your grant, by the average
annual change in the IPD-GDP as described in Sec. 2806.22(b); and
(ii) Every 5 years, beginning after the first 5 calendar years,
plus any initial partial year, following issuance of your grant, by 20
percent;
(3) The MW rate will increase by 20 percent every 5 years,
beginning after the first 5 years, plus the initial partial year, if
any, your grant is in effect;
(4) The BLM will not apply the phase-in to your MW rate under Sec.
2806.52(b)(4) or the reduction under Sec. 2806.52(c);
(5) If the approved POD for your project provides for staged
development, the BLM will calculate the MW capacity fee using the MW
capacity approved for the current stage plus any previously approved
stages, multiplied by the MW rate, as described under this section.
(6) For grants in place prior to January 18, 2017 that select the
scheduled rate adjustment method offered under Sec. 2806.51(c), the
per acre zone rate and the MW rate in place prior to December 19, 2016
will be adjusted for the first year's payment using the scheduled rate
adjustment method as follows:
(i) The per acre zone rate will increase by the average annual
change in the IPD-GDP as described in Sec. 2806.22(b) plus 20 percent;
(ii) The MW rate will increase by 20 percent; and
(iii) Subsequent increases will be performed as set forth in
paragraphs (d)(2) and (3) of this section from the date of the initial
adjustment under this paragraph (d).

Sec. 2806.54 Rents and fees for solar energy development leases.

If you hold a solar energy development lease obtained through
competitive bidding under subpart 2809 of this part, you must make
annual payments in accordance with this section and subpart, in
addition to the one-time, upfront bonus bid you paid to obtain the
lease. The annual payment includes an acreage rent for the number of
acres included within the solar energy lease and an additional MW
capacity fee based on the total authorized MW capacity for the approved
solar energy project on the public lands.
(a) Acreage rent. The BLM will calculate and bill you an acreage
rent that must be paid prior to issuance of your lease as described in
Sec. 2806.52(a). This acreage rent will be based on the following:
(1) Per acre zone rate. See Sec. 2806.52(a)(1).
(2) Assignment of counties. See Sec. 2806.52(a)(2) and (3).
(3) Acreage rent payment. See Sec. 2806.52(a)(4).
(4) Acreage rent adjustments. This paragraph (a)(4) applies unless
you selected the scheduled rate adjustment method (see Sec. 2806.51).
Once the acreage rent is determined under Sec. 2806.52(a), no further
adjustments in the annual acreage rent will be made until year 11 of
the lease term and each subsequent 10-year period thereafter. The BLM
will use the per acre zone rates in effect when it adjusts the annual
acreage rent at those 10-year intervals,
(b) MW capacity fee. See Sec. 2806.52(b) introductory text and
(b)(1), (2), and (3).
(c) MW rate phase-in. This paragraph (c) applies unless you
selected the scheduled rate adjustment method (see Sec. 2806.51). If
you hold a solar energy development lease, the MW capacity fee will be
phased in, starting when electricity begins to be generated. The MW
capacity fee for years 1-20 will be calculated using the MW rate in
effect when the lease is issued. The MW capacity fee for years 21-30
will be calculated using the MW rate in effect in year 21 of the lease.
These rates will be phased-in as follows:
(1) For years 1 through 10 of the lease, plus any initial partial
year, the MW capacity fee is calculated by multiplying the project's
authorized MW capacity by 50 percent of the applicable solar technology
MW rate, as described in Sec. 2806.52(b)(2).
(2) For years 11 through 20 of the lease, the MW capacity fee is
calculated by multiplying the project's authorized MW capacity by 100
percent of the applicable solar technology MW rate, as described in
Sec. 2806.52(b)(2).
(3) For years 21 through 30 of the lease, the MW capacity fee is
calculated by multiplying the project's authorized MW capacity by 100
percent of the applicable solar technology MW rate, as described in
Sec. 2806.52(b)(2).
(4) If the lease is renewed, the MW capacity fee is calculated
using the MW rates at the beginning of the renewed lease period and
will remain at that rate through the initial 10-year period of the
renewal term. The MW capacity fee will be adjusted using the MW rate at
the beginning of each subsequent 10-year period of the renewed lease
term.
(5) If an approved POD provides for staged development, the MW
capacity fee is calculated using the MW capacity approved for that
stage plus any previously approved stages, multiplied by the MW rate as
described under this section.
(d) Scheduled rate adjustment. Under the scheduled rate adjustment
(see Sec. 2806.51), the BLM will update your per acre zone rate and MW
rate as follows:
(1) The BLM will calculate your payments using the per acre zone
rate (see Sec. 2806.52(a)(1)) and MW rate (see Sec. 2806.52(b)(1)) in
place when your lease is issued;
(2) The per acre zone rate will increase every 10 years, beginning
after the first 10 years, plus the initial partial year, if any, your
lease is in effect, by the average annual change in the IPD-GDP for the
preceding 10-year period as described in Sec. 2806.22(b) plus 40
percent;
(3) The MW rate will increase by 40 percent every 10 years,
beginning after the first 10 years, plus the initial partial year, if
any, your lease is in effect;
(4) The BLM will not apply the phase-in to your MW rate under Sec.
2806.52(c). Instead, for years 1 through 5, plus any initial partial
year, the BLM will calculate the MW capacity fee by multiplying the
project's authorized MW capacity by 50 percent of the applicable solar
technology MW rate. This phase-in will not be applied to renewed
leases; and
(5) If the approved POD for your project provides for staged
development, the BLM will calculate the MW capacity fee using the MW
capacity approved for the current stage plus any previously approved
stages, multiplied by the MW rate, as described under this section.

Sec. 2806.56 Rent for support facilities authorized under separate
grant(s).

If a solar energy development project includes separate right-of-
way authorizations issued for support facilities only (administration
building, groundwater wells, construction lay down and staging areas,
surface water management and control structures, etc.) or linear right-
of-way facilities (pipelines, roads, power lines, etc.), rent is
determined using the Per Acre Rent Schedule for linear facilities (see
Sec. 2806.20(c)).

Sec. 2806.58 Rent for energy development testing grants.

(a) Grants for energy site-specific testing. You must pay $100 per
year for each meteorological tower or instrumentation facility
location. BLM offices with approved small site rental schedules may use
those fee structures if the fees in those schedules charge more than
$100 per meteorological tower per year. In lieu of annual payments, you
may instead pay for the entire term of the grant (3 years or less).

[[Page 92220]]

(b) Grants for energy project-area testing. You must pay $2,000 per
year or $2 per acre per year for the lands authorized by the grant,
whichever is greater. There is no additional rent for the installation
of each meteorological tower or instrumentation facility located within
the site testing and monitoring project-area.

0
43. Add an undesignated centered heading and Sec. Sec. 2806.60,
2806.61, 2806.62, 2806.64, 2806.66, and 2806.68 to read as follows:

Wind Energy Rights-of-Way

Sec.
2806.60 Rents and fees for wind energy rights-of-way.
2806.61 Scheduled Rate Adjustment.
2806.62 Rents and fees for wind energy development grants.
2806.64 Rents and fees for wind energy development leases.
2806.66 Rent for support facilities authorized under separate
grant(s).
2806.68 Rent for energy development testing grants.

Sec. 2806.60 Rents and fees for wind energy rights-of-way.

If you hold a right-of-way authorizing wind energy site-specific
testing or project-area testing or wind energy development, you must
pay an annual rent and fee in accordance with this section and subpart.
Your wind energy development right-of-way authorization will either be
a grant (if issued under subpart 2804) or a lease (if issued under
subpart 2809). Rents and fees for either type of authorization consist
of an acreage rent that must be paid prior to issuance of the
authorization and a phased-in MW capacity fee. Both the acreage rent
and the phased-in MW capacity fee are charged and calculated consistent
with Sec. 2806.11 and prorated consistent with Sec. 2806.12(a). The
MW capacity fee will vary depending on the size of the wind energy
development project.

Sec. 2806.61 Scheduled Rate Adjustment.

Sec. 2806.62 Rents and fees for wind energy development grants.

