Annual Charges for Use of Government Lands in Alaska, 1-7 [2017-28095]
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Rules and Regulations
Federal Register
Vol. 83, No. 1
Tuesday, January 2, 2018
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 11
[Docket No. RM16–19–000; Order No. 838]
Annual Charges for Use of
Government Lands in Alaska
Federal Energy Regulatory
Commission.
AGENCY:
ACTION:
Final rule.
The Federal Power Act
requires hydropower licensees to
recompense the United States for the
use, occupancy, and enjoyment of
federal lands. The Federal Energy
Regulatory Commission (Commission)
assesses annual charges for the use of
federal lands through its regulations
concerning charges for the use of
government lands. In this Final Rule,
the Commission revises the per-acre
land value component of its
methodology for calculating these
annual charges for hydropower projects
located in Alaska. Pursuant to the Final
Rule, the Commission will calculate a
statewide per-acre land value for
hydropower lands in Alaska. The
Commission will use this statewide peracre land value, rather than a regional
per-acre land value, to calculate annual
SUMMARY:
charges for use of federal lands for all
hydropower projects in Alaska, except
those located in the Aleutian Islands
Area.
This rule will become effective
February 1, 2018.
FOR FURTHER INFORMATION CONTACT:
Tara DiJohn (Legal Information), Office
of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE, Washington, DC
20426, (202) 502–8671, tara.dijohn@
ferc.gov
Norman Richardson (Technical
Information), Office of the Executive
Director, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
6219, norman.richardson@ferc.gov
SUPPLEMENTARY INFORMATION:
DATES:
Table of Contents
Paragraph Nos.
I. Background ................................................................................................................................................................................
A. Order No. 774 ...................................................................................................................................................................
1. Per-Acre Land Value ..................................................................................................................................................
2. Per-Acre Land Value for Alaska ................................................................................................................................
B. Fiscal Year 2016 Fee Schedule ........................................................................................................................................
C. Petition for Rulemaking ...................................................................................................................................................
D. Notice of Inquiry ..............................................................................................................................................................
E. Notice of Proposed Rulemaking .......................................................................................................................................
II. Discussion ................................................................................................................................................................................
A. Calculation of Statewide Per-Acre Value ........................................................................................................................
B. Application of Statewide Per-Acre Value .......................................................................................................................
C. Effective Date of Statewide Per-Acre Value ....................................................................................................................
III. Regulatory Requirements .......................................................................................................................................................
A. Information Collection Statement ...................................................................................................................................
B. Environmental Analysis ...................................................................................................................................................
C. Regulatory Flexibility Act ................................................................................................................................................
D. Document Availability .....................................................................................................................................................
E. Effective Date and Congressional Notification ................................................................................................................
Order No. 838
Final Rule
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(Issued December 21, 2017)
1. The Federal Power Act (FPA)
requires hydropower licensees that use
federal lands to compensate the United
States for the use, occupancy, and
enjoyment of federal lands.1 Currently,
the Commission uses a fee schedule,
based on the U.S. Bureau of Land
Management’s (BLM) methodology for
calculating rental rates for linear rights
of way, to calculate annual charges for
use of federal lands. The Commission’s
fee schedule identifies a fee for each
1 16
U.S.C. 803(e)(1) (2012).
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county or geographic area, which is the
product of four components: A per-acre
land value, an encumbrance factor, a
rate of return, and an annual adjustment
factor. The per-acre land value for a
particular county or geographic area
(i.e., a regional per-acre land value) is
determined using the average per-acre
land value identified by the National
Agricultural Statistics Service (NASS)
Census. This Final Rule amends part 11
of the Commission’s regulations and
implements the use of a revised per-acre
land value component for calculating
these annual charges for hydropower
projects located in Alaska. Under the
Final Rule, the Commission will use a
statewide per-acre land value, rather
than a regional per-acre land value, to
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calculate annual charges for use of
federal lands for all hydropower
projects in Alaska, except those located
in the Aleutian Islands Area.
I. Background
2. Section 10(e)(1) of the FPA requires
Commission hydropower licensees
using federal lands to pay reasonable
annual charges, as determined by the
Commission, to recompense the United
States for the use and occupancy of its
lands.2 While the Commission may
2 16 U.S.C. 803(e)(1) (2012). Section 10(e)(1) also
requires licensees to reimburse the United States for
the costs of administering Part I of the FPA. Those
charges are calculated and billed separately from
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periodically adjust these charges, it
must seek to avoid increasing the price
to power consumers by such charges.3
In other words, licensees that use and
occupy federal lands for project
purposes must compensate the United
States through payment of an annual
fee, to be established by the
Commission.4
3. The Commission has adopted
various methods over the years to
accomplish this statutory directive.5
Currently, the Commission uses a fee
schedule method, based on land values
published in the NASS Census, to
calculate annual charges for use of
government lands. The Commission
adopted this approach in a final rule
issued on January 12, 2013.6
A. Order No. 774
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4. In Order No. 774, the Commission
adopted a fee schedule method for
calculating annual charges for use of
government lands, based on BLM’s
methodology for calculating rental rates
for linear rights of way. Pursuant to
§ 11.2 of the Commission’s regulations,
the Commission publishes an annual fee
schedule which lists per-acre rental fees
by county or geographic area.7 To
calculate a licensee’s annual charge for
use of government lands, the
Commission multiplies the applicable
county or geographic area per-acre fee
identified in the fee schedule by the
number of federal acres used by the
hydroelectric project, as reported by that
licensee.
5. The per-acre rental fee for a
particular county or geographic area is
calculated by multiplying four
components: (1) A per-acre land value;
(2) an encumbrance factor; (3) a rate of
return; and (4) an annual adjustment
factor.
the federal land use charges, and are not the subject
of this rulemaking.
3 Id.
4 Pursuant to FPA section 17(a), 16 U.S.C. 810(a)
(2012), the fees collected for use of government
lands are allocated as follows: 12.5 percent is paid
into the Treasury of the United States, 50 percent
is paid into the federal reclamation fund, and 37.5
percent is paid into the treasuries of the states in
which particular projects are located. No part of the
fees discussed in this rulemaking is used to fund
the Commission’s operations.
5 See Annual Charges for Use of Government
Lands, Order No. 774, FERC Stats. & Regs. ¶ 31,341,
at PP 3–20 (2013) (cross-referenced at 142 FERC
¶ 61,045) (examining the myriad methods the
Commission has used or considered since 1937 for
assessing annual charges for the use of government
lands).
6 See generally, Order No. 774, FERC Stats. &
Regs. ¶ 31,341.
7 18 CFR 11.2 (2017). The fee schedule is
published annually as part of appendix A to part
11 of the Commission’s regulations.
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1. Per-Acre Land Value
6. The first component—the per-acre
land value—is based on average per-acre
land values published in the NASS
Census. The per-acre value for a
particular county or geographic area is
identified using the corresponding
NASS-published per-acre ‘‘land and
buildings’’ value.8 This per-acre value is
then reduced by the sum of a statespecific modifier (to remove the value of
irrigated lands) and seven percent (to
remove the value of buildings or other
improvements). The end result is the
adjusted per-acre land value.
7. The NASS Census is conducted
every five years, with an 18-month
delay before the census data is
published. The Commission
incorporates another 18-month delay to
account for revisions, consistent with
BLM’s implementation of its 2008 rule.
Therefore, the Commission based its
2011–2015 fee schedules on data from
the 2007 NASS Census. The
Commission’s 2016–2020 fee schedules
will be based on data from the 2012
NASS Census; the 2021–2025 fee
schedules will be based on data from
the 2017 NASS Census; the 2026–2030
fee schedules will be based on data from
the 2022 NASS Census; and so on.
State-specific adjustments to the peracre land values are performed in the
first year that data from a new NASS
Census are used, and will remain the
same until the subsequent NASS Census
data are used to calculate the
forthcoming set of fee schedules.
2. Per-Acre Land Value for Alaska
8. With regard to Alaska, Order No.
774 explained that the final rule would
adopt BLM’s approach to per-acre land
values by designating lands in Alaska as
part of one of the five NASS Census
geographic area identifiers: The
Aleutian Islands Area, the Anchorage
Area, the Fairbanks Area, the Juneau
Area, or the Kenai Peninsula Area.
Under BLM’s 2008 rule, the Aleutian
Islands Area includes all lands within
the Aleutian Islands chain; the
Fairbanks Area includes all lands
within the BLM Fairbanks District
boundaries; the Kenai Peninsula Area
includes all lands within the BLM
Anchorage District boundaries
excluding the Aleutian Islands chain,
the Anchorage Area, and, the Juneau
Area; the Anchorage Area includes all
lands within the Municipality of
8 The NASS Census ‘‘land and buildings’’
category is a combination of all land use categories
in the NASS Census, including croplands (irrigated
and non-irrigated), pastureland/rangeland,
woodland, and ‘‘other’’ (roads, ponds, wasteland,
and land encumbered by non-commercial/nonresidential buildings).
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Anchorage; and the Juneau Area
includes all lands within downtown
Juneau (i.e., voting precincts 1, 2, and
3).
9. Several commenters asserted that a
per-acre statewide value, a category also
reported by the NASS Census, should be
used to establish assessments for federal
land in Alaska.9 Order No. 774
considered the arguments raised in
support of a statewide per-acre value. In
particular, several commenters asserted
that it is inappropriate to use regional
per-acre values for Alaska because
Alaska does not use county
designations; the number of farms
surveyed for the NASS Census in the
entire state of Alaska is less than the
number of farms surveyed in most
counties in the lower-48 states; and,
certain per-acre land values near
Anchorage and Juneau are very high,
resulting in a substantial increase in
annual charges for the use of
government lands by hydropower
licensees in these areas. However, the
Commission ultimately concluded that
the commenters had not advanced a
sufficient explanation for why it was
more appropriate to use a statewide peracre value for Alaska, rather than the
smallest NASS Census defined area for
Alaska—the geographic area identifier.
