Rights-of-Way, Leasing, and Operations for Renewable Energy, 35634-35684 [2024-08099]

Download as PDF 35634 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations V. Procedural Matters DEPARTMENT OF THE INTERIOR I. Executive Summary Bureau of Land Management 43 CFR Part 2800 [BLM_HQ_FRN_MO# 4500177145] RIN 1004–AE78 Rights-of-Way, Leasing, and Operations for Renewable Energy Bureau of Land Management, Interior. ACTION: Final rule. AGENCY: This final rule updates procedures governing the BLM’s renewable energy and right-of-way programs, focusing on two main topics. The first topic is solar and wind energy generation rents and fees, implementing new authority from the Energy Act of 2020 to ‘‘reduce acreage rental rates and capacity fees, or both, for existing and new wind and solar authorizations’’ and making certain findings required by the statute. The second topic is expanding agency discretion to process applications for solar and wind energy generation rights-of-way inside designated leasing areas (DLAs). In addition to these two main topics, this final rule makes technical changes, corrections, and clarifications to the regulations. This final rule will update the BLM’s procedures governing the BLM’s administration of rights-of-way issued under Title V of the Federal Land Policy and Management Act (FLPMA), including for solar and wind energy applications and development authorizations. DATES: This rule is effective July 1, 2024. FOR FURTHER INFORMATION CONTACT: Jayme Lopez, Interagency Coordination Liaison, by phone at (520) 235–4581, or by email at energy@blm.gov for information relating to the BLM Renewable Energy programs and information about the final rule. Please use ‘‘RIN 1004–AE78’’ in the subject line. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-ofcontact in the United States. SUPPLEMENTARY INFORMATION: ddrumheller on DSK120RN23PROD with RULES6 SUMMARY: I. Executive Summary II. Background III. Discussion of Public Comments on the Proposed Rule IV. Section-by-Section Discussion VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 In 2021, the Bureau of Land Management (BLM) initiated preliminary activities related to rulemaking through listening sessions seeking public comment on the BLM’s potential use of the Energy Act of 2020 (43 U.S.C. 3003) authority to ‘‘reduce acreage rental rates and capacity fees’’ to ‘‘promote the greatest use of wind and solar energy resources.’’ In May 2022, the BLM published BLM Manual section 2806.60 as interim guidance to implement that authority from the Energy Act of 2020 pending completion of this final rule. On June 16, 2023, the BLM published a proposed rule (88 FR 39726 1) in the Federal Register, that, among other things, proposed updates to the BLM’s methodology for determining acreage rents and capacity fees for solar and wind energy development projects, including providing opportunities for reductions to rents and fees under the authority of the Energy Act of 2020. The BLM also proposed more flexibility in how the BLM processes applications for solar and wind energy development inside DLAs, and updates to how to prioritize solar and wind energy applications. The proposed rule also suggested technical changes, corrections, and clarifications to the existing right-of-way regulations. After considering comments on the proposed rule and other factors, the BLM prepared this final rule. II. Background The BLM’s governing regulations for rights-of-way, including for solar and wind energy generation, are found at Title 43 CFR part 2800. These regulations were last comprehensively updated by a final rule published in the Federal Register on December 19, 2016, ‘‘Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and Wind Energy Development and Technical Changes and Corrections’’ (81 FR 92122). That final rule built upon existing rights-of-way regulations and policies to expand BLM’s ability to responsibly facilitate solar and wind energy development. Most recently, the BLM amended components of 43 CFR part 2800 under its final rule, ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way,’’ (89 FR 25922) on April 12, 2024. That final rule updated BLM regulations to 1 https://www.federalregister.gov/documents/ 2023/06/16/2023-12178/rights-of-way-leasing-andoperations-for-renewable-energy. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 enhance the communications uses program, update its cost recovery fee schedules, and add provisions governing the development and approval of operations, maintenance, and fire prevention plans and agreements for rights-of-way for electric transmission and distribution facilities (i.e., powerlines). That final rule also included technical changes to certain sections that this renewable energy rule proposed to make changes to, as will be discussed further in the section-bysection discussion of this final rule. Solar and Wind Energy Rents and Fees Title V of FLPMA (43 U.S.C. 1761– 1772) generally requires grant holders, leaseholders, or both (holders) to ‘‘pay in advance the fair market value’’ for use of the public lands, subject to certain exceptions. The Energy Act of 2020, 43 U.S.C. 3003, introduced a new exception to FLPMA’s fair market value requirement, authorizing the Secretary to ‘‘reduce acreage rental rates and capacity fees, or both, for existing and new wind and solar authorizations’’ if the agency makes certain findings. These findings can include that the existing rates ‘‘exceed fair market value,’’ ‘‘impose economic hardships’’ or ‘‘limit commercial interest in a competitive lease sale or right-of-way grant,’’ or ‘‘that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources.’’ 43 U.S.C. 3003(b)(1)(A)–(C) and 3003(b)(2). As reflected in this final rule, the BLM determined that the changes to the acreage rents and capacity fees for solar and wind energy right-of-way authorizations are needed to ‘‘promote the greatest use of wind and solar energy resources’’ and maximize ‘‘commercial interest’’ in lease sales and right-of-way grants. Reducing the acreage rent and capacity fee in this final rule will encourage solar and wind energy development with a goal of increasing the share of clean energy that is part of the United States’ domestic power infrastructure as authorized by the Energy Act of 2020 and directed by Executive Orders 14008 and 14057. This will be done by decreasing the costs for developers to construct and operate solar and wind energy development, allowing them to increase investments in new facilities and thus promote additional development. These changes will result in the most additional deployment of solar and wind energy development (see Regulatory Impact Analysis 3.1.D). The BLM’s determination is supported by a regulatory impact analysis of economic impacts, public comments received on E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations the proposed rule, and the BLM’s experience with solar and wind energy development on public lands. Reductions in costs will also benefit smaller-scale projects or projects that are on the margins of being economically profitable. Additionally, the BLM expects that the rule will not only increase interest among renewable energy developers to use BLMadministered public lands, but it will decrease the cost for developers such that they may be able to invest in additional wind and solar projects on Tribal, State, or private lands. Further, the decrease in cost to developers is expected to translate, over time, to a reduction in the average cost per MW of solar and wind energy, which will make solar- and wind-generated energy more competitive with other energy sources and will stabilize or even reduce the cost of energy to consumers, even as the cost of other energy sources may experience increased volatility. The BLM also determined that the authority provided under the Energy Act of 2020, 43 U.S.C. 3003, supports two other reductions to the capacity fees under two potentially qualifying circumstances: (1) a Domestic Content reduction when a grant holder or lease holder demonstrates the use of American-made iron, steel, construction materials, or manufactured products in the construction of the project consistent with the requirements set forth in this final rule; and (2) a reduction for Project Labor Agreements (PLAs), i.e., when the holder uses PLAs to hire labor for the development and construction of a solar or wind development. The additional, voluntary reductions offered in this final rule advance the Energy Act of 2020 goal of promoting the greatest use of solar and wind energy resources. First, a Domestic Content reduction will provide an incentive to use components made or manufactured in the United States in the construction of the solar or wind energy development project by offsetting those costs, which, if broadly adopted, could increase demand for domestically produced renewable energy parts and materials and, over the long term, lead to decreased costs for parts and materials, decreased reliance on potentially volatile foreign-sourced parts and materials, and ultimately increased economic certainty for and promotion of wind and solar energy resources on public lands. Second, the PLA reduction will incentivize good labor practices and in turn lead to responsible and productive construction, minimize the potential duration, and improve construction standards, thereby promoting the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 greatest use of wind and solar resources. These reductions will also incentivize project proponents to advance other Congressional and Administration goals that strengthen the use of American products and manufacturing and the associated labor markets. Therefore, reductions in the final rule that rely upon authority from the Energy Act of 2020 include an 80 percent reduction to the MWh rate when setting the capacity fee and the two additional reductions to the capacity fee for which right-of-way holders may qualify: a 20 percent Domestic Content reduction and a 20 percent PLA reduction. The MWh rate reduction applies to projects when they are permitted (or grants or rightsof-way are re-issued under 2806.51(c)) and continues for the life of the grant. The MWh rate reduction will be 80 percent through 2035, 60 percent for new authorizations in 2036, 40 percent for new authorizations in 2037, and 20 percent for new authorizations in 2038 and beyond. Additional information on the MWh rate is found under the discussions of §§ 2801.5 and 2806.52(b) of this preamble, as well as more broadly under part 2806 of this preamble. This final rule also codifies a new rate-setting methodology for solar and wind energy development projects. Under this rule, the BLM will collect from right-of-way holders the greater of either an acreage rent or a capacity fee. The BLM will assess acreage rent by applying the rate schedule, based on a survey of values for pastureland from the National Agricultural Statistics Service (NASS) Cash Rents Survey, to the number of acres that the right-ofway authorizes for use. Capacity fees reflect the value of generating electricity from solar and wind energy resources, which are quantified by the number of megawatt hours (MWh) of electricity produced from public lands. In this rule, the BLM has changed the definition of capacity to move away from the maximum capacity that a solar facility could produce and towards ensuring that the capacity fee reflects the actual capacity for solar or wind energy generation of a site covered by a given right-of-way grant or lease, taking into consideration environmental or other factors that may impact generation capacity of the site, including weather, servicing, and Acts of God. As provided in the final rule, the BLM will determine the capacity fee by considering the wholesale prices for major trading hubs serving 11 western States, and documentation concerning the price received by the right-of-way holder under a Power Purchase Agreement. PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 35635 The final rule provides that, when issuing a grant or lease for solar or wind energy development, or a renewal of such grant or lease, the BLM will set the per-acre rate and the MWh rate (including applicable reductions). The acreage rent and capacity fee will be adjusted annually, however, using an annual adjustment factor set at the beginning of the grant or lease term. Upon renewal of a right-of-way, the peracre rate and the MWh rate and reductions would be updated based on the then-current rates, as well as any applicable reductions for which the right-of-way holder qualifies at that time. Existing right-of-way holders may elect to continue using their current rate setting methodology, which may be updated periodically for changes in the market, or change to the new rate setting methodology in this final rule. Otherwise, the new rate setting methodology would only apply to new or renewed rights-of-way. If an existing right-of-way holder elects to change to the new rate setting methodology, that methodology will apply until the end of the right-of-way term. This final rule bases the capacity fee for solar and wind energy generation facilities on actual energy generation at each facility rather than on nameplate capacity. The BLM believes this change more accurately reflects the actual capacity for energy production of an individual project based on a developer’s selection of technology, project design, and the solar or wind resource available at a particular site. This change to the capacity fee indexes the required payment to the projects’ energy generation, being greater when the project generates more energy and less when it generates less. This rule improves payment predictability for grant and leaseholders by revising the key data used for determining the acreage rent and the capacity fee—the state-wide pastureland rent values and the wholesale price of electricity—at the time the right-of-way is issued. In doing so, the per-acre and MWh rates are set for the term of the right-of-way and only adjusted by the annual adjustment factor and, in the case of the capacity fee, by the holder’s actual annual energy production. See preamble §§ 2806.50 and 2805.52 for a more detailed discussion of the BLM’s proposed methodology for determining the acreage rent and capacity fee. Solar and Wind Energy Applications Inside Designated Leasing Areas In this final rule, the BLM clarifies that it will review and process applications, including on a non- E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35636 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations competitive basis, for proposed solar and energy generation rights-of-way inside DLAs, which are defined at 43 CFR 2801.5(b). The BLM retains discretion to conduct competitive processes, either inside or outside of DLAs, where the authorized officer decides to do so. In the proposed rule, the BLM used the terms ‘‘competitive offer’’ and ‘‘competitive process’’ interchangeably. To provide clarity and minimize confusion, the final rule uses only the term ‘‘competitive process’’ to describe the method by with the BLM will offer parcels in a competitive bidding process. To learn more about BLM’s DLAs, see the 2012 Western Solar Plan (https://blmsolar.anl.gov/ documents/solar-peis/), which identified approximately 285,000 acres of agency preferred development locations (i.e., DLAs) with high potential for solar energy production and low conflicts with other resources and uses. Subsequently, the BLM designated approximately 388,000 acres of preferred development locations for solar energy in California through the 2016 Desert Renewable Energy Conservation Plan (https:// blmsolar.anl.gov/documents/drecp/) and over 192,000 acres of preferred development locations for solar, wind, and geothermal energy in Arizona through the 2017 Restoration Design Energy Project. Currently, the BLM is in the process of updating its 2012 Western Solar Plan to, among other things, make programmatic planning decisions for solar development on BLMadministered lands in 11 western states, including Arizona, California (exclusive of the area covered by the Desert Renewable Energy Conservation Plan), Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Oregon, Washington, and Wyoming (See https:// eplanning.blm.gov/eplanning-ui/ project/2022371/510). Under this final rule, if no competitive interest exists for a particular parcel, the BLM may issue leases without a competitive process. This change to the rule provides the BLM with increased flexibility and discretion to issue grants and leases through either competitive or noncompetitive processes across all public lands inside and outside of DLAs, which is expected to maximize interest in renewable energy leasing and accelerate the deployment of solar and wind energy on the public lands. See subpart 2809 for a discussion of the competitive process for solar and wind energy. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Need for the Rule FLPMA provides the BLM with comprehensive authority for the administration and protection of the public lands and their resources and directs that the public lands be managed ‘‘on the basis of multiple use and sustained yield’’ unless otherwise provided by law (43 U.S.C. 1732(a)). Further, FLPMA authorizes the BLM to issue rights-of-way on the public lands for electric generation systems, including solar and wind energy generation systems, and mandates that the United States receive fair market value for the use of the public lands and their resources unless otherwise provided for by statute (43 U.S.C. 1764(g)). On December 27, 2020, the Energy Act of 2020 was enacted, establishing a minimum goal of ‘‘authoriz[ing] production of not less than 25 gigawatts of electricity from wind, solar, and geothermal energy projects by not later than 2025’’ on Federal lands. 43 U.S.C. 3004. Current information regarding the BLM’s approved energy development projects and number of gigawatts is available on its website.2 The Energy Act of 2020 also provides the BLM with new authority to reduce rates below fair market value based on specific findings, including ‘‘that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources’’ 43 U.S.C. 3003(b)(2). The BLM has determined that reduced rates and fees are necessary to promote the greatest use of wind and solar energy resources, and this rule seeks to implement such reductions consistent with the direction in the Energy Act of 2020. On January 27, 2021, President Biden issued Executive Order (E.O.) 14008, ‘‘Tackling the Climate Crisis at Home and Abroad.’’ Section 207 of E.O. 14008, titled ‘‘Renewable Energy on Public Lands and in Offshore Waters,’’ instructs DOI ‘‘to increase renewable energy production on (public) lands.’’ The changes in this rulemaking will provide clearer direction for the BLM in processing proposed renewable energy right-of-way applications on public lands while also supporting the goals of the Energy Act of 2020 and E.O. 14008. Statutory Authority Section 310 of FLPMA (43 U.S.C. 1740) authorizes the Secretary to promulgate regulations to carry out the purposes of FLPMA and other laws applicable to public lands. Section 302 2 https://www.blm.gov/programs/energy-andminerals/renewable-energy/active-renewableprojects. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 of FLPMA (43 U.S.C. 1732) also provides comprehensive authority for the administration and protection of the public lands and their resources and directs that the public lands be managed ‘‘under principles of multiple use and sustained yield,’’ unless otherwise provided by law (43 U.S.C. 1732(a)). Sections 501, 504, and 505 of FLPMA authorize the Secretary to grant rightsof-way on public lands; to issue regulations governing such rights-ofway and charge rent for such rights-ofway; and to impose terms and conditions on rights-of-way grants, respectively (43 U.S.C. 1761, 1764, and 1765). Sections 304 and 504 of FLPMA (43 U.S.C. 1734(b) and 1764(g)) also authorize the BLM to collect funds from right-of-way applicants or holders to reimburse the agency for its costs incurred while working on a proposed or authorized right-of-way. As defined by FLPMA, the term ‘‘right-of-way’’ includes an easement, lease, permit, or license to occupy, use, or traverse public lands (43 U.S.C. 1702(f)). See Title V of FLPMA (43 U.S.C. 1761– 1772). The Energy Act of 2020 authorizes the Secretary to reduce acreage rental rates and capacity fees if the Secretary makes certain findings, which can include that the existing rates ‘‘impose economic hardships’’ or ‘‘limit commercial interest in a competitive lease sale or right-of-way grant,’’ or ‘‘that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources’’ (43 U.S.C. 3003). III. Discussion of Public Comments on the Proposed Rule This section of the preamble briefly summarizes broad and general comments on the proposed rule and the BLM’s responses. Comment responses within this section of the preamble have been grouped and summarized by category that would apply to one or more sections of this final rule. You will find additional comments that are more specific to sections of this final rule, and their responses, in Section IV (Sectionby-Section Discussion) of this preamble. Solar and Wind Energy Rents and Fees—Part 2806 Summary of Comments: While several commenters supported the proposal for reduced rents and fees, other commenters questioned the need for reduced rents and fees and requested more research and discussion to determine if current costs exceed fair market value, impose economic hardships, limit commercial interest, are not competitively priced, or E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations disincentivize the greatest use of wind and solar energy resources. Response: Under the Energy Act of 2020 (43 U.S.C. 3003(b)), Congress recognized the need to promote wind and solar energy projects on Federal lands, giving the Secretary the authority to reduce acreage rental rates, capacity fees, or both if she determines that ‘‘the existing rates (A) exceed fair market value; (B) impose economic hardships; (C) limit commercial interest in a competitive lease sale or right-of-way grant; or (D) are not competitively priced compared to other available land;’’ or that a reduction is ‘‘necessary to promote the greatest use of wind and solar energy resources.’’ 43 U.S.C. 3003(b)(1)–(2). The BLM considered whether capacity fee reductions are necessary to promote the greatest use of wind and solar energy resources and has determined reductions are necessary. This final rule describes how the capacity fee reductions will increase interest in and incentivize wind and solar energy development on public lands and thereby accelerate deployment of renewable energy resources in the United States. This final rule also includes changes to the BLM’s rate-setting methodology that improve future rate predictability (see Regulatory Impact Analysis) and reduce potential for economic hardships. Summary of Comments: Commenters suggested that the BLM should not speculate on the economic impacts of the proposed rule or requested additional analysis and use of additional sources to back up statements made. Response: The BLM prepared an economic analysis for the proposed rule and then completed a Regulatory Impact Analysis for this final rule that provides a transparent analysis of the anticipated economic consequences for this rulemaking. This analysis informs the agency decision, including whether this rulemaking would accomplish its goals. For further information on the economic impacts of this rule, please see the Regulatory Impact Analysis that is available with a search at regulations.gov of this Regulatory Identifying Number ‘‘1004–AE78.’’ Summary of Comments: Commenters suggested rents and fees should be increased rather than decreased due to the environmental impacts of solar and wind energy development, as well as their incompatibility with other uses. Some further suggested that reducing fees on projects that are on the margins of being profitable creates the risk of projects failing and not being properly removed and rehabilitated. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Response: The BLM disagrees with the commenters’ suggestion that rents and fees should be increased rather than decreased. As explained in more detail in the previous section on Solar and Wind Energy Rents and Fees, the Energy Act of 2020 (43 U.S.C. 3003) provides the BLM with authority to reduce acreage rents and capacity fees, including for the purpose of promoting the greatest use of wind and solar resources. The BLM has determined that reductions in acreage rents and capacity fees will promote wind and solar resources and is within the BLM’s discretion under the Energy Act of 2020. Further, the BLM has carefully considered its final rule and concluded that decreasing rents and fees is necessary to accomplish the goals set forth by Congress in the Energy Act of 2020, by the President in E.O. 14008, and by the Secretary in Secretary’s Order 3399. Congress set a national goal for renewable energy production on Federal land, directing the Secretary to seek to issue permits authorizing production of not less than 25 gigawatts of electricity from wind, solar, and geothermal energy projects on Federal land by not later than 2025. 43 U.S.C. 3004. Congress further provided the Secretary with discretion to reduce the acreage rental rates and capacity fees, including where necessary to promote the greatest use of solar and wind energy resources on BLM-administered public lands, which would advance the goals set by the Energy Act of 2020, as well as those in E.O. 13990, ‘‘Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,’’ 86 FR 7037; E.O. 14008, ‘‘Tackling the Climate Crisis at Home and Abroad,’’ 86 FR 7619; and Secretary’s Order 3399, ‘‘DepartmentWide Approach to the Climate Crisis and Restoring Transparency and Integrity to the Decision-Making Process.’’ The use of public lands for energy generation systems is specifically contemplated in the FLPMA and the Energy Act of 2020. The BLM considers the potential environmental effects of solar or wind energy development when conducting land use planning and evaluating project applications, not when identifying appropriate rental rates and fees for development projects. The BLM considers and analyzes environmental impacts of proposed energy development, including appropriate mitigation measures, before authorizing any such project. Additionally, the BLM does not believe there is any correlation between reductions in capacity fees and the ability of project proponents to properly PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 35637 remove and remediate facilities. Any applicable fee reductions contemplated in this rule would not alter a project proponent’s obligations to provide for adequate bonding associated with construction and remediation associated with terminated or abandoned facilities, as required by 43 CFR 2805.12(b), 2805.20, and 2809.18(e). Summary of Comments: Commenters noted that reducing rents and fees for renewable energy projects on public lands would economically impact the developers of similar projects on private or Tribal lands and could impact property values. Response: This final rule changes the BLM’s administrative processes and rates for solar and wind energy development projects on public lands. While the final rule is intended to encourage solar and wind energy development on the public lands, it would be speculative for the BLM to attempt to analyze whether and to what extent there may be secondary impacts to solar and wind energy development on private or Tribal property. This is particularly the case due to the wide variety of factors that influence developers’ decisions about whether and where to pursue solar and wind energy projects, including, but not limited to, state, Tribal, and local permitting requirements, the ability to enter into power purchase or offtake agreements, the availability of existing or proposed transmission, and projectspecific financing considerations. Notwithstanding these different factors, the final rule will generally decrease costs for developers on public lands, which may permit them to pursue additional opportunities for development on Tribal, state, and private lands and thereby further promote the greatest use of solar and wind energy. Summary of Comments: Some comments asked about rate changes that would occur after 2036. Commenters raised four specific issues that the 2036 rate change causes. First, some commenters asserted that rates after 2036 would run higher than fair market value and are therefore a violation of FLPMA’s requirement that the BLM charge no more than fair market value. Second, some commenters asserted that the Secretary’s authority to reduce rates under the Energy Act extends beyond 2035, and America’s need for renewable energy, set by Congressional and Presidential goals, would require incentives beyond 2036. Third, some commenters asserted that the 2036 rate increase would discourage right-of-way renewals after that year. Last, some commenters asserted that the BLM has E:\FR\FM\01MYR6.SGM 01MYR6 35638 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 not adequately explained why it is choosing to phase out the final rule’s rate reductions in 2036. Response: This final rule helps lead the way to accomplishing the national goal of a carbon pollution-free electricity sector by 2035, as highlighted in Executive Orders 14008 and 14057. Based on its review of comments, the BLM has modified the sunset provision in the final rule. Instead of immediately transitioning the capacity fee reduction from 80 percent to 20 percent, the final rule will lower the reduction by 20 percentage points per year over a period of three years starting in 2036. Instituting a phased sunset period to the 80 percent reduction in the capacity fee is appropriate as the renewable energy industry may no longer need this reduction to achieve the greatest use of wind and solar on public lands, and progress toward our national goal of a carbon-pollution free electricity sector may indicate that a reduction is no longer warranted. After the sunset period ends, this final rule will continue to provide a 20 percent reduction for solar and wind energy development projects. The BLM will evaluate progress towards reaching national goals and the benefit of the reduction before 2036 and could reinitiate rulemaking to adjust incentives, including extending them beyond 2036. The BLM believes that knowing beforehand what the rates are for a facility and the increased predictability of those rates in the future will improve the economic certainty for project development and support a developer’s or operator’s decisions in power purchasing, financing, and other agreements that are necessary for a successful renewable energy project. This would be the same for existing authorization holders who choose to change to this new rate setting methodology, as well as for authorization renewals. Lastly, the BLM believes that the economics for renewable energy will continue to improve over time, and that the magnitude of such a reduction in 2036 is uncertain. Lands Available for Solar and Wind Energy Applications Summary of Comments: Some commenters recommended that the BLM further restrict renewable energy development outside of solar energy zones and prohibit such development close to sensitive habitats or recreation areas. Commenters stated that competitive offers should not be allowed outside of designated zones. Response: Through the National Environmental Policy Act (NEPA) VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 process, the BLM considers the environmental impacts of proposed uses on the public lands, including solar and wind energy development, to inform the BLM decisions to deny, approve, or approve with modification the proposed use. The BLM will include terms and conditions as appropriate to address resource and environmental impacts of the project. The BLM also performs broader analysis to inform whether certain lands may be made available for that use through the land use planning process required by FLPMA, 43 U.S.C. 1712. As described further below, the BLM’s ongoing planning process to update to its 2012 Western Solar Plan 3 will amend BLM land use plans in 11 Western States (Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming), or portions thereof, to identify new priority areas for solar energy development, variance areas, and public lands that are excluded from solar energy development, and to update requirements that holders must comply with, including for sensitive resources and uses that the BLM has previously authorized. This rulemaking does not make land use planning decisions—including determining whether areas should be excluded from solar and wind energy development because they would impact sensitive habitats or recreation areas—which are completed under a separate BLM process. This rulemaking does not change the competitive process outside of designated zones, but rather aligns the competitive process for solar and wind applications across all areas within and outside of designated areas. The BLM believes that where competitive interest exists—for example, in the form of multiple overlapping applications or a high level of interest in a general area— competitive processes should be used, regardless of whether the lands are in a DLA, to advance the projects that are most likely to proceed to development. Summary of Comments: Commenters noted that the BLM references solar energy zones from the 2012 Western Solar Plan in the proposed rule without discussing that the 2012 Plan is now under revision and will include an additional 5 states (Idaho, Montana, Oregon, Washington, and Wyoming). Commenters requested that the BLM coordinate the rulemaking process with the land use planning effort accompanying the Western Solar 3 https://www.federalregister.gov/documents/ 2022/12/08/2022-26659/notice-of-intent-to-preparea-programmatic-environmental-impact-statementto-evaluate-utility-scale. PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 Programmatic Environmental Impact Statement (Western Solar PEIS), recognizing the various alternatives being considered and the impacts that each (Western Solar PEIS vs. proposed rule) have on the other. Commenters believed many of the changes in this rule that refer to decisions or processes that occur prior to project approval are currently being considered as part of the Western Solar PEIS plan amendment process and may be better suited for the PEIS. Response: This rulemaking effort and the Western Solar PEIS are two separate actions that complement one another, but they have different goals, are subject to different authorities, and will address different aspects of the ROW authorization process. This final rule sets out how the BLM will process applications and calculate rents, in order to implement new authorities and meet National goals established in the Energy Act and directed by Executive Order 14008 for both wind and solar energy development. This rulemaking does not make land use planning decisions. In contrast, the plan amendment process associated with the Western Solar PEIS focuses exclusively on solar development on public lands through a separate process governed by Section 202 of FLPMA (43 U.S.C. 1712) and the BLM resource management planning regulations at 43 CFR 1610, et seq. to update the BLM’s Western Solar Plan. That programmatic land use planning process will consider updating the BLM’s Western Solar Plan, with a primary focus on identifying the best locations for utility-scale solar energy development, as well as restrictions and mitigation applicable to such development, on BLM-managed public lands in 11 Western States. The BLM’s land use planning decisions, including any amendments to plans, will comply with applicable laws and regulations. Comment Summary: The BLM understands from comments it has received that some believe that the proposed rule has insufficient analysis under E.O. 12866. These comments suggest that the BLM must coordinate more closely with local governments to collect economic data. Response: The BLM appreciates the interest and engagement from partners across the multiple landscapes in the United States, however the BLM disagrees with comments that additional coordination must be performed with local governments for this rulemaking. This rule governs the BLM’s administration of applications and authorizations for solar and wind energy development projects on public lands. While the rule does have some financial E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 implications with adjustments to the BLM’s rates, these are transfer payments as explained more fully in the Regulatory Impact Analysis accompanying this final rule and would not materially affect the resources available to the American economy. The BLM will continue to engage with the public it serves, and its many partners through BLM’s public processes, including project-specific analysis and programmatic and land use planning analysis through NEPA. No change made based on these comments. Need for the Rule Summary of Comments: Commenters requested the BLM include a more meaningful explanation of the necessity of this rulemaking, including technical data that supports a need for increased preferences and favorable treatment for lease terms. Commenters stated that solar development is not in line with FLPMA and does not allow for multiple use on public lands. Response: The BLM received new authority and guidance from Congress (Energy Act of 2020) and direction from the President (Executive Order 14008, among others) to promote renewable energy generation on public lands. This rule implements the new authority and direction for management of the public lands. The BLM disagrees with the comments suggesting that solar energy development is inconsistent with FLPMA’s multiple use mandate. In managing the public lands, the BLM is not required to make every parcel of land available for all purposes. Consistent with FLPMA’s multiple use mandate, the BLM has discretion through land use planning to identify areas that are available for, or excluded from, solar or wind energy development and to evaluate each proposed solar or wind energy development through a site-specific environmental analysis, including the need for environmental mitigation, as part of the decisionmaking process prior to issuing a grant or lease. Summary of Comments: Other commenters stated that they believe the BLM must improve its approach to facilitating renewable energy development to meet congressional goals. Other commenters expressed a belief that the free market would provide better solutions to greenhouse gas emissions and the climate crisis without authorizing projects on public land or providing additional incentives to site projects on public land. Response: The BLM does not agree that the free market alone would provide better solutions to greenhouse gas emissions and the climate crisis. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Additionally, the approach suggested by commenters would be inconsistent with direction from Congress and the President to promote renewable energy generation on public lands. Particularly, the Energy Act of 2020, which is aimed at facilitating and promoting further development of wind and solar energy on Federal lands, specifically directs the BLM to ‘‘issue permits that, in total, authorize production of not less than 25 gigawatts of electricity from wind, solar, and geothermal energy projects by not later than 2025, through management of public lands and administration of Federal laws,’’ 43 U.S.C. 3004(b) (emphasis added). Additionally, as described above, on January 27, 2021, President Biden issued E.O. 14008, ‘‘Tackling the Climate Crisis at Home and Abroad.’’ Section 207 of E.O. 14008, titled ‘‘Renewable Energy on Public Lands and in Offshore Waters,’’ instructs DOI ‘‘to increase renewable energy production on [public] lands.’’ This final rule updates and improves the BLM’s approach to facilitating renewable energy development on public lands based on lessons learned from implementation of the 2016 rule as well as changes in National renewable energy goals and the maturation of energy market over the past eight years. This update to the BLM’s rules improves the BLM’s orderly administration of public lands and helps reach the goals set by Congress and at the direction of the President. The BLM expects to continue working with the public to provide better solutions to resource concerns, such as greenhouse gas emissions and climate change, to best manage the public lands and its resources. Addressing such resource solutions are not part of this rulemaking. Summary of Comments: Commenters stated that the current market conditions, state and Federal mandates and regulations, and demand for green energy makes reducing fees unnecessary and that the BLM has failed to explain why the reductions are necessary. Response: The changes in this rule clarify how the BLM will process renewable energy right-of-way applications on public lands while supporting the goals of the Energy Act of 2020 and direction from the President (E.O. 14008 and 14057). Through the BLM’s experience administering solar and wind energy development rights-ofway, the BLM understands the importance of stable and predictable rates for the term of an authorization. The BLM expects that the rule will help to meet national renewable goals more expeditiously. The BLM expects that the rule will not only increase interest PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 35639 among renewable energy developers to use BLM-administered public lands, but will decrease the cost for developers such that they may be able to invest in additional wind and solar projects on Tribal, State, or private lands. The BLM explains more fully the need for the rule and its reductions in the section-bysection discussion portion of this rule under subpart 2806. Summary of Comments: A commenter stated that section 3003(b) of the Energy Act does not explicitly authorize the Secretary of the Interior to reduce rightof-way rents and fees below fair market value and that Congress did not explicitly repeal, amend, or supersede FLPMA’s unequivocal fair market value requirement. They questioned if the Energy Act supersedes FLPMA’s fair market value requirement for rights-ofway. Response: The BLM disagrees with the comments suggesting that the Energy Act of 2020 does not authorize the Secretary to reduce right-of-way rents and fees below fair market value. First, a plain reading of the Energy Act authorizes the Secretary to reduce rental rates and capacity fees below fair market value. Specifically, it authorizes the Secretary to reduce ‘‘acreage rental rates, capacity fees, and other recurring annual fees in total’’ for solar and wind energy generation projects on BLMmanaged public lands under a broad set of circumstances. Additionally, Congress presumably understood the fair market value requirement in FLPMA, and the discretion in the Energy Act to reduce rental rates and capacity fees is as a modification of that existing requirement. The reductions authorized in Section 3003 of the Energy Act would be meaningless if Congress intended the reductions to be limited by FLPMA’s general requirement to collect fair market value for rights-of-way. Statutory Authority Summary of Comments: One commenter expressed concern that this proposed rule will set precedent for a similar issue DOI is trying to address under the Fluid Mineral Leases and Leasing process. Response: This final rule modifies procedures that are specific to identifying rental rates and capacity fees for wind and solar authorizations; it does not apply to or set a precedent for other BLM authorizations or processes, including those under the Mineral Leasing Act (MLA). Summary of Comments: Another commenter requested information about how this final rule interacts with other BLM rules and administration E:\FR\FM\01MYR6.SGM 01MYR6 35640 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 directives, including the Conservation and Landscape Health Rule, Secretary’s Order 3362, Improving Habitat Quality in Western Big-Game Winter Range and Migration Corridors (Feb. 9, 2018), and BLM Instruction Memorandum 2023– 005 Change 1, Habitat Connectivity on Public Lands (Nov. 18, 2022). Response: This final rule updates the processes used in the BLM’s orderly administration of the public lands. Any decisions made in connection with right-of-way grants following the procedures laid out in this rule will also be subject to all other applicable legal requirements and administrative directives, including the Conservation and Landscape Health Rule, Secretary’s Order 3362, and BLM policies and guidance. National Environmental Policy Act (NEPA) Comment Summary: Commenters requested the BLM prepare a NEPA analysis to evaluate the environmental effects of the final rule, including because extraordinary circumstances (43 CFR 46.215) apply and therefore reliance on a Categorical Exclusion is not appropriate. Response: The BLM disagrees with comments that an environmental assessment or environmental impact statement analysis under NEPA is required, or that extraordinary circumstances apply to this rulemaking. The BLM has determined that the categorical exclusion at 43 CFR 46.210(i), which excludes, ‘‘regulations . . . that are of an administrative, financial, legal, technical, or procedural nature; or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case,’’ applies to this final rule. The BLM has reviewed the extraordinary circumstances listed in 43 CFR 46.215 and determined that none applies. This categorical exclusion documentation is provided on the BLM’s ePlanning web page at the following URL: https:// eplanning.blm.gov/eplanning-ui/ project/2016102/510. As such, the final rule fits within the categorical exclusion for rules, regulations, or policies to establish bureau-wide administrative procedures, program processes, or instructions. This final rule does not authorize any project or other on-theground activity and therefore would have no significant individual or cumulative effect on the quality of the human environment. At such time that specific solar or wind energy development projects are proposed, the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 BLM will consider those proposed actions in compliance with NEPA. Comment Summary: Some commenters suggested