You must pay an annual acreage rent and MW capacity fee for your
wind energy development grant as follows:
(a) Acreage rent. The BLM will calculate the acreage rent by
multiplying the number of acres (rounded up to the nearest tenth of an
acre) within the authorized area times the per acre zone rate from the
wind energy acreage rent schedule in effect at the time the
authorization is issued.
(1) Per acre zone rate. The annual per acre zone rate from the wind
energy acreage rent schedule is calculated using the per acre zone
value (as assigned in accordance with paragraph (a)(2) of this
section), encumbrance factor, rate of return, and the annual adjustment
factor. The calculation for determining the annual per acre zone rate
is A x B x C x D = E where:

(i) A is the per acre zone value = the same per- acre zone values
described in the linear rent schedule in Sec. 2806.20(c);
(ii) B is the encumbrance factor = 10 percent;
(iii) C is the rate of return = 5.27 percent;
(iv) D is the annual adjustment factor = the average annual change
in the IPD-GDP for the 10-year period immediately preceding the year
that the NASS Census data becomes available (see Sec. 2806.22(a)).
The BLM will adjust the per acre rates each year based on the
average annual change in the IPD-GDP as determined under Sec.
2806.22(a). Adjusted rates are effective each year on January 1; and
(v) E is the annual per acre zone rate.

(2) Assignment of counties. The BLM will calculate the per acre
zone rate in paragraph (a)(1) of this section by using a State-specific
factor to assign a county to a zone in the wind energy acreage rent
schedule. The BLM will calculate a State-specific factor and apply it
to the NASS data (county average per acre land and building value) to
determine the per acre value and assign a county (or other geographical
area) to a zone. The State-specific factor represents the percent
difference between improved agricultural land and unimproved rangeland
values, using NASS data. The calculation per acre for determining the
State-specific factor is (A/B)-(C/D) = E where:

(i) A = the NASS Census statewide average per acre value of non-
irrigated acres;
(ii) B = the NASS Census statewide average per acre land and
building value;
(iii) C = the NASS Census total statewide acres in farmsteads,
homes, buildings, livestock facilities, ponds, roads, wasteland,
etc.;
(iv) D = the total statewide acres in farms; and
(v) E = the State-specific percent factor or 20 percent, whichever
is greater.

(3) The initial assignment of counties to the zones on the wind
energy acreage rent schedule will be based upon the most recent NASS
Census data (2012) for years 2016 through 2020. The BLM may on its own
or in response to requests consider making regional adjustments to
those initial assignments, based on evidence that the NASS Census
values do not accurately reflect those of the BLM-managed lands. The
BLM will update this rent schedule once every 5 years by re-assigning
counties to reflect the updated NASS Census values as described in
Sec. 2806.21 and recalculate the State-specific percent factor once
every 10 years as described in Sec. 2806.22(b).
(4) Acreage rent payment. You must pay the acreage rent regardless
of the stage of development or operations on the entire public land
acreage described in the right-of-way authorization. The BLM State
Director may approve a rental payment plan consistent with Sec.
2806.15(c).
(5) Acreage rent adjustments. This paragraph (a)(5) applies unless
you selected the scheduled rate adjustment method (see Sec. 2806.61).
The BLM will adjust the acreage rent annually to reflect the change in
the per acre zone rates as specified in paragraph (a)(1) of this
section. The BLM will use the most current per acre zone rates to
calculate the acreage rent for each year of the grant term.
(6) The acreage rent must be paid as described in Sec. 2806.62(a)
except for the initial implementation of the wind energy acreage rent
schedule of section Sec. 2806.62(c).
(7) You may obtain a copy of the current per acre zone rates for
wind energy development (wind energy acreage rent schedule) from any
BLM State, district, or field office or by writing: U.S. Department of
the Interior,

[[Page 92221]]

Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention:
Renewable Energy Coordination Office, Washington, DC 20003. The BLM
also posts the current wind energy acreage rent schedule for wind
energy development at https://www.blm.gov.
(b) MW capacity fee. The MW capacity fee is calculated by
multiplying the approved MW capacity by the MW rate. You must pay the
MW capacity fee annually when electricity generation begins or is
scheduled to begin in the approved POD, whichever comes first.
(1) MW rate. The MW rate is calculated by multiplying the total
hours per year by the net capacity factor, by the MWh price, by the
rate of return. For an explanation of each of these terms, see the
definition of MW rate in Sec. 2801.5(b).
(2) MW rate schedule. You may obtain a copy of the current MW rate
schedule for wind energy development from any BLM State, district, or
field office or by writing: U.S. Department of the Interior, Bureau of
Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable
Energy Coordination Office, Washington, DC 20003. The BLM also posts
the current MW rate schedule for wind energy development at https://www.blm.gov.
(3) Periodic adjustments in the MW rate. This paragraph (b)(3)
applies unless you selected the scheduled rate adjustment method (see
Sec. 2806.61). We will adjust the MW rate every 5 years, beginning in
2021, by recalculating the following two components of the MW rate
formula:
(i) The adjusted MWh price is 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 for the full 5
calendar-year period preceding the adjustment, rounded to the nearest
dollar increment; and
(ii) The adjusted rate of return is the 10-year average of the 20-
year U.S. Treasury bond yield for the full 10 calendar-year period
preceding the adjustment, rounded to the nearest one-tenth percent,
with a minimum rate of return of 4 percent.
(4) MW rate phase-in. This paragraph (b)(4) applies unless you
selected the scheduled rate adjustment method (see Sec. 2806.61). If
you hold a wind energy development grant, the MW rate will be phased in
as follows:
(i) There is a 3-year phase-in of the MW rate when electricity
generation begins or is scheduled to begin in the approved POD,
whichever comes first, at the rates of:
(A) 25 percent for the first year. This rate applies for the first
partial calendar year of operations;
(B) 50 percent for the second year; and
(C) 100 percent for the third and subsequent years of operations.
(ii) After generation of electricity starts and an approved POD
provides for staged development:
(A) The 3-year phase-in of the MW rate applies to each stage of
development; and
(B) The MW capacity fee is calculated using the authorized MW
capacity approved for that stage, plus any previously approved stages,
multiplied by the MW rate.
(iii) The MW rate may be phased in further, as described in
paragraph (c) of this section.
(5) The general payment provisions for rents described in this
subpart, except for Sec. 2806.14(a)(4), also apply to the MW capacity
fee.
(c) Initial implementation of the acreage rent and MW capacity fee.
This paragraph (c) applies unless you selected the scheduled rate
adjustment method (see Sec. 2806.61).
(1) If you hold a wind energy grant and made payments for billing
year 2016, the BLM will reduce by 50 percent the net increase in annual
costs between billing year 2017 and billing year 2016. The net increase
will be calculated based on a full calendar year.
(2) If the BLM accepted your application for a wind energy
development grant, including a plan of development and cost recovery
agreement, prior to September 30, 2014, the BLM will phase in your
payment of the acreage rent and MW capacity fee by reducing the:
(i) Acreage rent of the grant by 50 percent for the initial partial
year of the grant; and
(ii) MW capacity fee by 75 percent for the first (initial partial)
and second years and by 50 percent for the third and fourth years for
which the BLM requires payment of the MW capacity fee. This reduction
to the MW capacity fee applies to each stage of development.
(d) Scheduled rate adjustment. Under the scheduled rate adjustment
(see Sec. 2806.61), the BLM will update your per acre zone rate and MW
rate as follows:
(1) The BLM will calculate your payments using the per acre zone
rate (see Sec. 2806.62(a)(1)) and MW rate (see Sec. 2806.62(b)(1)) in
place when your grant is issued, or for existing grants, the per acre
zone rate and MW rate in place prior to December 19, 2016, as adjusted
under paragraph (d)(6) of this section;
(2) The per acre zone rate will increase:
(i) Annually, beginning after the first full year plus the initial
partial year, if any, your grant is in effect by the average annual
change in the IPD-GDP as described in Sec. 2806.22(b); and
(ii) Every 5 years, beginning after the first 5 years, plus the
initial partial year, if any, your grant is in effect, by 20 percent;
(3) The MW rate will increase by 20 percent every 5 years,
beginning after the first 5 years, plus the initial partial year, if
any, your grant is in effect;
(4) The BLM will not apply the phase-in to your MW rate under Sec.
2806.62(b)(4) or the reduction under Sec. 2806.62(c); and
(5) If the approved POD for your project provides for staged
development, the BLM will calculate the MW capacity fee using the MW
capacity approved for that stage in question plus any previously
approved stages, multiplied by the MW rate as described under this
section.
(6) For grants in place prior to January 18, 2017 that select the
scheduled rate adjustment method offered under Sec. 2806.61(c), the
per acre zone rate and the MW rate in place prior to December 19, 2016
will be adjusted for the first year's payment using the scheduled rate
adjustment method as follows:
(i) The per acre zone rate will increase by the average annual
change in the IPD-GDP as described in Sec. 2806.22(b) plus 20 percent;
(ii) The MW rate will increase by 20 percent; and
(iii) Subsequent increases will be performed as set forth in
paragraphs (d)(2) and (3) of this section from the date of the initial
adjustment under paragraph (d)(6) of this section.