10. Although the Commission rejected
the use of a statewide per-acre land
value for Alaska in Order No. 774, the
Commission clarified that it would not
use rates based on the Anchorage Area
and the Juneau Area values to assess
annual land use charges ‘‘because these
high, urban-based rates would not
reasonably reflect the value of
government lands on which
hydropower projects are located.’’ 10
Instead, for purposes of determining a
per-acre land value, the Commission
decided to apply the Kenai Peninsula
Area per-acre value for projects located
in the Anchorage Area or the Juneau
Area. Therefore, Order No. 774
explained that projects in Alaska would
be assessed the Aleutian Islands Area
per-acre land value if located in the
Aleutian Islands chain, the Fairbanks
Area per-acre land value if located in
the Fairbanks BLM District, or the Kenai
Peninsula Area per-acre land value if
located in the Anchorage BLM District
excluding the Aleutian Islands chain.
B. Fiscal Year 2016 Fee Schedule
11. The Commission used the 2012
NASS Census data to calculate its fee
schedule for the first time in Fiscal Year
(FY) 2016. Due to per-acre land value
9 Order No. 774, FERC Stats. & Regs. ¶ 31,341 at
P 44.
10 Id. P 45.
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better reflect the diverse topography of
the state and insulate against land value
fluctuations caused by individual
changes in farm data. The Alaska Group
stated that this method would produce
a more accurate estimate of the fair
market value of federal lands in Alaska.
C. Petition for Rulemaking
12. On June 6, 2016, the Alaska
Federal Land Fees Group, comprising
six hydroelectric licensees with projects
in Alaska (Alaska Group),12 petitioned
the Commission to conduct a
rulemaking to revise its method of
calculating federal land use charges for
hydropower projects in Alaska. The
Alaska Group’s petition focused solely
on the first component of the
Commission’s fee schedule—the peracre land value—and requested that the
Commission: (1) Calculate an adjusted
statewide average per-acre land value
for Alaska and (2) apply this adjusted
statewide average per-acre fee to all
projects in Alaska, except those located
in the Aleutian Islands area.13
13. In support of this proposal, the
Alaska Group stated that due to the
small number of farms (and associated
agricultural acreage) that contribute to
the data compiled in the NASS Census,
there is insufficient data in any
individual Alaska area (with the
exception of the Aleutian Islands) 14 to
produce a fair estimate of land values
within that area. Because there are so
few farms outside of the Aleutian
Islands Area, the Alaska Group
indicated that the per-acre land values
in the other four geographic areas of
Alaska are extremely sensitive to any
changes in the self-reported farm data
compiled by the NASS Census.
14. For these reasons, the Alaska
Group asserted that an adjusted
statewide per-acre land value would
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increases in the 2012 NASS Census
data, hydropower projects located in
certain geographic areas in Alaska
experienced a significant increase in
federal land use charges when
compared to the rates assessed in FY
2015.11
D. Notice of Inquiry
11 In the 2012 NASS Census, changes in land
values in other parts of the country varied widely:
Some rose significantly, some rose by relatively
small amounts, and some decreased.
12 Alaska Electric Light and Power, Bradley Lake
Project Management Committee (on behalf of
licensee Alaska Energy Authority), Chugach Electric
Association, the Ketchikan Public Utilities, Copper
Valley Electric Association, and Southeast Alaska
Power Agency.
13 The Alaska Group requests that any project
located in the Aleutian Islands Area continue to be
assessed annual charges for use of government
lands based on a regional per-acre land value.
14 The Alaska Group contended that because the
Aleutian Islands Area contains the greatest amount
of farmland in the state (668,016 acres), the NASS
Census data for the Aleutian Islands Area is
‘‘robust, reliable, and an accurate estimate of fair
market value.’’ Alaska Group’s June 6, 2016 Petition
for Rulemaking at 18. Therefore, the Alaska Group
requested that the proposed statewide per-acre land
value be applied to all hydropower projects located
in Alaska, except those projects located in the
Aleutian Islands Area.
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concerns that the NASS Census data
fails to provide an accurate accounting
of land values in Alaska.
19. Kodiak Electric, a licensee of a
hydropower project located in the
Aleutian Islands Area, stated that the
regional per-acre land values published
in the NASS Census result in reasonably
accurate land valuations for hydropower
lands in the Aleutian Islands Area.
Citing the large number of agricultural
acreage reported by the NASS Census
for the Aleutian Islands Area, Kodiak
Electric recommended that any
statewide per-acre land value for
Alaska, if adopted, not be applied to
projects located in the Aleutian Islands
Area.
20. The Forest Service was the only
commenter to provide alternative
proposals for Commission
consideration. Due to the small number
of farms in Alaska, the Forest Service
cautioned against the use of a fee
schedule based on NASS Census data.
Instead, the Forest Service
recommended that the Commission
consider calculating federal land
charges for Alaska using BLM’s
‘‘Minimum Rent Schedule for BLM
Land Use Authorizations in Alaska
2015’’ or a fee based on power
generated, similar to BLM’s solar fee
schedule.
21. Two individuals urged the
Commission to decline the request to
alter its current method for calculating
federal land use charges for hydropower
projects in Alaska. They expressed
concern that the use of a statewide peracre land value might result in the
under-collection of reasonable annual
charges, and questioned whether the
Alaska Group sufficiently demonstrated
that a statewide per-acre value would be
more accurate than a regional per-acre
land value.
15. On November 17, 2016, the
Commission issued a Notice of Inquiry
soliciting input on a narrow question
related to its current method for
calculating annual charges for the use of
government lands—whether regional
per-acre land values based on data
published in the NASS Census ‘‘land
and buildings’’ category result in
reasonably accurate land valuations for
projects that occupy federal lands in
Alaska.15 Specifically, the Commission
asked whether it should: (1) Use a
statewide per-acre land value rather
than a regional per-acre land value to
calculate the adjusted per-acre land
value for projects that occupy federal
lands in Alaska; (2) apply such a
statewide per-acre land value to (i) all
projects in Alaska, or (ii) all projects in
Alaska except those located in the
Aleutian Islands Area; and (3) use only
certain geographic regions of Alaska to
calculate such a statewide per-acre land
value.
16. In addition, the Notice of Inquiry
encouraged commenters to submit
alternative proposals for determining
reasonably accurate per-acre land values
for projects in Alaska, provided that any
proffered alternatives were grounded in
the NASS Census data. The notice also
invited federal land management
agencies to comment on how they
would view reductions in annual
charges for the lands they administer.
17. In response to the Notice of
Inquiry, seven entities filed comments,
including several Alaska licensees, a
U.S. senator, the U.S. Forest Service
(Forest Service), and two individuals.
18. The Alaska Group’s comments
reiterated its position that the
Commission should adopt a statewide
per-acre land value for all hydropower
projects in Alaska, and apply the
statewide per-acre value to all projects
in Alaska, except those located in the
Aleutian Islands Area. Similarly, U.S.
Senator Lisa Murkowski and Homer
Electric, an electric distribution
cooperative in the Kenai Peninsula,
urged the Commission to adopt a
statewide per-acre land value for
Alaska. These commenters echoed
22. In an August 17, 2017 Notice of
Proposed Rulemaking (NOPR), the
Commission proposed to adopt the use
of a statewide per-acre land value,
rather than a regional per-acre land
value, for the purposes of calculating
annual charges for hydropower projects
that occupy federal lands in Alaska.16
23. To calculate a statewide per-acre
land value for Alaska, the NOPR
proposed that the Commission would
average the data published in the ‘‘land
and buildings’’ category of the NASS
Census for two geographic areas: The
Kenai Peninsula Area and the Fairbanks
15 Annual Charges for Use of Government Lands
in Alaska, FERC Stats. & Regs. ¶ 31,579 (2016)
(NOI). The NOI was published in the Federal
Register on November 25, 2016. 81 FR 85173.
16 Annual Charges for Use of Government Lands
in Alaska, FERC Stats. & Regs. ¶ 32,722 (2017)
(NOPR). The NOPR was published in the Federal
Register on August 31, 2017. 82 FR 41359.
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E. Notice of Proposed Rulemaking
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Area.17 The proposed rule explained
that, pursuant to the Commission’s
current methodology, the statewide peracre value would be reduced by the sum
of Alaska’s state-specific reduction to
remove the value of irrigated lands and
a seven percent reduction to remove the
value of buildings. The Commission
would then apply the resulting adjusted
statewide per-acre land value to all
hydropower projects in Alaska except
for projects located in the Aleutian
Islands Area. The NOPR also stated that
the Commission would continue to
apply the regional per-acre land value
for the Aleutian Islands Area.18
24. The proposed rule represented an
effort to respond to the issues identified
by the petitioners—the prevalence of
federal lands in Alaska, the sparse
amount of agricultural acreage reflected
in the NASS Census, and the increase in
annual charges that resulted when the
Commission began using data from the
2012 NASS Census. Combining the
value of the farmland acreage in the
Kenai Peninsula and Fairbanks Areas to
calculate a statewide per-acre land
value, as proposed in the NOPR, would
result in a larger, more robust data set
that will be less prone to future
fluctuation due to changes in the level
of participation in NASS Census data
reporting or specific anomalies in the
data reported.
25. The NOPR did not propose to
adopt the Alaska Group’s suggestion of
including Aleutian Islands Area values
in calculating a statewide per-acre land
value to be applied to hydropower
projects located outside of the Aleutian
Islands Area, because those values are
lower than land values elsewhere in the
state.19
26. The NOPR also evaluated two
alternative proposals recommended by
the Forest Service: (i) A method based
on the 2015 Minimum Rent Schedule
for BLM Land Use Authorizations in
Alaska; 20 and (ii) a fee based on power
17 As we noted earlier, the Commission does not
use the NASS Census data from the Anchorage Area
or the Juneau Area for the purpose of determining
per-acre land values because the predominantly
high, urban-based rates do not reasonably reflect the
value of government lands on which hydropower
projects are located. See supra P 9.
18 As explained in the NOPR, the Commission is
satisfied that the use of the regional per-acre land
value for the Aleutian Islands Area results in
reasonably accurate land values due to the large
amount of farmland acreage represented in the
NASS Census data for this particular geographic
area.