that there should not be a requirement of a published environmental assessment (EA) or environmental impact statement (EIS) before foreclosing the opportunity to hold a competitive offer. Some commenters believed the BLM should require analysis of a competitive offer through an EIS to identify and disclose the impacts of such an action. Response: The BLM is not required to perform environmental analyses on whether to hold a competitive process; nonetheless, in § 2809.12(b) the BLM reserves the right to complete a NEPA analysis before holding a competitive process. The BLM does not typically complete a NEPA analysis for a competitive leasing process, but at least one NEPA analysis will be completed before authorizing solar or wind energy development. Determining that there may be competitive interest and utilizing a competitive process is administrative and procedural only, does not trigger the need to prepare an environmental analysis under NEPA or have any significant effect on the human environment, and is simply based on whether there is adequate interest from more than one applicant. The BLM would complete a land use planning and NEPA analysis were it to change allocations in a current land use plan to allocate areas of public lands to either allow or exclude solar or wind energy development—a process the BLM is currently undertaking regarding solar energy for 11 western states by updating the 2012 Western Solar Plan through a PEIS. For example, in the case of solar or wind energy development leasing, the BLM must first identify public lands as a designated leasing area for solar or wind energy development through a land use planning process with an associated NEPA analysis. If the BLM receives competitive interest in those lands, the BLM would hold a competitive process to determine the presumptive leaseholder. Alternatively, the BLM may determine that the NEPA analysis for a designated leasing area should be updated to reflect new or changing circumstances and in turn may offer such lands competitively to determine a preferred applicant. Upon determining the presumptive leaseholder or preferred applicant, the BLM would then complete a NEPA analysis before determining whether to authorize the wind or solar energy generation project proposed. For either the presumptive leaseholder or preferred applicant, even if the BLM PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 does not complete a NEPA analysis to consider whether to hold a competitive process, the resulting project will be subject to multiple NEPA analyses before it is approved. Additional comments: Additional comments and their responses are found in Section IV (Section-by-Section Discussion) of this preamble. The BLM is a multiple-use agency, and solar and wind energy development is one of the many uses for which the BLM manages the public lands. While all comments that the BLM received are important, this final rule does not respond to those that are out of scope for the action the BLM is taking. Comments that are out of scope for this rulemaking include those regarding project-specific considerations, state laws and authorities, national energy policies and priorities that do not affect solar and wind energy or the public lands, engaging in specific partnerships, general statements of support or opposition to the rule which do not require a detailed response, and availability and distribution of financial resources, among others that are not specific to the BLM’s administration of solar and wind energy development applications and rights-of-way and ratesetting. The BLM will continue to engage with the public and Tribal, Federal, State, and local government partners on the BLM’s management of its public lands, as appropriate. Subsequent actions that the BLM may take will be subject to the policies, laws, and regulations in place at that time, including those for consultation, environmental review, and entering into agreements or partnerships with others. IV. Section-by-Section Discussion 43 CFR Part 2800 Rights-of-Way Authorized Under FLPMA Part 2800 of the CFR describes requirements for rights-of-way issued under Title V of FLPMA. This final rule revises the per acre rent and per MWh capacity fee schedules for solar and wind energy development rights-of-way. It updates the application process for public lands and focuses the BLM’s competitive processes to places where there is competitive interest. This final rule also includes the principles for prioritizing solar and wind energy applications, establishing criteria for a ‘‘complete application,’’ and corrects or clarifies existing regulations. The BLM conducted extensive public and Tribal outreach on this rule both prior to its publication as a proposed rule and during the public comment period on the proposed rule. Prior to the E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 publication of the proposed rule, the BLM notified Tribes in August 2021 of its upcoming rule and requested any comments and concerns that Tribes may have on such a rule. The BLM then held three public listening sessions in September 2021 on its potential use of the Energy Act of 2020 authority. The BLM also requested and received feedback from the public on preferred alternatives to use of the Energy Act of 2020 authority in its Manual 2806.60, ‘‘Rent,’’ which was later published in May 2022 after three public listening sessions and public review and comment on the draft Manual. The BLM published its proposed rule in June 2023, receiving nearly 900 comments after holding three virtual public meetings. The BLM also sent Tribes another notice about the rulemaking in July 2023, requesting Tribal input and whether there was any interest to consult on the rule. No Tribes responded with interest to consult on the BLM’s rulemaking. Section 2801.5 What acronyms and terms are used in the regulations in this part? The existing § 2801.5 contains the acronyms and defines the terms used in this part of the regulations. The BLM proposed to remove, revise, and add acronyms and terms to this section. Section 2801.5 of this final rule has some revisions in response to comments that are discussed further in this section for each respective revision. Under this section, several commenters recommended the BLM engage relevant stakeholders and industry experts to ensure definitions accurately reflect industry practices and standards. The BLM regularly engages, and will continue to engage with, industry; Tribal, Federal, State and local authorities; and resource experts to supplement its knowledge about renewable energy and market advancements. The BLM sought public comment on the proposed rule and will seek public comment on any changes to its acronyms and terms in future rulemakings. The BLM received comments requesting the BLM consider the full life cycle of materials, energy inputs and technology types, and resource and land use footprints, and suggesting that labeling all wind and solar energy as renewable energy is misleading. The BLM agrees that it should analyze land use footprints and resource impacts of proposed projects on public lands. However, analyzing the full life cycle of materials, energy inputs, and technology types are addressed by other parts of the Federal government where such VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 analysis is within their expertise. The BLM also believes that for purposes of this final rule, all solar and wind energy generation projects are renewable energy development projects insofar as they use a natural resource on public lands that is not depleted to produce power. One comment suggested that the BLM should include a definition for ‘‘current land use plan’’ to mean ‘‘a document developed through a formal planning process to guide the management of activities and uses of public lands that has been approved, amended, or recertified within the past ten years.’’ The BLM has separate rules governing its land use planning processes found at 43 CFR Chapter V, Subchapter A, that provides definitions related to the BLM’s land use planning. Accordingly, the BLM did not make changes in response to that comment since they are out of scope for this rule under 43 CFR part 2800. Commenters suggested that the term ‘‘economic hardship’’ under 43 U.S.C. 3003 should be defined in this final rule and that the BLM should require proof of economic hardship for rent and fee reductions. The BLM does not define economic hardship in this rule as suggested. Each instance of hardship is unique to a holder and their circumstances and will be assessed on a case-by-case basis. The BLM does not intend to define hardship (economically, financially, or otherwise) so as not to unintentionally preclude reasonable requests to consider hardship. Commenters stated that the proposed rule uses unclear language and is inconsistent with underlying resource management plans, agency guidance, and regulatory frameworks, and requested the BLM use more specific language such as pastureland, rangeland, habitat, or other terminology to denote the uses of the landscape. The BLM disagrees with the commenters’ suggestion that the proposed rule uses unclear language and that the rule should include other definitions in this final rule. The BLM’s use of ‘‘pastureland rents’’ comes from the name of the survey data used as the basis in determining the acreage rent in this final rule: The NASS Survey of Pastureland Rents. This is a newer source of data from NASS that was not available in the original 2012 Western Solar Plan or when the BLM promulgated its 2016 rule for solar and wind energy and has not yet carried through to other guidance materials from the BLM. It is appropriate for the BLM to use this terminology in describing the data used and its source PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 35641 in the regulations. Future BLM guidance and actions would include this terminology as appropriate. Commenters requested the BLM settle on one standard term (‘‘preferred renewable energy development areas’’) for the preferred renewable energy project locations to avoid conflicts with other resources and uses. Commenters also suggested that the definitions for ‘‘variance areas’’ and ‘‘exclusion areas’’ should be added to the rule. The BLM understands the interest in defining such terms and has already done so in its land use planning efforts, such as the ongoing Solar Energy PEIS effort to update the 2012 Western Solar Plan. The BLM believes these terms are best identified and defined as part of the land use planning process and is not making any changes to this rule due to comments. Paragraph (a) of this final rule provides for the acronyms and paragraph (b) provides for the terms used in this part. The final rule would remove, revise, and add certain terms to the BLM’s acronyms and definitions found in part 2800. This final rule adds the acronym ‘‘FLPMA’’ to paragraph (a) meaning the Federal Land Policy and Management Act of 1976, as amended (43 U.S.C. 1701 et seq.). This acronym replaces the term ‘‘Act’’ from paragraph (b), providing clarity as to which act the BLM is referencing. The BLM received no substantive comments on replacing the term ‘‘Act’’ with ‘‘FLPMA,’’ and therefore this final rule makes no changes to the proposed rule. This final rule removes definitions of ‘‘Megawatt (MW) capacity fee,’’ ‘‘Net capacity factor,’’ ‘‘Megawatt hour (MWh) price,’’ ‘‘Rate of return,’’ and ‘‘Hours per year.’’ The BLM no longer charges a megawatt capacity fee based on solar and wind energy generation facility nameplate capacity; definitions related to the nameplate capacity fee are removed. The BLM did not make changes to the definitions in the final rule. Some commenters noted inconsistencies related to the terms ‘‘Rate of Return’’ and ‘‘Hours per year.’’ Commenters pointed out that the proposed rule stated that these terms would be removed from § 2801.5(b), noting the paragraph numbering for the Federal Register instructions were confusing whether the terms were removed or not. The BLM agrees with commenters and has revised the Federal Register instructions, removing the proposed instruction number vi, ‘‘removing paragraphs (1) and (2) in the term ‘‘Megawatt rate’’ and redesignating E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35642 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations paragraphs (3) and (4) as paragraphs (1) and (2). There are no paragraphs for the revised term, and removing the instructions is consistent with the proposed definition. The BLM did not make any other changes to this definition in the final rule. This final rule adds the term ‘‘Capacity fee’’ to mean the fee based on the amount of electricity produced from solar or wind energy resources on the public lands. This is consistent with the BLM’s change implementing a capacity fee that is based on electricity production. There were no substantive comments on the term, and the BLM did not make changes to this definition in the final rule. The BLM includes in this final rule a new term ‘‘Domestic Content reduction’’ to define the circumstances in which a holder meets the domestic content criteria and thus qualifies for a fee reduction. This final rule includes changes to the term for ‘‘domestic content’’ to mean an item or product that qualifies for the Buy America preference as set forth in Section 70914 of the Build America, Buy American (BABA) Act, Public Law 117–58, 135 Stat. 429, §§ 70901–70927 (Nov. 15, 2021), and implementing guidance at 2 CFR part 184. The final rule modifies the definition for ‘‘domestic content’’ from the definition of ‘‘domestic end product,’’ as that term is used in Section 52.225–1 of the Federal Acquisition Regulations (FAR) (48 CFR 52.225–1) in the proposed rule, to the criteria for ‘‘domestic content preference’’ provided in the BABA Act and 2 CFR part 184. As described below, the qualifying definition in this final rule offers clarity and consistency among Federal programs regarding what constitutes domestic content and therefore is appropriate to apply to determine when a holder may obtain a fee reduction as identified under § 2806.52(b). The BLM has determined that offering a Domestic Content reduction will further promote the greatest use of solar and wind resources because it will support the development of secure, reliable domestic supply chains while also reducing economic hardships for developers. As discussed in the preamble to the proposed rule, uncertainty in global supply chain dynamics, as seen in recent years, can delay deployment of solar and wind energy development projects on public lands (88 FR 39726, 39740–39742). By offsetting some of the costs of domestically sourced parts and materials, the Domestic Content reduction will insulate developers from global supply chain shocks of all kinds by reducing the economic dependence VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 of developers on global supply chains and will also support the efforts of domestic suppliers. In this way, the proposed Domestic Content reduction supports the transition to more reliable domestic supply chains that will, in turn, increase interest in developing solar and wind energy projects throughout the country, including on public lands (43 U.S.C. 3003(b)(1)(C)), and thereby would promote the development of solar and wind energy resources on public lands (43 U.S.C. 3003(b)(2)). Similar to the BLM’s use in the proposed rule of a definition for Buy American based on section 52.225–1(b) of the FAR, this final rule’s use of the term ‘‘domestic content,’’ following the BABA Act and 2 CFR part 184, identifies the components of projects through categories—iron or steel products, manufactured products, or construction material—that must be produced or manufactured in the United States in order to qualify for the Domestic Content reduction. The BABA Act applies to Federal financial assistance funds for ‘‘infrastructure projects,’’ which require the use of material produced in the United States. The Office of Management and Budget (OMB) published its final guidance implementing the BABA Act on August 23, 2023, under 2 CFR part 184. Generally, under 2 CFR 184.4(e), a ‘‘domestic content’’ preference would apply to three separate product categories: (i) iron or steel products; (ii) manufactured products; and (iii) construction materials. The OMB’s guidance defines each of these categories and makes clear how a proponent satisfies the categorical requirements to demonstrate that the components of an infrastructure project meet the domestic content standards. This final rule uses the term ‘‘domestic content’’ as a catch-all term to refer to items for which the holder might satisfy the Domestic Content reduction based on the definitions established 2 CFR part 184. Some commenters suggested that the proposed Buy American definition should be revised to reflect eligibility for the reduction to mimic the guidance published by the Treasury Department and Internal Revenue Service for the domestic content bonus credit from section 13701 of the Inflation Reduction Act (IRA), 117 Public Law 169, 136 Stat. 1818 (Aug. 16, 2022). Other commenters requested the BLM utilize a domestic content definition that incentivizes the use of domestically manufactured core solar components, as laid out in Section 13502 of the Inflation Reduction Act. Commenters also urged the BLM to PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 refine its approach and apply more robust origin standards to its domestic content proposal. The BLM has considered the various comments suggesting different definitions for what constitutes American-made products for the purposes of this reduction. In response to this public input, the BLM has changed from the FAR definition to the BABA Act (and implementing guidance at 2 CFR part 184) definition for the domestic content preference. The BLM is aware that the Treasury Department and Internal Revenue Service have issued guidance about the domestic content bonus under the Inflation Reduction Act for clean energy projects and facilities that meet American manufacturing and sourcing requirements. However, that guidance describes an intent to propose regulations that have not yet been finalized. This final rule’s definition for domestic content aligns with definitions in other Federal programs with oversight over domestic products and content. This approach will promote consistency among these Federal programs, reducing the potential for unintended consequences resulting from conflicting definitions. As noted above, the BABA Act definition focuses on construction materials and components for infrastructure projects and is closely aligned with the type of projects covered in this final rule. The final rule revises the term ‘‘grant’’ to reflect that solar or wind energy leases are not covered under the definition. The change provides clarity for where the BLM will issue a solar or wind energy grant and where a solar or wind energy lease will be issued. Commenters suggested the term ‘‘lease’’ is unnecessary and to use ‘‘grants’’ instead, as the difference between a lease and a grant under the proposed rule is the location of a rightof-way either inside or outside a DLA. As identified in the BLM’s 2012 Western Solar Plan, leases will be issued in areas designated for leasing under the relevant land use plan. The BLM disagrees with these comments and retains the distinction between solar and wind energy grants and leases in this final rule based on location of their issuance. The BLM did not make any change to this definition in the final rule. This final rule adds the term ‘‘Capacity fee’’ to mean the fee based on the amount of electricity produced from solar or wind energy resources on the public lands. This is consistent with the BLM’s change implementing a capacity fee that is based on electricity production. There were no substantive E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations comments on the term, and the BLM did not make changes to this definition in the final rule. The final rule revises the definition of the term ‘‘Megawatt hour (MWh) rate’’ to mean the five-calendar-year average of the annual weighted average wholesale prices per MWh for major trading hubs serving the 11 western states of the continental United States. This revision is consistent with the BLM’s change to implement a capacity fee for solar and wind energy development projects. Some commenters were unclear whether the BLM had revised the definition of ‘‘Megawatt hour (MWh) rate’’ in the existing regulations, as § 2801.5(b) currently does not define that term. Commenters presumed that the BLM proposes to revise the existing definition of ‘‘Megawatt rate.’’ The BLM understands the confusion raised by these comments. The BLM revises the term ‘‘Megawatt rate’’ to ‘‘Megawatt hour (MWh) rate’’ in this final rule, consistent with the change to implement a capacity fee for solar and wind energy development projects. The BLM did not make any other changes to this definition in the final rule. This final rule revises the term ‘‘Reasonable costs’’ to be consistent with the rule change replacing the words ‘‘the Act’’ with the acronym ‘‘FLPMA.’’ There were no substantive comments on the term, and the BLM did not make changes to this definition in the final rule. ‘‘Renewable Energy Coordination Office (RECO)’’ is added in this final rule to mean one of the National, State, district, or field offices established by the Secretary under 43 U.S.C. 3002(a) that is responsible for implementing a program to improve Federal permitting coordination with respect to eligible projects on covered land and such other activities as the Secretary determines necessary. There were no substantive comments on the term, and the BLM did not make changes to this definition in the final rule. This final rule includes the new term ‘‘solar or wind energy development’’ to mean the use of public lands to generate electricity from solar or wind energy resources on public lands. This definition clarifies that the term ‘‘energy development’’ refers to uses of public lands that directly involve the generation of electricity on public lands. This definition clarifies which right-ofway grants and leases are subject to the conditions in Section 50265(b)(1) of the IRA, which apply to ‘‘a right-of-way for wind or solar energy development on Federal land.’’ VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Commenters suggested revising the definition of ‘‘solar or wind energy development’’ to include language from the BLM’s recent Instruction Memorandum 2023–036, Inflation Reduction Act Conditions for Issuing Rights-of-Way for Solar or Wind Energy Development (April 23, 2023), according to which solar or wind energy development ‘‘does not include sitetesting, communication sites, transmission lines, gen-tie lines, pipelines, roads, installation of batteries and other energy storage systems, or other uses that might indirectly support energy production or transmission.’’ The BLM does not agree that adding additional language to the definition is necessary for this final rule. This rule and the BLM’s policies were written to complement each other in how the BLM administers applications and rights-ofway for such projects. The BLM did not make a change to this definition in the final rule. This final rule adds ‘‘Solar and wind energy lease’’ to mean any right-of-way issued under Title V of FLPMA within an area identified in a BLM land use plan as a DLA. Any right-of-way not issued within an area identified as a DLA would be a grant. The BLM received comments on this term, which are discussed with regard to the definition of ‘‘grant’’ in this final rule. The BLM did not make changes to this definition in the final rule. Section 2801.6 Scope Section 2801.6 describes the scope of 43 CFR part 2800’s applicability. Paragraph (a)(1) of this final rule includes the additional language ‘‘or leases’’ describing that this part applies to both authorization types: grants and leases. A comment requested the following language be added to § 2801.6 Scope: ‘‘Applications for transportation or utility right-of-way crossing conservation system units, national recreation areas, or national conservation areas in Alaska are subject to the provisions of Title XI of the Alaska National Interest Lands Conservation Act and 43 CFR part 36.’’ This rule focuses on the BLM’s generally applicable process for administering applications and rightsof-way for solar and wind energy development projects on the public lands. It does not modify or amend other applicable statutory or regulatory requirements, and the BLM would comply with all such requirements during the process set forth in this rule. The BLM made no changes to this section in the final rule based upon public comments. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 35643 Section 2801.9 When do I need a grant or lease? Section 2801.9 explains when a grant or lease is required for systems or facilities located on public lands. Paragraph (d) of this final rule extends the term for solar or wind energy development authorizations up to 50 years, and authorizations for other uses that support solar or wind energy development, to up to 50 years, and make other technical changes. Paragraph (d)(3) provides that solar or wind energy development facilities authorized with a grant or lease may be issued for up to 50 years (plus initial partial year of issuance). Paragraph (d)(4) provides that energy storage facilities that are authorized separate from an energy generation facility are authorized with a right-of-way grant for up to 50 years. Paragraph (d)(6) provides that electric transmission lines with a capacity of 100 kV or more are authorized with a right-of-way grant for up to 50 years. The BLM did not make a change to this section of the final rule. Commenters raised concerns with a 50-year authorization term for large development projects because, they suggested, the longer the public lands are occupied by a wind or solar project the longer it will likely take for those lands to fully recover after removing the project. Commenters also suggested that the longer-term authorization may unreasonably occupy the public lands with a solar or wind energy development when preferable or newer energy technology could be deployed there. The BLM disagrees with comments that assert the increase of the maximum term of an authorization from 30 years to 50 years is inappropriate because preferable technology may be desired at that location in the future. The BLM acknowledges that recovery of impacts might be greater for a 50-year right-ofway term. However, the BLM will analyze the environmental impacts of each proposed project, including the end of project life activities such as reclamation and restoration of public lands, under NEPA, and will consider the appropriate term for each proposed right-of-way, before deciding whether to approve for deny a proposed right-ofway for energy development. Additionally, BLM notes that most of the ground-disturbing impacts of solar or wind development come during the construction phase, so the environmental effects of a 50-year authorization are therefore likely to be similar to the effects of a 30-year authorization with respect to recovery. Any such impacts, however, will be E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35644 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations considered on a case-by-case basis, in compliance with NEPA, when the BLM evaluates each proposed project. Through this process, the BLM will consider the reasonably foreseeable use of public lands, including the technology proposed by an applicant and the environmental consequences of that use, when deciding whether and for what duration to authorize solar or wind energy development on the public lands. Some commenters argued against increasing the maximum term length for a right-of-way and expressed concerns about the economic and environmental impacts and the lifespan of energy generation equipment. Commenters suggested that a longer term to an authorization may not be appropriate due to the shorter lifespans of solar panels and wind turbines (30 years for solar and 20–25 years for wind), and that a shorter initial term, like the current 30-year term, instead of 50 years may be more suitable. The BLM understands the concerns raised by commenters regarding the proposal to increase the maximum term length for solar and wind energy development authorizations. In the BLM’s experience, the lifespan of solar and wind energy projects has been increasing over time as the technologies advance. When the BLM last updated its rules for solar and wind energy in 2016, the lifespan of a solar or wind project was approximately 20 years. The 30year term was appropriate for such a length, considering the amount of time necessary to construct a project and then the expected time to decommission and reclaim and restore the public lands during the authorization term. With increasing lifespans of solar and wind equipment, a longer-term right-of-way is appropriate. See recent Berkeley National Laboratory, Results from a Survey of U.S. Wind Industry Professionals,4 and the Department of Energy’s, Photovoltaics End-of-Life Action Plan,5 for a discussion of wind and solar energy project lifespans. However, the BLM has made changes to other parts of the rule to address the commenters’ concerns about dedicating public lands for up to 50 years to certain projects or uses that, over time, may become less efficient, see a significant decrease in production, or become entirely inactive. These changes also address concerns about public lands being used unlawfully for purposes 4 https://emp.lbl.gov/publications/benchmarkinganticipated-wind-project. 5 https://www.energy.gov/sites/default/files/202203/Solar-Energy-Technologies-Office-PV-End-ofLife-Action-Plan_0.pdf. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 other than those identified in the ROW grant (e.g., a former solar or wind generating site being used for equipment storage). In particular, the changes impose conditions aimed at ensuring diligent operations on the public lands, see § 2805.12(c)(8). These are in addition to the BLM’s existing diligent development requirements under § 2805.12(c)(7). Commenters suggested that the BLM evaluate changes to the environment or technology during the term of an authorization after it has been approved. The BLM did not adopt this suggestion. Once the BLM issues a final decision, the BLM would only re-address technological changes or environmental impacts during the term of an authorization if the BLM undertakes a new decision-making process, such as in response to a ROW holder’s proposed change in technology. The BLM’s original analysis for a proposed facility considers the environmental effects of the facility and technology proposed by the applicant for the term of the proposed authorization, informing the BLM’s decision to deny, approve, or approve with modification the proposed project. Any subsequent changes in equipment used at the site that would result in changes to environmental impacts that may occur after the BLM issues its decision, would be analyzed at the time the BLM considers issuing a new decision, based on the relevant information available at that time. The BLM may complete a new decisionmaking process to adjust the terms and conditions of the authorization under existing § 2805.15(e) under certain circumstances, such as a change to legislation or regulations, when necessary to protect public safety, an environmental change (e.g., new threatened or endangered species listing), or if proposed changes to technology may result in additional or different environmental impacts. One comment requested clarification on how § 2801.9 may be modified based on outcomes of the ongoing update to the Western Solar Plan. The analysis of environmental impacts of energy development and decisions made in updating the Western Solar Plan do not affect this final rule, which that provides BLM procedures and requirements when administering applications and authorizations for solar and wind energy development projects. Some comments suggested that proposed energy storage facilities and proposed energy generation facilities should be reviewed in separate NEPA documents due to differences in fire risk and toxicity concerns. While it is beyond the scope of this rulemaking to PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 speculate as to how the BLM will comply with NEPA when evaluating individual projects, the BLM agrees that energy storage facilities may have environmental impacts that are distinct from those posed by energy generation facilities. Nevertheless, the BLM can prepare a single NEPA document to evaluate impacts from energy generation facilities and energy storage facilities and may find it appropriate to do so in certain circumstances. Subpart 2802—Lands Available for FLPMA Grants or Leases The BLM proposed to revise the title of subpart 2802 to include ‘‘or leases’’ to clarify for readers that public lands are available for both grants and leases, consistent with other revisions in this rule regarding leases. No comments were received on this, and the BLM did not make changes to the final rule. Section 2802.11 How does the BLM designate right-of-way corridors and DLAs? Section 2802.11 explains how the BLM designates right-of-way corridors and DLAs through its land use planning process. This section includes a nonexhaustive list of factors the BLM could consider when designating such areas under its land use planning process described in 43 CFR part 1600. Other technical changes in § 2802.11(b) improve readability and consistency between the BLM’s regulatory authority under part 2800 and its statutory authority under FLPMA. The BLM did make changes to this section of the final rule. Paragraph (b)(1) is unchanged from the proposed rule and includes Tribal land use plans that BLM reviews for consistency when it is developing, amending, or revising a land use plan in accordance with Section 202(c)(9) of FLPMA (43 U.S.C. 1712(c)(9)). Paragraphs (b)(10) and (b)(11) add criteria that the BLM may consider when designating new leasing areas for solar and wind energy. Paragraph (b)(10) adds ‘‘access to electric transmission,’’ and paragraph (b)(11) provides for consideration of relatively large areas where energy development is feasible and there is a low potential for conflict due to environmental, cultural, and other relevant criteria, including assessing the demand for new or expanded areas; applying environmental, cultural, and other screening criteria; and analyzing proposed areas through the land use planning process described in part 1600. The BLM received comments about whether the BLM’s proposal to carry forward three of the four criteria from E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations the 2012 Western Solar Plan is consistent with other BLM planning actions. The BLM carried these three criteria forward from the 2012 Western Solar Plan, which is consistent with other BLM plans identifying solar and wind energy development areas. Some commenters suggested that the BLM redesignate proposed paragraph (b)(11) as paragraph (b) and redesignate existing paragraphs (b)–(d) as newly designated paragraphs (c)–(e). The BLM did not change the rule due to this comment. Reorganizing the paragraphs as suggested would be confusing to a reader as considerations for solar energy would no longer be located together in one subparagraph. The BLM did revise paragraph (b)(11) to clarify that the factors BLM considers include ‘‘whether there are areas’’ consistent with revisions under paragraph (b). One comment requested that wording be amended to ‘‘clarify that BLM may require sharing a gen-tie right of way subject to reasonable terms.’’ The term ‘‘gen-tie’’ refers to a generation interconnect transmission line that connects the original source electric generation (for the purposes of this rule, a wind or solar energy development) to the transmission system. These gen-tie lines are typically less than 5 miles long and require a right-of-way grant if they cross public lands. The BLM retains authority under 43 CFR 2805.15(b) to allow or not allow such common use of the right-of-way. Commenters suggested that the BLM alter the language of proposed § 2802.11(b), which identifies factors or criteria that the BLM may consider when designating an area of public land as a right-of-way corridor or a DLA. Some commenters recommended replacing the proposed term ‘‘may’’ with ‘‘must.’’ Other commenters suggested expressly incorporating all of the considerations listed in 43 U.S.C. 1712(c), which governs criteria for consideration by BLM when it prepares land use plans, to this section. Other commenters suggested that the BLM add transmission and electric infrastructure to the list of criteria or factors. Finally, some commenters agreed with the language in the proposed rule, which provides a non-exclusive list of factors or criteria that the BLM may consider when designating a corridor or a DLA. After considering comments on this section, the BLM did make some changes to this paragraph in the final rule. While § 2802.11(b) provides examples of criteria that the BLM may consider, some of the listed criteria might not be relevant in all cases, and the BLM may consider additional factors or criteria as appropriate. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Further, the BLM’s land use planning regulations, 43 CFR 1600, provide additional direction for complying with the requirements of Section 202 of FLPMA, 43 U.S.C. 1712. The BLM did not add transmission and electric infrastructure to the list of criteria or factors because the proposed rule already included ‘‘access to electric transmission,’’ which is retained as a criterion or factor in the final rule. However, the BLM revised paragraph (b) to replace ‘‘factors the BLM may consider include, but are not limited to, the following’’ to read as ‘‘the BLM may consider various factors, including’’ to clarify what the BLM considers when designating such areas. Commenters suggested that adding three criteria to a list of other criteria for the BLM to consider may create confusion. Some commenters supported the BLM adding paragraphs (b)(10) and (b)(11) to provide more detail of what and how the BLM considers when designating new leasing areas. Other commenters requested the BLM evaluate criteria for designating exclusion areas in addition to the criteria for designating DLAs and right-of-way corridors. The BLM believes that adding the three additional criteria for consideration when designated corridors and leasing areas is appropriate and provides for transparency when the BLM begins its land use planning processes to designate leasing areas. The BLM does not agree that exclusion criteria are appropriate when identifying DLAs. However, paragraph (d) of the existing regulations provides broad discretion for the BLM to identify areas where the BLM will not allow rights-of-way, which may include criteria to identify exclusion areas during the land use planning process. During the land use planning process, the BLM engages Federal, Tribal, State, and local government partners and the public to inform and clarify the factors analyzed when considering whether to designate exclusion areas. Including these criteria in the final rule will minimize the confusion that may arise in the future. Some comments requested that the final rule include additional criteria for designating exclusion and avoidance or variance areas. Commenters suggested that including these criteria would encourage the appropriate designation of such areas and thus focus on processing right-of-way applications only in areas where development is best suited. The BLM disagrees with commenters that additional criteria for designating exclusion and avoidance or variance areas should be included in the final rule. Such criteria do not need to be included in the final rule and are PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 35645 better suited for policy (e.g., instruction memoranda), which can be implemented consistent with this rule and other applicable regulatory authority and environmental analysis, while also providing appropriate flexibility in the process. Further, exclusion criteria are based on the environmental impacts of a program on the public lands, which are identified through a NEPA analysis, such as the ongoing Western Solar PEIS that is updating the 2012 Western Solar Plan. Lastly, this final rule updates its prioritization principles under 2804.35, which were not in place in 2012 with the Western Solar Plan. The BLM believes that with the robust public engagement, prioritization principles, and other preliminary application review meetings, holding a variance process is not necessary in administering applications for solar and wind energy development. Section 2803.10 Who may hold a grant or lease? Section 2803.10 provides the criteria for who may hold a grant or lease. In this final rule, the BLM clarifies that a holder who is of legal age and authorized to do business in one State must also meet this requirement in each other State in which the right-of-way grant they seek is located. No comments were received on this section, and the BLM did not make changes to this section of the final rule. Section 2803.12 What happens to my grant if I die? In the notice of proposed rulemaking for this rule, the BLM proposed to add new paragraph (a) and redesignate existing paragraphs (a) and (b) as paragraphs (b) and (c). This final rule does not carry forward those proposed revisions because another final rule included revisions that addressed those concerns. The BLM’s final rule ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-ofWay,’’ (89 FR 25922) [April 12, 2024] updated § 2803.12 to remove reference to applications in the section title and paragraph (a). This final rule retitles this section and revises paragraphs (a) and (b) to include ‘‘or lease’’ clarifying that this section applies to both grants and leases. Paragraph (b) of this final rule replaces the word ‘‘distributee’’ with ‘‘receiver’’ to improve clarity to readers that when the BLM distributes a grant or lease, the instrument would be received by the holder. This final rule also includes the provision that unqualified receivers of a right-of-way E:\FR\FM\01MYR6.SGM 01MYR6 35646 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 must comply with all terms, conditions, and stipulations. One comment suggested that the BLM clarify paragraph (b) to state that distribution will take place under state law in the state where the grant or lease is located. Including this suggested change could be inaccurate and potentially unenforceable. The BLM’s rules should not dictate distribution of a lease as an inheritable interest in all instances. Section 2804.12 What must I do when submitting my application? Section 2804.12 explains what an applicant must do when submitting a right-of-way application. The BLM proposed changes to paragraphs (c) and proposed to add paragraphs (f) and (j). The BLM did make a change to this section of the final rule. Paragraph (c) provides for additional requirements for solar and wind energy development or short-term rights-ofway. Paragraph (c)(1) requires payment of an application filing fee for solar and wind energy development and shortterm applications as an initial payment toward cost recovery payments. The BLM will refund the balance of the application filing fee if it exceeds the processing costs. Paragraph (c)(1) is revised for readability and now reads ‘‘payment toward cost recovery’’ instead of ‘‘payment towards cost recovery.’’ Paragraph (c)(2) requires payment of additional reasonable costs in addition to application filing fees. See existing § 2804.14 of this part for further information on reasonable costs in processing an application. Payment of category 6 cost recovery fees—which are based on full costs and are collected if the BLM has determined that processing efforts will take more than 64 hours to complete—may be reduced by the application filing fee that is paid when submitting an application. Some comments requested lower fees for application submittal. Another comment suggested that the BLM keep the application fee until all ‘‘reasonable costs’’ are paid before any refund is given. Under the existing regulations, application filing fees are a payment of reasonable costs for the United States to process an application and are intended to discourage applicants from unnecessarily applying for more land than is reasonable for a solar or wind energy development. As updated by this final rule, these application filing fees continue to be a payment of reasonable costs and may now clearly be applied to the processing fees, such as through a cost recovery agreement. Any overpayment of these costs may be reimbursed to the applicant or carried to VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 cover the inspection and monitoring of the right-of-way, if authorized. Entering into a cost recovery agreement requires action by the BLM and applicant to complete, including the prioritization of an application under § 2804.35 by the BLM and payment of reasonable costs identified by the BLM in a cost recovery agreement. Multiple comments suggested the BLM issue a cost recovery agreement within a certain timeframe, such as 30 days of receiving the required information. The BLM agrees that it is important for the BLM to be responsive to applicants who have provided the required information under this section. The proposed rule added paragraph (j) providing that an application is complete when an applicant submits the required information under this section. Upon receiving a complete application, the BLM would determine what cost recovery amounts would be necessary, and whether that should be under a cost recovery agreement. See § 2804.14 for further information. The BLM would notify an applicant within 30 days pursuant to § 2804.25(d) whether processing their application will take longer than 60 calendar days and what the expected processing timeframe is for the application. Section 2804.19 of the BLM’s right-of-way regulations provides that the BLM and applicant work together to establish and issue the cost recovery agreement; the length of that process can vary widely based on a number of variables including project complexity, analysis of the needs from a cost recovery agreement, and needed inputs from the developer. As noted under the previous comment response, entering into a cost recovery agreement requires action by the BLM and applicant to complete, including prioritization under § 2804.35 by the BLM and payment of reasonable costs identified by the BLM in a cost recovery agreement. Section 2804.12(f) of this final rule clarifies that the BLM may require additional information at any time while processing an application. Additional information may be necessary, such as environmental resource data. The BLM will issue a deficiency notice pursuant to existing § 2804.25(c) to inform applicants of additional information requirements. Comments requested that the BLM provide clear application requirements and limit the BLM’s ability to request additional information beyond those requirements. The BLM believes that the existing rules clearly state what is required for applications under 2804.10, What Should I do before I file my application?; in § 2804.11, Where do I PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 file my grant application?; and as updated by this final rule, § 2804.12, What must I do when submitting my application? Paragraph (f) of this final rule provides that BLM may request additional information while processing an application. Additional information may be requested under 2804.25(c) after an application is determined to be complete pursuant to added paragraph (j) of this final rule. Paragraph (j) describes that a complete application meets or addresses the requirements of § 2804.12, as appropriate for the application submitted. Some comments asked the BLM to clarify the definition of ‘‘complete application’’ in paragraph (j). The BLM believes that new paragraph (j) clearly describes what a complete application is. Upon satisfying the requirements of this section, the BLM will provide the applicant notice in writing that the application is complete. Some commenters suggested that the BLM provide a determination of application completeness within specified timeframes to promote a timelier application process. The BLM agrees that it is important to remain diligent in processing an application. However, the BLM did not propose to implement any timeframes for determining an application is complete as this section of the rules applies to applications for all rights-of-way, not just solar or wind energy applications. Reasonable expectations for timely and diligent application requirements will vary depending on the complexity of processing a certain type of system or use on the public lands. Section 2804.14 What is the processing fee for a grant application? The BLM recently published its final rule ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way’’ (89 FR 25922) [April 12, 2024]. In that final rule, the BLM updated its address within this section. The proposed updates that the BLM included in this rulemaking are no longer necessary. No comments were received, and the BLM did not make a change to this section in this final rule. Section 2804.22 How will the availability of funds affect the timing of the BLM’s processing? Section 2804.22 of this final rule clarifies how the availability of funds may affect the BLM’s schedule for processing an application. Paragraph (a) clarifies that when the BLM is processing an application, it will not continue to process the application until funds become available or the applicant E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 elects to pay full actual costs under § 2804.14(f). Paragraph (b) provides that the BLM may deny an application after 90 days if it has requested reasonable costs for processing an application and the proponent has failed to provide funds for reimbursement. The BLM did not change this section of the final rule. One commenter supported denying applications for which fees had not been paid. Such a procedure, the commenter suggested, would disincentivize applicants from submitting applications that they do not intend to diligently process. While the BLM will not deny an application without cause, as described in more detail under § 2804.26, the BLM agrees that failure to diligently pursue an application, including unfunded application cost recovery agreements, and incomplete applications, among other reasons are good cause for denying an application. Denying applications for these reasons would deter applicants from submitting applications for projects that they do not intend to diligently pursue. Paragraph (c) of this final rule provides that funds paid towards the cost recovery agreement for a project may not be refundable. Such funds would be those identified in the cost recovery agreement for hiring additional staff or contractors and agreed to by the applicant or right-of-way holder. Some comments supported the idea of cost recovery agreements that would allow the BLM to hire additional staff or contractors to aid in application processing and reduce processing times. This requirement helps ensure that there is available funding to the United States for reasonable costs of the government, including those BLM hiring and contracting decisions made to support processing applications. Section 2804.23 What costs am I responsible for when the BLM decides to use a competitive process for my application? Section 2804.23 of the final rule describes what costs an applicant is responsible for when the BLM decides to use a competitive process. Paragraph (b) requires, for cost recovery processing categories one through four, payment of cost recovery processing fees as if the other applications had not been filed. Paragraph (c) clarifies who is responsible for processing costs within processing category six. The BLM did not make a change to this section of the final rule. One comment suggested the language be changed to read, ‘‘What costs am I responsible for if the BLM decides to use a competitive process for my application?’’ The BLM considered this VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 change in title to the section and believes that the proposed naming of this section is clear with respect to what costs the applicant will be responsible for when the BLM determines it will use a competitive process. Section 2804.25 How will the BLM process my application? In the final rule, the BLM revised § 2804.25(c) to add that, if an applicant fails to comply with a deficiency notice under this section, the BLM may deny the application. To ensure that developers proceed diligently after entering into a cost recovery agreement, § 2804.25(c)(1) requires applicants to ‘‘commence any required resource surveys or inventories within one year of the request date, unless otherwise specified by the BLM.’’ If the applicant fails to comply with a deficiency notice under that provision, the BLM may deny the application. See § 2804.26(a)(9). To clarify that the BLM retains the discretion to deny an application where the applicant does not proceed diligently, the final rule adds to § 2804.25(c): ‘‘Failure to meet requirements under this section may result in the BLM denying your application pursuant to § 2804.26.’’ This added provision clarifies that the BLM retains the discretion to deny an application where the applicant does not proceed diligently. This change is consistent with changes made to § 2809.10(e) regarding when the BLM will no longer hold a competitive process. Together these amendments give the industry the certainty it needs to proceed with projects while retaining the BLM’s discretion to deny an application or offer lands competitively if the applicant does not proceed diligently. In that way, these amendments balance the BLM’s obligations to incentivize renewable energy development on public lands and to recover a fair return for U.S. taxpayers. In this section, the BLM proposed removing a mandatory public meeting that is unique to solar and wind energy rights-of-way applications and is in addition to other public participation that would occur as part of the BLM’s environmental review process. Paragraph (e)(2) describes public meeting requirements for solar or wind energy right-of-way applications. In the final rule, paragraph (e)(2) provides that the BLM may hold a local public meeting if there is no other public meeting or opportunity for early engagement. In other words, the final rule would require the BLM to hold a public meeting, offering the public opportunity to engage early, though the PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 35647 BLM could satisfy this requirement by holding a public scoping meeting or other public meeting that facilitates early engagement by the public. Commenters suggested that the BLM provide a website of applications and authorizations for interested parties so that they could receive up-to-date information on the applications and authorized projects. The BLM agrees with comments about maintaining a site that is accessible to the public on existing and proposed (i.e., applications for) projects on public lands. The BLM currently maintains an active web page at https://www.blm.gov/programs/ energy-and-minerals/renewable-energy/ active-renewable-projects where the public may access the most recent information on applications for solar, wind, and geothermal development projects, gen-tie-lines, upcoming lease sales, and other relevant application and development information about these sites. Some comments supported the removal of the requirement that BLM hold pre-processing public meetings, noting that solar and wind energy technologies are better known now than they have been previously and that these meetings are unnecessary. The BLM also received comments that did not support removing that requirement. These comments expressed concerns that by removing this public meeting the BLM would be excluding the public and should instead increase outreach to the public in the area affected by these proposed development projects. To address these concerns, the BLM has changed the regulatory text in paragraph (e)(2)(i) to ensure that a public meeting is held if there is no other opportunity for the public’s early engagement. The BLM also would retain discretion to hold additional public meetings under § 2804.25(e). Paragraph (e)(4) is updated to replace ‘‘the National Environmental Policy Act (NEPA)’’ with ‘‘NEPA,’’ consistent with the changes in paragraph (e)(2) of this section. The BLM updates the reference in this final rule, consistent with changes that CEQ has made to its regulations, such that 40 CFR parts 1501 through 1508 are now referred to as 40 CFR Chapter V, Subchapter A. Paragraph (e)(5) provides that the BLM will determine whether the proposed use complies with applicable Federal laws. Paragraph (f) addresses the segregation of lands within a right-ofway application. Paragraph (f)(3) now provides that a segregation may be extended when an application is complete and cost recovery has been received. E:\FR\FM\01MYR6.SGM 01MYR6 35648 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 Some comments suggested that the 2year segregation limit is appropriate, that the BLM should begin NEPA within 2 years of segregating the lands, and that such limitations should be consistent with the NEPA timeline requirements within the Fiscal Responsibility Act. The BLM agrees that the agency should be diligent in processing applications, including initiating NEPA. Because separate legal authority and policy guidance applies to NEPA compliance procedures, including applicable timelines to complete the NEPA process, the BLM did not make a change to this paragraph of the final rule in response to these comments. Some comments suggested additional language should be added to establish timelines and deadlines supporting quick action in processing applications. Section 2804.25(c) in the existing regulations provides specific due diligence requirements for applications. Unless another timeline is specified by the BLM, applicants have one year to complete certain actions, and the BLM may deny an application for failure to comply with the one-year requirement or other specified timeframe for submitting necessary information to the BLM. The BLM believes this timeline is generally adequate to promote the timely processing of applications and permitting of solar and wind development projects and to ensure that developers cannot hold public lands by submitting, but not diligently pursuing, an application, thus precluding other uses of such lands. The BLM did not change the final rule in response to these comments. The BLM received requests to revise the rule to require automatic segregation once an applicant has filed a complete application and has paid the required application fees and grant extensions past the four-year mark. Changing the method to segregate lands and the timeframes of those segregations is outside the scope of this rule. The BLM did not propose to change the method and timing of segregation, but only to make this paragraph consistent with new provisions in the final rule for complete applications and cost recovery. Section 2804.26 Under what circumstances may the BLM deny my application? Section 2804.26 of this final rule explains the circumstances under which the BLM may deny an application. Paragraph (a)(4), consistent with this final rule replacing the term ‘‘the Act’’ with ‘‘FLPMA’’ discussed under § 2801.5, provides that the BLM may deny your application if issuing the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 grant would be inconsistent with applicable law or regulation. The BLM did not carry forward paragraph (a)(9) of the proposed rule because the BLM’s final rule, ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way,’’ 89 FR 25922 (April 12, 2024) revised the BLM regulations at § 2804.26(a) to add the same provision allowing the BLM to deny applications that fail to comply with a deficiency notice . Thus, the revision in the proposed rule that would have added this provision is no longer necessary. Paragraph (10) incorporate requirements of this final rule that are discussed elsewhere. Paragraph (a)(10) provides that an application may be denied for failing to pay costs, as noted in § 2804.22(b). As proposed, paragraph (c) is removed in this final rule. Any request for an alternative requirement received after an application has been denied is not a timely request. Requests for an alternative requirement must be timely. See § 2804.40(c) for further information on timely requests. The BLM received a comment recommending that the BLM add another provision following section (a)(4), suggesting that this new provision address protection of special conservation areas managed by the BLM or other federal or state agencies. The BLM believes that including the suggested change to this section is unnecessary. The BLM’s process to deny an application under this section is addressed in the existing regulations at § 2804.26. The BLM’s management of special conservation and other sensitive areas is generally determined through the BLM’s resource management planning and NEPA processes. The BLM retains broad authority to deny an application on the basis that it would not be in the public interest, which may also address this concern to deny certain applications. Section 2804.30 Reserved] [Removed and Section 2804.30 is removed and reserved in this final rule. No comments were received on this section and the BLM did not make any changes to this section in the final rule. Prior § 2804.30 addressed competitive leasing inside of designated areas. The content of the prior § 2804.30 is now duplicative of this final rule in §§ 2809.13, 2809.14, and 2809.17. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 Section 2804.31 Reserved] [Removed and Section 2804.31 is removed and reserved in this final rule. Prior § 2804.31 addressed competitive process for site testing. This portion of the rule was not used since first put in place in 2016 and is removed. The BLM may still hold competitive processes for site testing if there is a competitive interest or other reasons as identified in § 2809.10 of this final rule. Some comments supported the removal of competitive processes for site testing grants, and other commenters suggested that the section may be useful in local field office decision making in the future. The BLM agrees that retaining requirements for competitive processes related to solar and wind energy is important. Subpart 2809 of this final rule provides the requirements for solar and wind energy competitive processes, which includes the requirements of this section. Section 2804.35 Application Prioritization for Solar and Wind Energy Development Rights-of-Way Section 2804.35 is retitled to ‘‘Application prioritization for solar and wind energy development rights-ofway.’’ This section provides for the relative importance of different criteria that vary from location to location, giving weight to local resource issues and circumstances that are not equally relevant for every application. Additionally, there are practical concerns for the BLM when processing solar and wind energy applications. This section provides that the relevant criteria are to be applied holistically to prioritize applications in a manner that would facilitate environmentally responsible projects and ensure that agency workloads are allocated appropriately. The revised section would also explicitly recognize that the BLM may identify additional criteria in guidance, which may be national in scope or specific to an area. Paragraph (a) clarifies that the purpose of prioritizing applications is to allocate agency resources to processing applications that have the greatest potential for approval and implementation. The BLM revised this section from the proposed rule to clarify that the BLM’s prioritization of an application is not a decision and is not subject to appeal under 43 CFR part 4. One commenter asked whether the BLM’s prioritization process might hinder development of renewable energy and potentially conflict with national priorities for renewable energy deployment. The BLM is endeavoring to E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations increase the responsible deployment of renewable energy on the public lands consistent with congressional and presidential direction. In addition, the BLM must continue to manage public lands under the principles of multiple use and sustained yield unless otherwise provided by law (43 U.S.C. 1732(a)). The prioritization criteria support national renewable energy goals by helping the BLM to consider applications for the projects that are most likely to succeed and ensure the BLM’s continued stewardship of the public lands. Paragraph (b) identifies criteria that the BLM may consider when prioritizing applications. This section provides discretion to the BLM as to how best to apply the criteria to prioritize processing solar or wind energy generation applications. Some comments suggested prioritizing applications for projects inside DLAs. Other comments suggested other criteria that should be considered when prioritizing applications, such as the presence of existing leasing agreements and rights-of-way, whether the application complies with all state and federal regulations, the size or location of the project, project features, proximity to transmission, and protection of natural resources. The BLM believes that these considerations are important, but no changes to the regulatory text are warranted since these considerations were already included in the proposed rule. The six listed criteria in the rule provide flexibility in how the BLM may apply the criteria for applications in the BLM’s varied landscapes on which a resource may have different sensitivities in one location as compared to another location. Prioritizing projects based on siting in designated or preferred areas is addressed in paragraph (b)(1). The BLM addressed comments concerning existing leasing agreements or rights-ofway in the BLM’s application processing steps in subpart 2804 of these rules. Paragraph (b)(4) addresses commenter suggestions regarding prioritizing applications based on compliance with federal regulation. Paragraphs (b)(2) and (b)(5) address the size or location, project features, proximity to electric transmission, and the protection of natural resources. Several comments requested clarity on the application of the prioritization criteria, including a description of the relative importance of each criterion. Other commenters also suggested that they believe the BLM should be prohibited from prioritizing applications based on additional criteria that are not expressly listed in this VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 section of the rule. In the BLM’s experience, the relative importance of different criteria may vary from location to location due to resource considerations. Likewise, not all prioritization criteria are equally relevant for every application. The BLM has intentionally not set specific preferences or weights for the criteria it will apply when prioritizing applications. This final rule confirms that the BLM will consider the prioritization criteria holistically when considering applications, and that the BLM may establish additional criteria through local or national policy guidance. In the final rule, the BLM changed paragraph (b) to refer to ‘‘criteria’’ instead of ‘‘factors’’ as proposed. This change is consistent with the BLM’s use of the term ‘‘criteria’’ in paragraph (b)(6). The first criterion is whether the proposed project is located within an area preferred for such development, such as a DLA. The BLM may reasonably presume that development projects proposed within these areas are more likely to proceed to approval as they pose less severe resource conflicts than other lands. Some comments suggested that wind energy is disadvantaged since there are no wind energy designated leasing areas or equivalents. The BLM disagrees with these comments. First, the 2016 Desert Renewable Energy Conservation Plan (https://blmsolar.anl.gov/documents/ drecp/) designated more than 192,000 acres of preferred development locations for solar, wind, and geothermal energy. Additionally, the criteria are not given specific preferences or weights when compared with one another, and, as such, the BLM would take into account the lack of wind DLAs when prioritizing wind energy development applications. The second criterion is whether the proposed development avoids adverse impacts to or conflicts with known resources or uses on or adjacent to public lands and includes specific measures designed to further mitigate impacts or conflicts. When submitting an application to the BLM, the applicant must address known potential adverse resource conflicts, including those for sensitive resources and values that are the basis for special designations and protections, as well as potential conflicts with existing uses on or adjacent to the proposed energy generation facility. Under section 2804.12(b)(2), the applicant must also include specific measures to mitigate impacts or conflicts with resources and uses. Including this information is PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 35649 necessary for the BLM to determine that an application is complete. While subsequent consultation, public comment, and environmental review processes may reveal unknown