Sec. 2806.64 Rents and fees for wind energy development leases.

If you hold a wind energy development lease obtained through
competitive bidding under subpart 2809 of this part, you must make
annual payments in accordance with this section and subpart, in
addition to the one-time, up front bonus bid you paid to obtain the
lease. The annual payment includes an acreage rent for the number of
acres included within the wind energy lease and an additional MW
capacity fee based on the total authorized MW capacity for the approved
wind energy project on the public lands.
(a) Acreage rent. The BLM will calculate and bill you an acreage
rent that must be paid prior to issuance of your lease as described in
Sec. 2806.62(a).

[[Page 92222]]

This acreage rent will be based on the following:
(1) Per acre zone rate. See Sec. 2806.62(a)(1).
(2) Assignment of counties. See Sec. 2806.62(a)(2) and (3).
(3) Acreage rent payment. See Sec. 2806.62(a)(4).
(4) Acreage rent adjustments. This paragraph (a)(4) applies unless
you selected the scheduled rate adjustment method (see Sec. 2806.61).
Once the acreage rent is determined under Sec. 2806.62(a), no further
adjustments in the annual acreage rent will be made until year 11 of
the lease term and each subsequent 10-year period thereafter. We will
use the per acre zone rates in effect at the time the acreage rent is
due (at the beginning of each 10-year period) to calculate the annual
acreage rent for each of the subsequent 10-year periods.
(b) MW capacity fee. See Sec. 2806.62(b) introductory text and
(b)(1), (2), and (3).
(c) MW rate phase-in. This paragraph (c) applies unless you
selected the scheduled rate adjustment method (see Sec. 2806.61). If
you hold a wind energy development lease, the MW capacity fee will be
phased in, starting when electricity begins to be generated. The MW
capacity fee for years 1-20 will be calculated using the MW rate in
effect when the lease is issued. The MW capacity fee for years 21-30
will be calculated using the MW rate in effect in year 21 of the lease.
These rates will be phased-in as follows:
(1) For years 1 through 10 of the lease, plus any initial partial
year, the MW capacity fee is calculated by multiplying the project's
authorized MW capacity by 50 percent of the wind energy technology MW
rate, as described in Sec. 2806.62(b)(2);
(2) For years 11 through 20 of the lease, the MW capacity fee is
calculated by multiplying the project's authorized MW capacity by 100
percent of the wind energy technology MW rate described in Sec.
2806.62(b)(2);
(3) For years 21 through 30 of the lease, the MW capacity fee is
calculated by multiplying the project's authorized MW capacity by 100
percent of the wind energy technology MW rate as described in Sec.
2806.62(b)(2);
(4) If the lease is renewed, the MW capacity fee is calculated
using the MW rates at the beginning of the renewed lease period and
will remain at that rate through the initial 10 year period of the
renewal term. The MW capacity fee will continue to adjust at the
beginning of each subsequent 10 year period of the renewed lease term
to reflect the then currently applicable MW rates; and
(5) If an approved POD provides for staged development, the MW
capacity fee is calculated using the MW capacity approved for that
stage plus any previously approved stage, multiplied by the MW rate, as
described in this section.
(d) Scheduled rate adjustment. Under the scheduled rate adjustment
(see Sec. 2806.61), the BLM will update your per acre zone rate and MW
rate as follows:
(1) The BLM will calculate your payments using the per acre zone
rate (see Sec. 2806.62(a)(1)) and MW rate (see Sec. 2806.62(b)(1)) in
place when your lease is issued;
(2) The per acre zone rate will increase every 10 years, beginning
after the first 10 years, plus the initial partial year, if any, your
lease is in effect, by the average annual change in the IPD-GDP for the
preceding 10-year period as described in Sec. 2806.22(b) plus 40
percent;
(3) The MW rate will increase by 40 percent every 10 years,
beginning after the first 10 years, plus the initial partial year, if
any, your lease is in effect;
(4) The BLM will not apply the phase-in to your MW rate under Sec.
2806.62(c). Instead, for years 1 through 5, plus any initial partial
year, the BLM will calculate the MW capacity fee by multiplying the
project's authorized MW capacity by 50 percent of the applicable solar
technology MW rate. This phase-in will not be applied to renewed
leases; and
(5) If the approved POD for your project provides for staged
development, the BLM will calculate the MW capacity fee using the MW
capacity approved for that stage in question plus any previously
approved stages, multiplied by the MW rate as described under this
section.

Sec. 2806.66 Rent for support facilities authorized under separate
grant(s).

If a wind energy development project includes separate right-of-way
authorizations issued for support facilities only (administration
building, groundwater wells, construction lay down and staging areas,
surface water management, and control structures, etc.) or linear
right-of-way facilities (pipelines, roads, power lines, etc.), rent is
determined using the Per Acre Rent Schedule for linear facilities (see
Sec. 2806.20(c)).

Sec. 2806.68 Rent for energy development testing grants.

(a) Grant for energy site-specific testing. You must pay $100 per
year for each meteorological tower or instrumentation facility
location. BLM offices with approved small site rental schedules may use
those fee structures if the fees in those schedules charge more than
$100 per meteorological tower per year. In lieu of annual payments, you
may instead pay for the entire term of the grant (3 years or less).
(b) Grant for energy project-area testing. You must pay $2,000 per
year or $2 per acre per year for the lands authorized by the grant,
whichever is greater. There is no additional rent for the installation
of each meteorological tower or instrumentation facility located within
the site testing and monitoring project area.

0
44. Add an undesignated centered heading immediately preceding newly
redesignated Sec. 2806.70 to read as follows:

Other Rights-of-Way

0
45. Revise newly redesignated Sec. 2806.70 to read as follows:

Sec. 2806.70 How will the BLM determine the payment for a grant or
lease when the linear, communication use, solar energy, or wind energy
payment schedules do not apply?

When we determine that the linear, communication use, solar, or
wind energy payment schedules do not apply, we may determine your
payment through a process based on comparable commercial practices,
appraisals, competitive bids, or other reasonable methods. We will
notify you in writing of the payment determination. If you disagree
with the payment determination, you may appeal our final determination
under Sec. 2801.10.

Subpart 2807--Grant Administration and Operation

0
46. Amend Sec. 2807.11 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraphs (d) and (e) as paragraphs (f) and (g); and
0
c. Adding new paragraphs (d) and (e).
The revisions and additions read as follows:

Sec. 2807.11 When must I contact BLM during operations?

* * * * *
(b) When your use requires a substantial deviation from the grant.
You must seek an amendment to your grant under Sec. 2807.20 and obtain
the BLM's approval before you begin any activity that is a substantial
deviation;
* * * * *
(d) Whenever site-specific circumstances or conditions result in
the need for changes to an approved right-of-way grant or lease, POD,
site plan, mitigation measures, or construction, operation, or
termination procedures that are not substantial deviations in location
or use authorized

[[Page 92223]]

by a right-of-way grant or lease. Changes for authorized actions,
project materials, or adopted mitigation measures within the existing,
approved right-of-way area must be submitted to us for review and
approval;
(e) To identify and correct discrepancies or inconsistencies;
* * * * *

0
47. Amend Sec. 2807.17 by redesignating paragraph (d) as paragraph (e)
and adding new paragraph (d) to read as follows:

Sec. 2807.17 Under what conditions may the BLM suspend or terminate
my grant?