19 NOPR, FERC Stats. & Regs. ¶ 32,722 at P 27.
20 See generally BLM, Rent for Remote NonLinear Rights-of-Way, Permits and Leases, https://
www.blm.gov/policy/im-ak-2015-010 (instruction
memorandum describing the U.S. Department of the
Interior—Office of Valuation Services’ April 2015
Minimum Rent Analysis & Schedule, which
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generated, similar to BLM’s solar fee
schedule.21 Because these alternative
proposals would likely result in higher
per-acre land fees for Alaska or would
rely on practices the Commission has
previously rejected, the Commission
declined to consider these alternatives
further.22
II. Discussion
27. In this Final Rule, the Commission
revises the per-acre land value
component of its methodology for
calculating annual charges for the use of
federal lands by hydropower licensees
in Alaska, and amends part 11 of its
regulations accordingly. As proposed in
the NOPR, the Commission will
calculate a statewide per-acre land value
for hydropower lands in Alaska. The
Commission will use this statewide peracre land value, rather than a regional
per-acre land value, to calculate annual
charges for use of federal lands for all
hydropower projects in Alaska, except
those located in the Aleutian Islands
Area.
A. Calculation of Statewide Per-Acre
Value
28. The Alaska Group filed comments
in support of the Commission’s proposal
to use a statewide per-acre land value to
calculate federal land charges for
hydropower projects in Alaska. The
Alaska Group urges the Commission to
adopt the proposal set forth in the
NOPR, with three ‘‘refinements.’’ First,
the Alaska Group requests that the
Commission issue the Final Rule with
an effective date of FY 2016 and issue
refunds to any Alaska licensee that paid
FY 2016 federal land use charges in
excess of the amount due under the
Final Rule’s revised calculation method.
Second, the Alaska Group asks the
Commission to reconsider its decision
to exclude the Aleutian Islands Area
from its calculation of a statewide peracre land value. Third, the Alaska
Group reasserts its argument that the
use of NASS Census data does not result
in fair or accurate valuations of federal
lands on which hydropower projects are
located, contending that the NASS
Census data significantly overvalues
federal lands in most of Alaska. While
expressing support for the NOPR, the
Alaska Group seeks to reserve the right
provides guidance and a rental schedule for land
use authorizations of up to 25 acres across each of
BLM’s district and field offices in Alaska).
21 See Competitive Processes, Terms, and
Conditions for Leasing Public Lands for Solar and
Wind Energy Development and Technical Changes
and Corrections, 81 FR 92122, 92217–18 (December
19, 2016) (to be codified at 43 CFR parts 2800 and
2880).
22 See NOPR, FERC Stats. & Regs. ¶ 32,722 at PP
28–29.
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to petition for further adjustments to the
Commission’s method for calculating
federal land use charges for hydropower
projects located in Alaska.
29. Jon Griffiths, a public policy
research assistant at the George
Washington University, expresses
support for the NOPR’s proposal to
adopt a statewide per-acre land value
for Alaska, but recommends that the
statewide value be based on an average
of the NASS Census data for all five
geographic areas in Alaska, rather than
just the Fairbanks and Kenai Peninsula
Areas. In particular, Mr. Griffiths
recommends that the Commission
include the Anchorage Area in its
calculation of a statewide per-acre land
value because it has the largest number
of agricultural properties in Alaska. In
addition, Mr. Griffiths observes that
including all five geographic areas
would result in a more robust and
representative data set. Finally, Mr.
Griffiths asserts that the NOPR’s
proposal amounts to a federal subsidy
for hydropower projects because
licensees are paying for land at a value
less than its current worth.
30. Aurora Taylor, an Alaska resident,
contends that the use of NASS Census
data is an inaccurate land pricing
method. She questions whether the use
of a statewide per-acre land value—
calculated by averaging NASS Census
data from only two geographic areas
(i.e., Fairbanks and Kenai Peninsula
Areas)—would result in a more accurate
and stable land valuation method for
Alaska.23 Ms. Taylor also suggests that
the Commission consider an alternative
fee structure based on the amount of
energy generated by the project.
However, as noted in the NOPR, the
Commission previously rejected as
unreasonable proposals based on a
project’s power capacity, generation, or
sales revenue because such fees would
result in a royalty as if the occupied
federal lands themselves were
producing power.24 The Commission
has explained that this type of fee
23 Ms. Taylor also expresses concern that the
Commission’s current method for calculating
federal land use charges fails to account for the
environmental costs of damming rivers. In
response, the Commission explains that these
charges represent a rental fee for the licensee’s use
of federal acreage. Therefore, it is reasonable for the
Commission to seek to establish a fair market rate
for the use of federal acreage, rather than a rate
based on quantifying environmental costs. In any
event, the Commission evaluates the environmental
impacts of a proposed hydropower project during
the licensing decision, and has noted that it is not
possible to assign dollar values to environmental
impacts. See Great Northern Paper, Inc., 85 FERC
¶ 61,316, at 62,244–45 (1998), aff’d, Conservation
Law Foundation v. FERC, 216 F.3d 41, 47–48 (D.C.
Cir. 2000).
24 See NOPR, FERC Stats. & Regs. ¶ 32,722 at P
29 n.20.
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schedule would overlook the fact that
power output is the result of several
factors (e.g., water rights, head, project
structures), not just the acreage of the
federal lands involved.25
31. The Final Rule adopts the same
revised calculation method proposed in
the NOPR. To calculate a statewide peracre land value, the Commission will
divide the total estimated market value
by the total agricultural acreage
(published in the ‘‘land and buildings’’
category of the NASS Census) for the
Kenai Peninsula Area and the Fairbanks
Area to arrive at an average per-acre
land and building value. Pursuant to the
Commission’s current methodology, the
Commission will adjust the resulting
per-acre value by Alaska’s state-specific
reduction to remove the value of
irrigated lands, as well as a seven
percent reduction to remove the value of
buildings (i.e., the adjusted per-acre
land value). The Commission will apply
this adjusted statewide per-acre land
value to all hydropower projects in
Alaska except those located in the
Aleutian Islands chain. Any project
located in the Aleutian Islands chain
will continue to be assessed the
Aleutian Islands Area per-acre land
value.
32. Two commenters recommended
that the Commission calculate the
statewide per-acre land value for Alaska
using data from all five geographic areas
identified in the NASS Census. One
commented that the failure to
incorporate data from all regions in
Alaska, including the Anchorage and
Juneau Areas, undervalues federal lands
and amounts to a federal subsidy for
hydropower projects. However, in
accordance with the policy adopted in
Order No. 774, the Commission has
never used the NASS Census data from
the Anchorage Area or the Juneau Area
for the purposes of determining per-acre
land values because the predominately
high, urban-based rates do not
reasonably reflect the value of
government lands on which
hydropower projects are located. No
evidence has been provided during the
course of this rulemaking that leads the
Commission to reconsider this decision.
Moreover, using these high, urban-based
rates to calculate a statewide per-acre
value would likely overvalue
hydropower lands and artificially inflate
federal land use charges.
25 See Annual Charges for the Use of Government
Lands, FERC Stats. & Regs ¶ 32,684, at P 9 (2011)
(citing Revision of the Billing Procedures for Annual
Charges for Administering Part I of the Federal
Power Act and to the Methodology for Assessing
Federal Land Use Charges, Order No. 469, FERC
Stats. & Regs. ¶ 30,741, at 30,589–90 (1987)).
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33. Similarly, the Commission is not
persuaded by the Alaska Group’s call to
include data from the Aleutian Islands
Area to calculate a statewide per-acre
land value. The Alaska Group asks the
Commission to use Aleutian Islands
Area data to calculate the statewide peracre value, but not apply the resulting
statewide value to projects in the
Aleutian Islands Area, which would
dramatically lower the resulting
statewide value, while maintaining the
use of the Aleutian Islands Area’s
extremely low regional per-acre value
($1.02 per acre, adjusted) for projects in
the Aleutian Islands Area. This
inconsistent approach would
undervalue hydropower lands and
artificially deflate federal land use
charges across the state. Commission
staff compared the FY 2017 per-acre
rates for hydropower projects located in
the Kenai Peninsula Area under the
Commission’s current methodology
($57.97), the NOPR’s proposal ($36.53),
and the Alaska Group’s proposal
($6.75).26 The drastic decrease between
the NOPR’s proposal and the Alaska
Group’s proposal directly corresponds
to the inclusion of the Aleutian Islands
Area data. We are not convinced that
this lower rate would result in fair
compensation to the United States and
the taxpayers for the use of public lands.
34. We are satisfied that a statewide
per-acre value, based on data from the
Kenai Peninsula and Fairbanks Areas, is
an appropriate response to the Alaska
Group’s Alaska-specific concerns. The
revised calculation method uses a larger
data set of agricultural acreage that will
be better insulated from fluctuation
between census years. It also excludes
extreme land values that would
artificially overvalue or undervalue
hydropower lands and preserves the
administrative efficiency benefits of
using a publicly available index of land
values to calculate rates. Therefore, on
balance, the Commission finds that the
Final Rule’s revised calculation method
results in a reasonable approximation of
per-acre land values for hydropower
lands in Alaska.27
26 The NOPR’s proposed calculation results in a
$36.53 adjusted per-acre land value rate for FY
2017, which represents an approximate 9 percent
increase from the FY 2015 rate for the Kenai
Peninsula Area ($33.28). FY 2015 was the last year
the Commission used data from the 2007 NASS
Census to calculate federal land use charges.
27 In its comments on the NOPR, the Alaska
Group stated that it reserves the right to petition the
Commission for future adjustments to the land
valuation method for federal lands in Alaska. The
Commission will consider, but may not act on,
future petitions requesting it to revise its method for
calculating federal land use charges for hydropower
projects located in Alaska.
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5
B. Application of Statewide Per-Acre
Value
35. Kodiak Electric filed comments on
the NOPR, reiterating its assertion that
the regional per-acre land value results
in a reasonably accurate land valuation
for hydropower lands in the Aleutian
Islands Area. Kodiak Electric expresses
support for the NOPR’s proposal to
continue to apply the regional per-acre
land value, rather than the statewide
per-acre land value, for projects located
in the Aleutian Islands Area. Pursuant
to the Final Rule, the Commission will
apply the statewide per-acre land value
to all hydropower projects located in
Alaska, except those located in the
Aleutian Islands Area. For projects
located in the Aleutian Islands Area, the
Commission will continue to apply the
regional per-acre land value when
calculating federal land use charges.