resource or use conflicts, based on previous experience permitting wind and solar projects on public land, the BLM understands that projects with fewer known conflicts are more likely to proceed to approval and successful implementation. The third criterion is whether the proposed project is in conformance with the governing BLM land use plans. Applications identify whether the proposed project is in conformance with the governing land use plan or would require an amendment or revision to the plan. The BLM may, in its discretion, consider applications for solar or wind energy generation facilities that would require an amendment or a revision to the governing land use plan under part 1600 of these regulations. However, such application could require greater resources to process and could present resource conflicts, which would result in a lower priority. The fourth criterion is whether the proposed project is consistent with relevant State, local, and Tribal government laws, plans, or priorities. The purpose of this determination is not to enforce these State, local, or Tribal laws, plans, or priorities, but rather to promote comity and identify projects that are more likely to be successfully approved. In addition, applying this principle helps to ensure that the BLM takes into account the existing resource knowledge and expertise that may be available through State, local, and Tribal plans and priorities. To carry out this prioritization, the BLM may enter into or rely on existing agreements with State, local, or Tribal governments. Some comments suggested that prioritization of an application should be subject to Tribal consultation. The BLM engages Federally recognized Tribes early in the application process under § 2804.12(b)(4), which allows Tribes to participate in preliminary application review meetings with the BLM and provide early information to the BLM about an application. Additionally, under paragraph (b)(4), the BLM will consider ‘‘whether the proposed project is consistent with relevant State, Tribal, and local government laws, plans, or priorities,’’ which may also include consultation with Tribes. Finally, the BLM acknowledges that E.O. 13175 sets forth criteria for when the BLM is required to consult with Tribes, and the BLM is committed to consulting with Tribes whenever such consultation is required E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35650 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations under the E.O., without regard to whether that requirement is specifically articulated in this rule. The fifth criterion is whether the proposed project incorporates the best management practices set forth in the applicable BLM land use plans and other BLM plans and policies. This principle ensures that the BLM takes into account the knowledge and expertise that has gone into formulating these existing plans and policies. Should an application require amending a BLM land use or other plan, it is likely to require more time and effort to process. The sixth criterion considers any other circumstances or prioritization criteria identified by the BLM in subsequent policy guidance or land use planning for an area. Paragraph (c) provides that the BLM will prioritize applications, once complete (as described in § 2804.12(j) of this part). The BLM’s prioritization may use any available information provided in the application or its Plan of Development, applicant responses to deficiency notices, and information provided to the BLM in public meetings or by other Federal agencies and State, local, or Tribal governments. Paragraph (d) clarifies the BLM discretion to re-categorize an application’s priority at any time. Recategorizing an application may be based on new information that the BLM has received or on changes the applicant has made to the application. Recategorizing an application may also be based on the BLM’s need to adjust its workload, if circumstances warrant such re-prioritization. Some comments expressed concern that denying or de-prioritizing an application prior to any final land use designation, such as those which may be made in the ongoing update to the 2012 Western Solar Plan, is inappropriate or pre-decisional. Comments further expressed that pending applications should not be denied before land use designations are made. The BLM is not constrained by ongoing or potential future land use planning processes, but it must manage public lands in conformance with the land use plans currently in effect. Accordingly, the BLM generally will not deny or deprioritize an application based on non-conformance with a future or ongoing land use planning effort. The criteria in the rule refer to consideration of governing land use plans. The BLM would deny or de-prioritize an application pursuant to its broad discretion in considering right-of-way applications based on existing information and existing land use plans. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 At the same time, the BLM retains authority to deny an application based on appropriate information even if the project would conform to the applicable land use plan, including, for example, where an application conflicts with current management policies that have not yet been incorporated into a land use plan. Some comments suggested that the BLM should adopt a first-come, firstserved system when processing applications or self-prioritization by an applicant for multiple applications within a single BLM field office. While in practice the BLM often processes applications on a first-come, first-served basis, it retains discretion to prioritize applications according to other considerations including input from an applicant about their applications. In practice, the BLM has observed that the prioritization of projects, particularly in Field and District Offices with high workloads, provides a number of benefits for the BLM and applicants. In coordinating with applicants, the BLM discusses workload capacities and will receive input from developers on the priority of their applications and whether there is a specific preferred order. Due to the many factors the BLM considers in this decision, however, the BLM’s determination on a project’s priority for processing may be different than that requested by a particular developer. Targeting workloads for BLM staff and management facilitates accelerated decision-making for those solar and wind energy development proposals with the greatest technical and financial feasibility and the least anticipated natural and cultural resource conflicts and increases consistency in processing project applications for the BLM and applicant. As detailed in the discussion of subpart 2809 in this rule, the BLM may also determine that there is a competitive interest for a right-of-way or system and hold a competitive process. Section 2804.40 Requirements Alternative Section 2804.40 of this final rule provides for situations when an applicant requests alternative requirements from the BLM if the requestor is unable to meet the requirements of this subpart. The final rule clarifies that this section applies specifically to the BLM’s consideration of alternatives to the application requirements set forth in subpart 2804. Other requirements related to rights-ofway, such as the requirement to pay rent as set forth in subpart 2806, cannot be adjusted under this section. The BLM PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 did not make a change to this section of the final rule. Some commenters suggested that state and local governments should be brought into the decision-making process if an applicant is unable to meet the application requirements and they request an alternative to one or more application requirements. It is the BLM’s responsibility to determine whether an alternative requirement for the application process should be allowed. Through agreements, including with cooperating agencies, the BLM engages with Tribal, Federal, State, and local government offices when it considers solar and wind energy development projects. The BLM would inform such partners of any changes to its requirements. Additionally, the BLM will consider under this section only requests for alternatives to modify the alternative requirements found in part 2804—Applying for FLPMA Grants. Requests to modify other requirements, including those identified in a decision authorizing a right-of-way, such as terms and conditions, cannot be approved under this section. This would include requests for alternative access. Section 2805.10 How will I know whether the BLM has approved or denied my application or if my bid for a solar or wind energy development grant or lease is successful or unsuccessful? Section 2805.10 of this final rule clarifies that agency decisions about whether to approve rights-of-way are generally administratively appealable while the issuance of a right-of-way grant or lease itself is not an opportunity for appeal. Paragraph (c) of this final rule clarifies that ‘‘The BLM will issue the right-ofway by signing the grant or lease and transmitting it to you.’’ The BLM’s act of returning the signed instrument to the holder constitutes the ‘‘issuance’’ of the right-of-way. Identifying the point in time at which the right-of-way is ‘‘issued’’ is important for calculating when the term of a right-of-way begins to run (see § 2805.11) and when the holder’s obligation to pay rent begins (see § 2806.12). Identifying the point at which the right-of-way is ‘‘issued’’ is also important for clarifying which actions are subject to the conditions in Section 50265(b)(1) of the IRA, which imposes conditions on when the Secretary may ‘‘issue a right-of-way for wind or solar energy development on Federal land.’’ The BLM did not make a change to this section of the final rule. E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 Section 2805.11 lease contain? What does a grant or Section 2805.11 of this final rule revises the right-of-way authorization term length for certain facilities, and the final rule includes minor updates to the proposed rule to improve technical clarity. No change was made in this section of the final rule due to public comment. The BLM’s final rule ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way,’’ 89 FR 25922 (April 12, 2024), updated § 2805.11 to redesignate paragraph (b) to paragraph (c). Proposed revisions from this rule under § 2805.11(b) are now finalized under 2805.11(c) consistent with the redesignation of this paragraph. Redesignated § 2805.11(c) addresses the duration of rights-of-way. Section 2805.11(c)(2) provides specific terms for solar and wind energy grants and leases. Paragraphs (c)(2)(iv), (c)(2)(v), and (c)(4) now show the maximum terms for solar and wind energy generation facilities, energy storage facilities that are separate from energy generation facilities, and electric transmission lines with a capacity of 100 kV or more. The term for a grant or lease for these types of authorizations may be up to 50 years. Revisions under this section are consistent with those made under § 2801.9(d). Paragraph (c)(2)(iv) is updated for the maximum term for both grants and leases, for up to 50 years (plus initial partial year of issuance). Paragraph (c)(2)(v) is updated for the maximum term for rights-of-way for energy storage facilities that are separate from energy generation facilities. Although the BLM generally treats energy storage facilities as linear rightsof-way, rather than solar or wind energy development rights-of-way, for purposes such as rent calculation, the BLM believes that the longer term of ‘‘up to 50 years,’’ commensurate with the maximum term for solar or wind energy development rights-of-way, will facilitate the transition to cleaner sources of energy in the United States. Paragraph (c)(4) would be added to update the term for electric transmission lines with a capacity of 100 kV or more, for up to 50 years, commensurate with the term for solar and wind energy development projects and energy storage facilities that are separate from energy generation facilities. Some comments sought clarification on whether a presumptive leaseholder’s (which is defined at § 2809.15(b)(1)) control of the property would preclude other uses, such as grazing or recreation, VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 or during any period when use is not immediately initiated. Prior to the competitive process, a prospective bidder would be informed as to whether they were bidding on a location with existing authorized uses, such as recreation or grazing or other known casual uses. The BLM’s identification of a presumptive leaseholder or issuance of a lease would not automatically exclude authorized uses. Rather, the BLM must follow its existing processes prior to ending existing uses; for example, in the context of livestock grazing, notice and cancellation is provided, subject to any required public comment periods. The BLM understands from comments it has received that there is some confusion whether solar and wind energy developments may also be projects. In the final rule, the BLM revised paragraph (b)(2) to add ‘‘projects’’ to clarify that solar and wind energy developments may be projects. Section 2805.12 What terms and conditions must I comply with? Section 2805.12 of this final rule lists certain terms and conditions that apply to all right-of-way grants and leases. The BLM revised this section to address public comments regarding the term length authorized for certain facilities. The BLM also included revisions to prevent a holder’s non-use of the public lands for the authorized energy generation facilities. Paragraph (c)(8) is added to this final rule addressing concerns raised in relation to § 2801.9(d) regarding the longer term for grants and leases. This rule provides diligent operation requirements wherein the holder of a solar or wind energy development grant or lease must maintain at least 75 percent of energy generation capacity for the authorized facility for the grant or lease term. A failure to meet this operational capacity for two consecutive years may support the suspension or termination of the grant or lease under §§ 2807.17 through 2807.19. The BLM would send notice to the grant or leaseholder with a reasonable opportunity to correct any noncompliance with the diligent operation requirement, including resuming use of the right-of-way. The BLM believes it is reasonable to establish a requirement that solar and wind energy generation developments must operate within 75 percent of their generation capacity, allowing a 25 percent operational change for each year. 6 This allows a solar or wind 6 As demonstrated in a 2018 NREL study, forecast modeling for solar photovoltaic and wind energy PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 35651 operator to safely accommodate operational changes related to unforeseen circumstances and maximize their energy production without the need to coordinate with the BLM for normal operations. A sustained reduction in output, such as for anomalous storm years or changes to a development’s technology, that reduce the energy generation below 75 percent of the project’s capacity would require coordination with the BLM to update project information. The energy generation capacity is first established by the right-of-way holder under section 2806.52(b)(5) in the first annual certified statement, and then informed by subsequent years’ operational capacities in the annual statement. Since the BLM bills in advance for a calendar year (see part 2806 for further information on solar and wind energy capacity fee), the BLM believes that this operational standard is appropriate for the orderly administration of the public lands and to ensure appropriate use of its resources. In response to the BLM’s notice, a holder must provide reasonable justification for the reductions in energy generation, such as delays in equipment delivery, legal challenges, or Acts of God. Holders must also provide the anticipated date when energy generation will resume and a request for extension under paragraph (e) for an extension of operations period to satisfy the two-year diligent operation requirements of paragraph (c)(8). The BLM may deny a request for extension for failure to comply with this section. The BLM will use the annual certified statement required under § 2806.52(b)(5) to determine whether a holder has been meeting the minimum energy generation capacity for the diligent operation requirement. Under paragraph 2806.52(b)(5)(vi), the holder must notify the BLM if they will reduce the amount of energy generated by 25 percent or more for that year. Two consecutive years with reduced energy generation would support the BLM’s notice to the grant or leaseholder of noncompliance with the diligent operation requirement. Paragraph (e)(2) of this final rule clarifies that the option of requesting alternative stipulations, terms, or conditions does not apply to terms or conditions related to rents or fees. As with requests for alternative application requirements under § 2804.40, requests developments is generally within 10 percent of expected capacities over a one-year period. https:// www.nrel.gov/docs/fy23osti/79498.pdf, Solar PV, Wind Generation, and Load Forecasting Dataset for ERCOT 2018: Performance-Based Energy Resource Feedback, Optimization, and Risk Management (P.E.R.F.O.R.M.) E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35652 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations for alternative stipulations, terms, or conditions under § 2805.12 are limited to technical obligations of the applicant or holder and not to the holder’s obligation to compensate the United States for the use of the public lands and their resources. Requests for exemptions or deviations from the general rent provisions of subpart 2806 should be made under provisions of that subpart that specifically address such exemptions or deviations, such as existing § 2806.15(c) (not revised in this rulemaking), which sets forth a procedure for asking the BLM State Director to waive or reduce a holder’s rent payment, or § 2806.52(b)(1)(i), which describes certain circumstances under which the BLM may calculate the capacity fee based on an alternative MWh rate. A comment suggested that the fees could be based on third-party evaluations, such as an appraisal. The BLM considered whether an appraisal specific to each authorization would be appropriate and determined that using such a process would be costly and add considerable time to the processing of an application. The BLM chose not to use an appraisal, except when it determines under § 2806.70 that its rent schedules do not apply to the underlying right-of-way use. For example, if the BLM receives a right-ofway application requesting a permit for a long-term landscape art installation, the schedules for transmission, solar or wind energy development, or communications sites would not apply, and the BLM may elect to use an appraisal to determine the appropriate rent. This final rule also provides for a specific alternative MWh rate for determining the capacity fee under § 2805.62(b)(1)(i) for development projects that use a Power Purchase Agreement (PPA). Such agreements must be provided to the BLM for review. If the BLM determines the lower rate is appropriate, it will use such agreements in place of the calculated MWh rate. The BLM did not make a change in response to this comment. A comment requested that the BLM require applicants to include PLAs and add union labor protections as a term and condition of solar and wind energy rights-of-way. In this final rule, the BLM has elected to provide an opportunity for holders to receive capacity fee reductions under certain conditions, including where the holder can show it is using PLAs for the construction of the planned facility (see § 2806.52(b)), consistent with the reduction authority under the Energy Act of 2020. However, in administering the public lands, the BLM is making such compliance VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 voluntary, offering the capacity fee reduction to incentivize the use of PLAs for solar and wind energy development projects instead of mandating compliance with such a term. The BLM believes this voluntary option provides opportunities to a wide variety of potential holders and recognizes the effort of those who qualify for such reductions consistent with criteria in § 2806.52(b). No change was made in the final rule due to this comment. Section 2805.13 When is a grant or lease effective? Section 2805.13 of this final rule includes a minor technical clarification to the title and section, adding ‘‘or lease,’’ to build consistency for authorization term lengths inside and outside of DLAs. The BLM received comments opposing this section regarding term length of authorizations. One comment recommended the BLM extend the maximum term from 30 years to 50 years only for leases inside DLAs. Another comment opposed extending the maximum term to 50 years for any authorization. The BLM addressed this and other similar comments under § 2801.9 of this preamble. Section 2805.14 What rights does a right-of-way grant or lease convey? Section 2805.14 of this final rule clarifies that the term ‘‘right-of-way’’ is the category of authorizations that generally are issued as a grant or a lease under Title V of FLPMA. This clarity has become increasingly important for the internal and external understanding of right-of-way authorizations with the passage of new legislation. The BLM did not receive comments on this section. The title is revised to ‘‘What rights does a right-of-way grant or lease convey?’’ The title clarifies that this section applies to both grants and leases. Paragraph (g) removes the text ‘‘solar or wind energy development’’ and adds ‘‘right-of-way’’ to now read as ‘‘right-ofway grant or lease.’’ This section provides for when an applicant applies to renew any right-of-way grant or lease under § 2807.22. Section 2805.16 If I hold a grant or lease, what monitoring fees must I pay? The BLM’s final rule ‘‘Update of the Communications Uses Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way’’ 89 FR 25922 (April 12, 2024) updated the BLM Headquarters address in § 2805.16. Thus, the proposed rule’s update to the BLM Headquarters address is no longer necessary. The BLM did not receive PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 comments on this section and did not include it in the final rule. Subpart 2806 Annual Rents and Payments Subpart 2806 of this final rule clarifies that the term ‘‘right-of-way’’ is the category of authorizations that are generally issued as a grant or a lease under Title V of FLPMA. This clarity has become increasingly important for the internal and external understanding of right-of-way authorizations with the passage of new legislation. In subpart 2806, the BLM sets the acreage rent and capacity fee calculation methodologies for solar and wind energy development rights-of-way. Section 504(g) of FLPMA, 43 U.S.C. 1764(g), requires right-of-way holders, subject to several narrow exceptions, ‘‘to pay in advance the fair market value’’ for the use of the public lands. Section 102(a) of FLPMA, 43 U.S.C. 1701(a), clarifies that ‘‘it is the policy of the United States that . . . the United States receive fair market value of the use of the public lands and their resources unless otherwise provided for by statute.’’ The BLM has consistently taken the position that this statutory mandate includes the authority to charge acreage rent and capacity fees that reflect the fair market value of the public lands and their resources. For example, the preamble to the BLM’s 2016 Final Rule, Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and Wind Energy Development and Technical Changes and Corrections, explained that ‘‘(t)he BLM has determined that the most appropriate way to obtain fair market value is through the collection of multicomponent fee [sic] that comprises an acreage rent, a MW capacity fee, and, where applicable, a minimum and a bonus bid for lands offered competitively . . . . [T]he collection of this multicomponent fee will ensure that the BLM obtains fair market value for the BLM authorized uses of the public lands, including for solar and wind energy generation.’’ 81 FR 92122, 92134 (Dec. 19, 2016). In that final rule, the BLM further explained that the use of a multicomponent rent and fee structure that comprises an acreage rent, a MW capacity fee, and in some cases also a minimum and a bonus bid assists the BLM in achieving important objectives, including identifying and capturing fair market value for the use of public land, providing a consistent approach with other categories of public land uses, encouraging efficient use of the public lands by reducing relative costs for comparable projects using fewer acres, and employing an approach E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations consistent with existing policies and regulations governing the BLM’s renewable energy program. See id. The multicomponent fee of this final rule will continue to advance important objectives that serve the public interest, including allowing the BLM to capture fair market value for use of the land (subject to reductions pursuant to Energy Act of 2020 authority). In the Energy Act of 2020, 43 U.S.C. 3003, Congress amended the fair market value requirement of Section 504(g) of FLPMA by providing the Secretary with discretion to ‘‘consider acreage rental rates, capacity fees, and other recurring annual fees in total when evaluating existing rates paid for the use of Federal land’’ for solar and wind energy projects and reduce acreage rental rates and capacity fees if the Secretary makes certain findings, including ‘‘that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources.’’ Consistent with FLPMA and the Energy Act of 2020, the BLM will continue to charge solar and wind energy rights-ofway acreage rent and capacity fees. The final rule implements a methodology that bases rent and fee rates on local land values and wholesale energy market prices. This methodology also supports the direction in the Energy Act of 2020, 43 U.S.C. 3004, of meeting national clean energy objectives, including the congressional goal of permitting 25 GW of renewable energy by 2025 on Federal lands through reductions in rental rates and capacity fees. As described in the section-bysection discussion for subpart 2806, this final rule is utilizing the authority in 43 U.S.C. 3003 to adjust the fair market value requirement through reductions in rental rates and capacity fees for solar and wind energy projects on public lands. Under the final rule, acreage rent rates for solar and wind energy rights-of-way are determined using the NASS Cash Rents Survey, which reflects a nominal value of the land at the time the rightof-way is issued and prior to commercial use. This per-acre land rental value will be multiplied by an encumbrance factor (which differentiates between solar and wind energy facilities) and an annual adjustment factor that accounts for changes in the value of the land over the lifetime of the right-of-way due to inflation and similar factors. Because the NASS Cash Rents Survey used for solar and wind acreage rents reflects a valuation of annual rent, no rate of return is applied when determining solar and wind energy acreage rents. The acreage rent rate reflects a nominal VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 value of the land to continue to maintain site control after the right-ofway is issued. Once a solar or wind energy generation facility is utilizing the solar or wind resources on public land to produce electricity, the BLM may charge the capacity fee for the right-of-way unless the acreage rent remains higher than the fee. The capacity fee is determined in part using the annual MWh production multiplied by either wholesale power pricing information or pricing figures specific to a project’s PPA to determine the market value of the electricity generated from the project. The wholesale power pricing information or other pricing basis variables in the BLM’s calculation, like the pastureland rental value based on the NASS Cash Rents Survey used for calculating acreage rents, will be fixed at the time the right-of-way is issued and will be updated using a fixed annual adjustment factor. This market value of the electricity generated will then be multiplied by a rate of return based on a percentage of wholesale pricing and by certain qualifying fee reductions to arrive at a capacity fee for the authorized project. Some comments suggested that fees should be compared with the fees associated with other energy sources instead of being based on the per-acre values for pastureland. Other comments expressed support for the BLM using the NASS Cash Rents Survey to calculate acreage rent rates. The BLM manages different energy sources, e.g., oil and gas and geothermal, consistent with the applicable laws for each. As such, rent and fee values promulgated in regulations consider differences under law. Solar and wind energy generation facilities on public lands are authorized under Title V of the FLPMA (43 U.S.C. 1761–1771) and its implementing regulations at 43 CFR part 2800. Section 504(g) of FLPMA generally sets the requirements for how the BLM will collect rents and fees for use of the public lands and their resources through a right-of-way. These requirements differ from those in the MLA (30 U.S.C. 181 et seq.) and the Geothermal Steam Act (30 U.S.C. 1001 et seq.), and thus a comparison of fees for production of these different energy sources on public lands would be inappropriate and irrelevant. In this final rule, the BLM updates rents and fees for solar and wind energy development rights-of-way under the authority provided by FLPMA to reflect the fair market value for use of the public lands and their resources by using acreage rental rates that reflect local land values prior to commercial electricity production through using PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 35653 pastureland cash rent survey values by NASS. The BLM then applies its authority under the Energy Act of 2020 to provide reductions that are necessary to promote the greatest use of wind and solar energy resources. One comment suggested that the proposed rule should not offer acreage rent and capacity fee reductions to projects outside DLAs and instead should implement project-specific reductions and other incentives to promote responsible development inside DLAs. DLAs are locations on public lands that the BLM has designated through the land use planning process as priority areas for solar and/or wind energy development. Limiting acreage rent and capacity fee reductions to DLAs would not, however, meet the Energy Act of 2020’s direction to promote the greatest use of wind and solar resources. To date, the BLM has only allocated DLAs for solar facilities on public lands within six southwestern states for locations that are predominately favorable for thermal solar projects (i.e., concentrated solar). The BLM currently has no DLAs allocated for solar in other states. Furthermore, the BLM has no DLAs allocated for wind energy development on public lands in any state. The BLM determined that limiting rent and fee reductions to only DLAs would be suboptimal in supporting clean energy goals. As such, the final rule will provide for rent and fee reductions on public lands both inside and outside DLAs, which will serve the BLM’s purpose of promoting the greatest use of wind and solar energy resources on public lands. One comment suggested that subpart 2806 should not eliminate fair market value for rental and leases on public lands or the competitive bid process. The commenter did not support incentivizing renewable development for a specific project by eliminating the competitive leasing process. Contrary to the commenter’s suggestion, this final rule does not eliminate the BLM’s ability to utilize a competitive bid process for solar and wind energy development. The final rule adjusts the competitive process requirements for wind and solar energy development proposals within DLAs by aligning it to be consistent with agency discretion for utilizing a competitive process outside DLAs when the BLM’s authorized officer decides to use a competitive process. Some comments suggested that this rule should generally raise fees for developers and require more upfront mitigation money to address long term environmental issues. Related E:\FR\FM\01MYR6.SGM 01MYR6 35654 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations comments suggested that the BLM should establish an environmental mitigation fund in addition to rents and fees to accommodate the high probability of direct and cumulative impacts. The BLM considered these comments and is not making these suggested changes. The BLM believes such changes are unnecessary because the final rule does not limit the BLM’s existing authority and ability to appropriately impose mitigation requirements as a component of the terms, conditions, and stipulations for a solar or wind energy development. The BLM will continue to require appropriate mitigation and conditions of approval to address environmental impacts for right-of-way grants and leases without further requirements promulgated under this final rule. Other commenters stated that the BLM should implement a minimum efficiency criterion to ensure that consumers receive the necessary amount of power to keep up with demand. The BLM disagrees with comments suggesting that the BLM should regulate how efficiently a project must operate. Developing a project is a complex process that depends on several factors, including the availability and cost of appropriate technology. The BLM has included a provision in this final rule that sets an operational standard requiring a development project to annually maintain at least 75 percent of its energy generation capacity. See § 2805.12(c)(8) for further information on the operational standards for solar and wind energy development projects on public lands. ddrumheller on DSK120RN23PROD with RULES6 Section 2806.10 What rent must I pay for my grant or lease? Section 2806.10 of this final rule provides a minor technical clarification described below. The BLM did not receive comments on this section and has made no changes to it in the final rule. Section 2806.10 provides rent requirements that apply to all grants and leases, requiring payment in advance, consistent with Section 504(g) of FLPMA, as amended. New § 2806.10(c) would clarify to a reader that the per acre rent schedule for linear right-ofway grants must be used unless a separate rent schedule is established for your use—such as with communication sites under § 2806.30 or solar and wind energy development facilities per § 2806.50—or the BLM determines under § 2806.70 that its rent schedules do not apply to the underlying right-ofway use. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Section 2806.12 pay rent? When and where do I Section 2806.12 of this final rule provides a minor technical clarification as described below. The BLM did not receive comments on this section and has made no changes to it in the final rule. Paragraphs 2806.12(a) and (b) describe the proration of rent for the first year of a grant and the schedule for payment of rents. Paragraphs 2806.12(a) and (b) would be revised by deleting the term ‘‘non-linear,’’ which is not defined in the regulations, to clarify that these provisions apply to all right-of-way grants or leases. Section 2806.20 What is the rent for a linear right-of-way grant? Section 2806.20 of this final rule clarifies the BLM’s mailing address. Section 2806.20(c) addresses how to obtain a current rent schedule for linear rights-of-way. This paragraph provides the BLM’s mailing address of record by reference to § 2804.14(c). Solar and Wind Energy Development Rights-of-Way The existing regulations contain two undesignated center headings to organize and differentiate sections pertaining to solar (see existing §§ 2806.50 through 58) and wind (see existing §§ 2806.60 through 68) energy rights-of-way. The final rule revises those sections and undesignated headings to provide a single set of provisions for all solar and wind energy development rights-of-way. The rent, fee, and payment requirements under the final rule are discussed in the following sections and are identical for solar and wind except for the difference in the encumbrance factor used in calculating the acreage rent that is discussed under § 2806.52(a). Sections 2806.50 through 2806.58 address solar and wind energy rents and capacity fees. The final rule updates the acreage rent and capacity fee calculation methods to improve predictability of rates for solar and wind energy development projects on public land. The combined rent and fee calculation methodologies have the flexibility to meet FLPMA’s fair market value requirement while also applying calculation factors to reduce rates to promote the greatest use of wind and solar energy resources on the public lands consistent with the Energy Act of 2020. The final rule retains flexibility to utilize different data sources for electricity market values over time. Developers of solar and wind energy on PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 public lands will have improved rate predictability over the term of an authorization. This is accomplished by establishing an acreage rate and capacity fee rate at the beginning of a grant or lease term with upfront built-in rate adjustments and by indexing the capacity fee to the annual energy production. The BLM’s acreage rent is the average of the state-wide pastureland rent from the NASS Cash Rent Survey. The acreage rent is the minimum payment made to the BLM each year by the developer. See § 2806.52(a) for further information on the acreage rent. The capacity fee, based on wholesale power prices, serves to compensate the United States for long-term site control and the production value of the electricity generated by solar and wind energy projects on public lands. The capacity fee will be collected annually, but only when the capacity fee exceeds the acreage rent for the year. See § 2806.52(b) for further information on the capacity fee. The final rule includes certain reductions that may be applied under the authority granted to the Secretary in the Energy Act of 2020, which provides that annual acreage rent and capacity fees may be reduced if the Secretary determines that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources, among other reasons. Adjustments to the capacity fee from the MWh rate reduction, The Domestic Content reduction, and PLA reduction are discussed in greater detail in § 2806.52(b)(1)(ii) through (iv). The BLM has determined that the rate reductions in this final rule would help to promote the greatest use of wind and solar energy resources on public lands. Section 2806.50 Rents and Fees for Solar and Wind Energy Development Section 2806.50 of the final rule requires the holder of a solar or wind energy right-of-way to pay in advance the greater of either an annual acreage rent or a capacity fee, consistent with Section 504(g) of FLPMA (43 U.S.C. 1764(g)). There are no provisions in this rule for a phased-in rent or fee. The acreage rent or capacity fee, as applicable, is calculated based on the requirements found in §§ 2806.11 and 2806.12. The acreage rent is calculated according to the formula set forth in § 2806.52(a), while the capacity fee is calculated according to the formula set forth in § 2806.52(b). Some comments expressed concern that this rule creates negative market incentives by keeping acreage rents and capacity fees artificially low. These E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 commenters suggest that the BLM should implement a consistent yearly increase in acreage rent and capacity fees based on initial rates, with reductions provided only for projects in specific circumstances, such as siting within solar zones or on disturbed lands, and with strong commitments to domestic content. The BLM is cognizant that the rent and fee rate structure is important for promoting the greatest use of wind and solar energy resources and is a critical component to providing short- to medium-term stability for emerging energy markets. There is a strong public interest in maintaining rate predictability for electricity generating entities that are subject to long-term interconnect and PPAs. This final rule sets rates that are also increased annually, through the annual adjustment factor (see § 2806.52(b)(2)). The annual adjustment continues through the term of the authorization. Additionally, this final rule provides an opportunity for rate reductions for all solar and wind energy development projects that further the goals of the Energy Act of 2020, which is to authorize 25 gigawatts of renewable energy on Federal lands by 2025 and further national clean energy priorities. The BLM did not make a change to this section of the final rule. Section 2806.51 Grant and Lease Rate Adjustments Section 2806.51’s title is changed from the proposed rule to clarify that this section applies to all grants and leases. This section provides for rightof-way grant and leaseholders to transition to the new rate making under this final rule through an affirmative request to the BLM. Absent a request, they would retain the rate setting method in effect prior to this final rule. Paragraph (c) informs holders of existing solar or wind energy development rights-of-way that they may request the new rate methodology in this final rule be applied to their existing grant or lease. Existing holders have two years from the date this final rule becomes effective to request a change to the new rate making method. The BLM will continue to apply the grant holder’s or lessee’s current rate methodology if a timely request is not received. The BLM received a comment that does not support any rate reduction based on an estimation of energy generated because all rates should be assessed on actual production. The BLM has the administrative flexibility to collect payment in advance based on estimated energy. The amount the BLM may collect for the right-of-way may VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 change once the BLM determines the actual energy production on the right-ofway. The BLM will reconcile any difference in the amount due and credit any overpayment, and right-of-way grant holders and lessees are liable for any underpayment. See § 2806.52(b)(5) of this rule for the BLM’s annual certified statement that provides more information about the estimated and actual energy generation. The BLM did not change this section of the final rule in response to this comment. Some comments recommended that the final rule cap the total amount of reduction in acreage rents and capacity fees that an individual leaseholder can claim for a right-of-way. The final rule does not cap the number or level of reductions an applicant or holder may qualify for; however, the final rule does require that the BLM collect no less than the acreage rent for the right-of-way each year, notwithstanding the number of reductions that apply to the grant per § 2806.52(b). The BLM did not change this section of the final rule in response to this comment. Some comments suggested that rate reductions may be achieved without any changes to where the BLM sources its market pricing data. In the final rule, the BLM preserves its discretion to change the source of market data. In the BLM’s experience, access to such information may change over time. For this final rule, the BLM is using the Energy Information Administration pricing data that may be found at https:// www.eia.gov/electricity/wholesale/. Energy Information Administration data is free and open to the public, increasing transparency into the BLM’s rate schedule. The BLM did not change to this section of the final rule in response to this comment. Some comments recommended that the BLM seek to increase domestically sourced products and materials and that the BLM should use this rule to mandate robust domestic content thresholds for projects permitted on Federal land. The BLM agrees with these commenters’ interest in increased use of domestic content for solar and wind energy development projects. This final rule includes a financial incentive in the form of a ‘‘Domestic Content reduction’’ under § 2806.52(b)(1)(iii) to encourage holders to use components made or manufactured in the United States in the construction of the solar or wind energy project. This capacity fee reduction is intended to offset costs associated with using only iron, steel, manufactured products, and construction materials incorporated into the project that are produced in the United States consistent with the PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 35655 direction in the Energy Act of 2020. The BLM anticipates that this proposed capacity fee reduction would increase economic certainty for renewable energy projects on BLM-managed public lands. By incentivizing the use of domestically made parts and materials in exchange for a reduced capacity fee, the BLM expects to reduce costs for developers that choose to incorporate domestically produced materials into their projects. The BLM believes that this reduction will help increase demand for domestically produced renewable energy parts and materials. These intended outcomes would serve to promote the greatest use of wind and solar energy resources on public lands. Currently, wind and solar energy developers face a choice between relying on foreign-sourced parts and materials or paying higher prices for domestically sourced parts and materials, if available. (See for example the Department of Energy’s Solar Photovoltaics—Supply Chain Deep Dive Assessment, available at https:// www.energy.gov/sites/default/files/ 2022-02/Solar%20Energy%20Supply %20Chain%20Report%20%20Final.pdf). As seen in recent years, uncertainty in global supply chain dynamics has the potential to delay deployment of solar and wind energy development projects on public lands. Using incentives to create demand for American-made renewable energy parts and materials will help develop domestic supply chains and reduce impacts on renewable energy deployment on public lands from potential supply chain delays. The BLM believes that incentivizing the use of parts and materials that qualify for the Domestic Content reduction will increase the responsible