* * * * *
(d) The BLM may suspend or terminate another Federal agency's grant
only if:
(1) The terms and conditions of the Federal agency's grant allow
it; or
(2) The agency head holding the grant consents to it.
* * * * *

0
48. Revise Sec. 2807.21 to read as follows:

Sec. 2807.21 May I assign or make other changes to my grant or lease?

(a) With the BLM's approval, you may assign, in whole or in part,
any right or interest in a grant or lease. Assignment actions that may
require BLM approval include, but are not limited to, the following:
(1) The transfer by the holder (assignor) of any right or interest
in the grant or lease to a third party (assignee); and
(2) Changes in ownership or other related change in control
transactions involving the BLM right-of-way holder and another business
entity (assignee), including corporate mergers or acquisitions, but not
transactions within the same corporate family.
(b) The BLM may require a grant or lease holder to file new or
revised information in some circumstances that do not constitute an
assignment (see subpart 2803 and Sec. Sec. 2804.12(e) and 2807.11).
Circumstances that would not constitute an assignment but may
necessitate this filing include, but are not limited to:
(1) Transactions within the same corporate family;
(2) Changes in the holder's name only (see paragraph (h) of this
section); and
(3) Changes in the holder's articles of incorporation.
(c) In order to assign a grant or lease, the proposed assignee must
file an assignment application and follow the same procedures and
standards as for a new grant or lease, including paying application and
processing fees, and the grant must be in compliance with the terms and
conditions of Sec. 2805.12. The preliminary application review
meetings and public meeting under Sec. Sec. 2804.12 and 2804.25 are
not required for an assignment. We will not approve any assignment
until the assignor makes any outstanding payments that are due (see
Sec. 2806.13(g)).
(d) The assignment application must also include:
(1) Documentation that the assignor agrees to the assignment; and
(2) A signed statement that the proposed assignee agrees to comply
with and be bound by the terms and conditions of the grant that is
being assigned and all applicable laws and regulations.
(e) Your assignment is not recognized until the BLM approves it in
writing. We will approve the assignment if doing so is in the public
interest. Except for leases issued under subpart 2809 of this part, we
may modify the grant or lease or add bonding and other requirements,
including additional terms and conditions, to the grant or lease when
approving the assignment, unless a modification to a lease issued under
subpart 2809 of this part is required under Sec. 2805.15(e). We may
decrease rents if the new holder qualifies for an exemption (see Sec.
2806.14) or waiver or reduction (see Sec. 2806.15) and the previous
holder did not. Similarly, we may increase rents if the previous holder
qualified for an exemption or waiver or reduction and the new holder
does not. If we approve the assignment, the benefits and liabilities of
the grant or lease apply to the new grant or lease holder.
(f) The processing time and conditions described at Sec.
2804.25(d) of this part apply to assignment applications.
(g) Only interests in issued right-of-way grants and leases are
assignable. Except for applications submitted by a preferred applicant
under Sec. 2804.30(g), pending right-of-way applications do not create
any property rights or other interest and may not be assigned from one
entity to another, except that an entity with a pending application may
continue to pursue that application even if that entity becomes a
wholly owned subsidiary of a new third party.
(h) To complete a change in name only, (i.e., when the name change
in question is not the result of an underlying change in control of the
right-of-way grant), the following requirements must be met:
(1) The holder must file an application requesting a name change
and follow the same procedures as for a new grant, including paying
processing fees. However, the application fees (see subpart 2804 of
this part) and the preliminary application review and public meetings
(see Sec. Sec. 2804.12 and 2804.25) are not required. The name change
request must include:
(i) If the name change is for an individual, a copy of the court
order or other legal document effectuating the name change; or
(ii) If the name change is for a corporation, a copy of the
corporate resolution(s) proposing and approving the name change, a copy
of the acceptance of the change in name by the State or Territory in
which it is incorporated, and a copy of the appropriate resolution,
order or other documentation showing the name change.
(2) When reviewing a proposed name change only, we may determine it
is necessary to:
(i) Modify a grant issued under subpart 2804 to add bonding and
other requirements, including additional terms and conditions to the
grant; or
(ii) Modify a lease issued under subpart 2809 in accordance with
Sec. 2805.15(e).
(3) Your name change is not recognized until the BLM approves it in
writing.

0
49. Amend Sec. 2807.22 by:
0
a. Revising the section heading and paragraphs (a), (b), and (d);
0
b. Redesignating paragraph (f) as paragraph (g); and
0
c. Adding new paragraph (f).
The revisions and addition read as follows:

Sec. 2807.22 How do I renew my grant or lease?

(a) If your grant or lease specifies the terms and conditions for
its renewal, and you choose to renew it, you must request a renewal
from the BLM at least 120 calendar days before your grant or lease
expires consistent with the renewal terms and conditions specified in
your grant or lease. We will renew the grant or lease if you are in
compliance with the renewal terms and conditions; the other terms,
conditions, and stipulations of the grant or lease; and other
applicable laws and regulations.
(b) If your grant or lease does not specify the terms and
conditions for its renewal, you may apply to us to renew the grant or
lease. You must send us your application at least 120 calendar days
before your grant or lease expires. In your application you must show
that you are in compliance with the terms, conditions, and stipulations
of the grant or lease and other applicable laws and regulations, and
explain why a renewal

[[Page 92224]]

of your grant or lease is necessary. We may approve or deny your
application to renew your grant or lease.
* * * * *
(d) We will review your application and determine the applicable
terms and conditions of any renewed grant or lease.
* * * * *
(f) If you make a timely and sufficient application for a renewal
of your existing grant or lease, or for a new grant or lease, in
accordance with this section, the existing grant does not expire until
we have issued a decision to approve or deny the application.
* * * * *

0
50. Revise subpart 2809 to read as follows:
Subpart 2809--Competitive Process for Leasing Public Lands for Solar
and Wind Energy Development Inside Designated Leasing Areas
Sec.
2809.10 General.
2809.11 How will the BLM solicit nominations?
2809.12 How will the BLM select and prepare parcels?
2809.13 How will the BLM conduct competitive offers?
2809.14 What types of bids are acceptable?
2809.15 How will the BLM select the successful bidder?
2809.16 When do variable offsets apply?
2809.17 Will the BLM ever reject bids or re-conduct a competitive
offer?
2809.18 What terms and conditions apply to leases?
2809.19 Applications in designated leasing areas or on lands that
later become designated leasing areas.

Subpart 2809--Competitive Process for Leasing Public Lands for
Solar and Wind Energy Development Inside Designated Leasing Areas

Sec. 2809.10 General.

(a) Lands inside designated leasing areas may be made available for
solar and wind energy development through a competitive leasing offer
process established by the BLM under this subpart.
(b) The BLM may include lands in a competitive offer on its own
initiative.
(c) The BLM may solicit nominations by publishing a call for
nominations under Sec. 2809.11(a).
(d) The BLM will generally prioritize the processing of ``leases''
awarded under this subpart over the processing of non-competitive
``grant'' applications under subpart 2804, including those that are
``high priority'' under Sec. 2804.35.

Sec. 2809.11 How will the BLM solicit nominations?