C. Effective Date of Statewide Per-Acre
Value
36. The Alaska Group contends that
the effective date of the Final Rule
should be FY 2016, and urges the
Commission to issue refunds to any
Alaska licensee that paid FY 2016
federal land use charges in excess of the
amount that would be due under the
Final Rule’s revised calculation method.
We deny this request. The Commission
previously considered and rejected
various legal and policy arguments
made by the Alaska Group on behalf of
its member licensees seeking partial
refunds of their FY 2016 federal land
use charges because they claimed such
charges were unreasonable.28 The
members of the Alaska Group elected
not to seek judicial review of this
decision, such that an attack on it now
is untimely. Further, they have not
asserted, let alone proved, that the past
payments resulted in any hardship to
the licensees in question. Accordingly,
we will not revisit those arguments
here. The Final Rule’s revised
calculation method, set forth in
§ 11.2(c)(1)(iv) of the Commission’s
regulations, will be used to calculate
any federal land use bills for Alaska
licensees that are issued on or after the
effective date of this Final Rule (i.e., FY
2017 bills, onward).
28 Alaska Elec. Light & Power, 157 FERC ¶ 61,111
(2016) (finding the calculation of the Alaska
Group’s FY 2016 federal land use charges
reasonable, and not a change in Commission
procedure or policy). The Alaska Group did not
appeal the Commission’s order denying rehearing of
this issue. Additionally, the decision to adopt a
revised calculation method for projects in Alaska
does not negate the Commission’s determination
that the FY 2016 federal land use charges were
reasonable and calculated appropriately.
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Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Rules and Regulations
III. Regulatory Requirements
A. Information Collection Statement
37. The Paperwork Reduction Act 29
requires each federal agency to seek and
obtain Office of Management and
Budget (OMB) approval before
undertaking a collection of information
directed to ten or more persons or
contained in a rule of general
applicability. OMB regulations require
approval of certain information
collection requirements contained in
final rules published in the Federal
Register.30 This rule does not impose or
alter existing reporting or recordkeeping
requirements on applicable entities as
defined by the Paperwork Reduction
Act.31 As a result, this rule does not
trigger the Paperwork Reduction Act.
B. Environmental Analysis
38. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant effect on the human
environment.32 Commission actions
concerning annual charges are
categorically exempt from this
requirement.33
C. Regulatory Flexibility Act
39. The Regulatory Flexibility Act of
1980 (RFA) 34 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. The RFA mandates
consideration of regulatory alternatives
that accomplish the stated objectives of
a rulemaking and minimize any
significant economic impact on a
substantial number of small entities.35
40. The Small Business
Administration’s (SBA) Office of Size
Standards develops the numerical
definition of a small business.36 The
SBA revised its size standard for electric
utilities (effective January 22, 2014)
from a standard based on megawatt
hours to a standard based on the
number of employees, including
affiliates.37 Under SBA’s current size
standards, a hydroelectric generator is
small if, including its affiliates, it
employs 500 or fewer people.38
29 44
U.S.C. 3501–3521 (2012).
5 CFR 1320.12 (2017).
31 44 U.S.C. 3502(2)–(3) (2012).
32 Regulations Implementing the National
Environmental Policy Act of 1969, Order No. 486,
FERC Stats. & Regs. ¶ 30,783 (1987).
33 18 CFR 380.4(a)(11) (2017).
34 5 U.S.C. 601–612.
35 5 U.S.C. 603(c) (2012).
36 13 CFR 121.101 (2017).
37 SBA Final Rule on ‘‘Small Business Size
Standards: Utilities,’’ 78 FR 77343 (Dec. 23, 2013).
38 13 CFR 121.201, Sector 22, Utilities (2017).
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41. Section 10(e)(1) of the FPA
requires that the Commission fix a
reasonable annual charge for the use,
occupancy, and enjoyment of federal
lands by hydropower licensees. To date,
the Commission has issued 21 active
licenses that occupy federal lands in
Alaska to 15 discrete entities. Therefore,
the Final Rule will apply to a total of 15
entities. Of these 15 entities, 13 entities
would be impacted by the Final Rule
because they hold licenses that occupy
federal lands in the Kenai Peninsula,
Fairbanks, Juneau, or Anchorage
Areas.39 The Final Rule adopts the use
of a statewide per-acre land value,
rather than a regional per-acre land
value, for the purposes of calculating
annual charges for the use of federal
lands in Alaska. The Commission will
apply the statewide per-acre land value
to all hydropower projects in Alaska,
except those located in the Aleutian
Islands Area. The Commission will
continue to apply the regional per-acre
land value for projects located in the
Aleutian Islands Area.
42. Based on a review of the 13
licensees that would be impacted by the
Final Rule, we estimate that most, if not
all, are small entities under the SBA
definition. These 13 licensees include
utilities, non-for-profit electric
cooperatives, cities, and companies.
43. Any impact on these small entities
would not be significant. Under the
Final Rule, a statewide per-acre land
value for hydropower lands in Alaska
would be calculated based on a larger
agricultural data set, resulting in land
values that will be less prone to future
fluctuation caused by changes in census
data reporting. For Fiscal Year (FY)
2017, the statewide per-acre rate will be
lower than the regional per-acre rates
that were assessed in FY 2016 for the
majority of active licenses in Alaska
(other than those located in the Aleutian
Islands Area). Accordingly, the 13
affected licensees’ federal land use
charges for FY 2017 will be lower than
the total charges they should have paid
in the previous fiscal year based on
project geography.40 The use of a
39 We note that six of the 13 affected licensees are
members of the Alaska Group, which petitioned the
Commission to revise its methodology for
calculating annual charges for use of federal lands
by establishing a statewide per-acre land value for
Alaska.
40 During this rulemaking proceeding,
Commission staff identified two affected licensees
(P–2230 and P–10773) that were assessed federal
land use charges in FY 2013–2016 based on an
incorrect per-acre rate—an ‘‘All Areas’’ rate, rather
than the appropriate Kenai Peninsula Area rate—
resulting in lower total charges during this four year
period. Under the Final Rule, these two licensees
will pay charges based on the statewide per-acre
land value. Therefore, while their FY 2017 charges
will increase compared to the FY 2016, these two
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statewide per-acre rate will also result
in lower FY 2017 charges for each of the
13 affected licensees compared to the
FY 2017 charges they would be assessed
under the regional per-acre value
method. Consequently, the Final Rule
should not impose a significant
economic impact on small entities.
44. Accordingly, pursuant to section
605(b) of the RFA, the Commission
certifies that this Final Rule will not
have a significant economic impact on
a substantial number of small entities.
D. Document Availability
45. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and print the contents of this
document via the internet through the
Commission’s Home Page (https://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5:00 p.m.
Eastern time) at 888 First Street NE,
Room 2A, Washington, DC 20426.
46. From the Commission’s Home
Page on the internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
47. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from the
Commission’s Online Support at (202)
502–6652 (toll free at 1–866–208–3676)
or email at ferconlinesupport@ferc.gov,
or the Public Reference Room at (202)
502–8371, TTY (202) 502–8659. Email
the Public Reference Room at
public.referenceroom@ferc.gov.
E. Effective Date and Congressional
Notification
48. This regulation is effective
February 1, 2018. The Commission has
determined, with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not a ‘‘major rule’’
as defined in section 251 of the Small
Business Regulatory Enforcement
Fairness Act of 1996.41 This rule is
being submitted to the Senate, House,
and Government Accountability Office.
licensees have been undercharged since FY 2013
and will have lower FY 2017 charges under the
Final Rule than they would under the
Commission’s current methodology using the
appropriate per-acre land value (i.e., Kenai
Peninsula Area rate).
41 5 U.S.C. 804(2) (2012).
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Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Rules and Regulations
List of Subjects in 18 CFR Part 11
DEPARTMENT OF LABOR
Dams, Electric power, Indians—lands,
Public lands, Reporting and
recordkeeping requirements.
Employment and Training
Administration
By the Commission.
Issued: December 21, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
20 CFR Part 655
In consideration of the foregoing, the
Federal Energy Regulatory Commission
amends part 11, chapter I, title 18, Code
of Federal Regulations, as follows:
20 CFR Parts 702, 725, 726
Office of Workers’ Compensation
Programs
PART 11—ANNUAL CHARGES UNDER
PART I OF THE FEDERAL POWER ACT
Office of the Secretary
29 CFR Part 5
41 CFR Part 50–201
Wage and Hour Division
1. The authority citation for part 11
continues to read as follows:
■
Authority: 16 U.S.C. 792–828c; 42 U.S.C.
7101–7352.
29 CFR Parts 500, 501, 503, 530, 570,
578, 579, 801, 825
2. In § 11.2, add paragraph (c)(1)(iv) to
read as follows:
Occupational Safety and Health
Administration
§ 11.2
29 CFR Parts 1902, 1903
■
Use of government lands.
*
*
*
*
*
(c) * * *
(1) * * *
(iv) For all geographic areas in Alaska
except for the Aleutian Islands Area, the
Commission will calculate a statewide
per-acre value based on the average peracre land and building values published
in the NASS Census for the Kenai
Peninsula Area and the Fairbanks Area.
This statewide per-acre value will be
reduced by the sum of the state-specific
modifier and seven percent. The
resulting adjusted statewide per-acre
value will be applied to all projects
located in Alaska, except for projects
located in the Aleutian Island Area.
*
*
*
*
*
[FR Doc. 2017–28095 Filed 12–29–17; 8:45 am]
BILLING CODE 6717–01–P
Employee Benefits Security
Administration
Mine Safety and Health Administration
30 CFR Part 100
RIN 1290–AA33
Department of Labor Federal Civil
Penalties Inflation Adjustment Act
Annual Adjustments for 2018
Employment and Training
Administration, Office of Workers’
Compensation Programs, Office of the
Secretary, Wage and Hour Division,
Occupational Safety and Health
Administration, Employee Benefits
Security Administration, and Mine
Safety and Health Administration,
Department of Labor.
ACTION: Final rule.