(a) Call for nominations. The BLM will publish a notice in the
Federal Register and may use other notification methods, such as a
newspaper of general circulation in the area affected by the potential
offer of public land for solar and wind energy development or the
Internet; to solicit nominations and expressions of interest for
parcels of land inside designated leasing areas for solar or wind
energy development.
(b) Nomination submission. A nomination must be in writing and must
include the following:
(1) Nomination fee. If you nominate a specific parcel of land under
paragraph (a) of this section, you must also include a non-refundable
nomination fee of $5 per acre. We will adjust the nomination fee once
every 10 years using the change in the IPD-GDP for the preceding 10-
year period and round it to the nearest half dollar. This 10 year
average will be adjusted at the same time as the per acre rent schedule
for linear rights-of-way under Sec. 2806.22;
(2) Nominator's name and personal or business address. The name of
only one citizen, association, partnership, corporation, or
municipality may appear as the nominator. All communications relating
to leasing will be sent to that name and address, which constitutes the
nominator's name and address of record; and
(3) The legal land description and a map of the nominated lands.
(c) We may consider informal expressions of interest suggesting
lands to be included in a competitive offer. If you submit a written
expression of interest, you must provide a description of the suggested
lands and rationale for their inclusion in a competitive offer.
(d) In order to submit a nomination, you must be qualified to hold
a grant or lease under

Sec. 2803.10.

(e) Nomination withdrawals. A nomination cannot be withdrawn,
except by the BLM for cause, in which case all nomination monies will
be refunded to the nominator.

Sec. 2809.12 How will the BLM select and prepare parcels?

(a) The BLM will identify parcels for competitive offer based on
nominations and expressions of interest or on its own initiative.
(b) The BLM and other Federal agencies, as applicable, will conduct
necessary studies and site evaluation work, including applicable
environmental reviews and public meetings, before offering lands
competitively.

Sec. 2809.13 How will the BLM conduct competitive offers?

(a) Variety of competitive procedures available. The BLM may use
any type of competitive process or procedure to conduct its competitive
offer, and any method, including the use of the Internet, to conduct
the actual auction or competitive bid procedure. Possible bid
procedures could include, but are not limited to: Sealed bidding, oral
auctions, modified competitive bidding, electronic bidding, and any
combination thereof.
(b) Notice of competitive offer. We will publish a notice in the
Federal Register at least 30 days prior to the competitive offer and
may use other notification methods, such as a newspaper of general
circulation in the area affected by the potential right-of-way or the
Internet. The Federal Register and other notices will include:
(1) The date, time, and location, if any, of the competitive offer;
(2) The legal land description of the parcel to be offered;
(3) The bidding methodology and procedures to be used in conducting
the competitive offer, which may include any of the competitive
procedures identified in paragraph (a) of this section;
(4) The minimum bid required (see Sec. 2809.14(a)), including an
explanation of how we determined this amount;
(5) The qualification requirements for potential bidders (see Sec.
2803.10);
(6) If a variable offset (see Sec. 2809.16) is offered:
(i) The percent of each offset factor;
(ii) How bidders may pre-qualify for each offset factor; and
(iii) The documentation required to pre-qualify for each offset
factor; and
(7) The terms and conditions of the lease, including the
requirements for the successful bidder to submit a POD for the lands
involved in the competitive offer (see Sec. 2809.18) and any lease
mitigation requirements, including compensatory mitigation for residual
impacts associated with the right-of-way.
(c) We will notify you in writing of our decision to conduct a
competitive offer at least 30 days prior to the competitive offer if
you nominated lands and paid the nomination fees required by Sec.
2809.11(b)(1).

Sec. 2809.14 What types of bids are acceptable?

(a) Bid submissions. The BLM will accept your bid only if:
(1) It includes the minimum bid and at least 20 percent of the
bonus bid; and
(2) The BLM determines that you are qualified to hold a grant or
lease under

[[Page 92225]]

Sec. 2803.10. You must include documentation of your qualifications
with your bid, unless we have previously approved your qualifications
under Sec. 2809.10(d) or Sec. 2809.11(d).
(b) Minimum bid. The minimum bid is not prorated among all bidders,
but must be paid entirely by the successful bidder. The minimum bid
consists of:
(1) The administrative costs incurred by the BLM and other Federal
agencies in preparing for and conducting the competitive offer,
including required environmental reviews; and
(2) An amount determined by the authorized officer and disclosed in
the notice of competitive offer. This amount will be based on known or
potential values of the parcel. In setting this amount, the BLM will
consider factors that include, but are not limited to, the acreage rent
and megawatt capacity fee.
(c) Bonus bid. The bonus bid consists of any dollar amount that a
bidder wishes to bid in addition to the minimum bid.
(d) If you are not the successful bidder, as defined in Sec.
2809.15(a), the BLM will refund your bid.

Sec. 2809.15 How will the BLM select the successful bidder?

(a) The bidder with the highest total bid, prior to any variable
offset, is the successful bidder and may be offered a lease in
accordance with Sec. 2805.10.
(b) The BLM will determine the variable offsets for the successful
bidder in accordance with Sec. 2809.16 before issuing final payment
terms.
(c) Payment terms. If you are the successful bidder, you must:
(1) Make payments by personal check, cashier's check, certified
check, bank draft, or money order, or by other means deemed acceptable
by the BLM, payable to the Department of the Interior--Bureau of Land
Management;
(2) By the close of official business hours on the day of the offer
or such other time as the BLM may have specified in the offer notices,
submit for each parcel:
(i) Twenty percent of the bonus bid (before the offsets are applied
under paragraph (b) of this section); and
(ii) The total amount of the minimum bid specified in Sec.
2809.14(b);
(3) Within 15 calendar days after the day of the offer, submit the
balance of the bonus bid (after the variable offsets are applied under
paragraph (b) of this section) to the BLM office conducting the offer;
and
(4) Within 15 calendar days after the day of the offer, submit the
acreage rent for the first full year of the solar or wind energy
development lease as provided in Sec. 2806.54(a) or Sec. 2806.64(a),
respectively. This amount will be applied toward the first 12 months
acreage rent, if the successful bidder becomes the lessee.
(d) The BLM will offer you a right-of-way lease if you are the
successful bidder and:
(1) Satisfy the qualifications in Sec. 2803.10;
(2) Make the payments required under paragraph (c) of this section;
and
(3) Do not have any trespass action pending against you for any
activity on BLM-administered lands (see Sec. 2808.12) or have any
unpaid debts owed to the Federal Government.
(e) The BLM will not offer a lease to the successful bidder and
will keep all money that has been submitted, if the successful bidder
does not satisfy the requirements of paragraph (d) of this section. In
this case, the BLM may offer the lease to the next highest bidder under
Sec. 2809.17(b) or re-offer the lands under Sec. 2809.17(d).

Sec. 2809.16 When do variable offsets apply?

(a) The successful bidder may be eligible for an offset of up to 20
percent of the bonus bid based on the factors identified in the notice
of competitive offer.
(b) The BLM may apply a variable offset to the bonus bid of the
successful bidder. The notice of competitive offer will identify each
factor of the variable offset, the specific percentage for each factor
that would be applied to the bonus bid, and the documentation required
to be provided to the BLM prior to the day of the offer to qualify for
the offset. The total variable offset cannot be greater than 20 percent
of the bonus bid.
(c) The variable offset may be based on any of the following
factors:
(1) Power purchase agreement;
(2) Large generator interconnect agreement;
(3) Preferred solar or wind energy technologies;
(4) Prior site testing and monitoring inside the designated leasing
area;
(5) Pending applications inside the designated leasing area;
(6) Submission of nomination fees;
(7) Submission of biological opinions, strategies, or plans;
(8) Environmental benefits;
(9) Holding a solar or wind energy grant or lease on adjacent or
mixed land ownership;
(10) Public benefits; and
(11) Other similar factors.
(d) The BLM will determine your variable offset prior to the
competitive offer.

Sec. 2809.17 Will the BLM ever reject bids or re-conduct a
competitive offer?

(a) The BLM may reject bids regardless of the amount offered. If
the BLM rejects your bid under this provision, you will be notified in
writing and such notice will include the reason(s) for the rejection
and what refunds to which you are entitled. If the BLM rejects a bid,
the bidder may appeal that decision under Sec. 2801.10.
(b) We may offer the lease to the next highest qualified bidder if
the successful bidder does not execute the lease or is for any reason
disqualified from holding the lease.
(c) If we are unable to determine the successful bidder, such as in
the case of a tie, we may re-offer the lands competitively (under Sec.
2809.13) to the tied bidders or to all prospective bidders.
(d) If lands offered under Sec. 2809.13 receive no bids, we may:
(1) Re-offer the lands through the competitive process under Sec.
2809.13; or
(2) Make the lands available through the non-competitive
application process found in subparts 2803, 2804, and 2805 of this
part, if we determine that doing so is in the public interest.