AGENCY:
The U.S. Department of Labor
(Department) is publishing this final
rule to adjust for inflation the civil
monetary penalties assessed or enforced
in its regulations, pursuant to the
Federal Civil Penalties Inflation
Adjustment Act of 1990 as amended by
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Inflation Adjustment Act). The
Inflation Adjustment Act requires the
Department to annually adjust its civil
money penalty levels for inflation no
later than January 15 of each year. The
Inflation Adjustment Act provides that
agencies shall adjust civil monetary
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penalties notwithstanding Section 553
of the Administrative Procedure Act
(APA). Additionally, the Inflation
Adjustment Act provides a cost-of-living
formula for adjustment of the civil
penalties. Accordingly, this final rule
sets forth the Department’s 2018 annual
adjustments for inflation to its civil
monetary penalties.
DATES: This final rule is effective on
January 2, 2018. As provided by the
Inflation Adjustment Act, the increased
penalty levels apply to any penalties
assessed after January 2, 2018.
FOR FURTHER INFORMATION CONTACT: Erin
FitzGerald, Senior Policy Advisor, U.S.
Department of Labor, Room S–2312, 200
Constitution Avenue NW, Washington,
DC 20210; telephone: (202) 693–5076
(this is not a toll-free number). Copies
of this final rule may be obtained in
alternative formats (large print, Braille,
audio tape or disc), upon request, by
calling (202) 693–5959 (this is not a tollfree number). TTY/TDD callers may dial
toll-free 1–877–889–5627 to obtain
information or request materials in
alternative formats.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
29 CFR Part 2560, 2575, 2590
SUMMARY:
7
I. Background
II. Adjustment for 2018
III. Paperwork Reduction Act
IV. Administrative Procedure Act
V. Executive Order 12866: Regulatory
Planning and Review, Executive Order
13563: Improving Regulation and
Regulatory Review, and Executive Order
13771: Reducing Regulations and
Controlling Regulatory Costs
VI. Regulatory Flexibility Act and Small
Business Regulatory Enforcement
Fairness Act
VII. Other Regulatory Considerations
A. The Unfunded Mandates Reform Act of
1995
B. Executive Order 13132: Federalism
C. Executive Order 13175: Indian Tribal
Governments
D. The Treasury and General Government
Appropriations Act of 1999: Assessment
of Federal Regulations and Policies on
Families
E. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
F. Environmental Impact Assessment
G. Executive Order 13211: Energy Supply
H. Executive Order 12630: Constitutionally
Protected Property Rights
I. Executive Order 12988: Civil Justice
Reform Analysis
I. Background
On November 2, 2015, Congress
enacted the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015, Public Law 114–74, sec.
701 (Inflation Adjustment Act), which
further amended the Federal Civil
E:\FR\FM\02JAR1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 1 (Tuesday, January 2, 2018)]
[Rules and Regulations]
[Pages 1-7]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28095]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Rules
and Regulations
[[Page 1]]
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 11
[Docket No. RM16-19-000; Order No. 838]
Annual Charges for Use of Government Lands in Alaska
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Power Act requires hydropower licensees to
recompense the United States for the use, occupancy, and enjoyment of
federal lands. The Federal Energy Regulatory Commission (Commission)
assesses annual charges for the use of federal lands through its
regulations concerning charges for the use of government lands. In this
Final Rule, the Commission revises the per-acre land value component of
its methodology for calculating these annual charges for hydropower
projects located in Alaska. Pursuant to the Final Rule, the Commission
will calculate a statewide per-acre land value for hydropower lands in
Alaska. The Commission will use this statewide per-acre land value,
rather than a regional per-acre land value, to calculate annual charges
for use of federal lands for all hydropower projects in Alaska, except
those located in the Aleutian Islands Area.
DATES: This rule will become effective February 1, 2018.
FOR FURTHER INFORMATION CONTACT:
Tara DiJohn (Legal Information), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426, (202) 502-8671, [email protected]
Norman Richardson (Technical Information), Office of the Executive
Director, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6219, [email protected]
SUPPLEMENTARY INFORMATION:
Table of Contents
Paragraph Nos.
I. Background........................................ 2
A. Order No. 774................................. 4
1. Per-Acre Land Value....................... 6
2. Per-Acre Land Value for Alaska............ 8
B. Fiscal Year 2016 Fee Schedule................. 11
C. Petition for Rulemaking....................... 12
D. Notice of Inquiry............................. 15
E. Notice of Proposed Rulemaking................. 22
II. Discussion....................................... 27
A. Calculation of Statewide Per-Acre Value....... 28
B. Application of Statewide Per-Acre Value....... 35
C. Effective Date of Statewide Per-Acre Value.... 36
III. Regulatory Requirements......................... 37
A. Information Collection Statement.............. 37
B. Environmental Analysis........................ 38
C. Regulatory Flexibility Act.................... 39
D. Document Availability......................... 45
E. Effective Date and Congressional Notification. 48
Order No. 838
Final Rule
(Issued December 21, 2017)
1. The Federal Power Act (FPA) requires hydropower licensees that
use federal lands to compensate the United States for the use,
occupancy, and enjoyment of federal lands.\1\ Currently, the Commission
uses a fee schedule, based on the U.S. Bureau of Land Management's
(BLM) methodology for calculating rental rates for linear rights of
way, to calculate annual charges for use of federal lands. The
Commission's fee schedule identifies a fee for each county or
geographic area, which is the product of four components: A per-acre
land value, an encumbrance factor, a rate of return, and an annual
adjustment factor. The per-acre land value for a particular county or
geographic area (i.e., a regional per-acre land value) is determined
using the average per-acre land value identified by the National
Agricultural Statistics Service (NASS) Census. This Final Rule amends
part 11 of the Commission's regulations and implements the use of a
revised per-acre land value component for calculating these annual
charges for hydropower projects located in Alaska. Under the Final
Rule, the Commission will use a statewide per-acre land value, rather
than a regional per-acre land value, to calculate annual charges for
use of federal lands for all hydropower projects in Alaska, except
those located in the Aleutian Islands Area.
---------------------------------------------------------------------------
\1\ 16 U.S.C. 803(e)(1) (2012).
---------------------------------------------------------------------------
I. Background
2. Section 10(e)(1) of the FPA requires Commission hydropower
licensees using federal lands to pay reasonable annual charges, as
determined by the Commission, to recompense the United States for the
use and occupancy of its lands.\2\ While the Commission may
[[Page 2]]
periodically adjust these charges, it must seek to avoid increasing the
price to power consumers by such charges.\3\ In other words, licensees
that use and occupy federal lands for project purposes must compensate
the United States through payment of an annual fee, to be established
by the Commission.\4\
---------------------------------------------------------------------------
\2\ 16 U.S.C. 803(e)(1) (2012). Section 10(e)(1) also requires
licensees to reimburse the United States for the costs of
administering Part I of the FPA. Those charges are calculated and
billed separately from the federal land use charges, and are not the
subject of this rulemaking.
\3\ Id.
\4\ Pursuant to FPA section 17(a), 16 U.S.C. 810(a) (2012), the
fees collected for use of government lands are allocated as follows:
12.5 percent is paid into the Treasury of the United States, 50
percent is paid into the federal reclamation fund, and 37.5 percent
is paid into the treasuries of the states in which particular
projects are located. No part of the fees discussed in this
rulemaking is used to fund the Commission's operations.
---------------------------------------------------------------------------
3. The Commission has adopted various methods over the years to
accomplish this statutory directive.\5\ Currently, the Commission uses
a fee schedule method, based on land values published in the NASS
Census, to calculate annual charges for use of government lands. The
Commission adopted this approach in a final rule issued on January 12,
2013.\6\
---------------------------------------------------------------------------
\5\ See Annual Charges for Use of Government Lands, Order No.
774, FERC Stats. & Regs. ] 31,341, at PP 3-20 (2013) (cross-
referenced at 142 FERC ] 61,045) (examining the myriad methods the
Commission has used or considered since 1937 for assessing annual
charges for the use of government lands).
\6\ See generally, Order No. 774, FERC Stats. & Regs. ] 31,341.
---------------------------------------------------------------------------
A. Order No. 774
4. In Order No. 774, the Commission adopted a fee schedule method
for calculating annual charges for use of government lands, based on
BLM's methodology for calculating rental rates for linear rights of
way. Pursuant to Sec. 11.2 of the Commission's regulations, the
Commission publishes an annual fee schedule which lists per-acre rental
fees by county or geographic area.\7\ To calculate a licensee's annual
charge for use of government lands, the Commission multiplies the
applicable county or geographic area per-acre fee identified in the fee
schedule by the number of federal acres used by the hydroelectric
project, as reported by that licensee.
---------------------------------------------------------------------------
\7\ 18 CFR 11.2 (2017). The fee schedule is published annually
as part of appendix A to part 11 of the Commission's regulations.
---------------------------------------------------------------------------
5. The per-acre rental fee for a particular county or geographic
area is calculated by multiplying four components: (1) A per-acre land
value; (2) an encumbrance factor; (3) a rate of return; and (4) an
annual adjustment factor.
1. Per-Acre Land Value
6. The first component--the per-acre land value--is based on
average per-acre land values published in the NASS Census. The per-acre
value for a particular county or geographic area is identified using
the corresponding NASS-published per-acre ``land and buildings''
value.\8\ This per-acre value is then reduced by the sum of a state-
specific modifier (to remove the value of irrigated lands) and seven
percent (to remove the value of buildings or other improvements). The
end result is the adjusted per-acre land value.
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\8\ The NASS Census ``land and buildings'' category is a
combination of all land use categories in the NASS Census, including
croplands (irrigated and non-irrigated), pastureland/rangeland,
woodland, and ``other'' (roads, ponds, wasteland, and land
encumbered by non-commercial/non-residential buildings).
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7. The NASS Census is conducted every five years, with an 18-month
delay before the census data is published. The Commission incorporates
another 18-month delay to account for revisions, consistent with BLM's
implementation of its 2008 rule. Therefore, the Commission based its
2011-2015 fee schedules on data from the 2007 NASS Census. The
Commission's 2016-2020 fee schedules will be based on data from the
2012 NASS Census; the 2021-2025 fee schedules will be based on data
from the 2017 NASS Census; the 2026-2030 fee schedules will be based on
data from the 2022 NASS Census; and so on. State-specific adjustments
to the per-acre land values are performed in the first year that data
from a new NASS Census are used, and will remain the same until the
subsequent NASS Census data are used to calculate the forthcoming set
of fee schedules.
2. Per-Acre Land Value for Alaska
8. With regard to Alaska, Order No. 774 explained that the final
rule would adopt BLM's approach to per-acre land values by designating
lands in Alaska as part of one of the five NASS Census geographic area
identifiers: The Aleutian Islands Area, the Anchorage Area, the
Fairbanks Area, the Juneau Area, or the Kenai Peninsula Area. Under
BLM's 2008 rule, the Aleutian Islands Area includes all lands within
the Aleutian Islands chain; the Fairbanks Area includes all lands
within the BLM Fairbanks District boundaries; the Kenai Peninsula Area
includes all lands within the BLM Anchorage District boundaries
excluding the Aleutian Islands chain, the Anchorage Area, and, the
Juneau Area; the Anchorage Area includes all lands within the
Municipality of Anchorage; and the Juneau Area includes all lands
within downtown Juneau (i.e., voting precincts 1, 2, and 3).
9. Several commenters asserted that a per-acre statewide value, a
category also reported by the NASS Census, should be used to establish
assessments for federal land in Alaska.\9\ Order No. 774 considered the
arguments raised in support of a statewide per-acre value. In
particular, several commenters asserted that it is inappropriate to use
regional per-acre values for Alaska because Alaska does not use county
designations; the number of farms surveyed for the NASS Census in the
entire state of Alaska is less than the number of farms surveyed in
most counties in the lower-48 states; and, certain per-acre land values
near Anchorage and Juneau are very high, resulting in a substantial
increase in annual charges for the use of government lands by
hydropower licensees in these areas. However, the Commission ultimately
concluded that the commenters had not advanced a sufficient explanation
for why it was more appropriate to use a statewide per-acre value for
Alaska, rather than the smallest NASS Census defined area for Alaska--
the geographic area identifier.
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\9\ Order No. 774, FERC Stats. & Regs. ] 31,341 at P 44.
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10. Although the Commission rejected the use of a statewide per-
acre land value for Alaska in Order No. 774, the Commission clarified
that it would not use rates based on the Anchorage Area and the Juneau
Area values to assess annual land use charges ``because these high,
urban-based rates would not reasonably reflect the value of government
lands on which hydropower projects are located.'' \10\ Instead, for
purposes of determining a per-acre land value, the Commission decided
to apply the Kenai Peninsula Area per-acre value for projects located
in the Anchorage Area or the Juneau Area. Therefore, Order No. 774
explained that projects in Alaska would be assessed the Aleutian
Islands Area per-acre land value if located in the Aleutian Islands
chain, the Fairbanks Area per-acre land value if located in the
Fairbanks BLM District, or the Kenai Peninsula Area per-acre land value
if located in the Anchorage BLM District excluding the Aleutian Islands
chain.
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\10\ Id. P 45.
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B. Fiscal Year 2016 Fee Schedule
11. The Commission used the 2012 NASS Census data to calculate its
fee schedule for the first time in Fiscal Year (FY) 2016. Due to per-
acre land value
[[Page 3]]
increases in the 2012 NASS Census data, hydropower projects located in
certain geographic areas in Alaska experienced a significant increase
in federal land use charges when compared to the rates assessed in FY
2015.\11\
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\11\ In the 2012 NASS Census, changes in land values in other
parts of the country varied widely: Some rose significantly, some
rose by relatively small amounts, and some decreased.
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C. Petition for Rulemaking
12. On June 6, 2016, the Alaska Federal Land Fees Group, comprising
six hydroelectric licensees with projects in Alaska (Alaska Group),\12\
petitioned the Commission to conduct a rulemaking to revise its method
of calculating federal land use charges for hydropower projects in
Alaska. The Alaska Group's petition focused solely on the first
component of the Commission's fee schedule--the per-acre land value--
and requested that the Commission: (1) Calculate an adjusted statewide
average per-acre land value for Alaska and (2) apply this adjusted
statewide average per-acre fee to all projects in Alaska, except those
located in the Aleutian Islands area.\13\
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\12\ Alaska Electric Light and Power, Bradley Lake Project
Management Committee (on behalf of licensee Alaska Energy
Authority), Chugach Electric Association, the Ketchikan Public
Utilities, Copper Valley Electric Association, and Southeast Alaska
Power Agency.
\13\ The Alaska Group requests that any project located in the
Aleutian Islands Area continue to be assessed annual charges for use
of government lands based on a regional per-acre land value.
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13. In support of this proposal, the Alaska Group stated that due
to the small number of farms (and associated agricultural acreage) that
contribute to the data compiled in the NASS Census, there is
insufficient data in any individual Alaska area (with the exception of
the Aleutian Islands) \14\ to produce a fair estimate of land values
within that area. Because there are so few farms outside of the
Aleutian Islands Area, the Alaska Group indicated that the per-acre
land values in the other four geographic areas of Alaska are extremely
sensitive to any changes in the self-reported farm data compiled by the
NASS Census.
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\14\ The Alaska Group contended that because the Aleutian
Islands Area contains the greatest amount of farmland in the state
(668,016 acres), the NASS Census data for the Aleutian Islands Area
is ``robust, reliable, and an accurate estimate of fair market
value.'' Alaska Group's June 6, 2016 Petition for Rulemaking at 18.
Therefore, the Alaska Group requested that the proposed statewide
per-acre land value be applied to all hydropower projects located in
Alaska, except those projects located in the Aleutian Islands Area.
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14. For these reasons, the Alaska Group asserted that an adjusted
statewide per-acre land value would better reflect the diverse
topography of the state and insulate against land value fluctuations
caused by individual changes in farm data. The Alaska Group stated that
this method would produce a more accurate estimate of the fair market
value of federal lands in Alaska.
D. Notice of Inquiry
15. On November 17, 2016, the Commission issued a Notice of Inquiry
soliciting input on a narrow question related to its current method for
calculating annual charges for the use of government lands--whether
regional per-acre land values based on data published in the NASS
Census ``land and buildings'' category result in reasonably accurate
land valuations for projects that occupy federal lands in Alaska.\15\
Specifically, the Commission asked whether it should: (1) Use a
statewide per-acre land value rather than a regional per-acre land
value to calculate the adjusted per-acre land value for projects that
occupy federal lands in Alaska; (2) apply such a statewide per-acre
land value to (i) all projects in Alaska, or (ii) all projects in
Alaska except those located in the Aleutian Islands Area; and (3) use
only certain geographic regions of Alaska to calculate such a statewide
per-acre land value.
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\15\ Annual Charges for Use of Government Lands in Alaska, FERC
Stats. & Regs. ] 31,579 (2016) (NOI). The NOI was published in the
Federal Register on November 25, 2016. 81 FR 85173.
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16. In addition, the Notice of Inquiry encouraged commenters to
submit alternative proposals for determining reasonably accurate per-
acre land values for projects in Alaska, provided that any proffered
alternatives were grounded in the NASS Census data. The notice also
invited federal land management agencies to comment on how they would
view reductions in annual charges for the lands they administer.
17. In response to the Notice of Inquiry, seven entities filed
comments, including several Alaska licensees, a U.S. senator, the U.S.
Forest Service (Forest Service), and two individuals.
18. The Alaska Group's comments reiterated its position that the
Commission should adopt a statewide per-acre land value for all
hydropower projects in Alaska, and apply the statewide per-acre value
to all projects in Alaska, except those located in the Aleutian Islands
Area. Similarly, U.S. Senator Lisa Murkowski and Homer Electric, an
electric distribution cooperative in the Kenai Peninsula, urged the
Commission to adopt a statewide per-acre land value for Alaska. These
commenters echoed concerns that the NASS Census data fails to provide
an accurate accounting of land values in Alaska.
19. Kodiak Electric, a licensee of a hydropower project located in
the Aleutian Islands Area, stated that the regional per-acre land
values published in the NASS Census result in reasonably accurate land
valuations for hydropower lands in the Aleutian Islands Area. Citing
the large number of agricultural acreage reported by the NASS Census
for the Aleutian Islands Area, Kodiak Electric recommended that any
statewide per-acre land value for Alaska, if adopted, not be applied to
projects located in the Aleutian Islands Area.
20. The Forest Service was the only commenter to provide
alternative proposals for Commission consideration. Due to the small
number of farms in Alaska, the Forest Service cautioned against the use
of a fee schedule based on NASS Census data. Instead, the Forest
Service recommended that the Commission consider calculating federal
land charges for Alaska using BLM's ``Minimum Rent Schedule for BLM
Land Use Authorizations in Alaska 2015'' or a fee based on power
generated, similar to BLM's solar fee schedule.
21. Two individuals urged the Commission to decline the request to
alter its current method for calculating federal land use charges for
hydropower projects in Alaska. They expressed concern that the use of a
statewide per-acre land value might result in the under-collection of
reasonable annual charges, and questioned whether the Alaska Group
sufficiently demonstrated that a statewide per-acre value would be more
accurate than a regional per-acre land value.
E. Notice of Proposed Rulemaking
22. In an August 17, 2017 Notice of Proposed Rulemaking (NOPR), the
Commission proposed to adopt the use of a statewide per-acre land
value, rather than a regional per-acre land value, for the purposes of
calculating annual charges for hydropower projects that occupy federal
lands in Alaska.\16\
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\16\ Annual Charges for Use of Government Lands in Alaska, FERC
Stats. & Regs. ] 32,722 (2017) (NOPR). The NOPR was published in the
Federal Register on August 31, 2017. 82 FR 41359.