Sec. 2809.18 What terms and conditions apply to leases?

The lease will be issued subject to the following terms and
conditions:
(a) Lease term. The term of your lease includes the initial partial
year in which it is issued, plus 30 additional full years. The lease
will terminate on December 31 of the final year of the lease term. You
may submit an application for renewal under Sec. 2805.14(g).
(b) Rent. You must pay rent as specified in:
(1) Section 2806.54, if your lease is for solar energy development;
or
(2) Section 2806.64, if your lease is for wind energy development.
(c) POD. You must submit, within 2 years of the lease issuance
date, a POD that:
(1) Is consistent with the development schedule and other
requirements in the POD template posted at https://www.blm.gov; and
(2) Addresses all pre-development and development activities.
(d) Cost recovery. You must pay the reasonable costs for the BLM or
other Federal agencies to review and approve your POD and to monitor
your lease. To expedite review of your POD and monitoring of your
lease, you may notify BLM in writing that you are waiving paying
reasonable costs and are electing to pay the full actual costs incurred
by the BLM.

[[Page 92226]]

(e) Performance and reclamation bond. (1) For Solar Energy
Development, you must provide a bond in the amount of $10,000 per acre
prior to written approval to proceed with ground disturbing activities.
(2) For Wind Energy Development, you must provide a bond in the
amount of $10,000 per authorized turbine less than 1 MW in nameplate
capacity or $20,000 per authorized turbine equal or greater than 1 MW
in nameplate capacity prior to written approval to proceed with ground
disturbing activities.
(3) For testing and monitoring sites authorized under a development
lease, you must provide a bond in the amount of $2,000 per site prior
to receiving written approval to proceed with ground disturbing
activities.
(4) The BLM will adjust the solar and wind energy development bond
amounts every 10 years using the change in the IPD-GDP for the
preceding 10-year period rounded to the nearest $100. This 10-year
average will be adjusted at the same time as the Per Acre Rent Schedule
for linear rights-of-way under Sec. 2806.22.
(f) Assignments. You may assign your lease under Sec. 2807.21, and
if an assignment is approved, the BLM will not make any changes to the
lease terms or conditions, as provided for by Sec. 2807.21(e) except
for modifications required under Sec. 2805.15(e).
(g) Due diligence of operations. You must start construction within
5 years and begin generation of electricity no later than 7 years from
the date of lease issuance, as specified in your approved POD. A
request for an extension may be granted for up to 3 years with a show
of good cause and approval by the BLM.

Sec. 2809.19 Applications in designated leasing areas or on lands
that later become designated leasing areas.

(a) Applications for solar or wind energy development filed on
lands outside of designated leasing areas, which subsequently become
designated leasing areas will:
(1) Continue to be processed by the BLM and are not subject to the
competitive leasing offer process of this subpart, if such applications
are filed prior to the publication of the notice of intent or other
public announcement from the BLM of the proposed land use plan
amendment to designate the solar or wind leasing area; or
(2) Remain in pending status unless withdrawn by the applicant,
denied, or issued a grant by the BLM, or the subject lands become
available for application or leasing under this part, if such
applications are filed on or after the date of publication of the
notice of intent or other public announcement from the BLM of the
proposed land use plan amendment to designate the solar or wind leasing
area.
(3) Resume being processed by the BLM if your application is
pending under paragraph (a)(2) of this section and the lands become
available for application under Sec. 2809.17(d)(2).
(b) An applicant that submits a bid on a parcel of land for which
an application is pending under paragraph (a)(2) of this section may:
(1) Qualify for a variable offset under Sec. 2809.16; and
(2) Receive a refund for any unused application fees or processing
costs if the lands identified in the application are subsequently
leased to another entity under Sec. 2809.13.
(c) After the effective date of this regulation, the BLM will not
accept a new application for solar or wind energy development inside
designated leasing areas (see Sec. Sec. 2804.12(b)(1) and 2804.23(e)),
except as provided by Sec. 2809.17(d)(2).
(d) You may file a new application under part 2804 for testing and
monitoring purposes inside designated leasing areas. If the BLM
approves your application, you will receive a short term grant in
accordance with Sec. 2805.11(b)(2)(i) or (ii), which may qualify you
for an offset under Sec. 2809.16.

PART 2880--RIGHTS-OF-WAY UNDER THE MINERAL LEASING ACT

0
51. Revise the authority citation for part 2880 to read as follows:

Authority: 30 U.S.C. 185 and 189, and 43 U.S.C. 1732(b), 1733,
and 1740.

Subpart 2884--Applying for MLA Grants or TUPs

0
52. In Sec. 2884.11, revise paragraph (c)(5) to read as follows:

Sec. 2884.11 What information must I submit in my application?

* * * * *
(c) * * *
(5) The estimated schedule for constructing, operating,
maintaining, and terminating the project (a POD). Your POD must be
consistent with the development schedule and other requirements as
noted on the POD template for oil and gas pipelines at https://www.blm.gov;
* * * * *
53. In Sec. 2884.12, revise paragraphs (a), (b), and (c) to read
as follows:

Sec. 2884.12 What is the processing fee for a grant or TUP
application?

(a) You must pay a processing fee with the application to cover the
costs to the Federal Government of processing your application before
the Federal Government incurs them. Subject to applicable laws and
regulations, if processing your application will involve Federal
agencies other than the BLM, your fee may also include the reasonable
costs estimated to be incurred by those Federal agencies. Instead of
paying the BLM a fee for the estimated work of other Federal agencies
in processing your application, you may pay other Federal agencies
directly for the costs estimated to be incurred by them in processing
your application. The fees for Processing Categories 1 through 4 are
one-time fees and are not refundable. The fees are categorized based on
an estimate of the amount of time that the Federal Government will
expend to process your application and issue a decision granting or
denying the application.
(b) There is no processing fee if work is estimated to take 1 hour
or less. Processing fees are based on categories. We update the
processing fees for Categories 1 through 4 in the schedule each
calendar year, based on the previous year's change in the IPD-GDP, as
measured second quarter to second quarter. We will round these changes
to the nearest dollar. We will update Category 5 processing fees as
specified in the Master Agreement. These processing categories and the
estimated range of Federal work hours for each category are:

Processing Categories
------------------------------------------------------------------------
Processing category Federal work hours involved
------------------------------------------------------------------------
(1) Applications for new grants or TUPs, Estimated Federal work hours
assignments, renewals, and amendments to are >1 <=8.
existing grants or TUPs.
(2) Applications for new grants or TUPs, Estimated Federal work hours
assignments, renewals, and amendments to are >8 <=24.
existing grants or TUPs.
(3) Applications for new grants or TUPs, Estimated Federal work hours
assignments, renewals, and amendments to are >24 <=36.
existing grants or TUPs.
(4) Applications for new grants or TUPs, Estimated Federal work hours
assignments, renewals, and amendments to are >36 <=50.
existing grants or TUPs.
(5) Master Agreements..................... Varies.

[[Page 92227]]

(6) Applications for new grants or TUPs, Estimated Federal work hours
assignments, renewals, and amendments to are >50.
existing grants or TUPs.
------------------------------------------------------------------------

(c) You may obtain a copy of the current schedule from any BLM
State, district, or field office or by writing: U.S. Department of the
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM,
Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov.
* * * * *

0
54. Amend Sec. 2884.16 by redesignating paragraphs (a)(6), (7), and
(8) as paragraphs (a)(7), (8), and (9), and adding new paragraph (a)(6)
to read as follows:

Sec. 2884.16 What provisions do Master Agreements contain and what
are their limitations?