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23. To calculate a statewide per-acre land value for Alaska, the
NOPR proposed that the Commission would average the data published in
the ``land and buildings'' category of the NASS Census for two
geographic areas: The Kenai Peninsula Area and the Fairbanks
[[Page 4]]
Area.\17\ The proposed rule explained that, pursuant to the
Commission's current methodology, the statewide per-acre value would be
reduced by the sum of Alaska's state-specific reduction to remove the
value of irrigated lands and a seven percent reduction to remove the
value of buildings. The Commission would then apply the resulting
adjusted statewide per-acre land value to all hydropower projects in
Alaska except for projects located in the Aleutian Islands Area. The
NOPR also stated that the Commission would continue to apply the
regional per-acre land value for the Aleutian Islands Area.\18\
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\17\ As we noted earlier, the Commission does not use the NASS
Census data from the Anchorage Area or the Juneau Area for the
purpose of determining per-acre land values because the
predominantly high, urban-based rates do not reasonably reflect the
value of government lands on which hydropower projects are located.
See supra P 9.
\18\ As explained in the NOPR, the Commission is satisfied that
the use of the regional per-acre land value for the Aleutian Islands
Area results in reasonably accurate land values due to the large
amount of farmland acreage represented in the NASS Census data for
this particular geographic area.
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24. The proposed rule represented an effort to respond to the
issues identified by the petitioners--the prevalence of federal lands
in Alaska, the sparse amount of agricultural acreage reflected in the
NASS Census, and the increase in annual charges that resulted when the
Commission began using data from the 2012 NASS Census. Combining the
value of the farmland acreage in the Kenai Peninsula and Fairbanks
Areas to calculate a statewide per-acre land value, as proposed in the
NOPR, would result in a larger, more robust data set that will be less
prone to future fluctuation due to changes in the level of
participation in NASS Census data reporting or specific anomalies in
the data reported.
25. The NOPR did not propose to adopt the Alaska Group's suggestion
of including Aleutian Islands Area values in calculating a statewide
per-acre land value to be applied to hydropower projects located
outside of the Aleutian Islands Area, because those values are lower
than land values elsewhere in the state.\19\
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\19\ NOPR, FERC Stats. & Regs. ] 32,722 at P 27.
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26. The NOPR also evaluated two alternative proposals recommended
by the Forest Service: (i) A method based on the 2015 Minimum Rent
Schedule for BLM Land Use Authorizations in Alaska; \20\ and (ii) a fee
based on power generated, similar to BLM's solar fee schedule.\21\
Because these alternative proposals would likely result in higher per-
acre land fees for Alaska or would rely on practices the Commission has
previously rejected, the Commission declined to consider these
alternatives further.\22\
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\20\ See generally BLM, Rent for Remote Non-Linear Rights-of-
Way, Permits and Leases, https://www.blm.gov/policy/im-ak-2015-010
(instruction memorandum describing the U.S. Department of the
Interior--Office of Valuation Services' April 2015 Minimum Rent
Analysis & Schedule, which provides guidance and a rental schedule
for land use authorizations of up to 25 acres across each of BLM's
district and field offices in Alaska).
\21\ See Competitive Processes, Terms, and Conditions for
Leasing Public Lands for Solar and Wind Energy Development and
Technical Changes and Corrections, 81 FR 92122, 92217-18 (December
19, 2016) (to be codified at 43 CFR parts 2800 and 2880).
\22\ See NOPR, FERC Stats. & Regs. ] 32,722 at PP 28-29.
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II. Discussion
27. In this Final Rule, the Commission revises the per-acre land
value component of its methodology for calculating annual charges for
the use of federal lands by hydropower licensees in Alaska, and amends
part 11 of its regulations accordingly. As proposed in the NOPR, the
Commission will calculate a statewide per-acre land value for
hydropower lands in Alaska. The Commission will use this statewide per-
acre land value, rather than a regional per-acre land value, to
calculate annual charges for use of federal lands for all hydropower
projects in Alaska, except those located in the Aleutian Islands Area.
A. Calculation of Statewide Per-Acre Value
28. The Alaska Group filed comments in support of the Commission's
proposal to use a statewide per-acre land value to calculate federal
land charges for hydropower projects in Alaska. The Alaska Group urges
the Commission to adopt the proposal set forth in the NOPR, with three
``refinements.'' First, the Alaska Group requests that the Commission
issue the Final Rule with an effective date of FY 2016 and issue
refunds to any Alaska licensee that paid FY 2016 federal land use
charges in excess of the amount due under the Final Rule's revised
calculation method. Second, the Alaska Group asks the Commission to
reconsider its decision to exclude the Aleutian Islands Area from its
calculation of a statewide per-acre land value. Third, the Alaska Group
reasserts its argument that the use of NASS Census data does not result
in fair or accurate valuations of federal lands on which hydropower
projects are located, contending that the NASS Census data
significantly overvalues federal lands in most of Alaska. While
expressing support for the NOPR, the Alaska Group seeks to reserve the
right to petition for further adjustments to the Commission's method
for calculating federal land use charges for hydropower projects
located in Alaska.
29. Jon Griffiths, a public policy research assistant at the George
Washington University, expresses support for the NOPR's proposal to
adopt a statewide per-acre land value for Alaska, but recommends that
the statewide value be based on an average of the NASS Census data for
all five geographic areas in Alaska, rather than just the Fairbanks and
Kenai Peninsula Areas. In particular, Mr. Griffiths recommends that the
Commission include the Anchorage Area in its calculation of a statewide
per-acre land value because it has the largest number of agricultural
properties in Alaska. In addition, Mr. Griffiths observes that
including all five geographic areas would result in a more robust and
representative data set. Finally, Mr. Griffiths asserts that the NOPR's
proposal amounts to a federal subsidy for hydropower projects because
licensees are paying for land at a value less than its current worth.
30. Aurora Taylor, an Alaska resident, contends that the use of
NASS Census data is an inaccurate land pricing method. She questions
whether the use of a statewide per-acre land value--calculated by
averaging NASS Census data from only two geographic areas (i.e.,
Fairbanks and Kenai Peninsula Areas)--would result in a more accurate
and stable land valuation method for Alaska.\23\ Ms. Taylor also
suggests that the Commission consider an alternative fee structure
based on the amount of energy generated by the project. However, as
noted in the NOPR, the Commission previously rejected as unreasonable
proposals based on a project's power capacity, generation, or sales
revenue because such fees would result in a royalty as if the occupied
federal lands themselves were producing power.\24\ The Commission has
explained that this type of fee
[[Page 5]]
schedule would overlook the fact that power output is the result of
several factors (e.g., water rights, head, project structures), not
just the acreage of the federal lands involved.\25\
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\23\ Ms. Taylor also expresses concern that the Commission's
current method for calculating federal land use charges fails to
account for the environmental costs of damming rivers. In response,
the Commission explains that these charges represent a rental fee
for the licensee's use of federal acreage. Therefore, it is
reasonable for the Commission to seek to establish a fair market
rate for the use of federal acreage, rather than a rate based on
quantifying environmental costs. In any event, the Commission
evaluates the environmental impacts of a proposed hydropower project
during the licensing decision, and has noted that it is not possible
to assign dollar values to environmental impacts. See Great Northern
Paper, Inc., 85 FERC ] 61,316, at 62,244-45 (1998), aff'd,
Conservation Law Foundation v. FERC, 216 F.3d 41, 47-48 (D.C. Cir.
2000).
\24\ See NOPR, FERC Stats. & Regs. ] 32,722 at P 29 n.20.
\25\ See Annual Charges for the Use of Government Lands, FERC
Stats. & Regs ] 32,684, at P 9 (2011) (citing Revision of the
Billing Procedures for Annual Charges for Administering Part I of
the Federal Power Act and to the Methodology for Assessing Federal
Land Use Charges, Order No. 469, FERC Stats. & Regs. ] 30,741, at
30,589-90 (1987)).
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31. The Final Rule adopts the same revised calculation method
proposed in the NOPR. To calculate a statewide per-acre land value, the
Commission will divide the total estimated market value by the total
agricultural acreage (published in the ``land and buildings'' category
of the NASS Census) for the Kenai Peninsula Area and the Fairbanks Area
to arrive at an average per-acre land and building value. Pursuant to
the Commission's current methodology, the Commission will adjust the
resulting per-acre value by Alaska's state-specific reduction to remove
the value of irrigated lands, as well as a seven percent reduction to
remove the value of buildings (i.e., the adjusted per-acre land value).
The Commission will apply this adjusted statewide per-acre land value
to all hydropower projects in Alaska except those located in the
Aleutian Islands chain. Any project located in the Aleutian Islands
chain will continue to be assessed the Aleutian Islands Area per-acre
land value.
32. Two commenters recommended that the Commission calculate the
statewide per-acre land value for Alaska using data from all five
geographic areas identified in the NASS Census. One commented that the
failure to incorporate data from all regions in Alaska, including the
Anchorage and Juneau Areas, undervalues federal lands and amounts to a
federal subsidy for hydropower projects. However, in accordance with
the policy adopted in Order No. 774, the Commission has never used the
NASS Census data from the Anchorage Area or the Juneau Area for the
purposes of determining per-acre land values because the predominately
high, urban-based rates do not reasonably reflect the value of
government lands on which hydropower projects are located. No evidence
has been provided during the course of this rulemaking that leads the
Commission to reconsider this decision. Moreover, using these high,
urban-based rates to calculate a statewide per-acre value would likely
overvalue hydropower lands and artificially inflate federal land use
charges.
33. Similarly, the Commission is not persuaded by the Alaska
Group's call to include data from the Aleutian Islands Area to
calculate a statewide per-acre land value. The Alaska Group asks the
Commission to use Aleutian Islands Area data to calculate the statewide
per-acre value, but not apply the resulting statewide value to projects
in the Aleutian Islands Area, which would dramatically lower the
resulting statewide value, while maintaining the use of the Aleutian
Islands Area's extremely low regional per-acre value ($1.02 per acre,
adjusted) for projects in the Aleutian Islands Area. This inconsistent
approach would undervalue hydropower lands and artificially deflate
federal land use charges across the state. Commission staff compared
the FY 2017 per-acre rates for hydropower projects located in the Kenai
Peninsula Area under the Commission's current methodology ($57.97), the
NOPR's proposal ($36.53), and the Alaska Group's proposal ($6.75).\26\
The drastic decrease between the NOPR's proposal and the Alaska Group's
proposal directly corresponds to the inclusion of the Aleutian Islands
Area data. We are not convinced that this lower rate would result in
fair compensation to the United States and the taxpayers for the use of
public lands.
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\26\ The NOPR's proposed calculation results in a $36.53
adjusted per-acre land value rate for FY 2017, which represents an
approximate 9 percent increase from the FY 2015 rate for the Kenai
Peninsula Area ($33.28). FY 2015 was the last year the Commission
used data from the 2007 NASS Census to calculate federal land use
charges.
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34. We are satisfied that a statewide per-acre value, based on data
from the Kenai Peninsula and Fairbanks Areas, is an appropriate
response to the Alaska Group's Alaska-specific concerns. The revised
calculation method uses a larger data set of agricultural acreage that
will be better insulated from fluctuation between census years. It also
excludes extreme land values that would artificially overvalue or
undervalue hydropower lands and preserves the administrative efficiency
benefits of using a publicly available index of land values to
calculate rates. Therefore, on balance, the Commission finds that the
Final Rule's revised calculation method results in a reasonable
approximation of per-acre land values for hydropower lands in
Alaska.\27\
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\27\ In its comments on the NOPR, the Alaska Group stated that
it reserves the right to petition the Commission for future
adjustments to the land valuation method for federal lands in
Alaska. The Commission will consider, but may not act on, future
petitions requesting it to revise its method for calculating federal
land use charges for hydropower projects located in Alaska.
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B. Application of Statewide Per-Acre Value
35. Kodiak Electric filed comments on the NOPR, reiterating its
assertion that the regional per-acre land value results in a reasonably
accurate land valuation for hydropower lands in the Aleutian Islands
Area. Kodiak Electric expresses support for the NOPR's proposal to
continue to apply the regional per-acre land value, rather than the
statewide per-acre land value, for projects located in the Aleutian
Islands Area. Pursuant to the Final Rule, the Commission will apply the
statewide per-acre land value to all hydropower projects located in
Alaska, except those located in the Aleutian Islands Area. For projects
located in the Aleutian Islands Area, the Commission will continue to
apply the regional per-acre land value when calculating federal land
use charges.
C. Effective Date of Statewide Per-Acre Value
36. The Alaska Group contends that the effective date of the Final
Rule should be FY 2016, and urges the Commission to issue refunds to
any Alaska licensee that paid FY 2016 federal land use charges in
excess of the amount that would be due under the Final Rule's revised
calculation method. We deny this request. The Commission previously
considered and rejected various legal and policy arguments made by the
Alaska Group on behalf of its member licensees seeking partial refunds
of their FY 2016 federal land use charges because they claimed such
charges were unreasonable.\28\ The members of the Alaska Group elected
not to seek judicial review of this decision, such that an attack on it
now is untimely. Further, they have not asserted, let alone proved,
that the past payments resulted in any hardship to the licensees in
question. Accordingly, we will not revisit those arguments here. The
Final Rule's revised calculation method, set forth in Sec.
11.2(c)(1)(iv) of the Commission's regulations, will be used to
calculate any federal land use bills for Alaska licensees that are
issued on or after the effective date of this Final Rule (i.e., FY 2017
bills, onward).
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\28\ Alaska Elec. Light & Power, 157 FERC ] 61,111 (2016)
(finding the calculation of the Alaska Group's FY 2016 federal land
use charges reasonable, and not a change in Commission procedure or
policy). The Alaska Group did not appeal the Commission's order
denying rehearing of this issue. Additionally, the decision to adopt
a revised calculation method for projects in Alaska does not negate
the Commission's determination that the FY 2016 federal land use
charges were reasonable and calculated appropriately.
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[[Page 6]]
III. Regulatory Requirements
A. Information Collection Statement
37. The Paperwork Reduction Act \29\ requires each federal agency
to seek and obtain Office of Management and Budget (OMB) approval
before undertaking a collection of information directed to ten or more
persons or contained in a rule of general applicability. OMB
regulations require approval of certain information collection
requirements contained in final rules published in the Federal
Register.\30\ This rule does not impose or alter existing reporting or
recordkeeping requirements on applicable entities as defined by the
Paperwork Reduction Act.\31\ As a result, this rule does not trigger
the Paperwork Reduction Act.
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\29\ 44 U.S.C. 3501-3521 (2012).
\30\ See 5 CFR 1320.12 (2017).
\31\ 44 U.S.C. 3502(2)-(3) (2012).
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B. Environmental Analysis
38. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant effect on the human environment.\32\ Commission
actions concerning annual charges are categorically exempt from this
requirement.\33\
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\32\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
\33\ 18 CFR 380.4(a)(11) (2017).
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C. Regulatory Flexibility Act
39. The Regulatory Flexibility Act of 1980 (RFA) \34\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a rulemaking and minimize any
significant economic impact on a substantial number of small
entities.\35\
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\34\ 5 U.S.C. 601-612.
\35\ 5 U.S.C. 603(c) (2012).
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40. The Small Business Administration's (SBA) Office of Size
Standards develops the numerical definition of a small business.\36\
The SBA revised its size standard for electric utilities (effective
January 22, 2014) from a standard based on megawatt hours to a standard
based on the number of employees, including affiliates.\37\ Under SBA's
current size standards, a hydroelectric generator is small if,
including its affiliates, it employs 500 or fewer people.\38\
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\36\ 13 CFR 121.101 (2017).
\37\ SBA Final Rule on ``Small Business Size Standards:
Utilities,'' 78 FR 77343 (Dec. 23, 2013).
\38\ 13 CFR 121.201, Sector 22, Utilities (2017).
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41. Section 10(e)(1) of the FPA requires that the Commission fix a
reasonable annual charge for the use, occupancy, and enjoyment of
federal lands by hydropower licensees. To date, the Commission has
issued 21 active licenses that occupy federal lands in Alaska to 15
discrete entities. Therefore, the Final Rule will apply to a total of
15 entities. Of these 15 entities, 13 entities would be impacted by the
Final Rule because they hold licenses that occupy federal lands in the
Kenai Peninsula, Fairbanks, Juneau, or Anchorage Areas.\39\ The Final
Rule adopts the use of a statewide per-acre land value, rather than a
regional per-acre land value, for the purposes of calculating annual
charges for the use of federal lands in Alaska. The Commission will
apply the statewide per-acre land value to all hydropower projects in
Alaska, except those located in the Aleutian Islands Area. The
Commission will continue to apply the regional per-acre land value for
projects located in the Aleutian Islands Area.
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\39\ We note that six of the 13 affected licensees are members
of the Alaska Group, which petitioned the Commission to revise its
methodology for calculating annual charges for use of federal lands
by establishing a statewide per-acre land value for Alaska.
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42. Based on a review of the 13 licensees that would be impacted by
the Final Rule, we estimate that most, if not all, are small entities
under the SBA definition. These 13 licensees include utilities, non-
for-profit electric cooperatives, cities, and companies.
43. Any impact on these small entities would not be significant.
Under the Final Rule, a statewide per-acre land value for hydropower
lands in Alaska would be calculated based on a larger agricultural data
set, resulting in land values that will be less prone to future
fluctuation caused by changes in census data reporting. For Fiscal Year
(FY) 2017, the statewide per-acre rate will be lower than the regional
per-acre rates that were assessed in FY 2016 for the majority of active
licenses in Alaska (other than those located in the Aleutian Islands
Area). Accordingly, the 13 affected licensees' federal land use charges
for FY 2017 will be lower than the total charges they should have paid
in the previous fiscal year based on project geography.\40\ The use of
a statewide per-acre rate will also result in lower FY 2017 charges for
each of the 13 affected licensees compared to the FY 2017 charges they
would be assessed under the regional per-acre value method.
Consequently, the Final Rule should not impose a significant economic
impact on small entities.
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\40\ During this rulemaking proceeding, Commission staff
identified two affected licensees (P-2230 and P-10773) that were
assessed federal land use charges in FY 2013-2016 based on an
incorrect per-acre rate--an ``All Areas'' rate, rather than the
appropriate Kenai Peninsula Area rate--resulting in lower total
charges during this four year period. Under the Final Rule, these
two licensees will pay charges based on the statewide per-acre land
value. Therefore, while their FY 2017 charges will increase compared
to the FY 2016, these two licensees have been undercharged since FY
2013 and will have lower FY 2017 charges under the Final Rule than
they would under the Commission's current methodology using the
appropriate per-acre land value (i.e., Kenai Peninsula Area rate).
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44. Accordingly, pursuant to section 605(b) of the RFA, the
Commission certifies that this Final Rule will not have a significant
economic impact on a substantial number of small entities.
D. Document Availability
45. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and print the contents of this document via the
internet through the Commission's Home Page (https://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A,
Washington, DC 20426.
46. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
47. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
E. Effective Date and Congressional Notification
48. This regulation is effective February 1, 2018. The Commission
has determined, with the concurrence of the Administrator of the Office
of Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 251 of the Small Business
Regulatory Enforcement Fairness Act of 1996.\41\ This rule is being
submitted to the Senate, House, and Government Accountability Office.
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\41\ 5 U.S.C. 804(2) (2012).
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[[Page 7]]
List of Subjects in 18 CFR Part 11
Dams, Electric power, Indians--lands, Public lands, Reporting and
recordkeeping requirements.
By the Commission.
Issued: December 21, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
In consideration of the foregoing, the Federal Energy Regulatory
Commission amends part 11, chapter I, title 18, Code of Federal
Regulations, as follows:
PART 11--ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT
0
1. The authority citation for part 11 continues to read as follows:
Authority: 16 U.S.C. 792-828c; 42 U.S.C. 7101-7352.
0
2. In Sec. 11.2, add paragraph (c)(1)(iv) to read as follows:
Sec. 11.2 Use of government lands.
* * * * *
(c) * * *
(1) * * *
(iv) For all geographic areas in Alaska except for the Aleutian
Islands Area, the Commission will calculate a statewide per-acre value
based on the average per-acre land and building values published in the
NASS Census for the Kenai Peninsula Area and the Fairbanks Area. This
statewide per-acre value will be reduced by the sum of the state-
specific modifier and seven percent. The resulting adjusted statewide
per-acre value will be applied to all projects located in Alaska,
except for projects located in the Aleutian Island Area.
* * * * *
[FR Doc. 2017-28095 Filed 12-29-17; 8:45 am]
BILLING CODE 6717-01-P