(a) * * *
(6) Describes existing agreements between the BLM and other Federal
agencies for cost reimbursement;
* * * * *

0
55. Amend Sec. 2884.17 by revising paragraph (a) and adding paragraph
(e) to read as follows:

Sec. 2884.17 How will BLM process my Processing Category 6
application?

(a) For Processing Category 6 applications, you and the BLM must
enter into a written agreement that describes how we will process your
application. The final agreement consists of a work plan, a financial
plan, and a description of any existing agreements you have with other
Federal agencies for cost reimbursement associated with such
application.
* * * * *
(e) We may collect funds to reimburse the Federal Government for
reasonable costs for processing applications and other documents under
this part relating to the Federal lands.

0
56. In Sec. 2884.18, revise paragraphs (a)(1) and (c) to read as
follows:

Sec. 2884.18 What if there are two or more competing applications for
the same pipeline?

(a) * * *
(1) Processing Categories 1 through 4. You must reimburse the
Federal Government for processing costs as if the other application or
applications had not been filed.
* * * * *
(c) If we determine that competition exists, we will describe the
procedures for a competitive bid through a bid announcement in the
Federal Register and may use other notification methods, such as a
newspaper of general circulation or the Internet. We may offer lands
through a competitive process on our own initiative.

0
57. Amend Sec. 2884.20 by revising paragraphs (a) introductory text
and (d) to read as follows:

Sec. 2884.20 What are the public notification requirements for my
application?

(a) When the BLM receives your application, it will publish a
notice in the Federal Register and may use other notification methods,
such as a newspaper of general circulation in the vicinity of the lands
involved or the Internet. If we determine the pipeline(s) will have
only minor environmental impacts, we are not required to publish this
notice. The notice will, at a minimum, contain:
* * * * *
(d) We may hold public hearings or meetings on your application if
we determine that there is sufficient interest to warrant the time and
expense of such hearings or meetings. We will publish a notice in the
Federal Register and may use other notification methods, such as a
newspaper of general circulation in the vicinity of the lands involved
or the Internet, to announce in advance any public hearings or
meetings.

0
58. Amend Sec. 2884.21 by:
0
a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d);
0
b. Adding new paragraph (b); and
0
c. Revising newly redesignated paragraph (d)(4).
The revisions and addition read as follows:

Sec. 2884.21 How will BLM process my application?

* * * * *
(b) The BLM will not process your application if you have any
trespass action pending against you for any activity on BLM-
administered lands (see Sec. 2888.11) or have any unpaid debts owed to
the Federal Government. The only applications the BLM would process are
those to resolve the trespass with a right-of-way as authorized in this
part, or a lease or permit under the regulations found at 43 CFR part
2920, but only after outstanding debts are paid. Outstanding debts are
those currently unpaid debts owed to the Federal Government after all
administrative collection actions have occurred, including any appeal
proceedings under applicable Federal regulations and the Administrative
Procedure Act.
* * * * *
(d) * * *
(4) Hold public meetings, if sufficient public interest exists to
warrant their time and expense. The BLM will publish a notice in the
Federal Register and may use other methods, such as a newspaper of
general circulation in the vicinity of the lands involved or the
Internet, to announce in advance any public hearings or meetings; and
* * * * *

0
59. Amend Sec. 2884.22 by revising paragraph (a) to read as follows:

Sec. 2884.22 Can BLM ask me for additional information?

(a) If we ask for additional information, we will follow the
procedures in Sec. 2804.25(c) of this chapter.
* * * * *

0
60. Amend Sec. 2884.23 by revising paragraph (a)(6), redesignating
paragraph (b) as paragraph (c), and adding new paragraph (b) to read as
follows:

Sec. 2884.23 Under what circumstances may BLM deny my application?

(a) * * *
(6) You do not adequately comply with a deficiency notice (see
Sec. 2804.25(c) of this chapter) or with any requests from the BLM for
additional information needed to process the application.
(b) If you are unable to meet any of the requirements in this
section you may request an alternative from the BLM (see Sec.
2884.30).
* * * * *

0
61. Add Sec. 2884.30 to read as follows:

Sec. 2884.30 Showing of good cause.

If you are unable to meet any of the processing requirements in
this subpart, you may request approval for an alternative requirement
from the BLM. Any such request is not approved until you receive BLM
approval in writing. Your request to the BLM must:
(a) Show good cause for your inability to meet a requirement;
(b) Suggest an alternative requirement and explain why that
requirement is appropriate; and
(c) Be received in writing by the BLM in a timely manner, before
the deadline to meet a particular requirement has passed.

Subpart 2885--Terms and Conditions of MLA Grants and TUPs

0
62. Amend Sec. 2885.11 by revising paragraphs (a) introductory text
and (b)(7) to read as follows:

[[Page 92228]]

Sec. 2885.11 What terms and conditions must I comply with?

(a) Duration. All grants, except those issued for a term of 3 years
or less, will expire on December 31 of the final year of the grant. The
term of a grant may not exceed 30 years, with the initial partial year
of the grant considered to be the first year of the term. The term of a
TUP may not exceed 3 years. The BLM will consider the following factors
in establishing a reasonable term:
* * * * *
(b) * * *
(7) The BLM may require that you obtain, or certify that you have
obtained, a performance and reclamation bond or other acceptable
security to cover any losses, damages, or injury to human health, the
environment, and property incurred in connection with your use and
occupancy of the right-of-way or TUP area, including terminating the
grant or TUP, and to secure all obligations imposed by the grant or TUP
and applicable laws and regulations. Your bond must cover liability for
damages or injuries resulting from releases or discharges of hazardous
materials. We may require a bond, an increase or decrease in the value
of an existing bond, or other acceptable security at any time during
the term of the grant or TUP. This bond is in addition to any
individual lease, statewide, or nationwide oil and gas bonds you may
have. All other provisions inSec. 2805.12(b) of this chapter regarding
bond requirements for grants and leases issued under FLPMA also apply
to grants or TUPs for oil and gas pipelines issued under this part;
* * * * *

0
63. Amend Sec. 2885.15 by revising paragraph (b) to read as follows:

Sec. 2885.15 How will BLM charge me rent?

* * * * *
(b) There are no reductions or waivers of rent for grants or TUPs,
except as provided under Sec. 2885.20(b).
* * * * *

0
64. Amend Sec. 2885.16 by revising paragraph (a) to read as follows:

Sec. 2885.16 When do I pay rent?

(a) You must pay rent for the initial rental period before we issue
you a grant or TUP. We prorate the initial rental amount based on the
number of full months left in the calendar year after the effective
date of the grant or TUP. If your grant qualifies for annual payments,
the initial rent consists of the remaining partial year plus the next
full year. If your grant or TUP allows for multi-year payments, your
initial rent payment may be for the full term of the grant or TUP. See
Sec. 2885.21 for additional information on payment of rent.
* * * * *

0
65. Amend Sec. 2885.17 by revising the section heading, redesignating
paragraph (e) as paragraph (f), and adding new paragraph (e) to read as
follows:

Sec. 2885.17 What happens if I do not pay rents and fees or if I pay
the rents or fees late?

* * * * *
(e) We will retroactively bill for uncollected or under-collected
rent, including late payment and administrative fees, upon discovery
if:
(1) A clerical error is identified;
(2) An adjustment to rental schedules is not applied; or
(3) An omission or error in complying with the terms and conditions
of the authorized right-of-way is identified.
* * * * *

0
66. In Sec. 2885.19, revise paragraph (b) to read as follows:

Sec. 2885.19 What is the rent for a linear right-of-way grant?

* * * * *
(b) You may obtain a copy of the current Per Acre Rent Schedule
from any BLM State, district, or field office or by writing: U.S.
Department of the Interior, Bureau of Land Management, 20 M Street SE.,
Room 2134LM, Washington, DC 20003. The BLM also posts the current rent
schedule at https://www.blm.gov.

0
67. In Sec. 2885.20, revise paragraph (b) to read as follows:

Sec. 2885.20 How will the BLM calculate my rent for linear rights-of-
way the Per Acre Rent Schedule covers?

* * * * *
(b) Phase-in provisions. If, as the result of any revisions made to
the Per Acre Rent Schedule under Sec. 2885.19(a)(2), the payment of
your new annual rental amount would cause you undue hardship, you may
qualify for a 2-year phase-in period if you are a small business entity
as that term is defined in Small Business Administration regulations
and if it is in the public interest. We will require you to submit
information to support your claim. If approved by the BLM State
Director, payment of the amount in excess of the previous year's rent
may be phased-in by equal increments over a 2-year period. In addition,
the BLM will adjust the total calculated rent for year 2 of the phase-
in period by the annual index provided by Sec. 2885.19(a)(1).
* * * * *

0
68. Revise Sec. 2885.24 to read as follows:

Sec. 2885.24 If I hold a grant or TUP, what monitoring fees must I
pay?

(a) Monitoring fees. Subject to Sec. 2886.11, you must pay a fee
to the BLM for any costs the Federal Government incurs in inspecting
and monitoring the construction, operation, maintenance, and
termination of the pipeline and protection and rehabilitation of the
affected public lands your grant or TUP covers. We update the
monitoring fees for Categories 1 through 4 in the schedule each
calendar year, based on the previous year's change in the IPD-GDP, as
measured second quarter to second quarter. We will round these changes
to the nearest dollar. We will update Category 5 monitoring fees as
specified in the Master Agreement. We categorize the monitoring fees
based on the estimated number of work hours necessary to monitor your
grant or TUP. Monitoring fees for Categories 1 through 4 are one-time
fees and are not refundable. These monitoring categories and the
estimated range of Federal work hours for each category are:

Monitoring Categories
------------------------------------------------------------------------
Monitoring category Federal work hours involved
------------------------------------------------------------------------
(1) Inspecting and monitoring of Estimated Federal work hours are >1
new grants and TUPs, assignments, <=8.
renewals, and amendments to
existing grants and TUPs.
(2) Inspecting and monitoring of Estimated Federal work hours are >8
new grants and TUPs, assignments, <=24.
renewals, and amendments to
existing grants and TUPs.
(3) Inspecting and monitoring of Estimated Federal work hours are >24
new grants and TUPs, assignments, <=36.
renewals, and amendments to
existing grants and TUPs.

[[Page 92229]]

(4) Inspecting and monitoring of Estimated Federal work hours are >36
new grants and TUPs, assignments, <=50.
renewals, and amendments to
existing grants and TUPS.
(5) Master Agreements............. Varies.
(6) Inspecting and monitoring of Estimated Federal work hours >50.
new grants and TUPs, assignments,
renewals, and amendments to
existing grants and TUPs.
------------------------------------------------------------------------

(b) The current monitoring cost schedule is available from any BLM
State, district, or field office or by writing: U.S. Department of the
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM,
Washington, DC 20003. The BLM also posts the current schedule at https://www.blm.gov.

0
69. Amend Sec. 2886.12 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraph (d) as paragraph (g); and
0
c. Adding new paragraphs (d), (e), and (f).
The revisions and additions read as follows:

Sec. 2886.12 When must I contact BLM during operations?

* * * * *
(b) When your use requires a substantial deviation from the grant
or TUP. You must seek an amendment to your grant or TUP under Sec.
2887.10 and obtain our approval before you begin any activity that is a
substantial deviation;
* * * * *
(d) Whenever site-specific circumstances or conditions arise that
result in the need for changes to an approved right-of-way grant or
TUP, POD, site plan, mitigation measures, or construction, operation,
or termination procedures that are not substantial deviations in
location or use authorized by a right-of-way grant or TUP. Changes for
authorized actions, project materials, or adopted mitigation measures
within the existing, approved right-of-way or TUP area must be
submitted to the BLM for review and approval;
(e) To identify and correct discrepancies or inconsistencies;
(f) When you submit a certification of construction, if the terms
of your grant require it. A certification of construction is a document
you submit to the BLM after you have finished constructing a facility,
but before you begin operating it, verifying that you have constructed
and tested the facility to ensure that it complies with the terms of
the grant and with applicable Federal and State laws and regulations;
and
* * * * *

Subpart 2887--Amending, Assigning, or Renewing MLA Grants and TUPs

0
70. Revise Sec. 2887.11 to read as follows:

Sec. 2887.11 May I assign or make other changes to my grant or TUP?

(a) With the BLM's approval, you may assign, in whole or in part,
any right or interest in a grant or TUP. Assignment actions that may
require BLM approval include, but are not limited to, the following:
(1) The transfer by the holder (assignor) of any right or interest
in the grant or TUP to a third party (assignee); and
(2) Changes in ownership or other related change in control
transactions involving the BLM right-of-way grant holder or TUP holder
and another business entity (assignee), including corporate mergers or
acquisitions, but not transactions within the same corporate family.
(b) The BLM may require a grant or lease holder to file new or
revised information in some circumstances that do not constitute an
assignment (see subpart 2883 and Sec. Sec. 2884.11(c) and 2886.12).
Circumstances that would not constitute an assignment but may
necessitate this filing include, but are not limited to:
(1) Transactions within the same corporate family;
(2) Changes in the holder's name only (see paragraph (h) of this
section); and
(3) Changes in the holder's articles of incorporation.
(c) In order to assign a grant or TUP, the proposed assignee,
subject to Sec. 2886.11, must file an application and follow the same
procedures and standards as for a new grant or TUP, including paying
processing fees (see Sec. 2884.12).
(d) The assignment application must also include:
(1) Documentation that the assignor agrees to the assignment; and
(2) A signed statement that the proposed assignee agrees to comply
with and to be bound by the terms and conditions of the grant or TUP
that is being assigned and all applicable laws and regulations.
(e) Your assignment is not recognized until the BLM approves it in
writing. We will approve the assignment if doing so is in the public
interest. The BLM may modify the grant or TUP or add bonding and other
requirements, including terms and conditions, to the grant or TUP when
approving the assignment. If we approve the assignment, the benefits
and liabilities of the grant or TUP apply to the new grant or TUP
holder.
(f) The processing time and conditions described at Sec. 2884.21
apply to assignment applications.
(g) Only interests in issued right-of-way grants and TUPs are
assignable. Pending right-of-way and TUP applications do not create any
property rights or other interest and may not be assigned from one
entity to another, except that an entity with a pending application may
continue to pursue that application even if that entity becomes a
wholly owned subsidiary of a new third party.
(h) Change in name only of holder. Name-only changes are made by
individuals, partnerships, corporations, and other right-of-way and TUP
holders for a variety of business or legal reasons. To complete a
change in name only, (i.e., when the name change in question is not the
result of an underlying change in control of the right-of-way grant or
TUP), the following requirements must be met:
(1) The holder must file an application requesting a name change
and follow the same procedures as for a new grant or TUP, including
paying processing fees (see subpart 2884 of this part). The name change
request must include:
(i) If the name change is for an individual, a copy of the court
order or other legal document effectuating the name change; or
(ii) If the name change is for a corporation, a copy of the
corporate resolution(s) proposing and approving the name change, a copy
of the filing/acceptance of the change in name by the State or
territory in which it is incorporated, and a copy of the appropriate
resolution(s), order(s), or

[[Page 92230]]

other documentation showing the name change.
(2) In connection with processing of a name change only, the BLM
retains the authority under Sec. 2885.13(e) to modify the grant or
TUP, or add bonding and other requirements, including additional terms
and conditions, to the grant or TUP.
(3) Your name change is not recognized until the BLM approves it in
writing.

0
71. In Sec. 2887.12, add paragraphs (d) and (e) to read as follows:

Sec. 2887.12 How do I renew my grant?

* * * * *
(d) If you make a timely and sufficient application for a renewal
of your existing grant or for a new grant in accordance with this
section, the existing grant does not expire until we have issued a
decision to approve or deny the application.
(e) If we deny your application, you may appeal the decision under
Sec. 2881.10.

Dated: November 10, 2016.
Amanda C. Leiter,
Acting Assistant Secretary for Land and Minerals Management, Department
of the Interior.
[FR Doc. 2016-27551 Filed 12-16-16; 8:45 am]
BILLING CODE 4310-84-P

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