deployment of renewable energy and will increase commercial interest in the use of public lands, promoting the development of solar and wind energy resources on public lands. This final rule changes the definition used for domestic content to align with the BABA Act and implementing guidance at 2 CFR 184. See § 2806.52(b) for further information on the domestic content reduction. Some comments suggested that a broad approach to rate reductions may have revenue implications and fail to guarantee that taxpayers obtain a fair return for the utilization of our public lands. Consistent with congressional and presidential direction, the BLM is endeavoring to increase the responsible deployment of renewable energy on the public lands and as part of that direction has been authorized to reduce rents and fees to promote the greatest E:\FR\FM\01MYR6.SGM 01MYR6 35656 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 use of wind and solar resources on public lands. As part of this rulemaking process, the BLM carefully deliberated on how to implement the directives and new authorities while maintaining a reasonable return for the use of the public lands and their resources. Following the BLM’s implementation of previous rate reductions in calendar year 2022 for solar and wind energy development projects, the agency received feedback which generally indicated that overall costs for permitting, development, and operations on Federal public lands were still perceived as a barrier to entry and a disincentive to the BLM’s ability to promote solar and wind deployment on public lands. The BLM believes the fee reductions will assist in removing barriers inhibiting deployment of solar and wind development on public lands. Section 2806.52 Annual Rents and Fees for Solar and Wind Energy Development Section 2806.52 of this final rule describes the BLM’s methodology to determine the acreage rent and capacity fee for solar and wind development rights-of-way. Payment is required of the greater of either an acreage rent, which is calculated in advance of authorization, or a capacity fee, which is calculated upon the start of energy generation. This section was revised based on public comments. Section 2806.52(a) provides that acreage rent would be determined by multiplying the number of acres authorized for a project (rounded up to the nearest tenth) by the state-specific per-acre rate from the solar and wind energy acreage rent schedule in effect at the time a grant or lease is issued. The acreage rent would be the minimum yearly payment for a grant or lease and would not be required if the capacity fee under paragraph (b) of this section exceeds the acreage rent. Paragraph (a)(1) explains that the peracre rate is calculated by multiplying the state-specific per-acre value by the encumbrance factor and a factor that reflects the compound annual adjustment since the start of the grant or lease term, according to the formula A × B × ((1 + C) ∧ D)). Paragraph (a)(1)(i) identifies ‘‘A’’ as the per-acre rate, using the state-specific per-acre value from the solar or wind energy acreage rent schedule for the state where a project is located for the year when the grant or lease is issued. The average per acre value will be determined using the NASS pastureland rents reported within the previous 5year period. The BLM will update the acreage rent schedule and its per-acre VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 rate every 5 years consistent with the timing of rent adjustments under § 2806.22 for the linear rents schedule. Based on the pastureland rent value in the NASS Cash Rents Survey through 2021, the most recent 5-year average ranges from $2.10 per acre in Arizona to $12.60 per acre in California with a median value of $6.62 per acre in the Western States. The next year the BLM will update its rent schedule will be for calendar year 2026. Using Nevada as an example for how the BLM will average NASS pastureland rents, assume that NASS reported values of $10.00, $13.00, and $10.00 per acre respectively for 2019, 2020, and 2021. NASS reported values during the 5-year period only for those 3 years and did not report values for 2017 and 2018. In that case, the BLM would average the reported values using three years for that 5-year period, which would equate to $11.00 per acre. The per-acre rate charged to the rightof-way holder for a grant or lease will not change once calculated and the authorization is issued. Rates for an existing authorization will not change with updates to the acreage rent schedule; instead, the acreage rent will be adjusted by the annual adjustment factor, ‘‘C’’ in the formula above, under 2806.52(a)(1)(iii). Paragraph (a)(1)(ii) identifies ‘‘B’’ in the formula above as the encumbrance factor. The encumbrance factor is applied to account for the intensity of the solar or wind development’s surface use of the public lands. In the final rule, solar energy generation facilities are subject to a 100 percent encumbrance factor and wind energy generation facilities are subject to a five percent encumbrance factor. The 100 percent encumbrance factor for solar facilities reflects a greater intensity of development on the surface of public lands and a virtual exclusion of other uses on the right-of-way. The five percent encumbrance factor for wind facilities recognizes that a wind energy facility only partially encumbers the land, allowing other uses to co-exist. Some comments suggest that a lower encumbrance value for solar is appropriate, noting that facilities may incorporate design elements or construction methods that reduce impacts to resources, such as raised fences for wildlife passage or vegetation disturbance caps. The BLM appreciates that projects incorporating such improvements may cause fewer impacts to public land resources. However, the BLM disagrees that such improvements reduce the encumbrance factor, which is based on the occupancy of the land and impact to other uses of the land. Solar PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 energy developments have a greater occupancy of the land and impact to other uses because they preclude the majority and sometimes all other uses. This encumbrance factor for solar energy developments is appropriate for public lands, and the BLM retains its 100 percent encumbrance factor for this rule. One comment asserted that the proposed encumbrance value of five percent for wind energy is too low and should be set around 50 percent and that if the BLM decreases the encumbrance factor from 10 percent, the BLM should a explain its rationale in this rule. Others believed the encumbrance factor should be lower, asserting that a mid-point encumbrance factor of 3 percent is appropriate based on the Department of Energy’s Wind Vision analysis. The BLM considered the intensity of the surface use and exclusion of other uses when setting the encumbrance factor in this final rule. While the commenters that advocated for a 50 percent encumbrance factor did not provide data supporting that figure, the National Renewable Energy Laboratory has found that generally ‘‘only a small fraction of that area (<1%–4%) is estimated to be directly impacted or permanently occupied by physical wind energy infrastructure.’’ 7 In practice, the BLM has found that, based on geography or project design, and effect on other uses, the encumbrance may be more or less than that reported by NREL occupied land percentages and therefore set a five percent encumbrance factor for wind energy. Paragraph (a)(1)(iii) clarifies that ‘‘C’’ in the formula above is the annual adjustment factor, which is three percent, and Paragraph (a)(1)(iv) clarifies that ‘‘D’’ is the year of the grant or lease term, where the first year (whether partial or a full year) would be 0 (that is, there is no inflation for the first year of the term). Under the final rule, the annual adjustment factor would be fixed at three percent and compounded annually for the term of the authorization. Paragraph (a)(2) describes where you may obtain a copy of the current peracre rates for the solar and wind energy rent schedule. Paragraph (b) describes that the capacity fee is calculated by multiplying the MWh rate or the alternative MWh rate (which is described below), the MWh rate reduction, the Domestic Content reduction, PLA reduction, the 7 https://www.nrel.gov/news/program/2022/nrelexplores-the-dynamic-nature-of-wind-deploymentand-land-use.html. E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations rate of return, and the annual power generated on public lands for the grant or lease in question (measured in MWh) by a factor that reflects the compound annual adjustment. The capacity fee is required to be paid annually beginning in the first year that generation begins for the energy generation facility. There will be no capacity fee levied for the first year or any other year if the acreage rent exceeds the capacity fee. The formula for calculating the annual capacity fee is A × B × C × D × [(1 + E) ∧F] × G × H. Paragraph (b)(1)(i) describes that ‘‘A’’ is either the MWh rate, an amount determined based on the average of the annual weighted average wholesale price per MWh for the major trading hubs serving the 11 Western States of the continental United States, or the alternative MWh rate. The MWh rate is calculated based on the wholesale prices from the full five calendar-year period preceding the most recent MWh rate adjustment before the right-of-way was issued, rounded to the nearest dollar. There is no MWh rate phase-in for energy generation facilities except for existing holders that elect to continue paying under their current rate adjustment method per § 2806.51(c). The BLM may use an alternative MWh rate when a grant or leaseholder enters into a PPA with a utility for a price per MWh that is lower than the average of the annual weighted average wholesale price. In those instances, the BLM will determine if the rate in the PPA is appropriate to use instead of the MWh rate. For example, an alternative MWh rate may not be appropriate if a utility issues itself a PPA for its solar or wind energy development. If the rate in the PPA is appropriate, then the BLM would set an alternative MWh rate for the grant or lease at the rate in the PPA. The BLM received a request to remove the BLM’s discretion to use an alternative MWh rate rather than a MWh rate calculated on the average wholesale pricing as described under § 2806.52(b)(1)(i). The BLM provides an opportunity for an alternative MWh rate in this rule in the event that there is a difference between wholesale pricing (energy pricing at market) compared to the negotiated pricing that may be achieved in a PPA. The BLM understands from a recent report from Lawrence Berkeley National Lab (available at https://emp.lbl.gov/utilityscale-solar/) that PPA pricing may be less than wholesale market pricing. The BLM does not want to disincentivize reasonable development on public lands or more favorable power purchase rates, which would be contrary to national goals set by law and directed by VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 executive order, by disincentivizing such actions. However, the BLM also wishes to ensure it retains the discretion necessary to ensure that an alternative MWh rate is appropriate. The BLM did not make changes in the final rule due to these comments. In paragraph (b)(1)(ii), ‘‘B’’ is the MWh rate reduction. The final rule sets the capacity fee at 20 percent of the wholesale price per MWh or alternative MWh rate through calendar year 2035. This reduction is consistent with the authority provided in the Energy Act of 2020 allowing the Secretary to reduce acreage rental rates and capacity fees if, among other things, the Secretary determines ‘‘that a reduced rental rate or capacity fee is necessary to promote the greatest use of wind and solar energy resources.’’ Further, this reduction would help BLM meet the goal under the Energy Act of 2020 of ‘‘authoriz[ing] production of not less than 25 gigawatts of electricity from wind, solar, and geothermal projects by not later than 2025.’’ Implementing this reduction is necessary to promote the greatest use of wind and solar energy resources and maximize commercial interest in lease sales by lowering the entry cost of prospective energy generating facilities. Additionally, implementing this reduction puts the rates the BLM charges closer to what the BLM charged developers in 2007 and 2008 when interest in solar and wind energy development on public lands began to increase. The reduced rates and new rate setting methodology lower the potential that existing right-of-way holders who agreed to terms and conditions for using public lands that were later updated based on market changes will experience economic hardship as a result of those adjustments. This final rule uses predetermined adjustments instead. For example, the MWh rate reduction for a newly authorized solar or wind energy grant or lease in 2035 will be set at 20 percent of the wholesale price per MWh or alternative MWh rate. This will yield a continued 80 percent reduction through the end of that authorization’s term consistent with the Energy Act of 2020 authority. Starting in 2036, the BLM will begin to transition the MWh rate reduction to 20 percent by 2038. The MWh rate reduction will be reduced to 60 percent for new projects authorized in 2036, 40 percent for new projects authorized in 2037, and 20 percent for new projects authorized in 2038 and beyond. The rates for existing authorizations will not change with this transition to a 20 percent reduction. For example, an authorization for solar or wind energy PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 35657 development in 2037 would receive a 40 percent reduction through the end of the authorization’s term. The BLM would similarly apply this reduction to authorizations it issues based on the year of issuance. Some comments suggested the transition from an 80 percent MWh rate reduction to a 20 percent MWh rate reduction appears arbitrary and without grounding in economic analysis of market conditions and suggested instead allowing the 80 percent reduction to continue until a future rulemaking. The BLM understands the concerns raised by the commenters regarding the change to the reduction in the proposed rule. However, the BLM disagrees that the 80 percent MWh rate reduction should continue until a future rulemaking. Instituting a phased sunset period to the 80 percent reduction in the capacity fee is appropriate as the renewable energy industry may no longer need this reduction to achieve the greatest use of wind and solar on public lands, and progress toward our national goal of a carbon-pollution free electricity sector may indicate that a reduction is no longer warranted. In this final rule, the BLM is revising the transition from MWh rate reduction from 80 percent to 20 percent over several years. This transition would lessen the year-overyear rate change until 2038, when the MWh rate reduction would remain at 20 percent. The BLM will evaluate progress towards reaching national goals before 2036 and could reinitiate rulemaking to adjust incentives, including extending them beyond 2036, if appropriate under the authority in the Energy Act of 2020 or other applicable authority. In paragraph (b)(1)(iii), ‘‘C’’ is the Domestic Content reduction. This paragraph is revised consistent with the changes discussed under § 2801.5. As explained previously, the BLM is promoting the development of solar and wind energy resources on public lands by offsetting some of the costs of using items and materials produced in the United States in the construction of solar and wind energy development facilities. The BABA Act, Public Law 117–58, 135 Stat. 429, §§ 70901 through 70927 (Nov. 15, 2021) and the implementing regulations at 2 CFR part 184, describe certain categories of items or products that are eligible for the domestic content preference. As noted in § 2801.5, the BLM adopts the term ‘‘domestic content’’ to refer to the items and materials associated with the construction of a solar or wind energy facility on public lands that are eligible for the domestic content preference. Paragraph (b)(1)(iii) of § 2806.52 of the BLM’s regulation would reduce the E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35658 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations capacity fee for solar or wind energy generation facilities if the holder can demonstrate that the construction of the facilities for the right-of-way—excluding labor costs—qualify as produced in the United States as described in 2 CFR 184.4. The Domestic Content reduction is 20 percent for facilities qualifying for the domestic content preference defined in 2 CFR part 184. To qualify for this capacity fee reduction, the percent of the energy generation facility’s total cost that consists of items qualifying for the domestic content preference would have to meet or exceed the ‘‘Produced in the United States’’ requirements in 2 CFR 184.3. Generally, this would mean that: (1) all manufacturing processes for iron or steel products used as a component of the project occurred in the United States; (2) manufactured products (a) were manufactured in the United States, and (b) the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of the manufactured product, as determined in 2 CFR 184.5; and (3) all manufacturing processes for construction materials occurred in the United States, as defined in 2 CFR 184.6. The holder would have to provide sufficient documentation (e.g., purchase orders for end products, materials, and supplies of the facility; as-built or construction plans) to demonstrate that the products used in the energy generation facility meet the thresholds identified in 2 CFR part 184. Once an energy generation facility qualifies for a Domestic Content reduction, the facility will continue to benefit from the reduction for the term of the grant or lease. The BLM will only revisit the reduction at the time of an assignment, amendment, or renewal of an energy generation facility grant or lease to determine what reduction, if any, it may qualify for. The BLM will apply the criteria defining the domestic content preference and the components of construction for the version of 2 CFR part 184 in effect at the time the rightof-way is issued unless OMB amends that guidance in the future in such a way that the current definition contemplated in this final rule no longer provides a clear meaning. In that circumstance, the BLM will apply the most recent version of 2 CFR part 184 that provides a workable definition until such time as the BLM is able to amend its rules. In addition to changing the definition to qualify for a domestic content reduction from a FAR to a BABA-based definition, this final rule only provides for a single 20 percent reduction that VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 interested parties qualify for if they meet the requirements of 2 CFR part 184 instead of the incremental reduction that the BLM had proposed. Under the BABA definition described above, projects qualify for the domestic content preference by meeting or exceeding specific materials requirements. As this is a binary qualification, an incremental reduction would be untenable. Further, using a single reduction based on the BABA threshold will provide for simpler implementation of the regulation and more clarity to applicants. One comment suggested that the BLM use the Electronic Product Environmental Assessment Tool (EPEAT) product registry for photovoltaic module use in development projects and any Domestic Content reduction. EPEAT is a global label managed by the Global Electronics Council that identifies environmentally sustainable electronic products. Currently, however, EPEAT only covers a narrow set of products and construction material related to solar development facilities (specifically, photovoltaic modules and inverters) and does not cover any materials related to wind energy generation facilities. As a result, requiring applicants to use EPEAT-registered products for renewable energy facilities on public lands could frustrate the goals of the Domestic Content reduction. Further, such a requirement would not serve the purposes Energy Act of 2020 or relevant direction in Executive Orders because it would limit the technology that could be deployed on public lands. The BLM may, however, consider such criteria for the Domestic Content reduction in the future once the EPEAT covers a broader range of solar and wind energy materials. The BLM made no changes to the final rule due to this comment. Some comments suggested that the BLM should require proof of compliance with the domestic content incentive prior to reducing rates. The BLM agrees with these comments and will require confirmation that the holder seeking to obtain this reduction satisfies the qualifying definitions the BLM is utilizing: the standard in 2 CFR part 184. See § 2806.52(b)(5) regarding conditional approvals where the BLM makes it clear that approval will be granted by the BLM once it has been demonstrated to the satisfaction of the BLM that the facility qualifies for the reduction. Some comments suggested that rate reductions in the final rule should be consistent with the IRA. The BLM considered a reduction based on the domestic content bonus tax credits in PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 the IRA and its definition of Buy America bonus tax credits. The BLM is aware that the Treasury Department has issued guidance about the domestic content bonus under the IRA for clean energy projects and facilities that meet American manufacturing and sourcing requirements. However, that guidance describes an intent to propose regulations that have not yet been finalized, and this final rule’s definition for domestic content aligns with definitions in other Federal programs with oversight over domestic products and content. No changes were made due to these comments. Paragraph (b)(1)(iv) is ‘‘D’’, the Project Labor Agreement reduction. The BLM is promoting the development of solar and wind energy resources on public lands by offsetting some of the costs when using a PLA during construction of solar and wind energy development projects consistent with authority under the Energy Act of 2020. The BLM’s approach also is consistent with the policy direction in Executive Order 14063 directing Federal agencies to use PLAs in connection with large-scale construction projects to promote economy and efficiency in the context of Federal procurement. A PLA is a prehire collective bargaining agreement negotiated between one or more construction unions and one or more construction employers that establishes the terms and conditions of employment for a specific construction project, consistent with 29 U.S.C. 158(f). The 20 percent reduction of the capacity fee offered in this final rule to incentivize the use of a PLA is necessary to promote the greatest use of solar and wind energy resources on public land, as authorized by the Energy Act of 2020 (43 U.S.C. 3003(b)(2). In particular, PLAs lead to better and more efficient outcomes in the construction of solar and wind energy projects in the following ways, which in turn leads to the greatest use of solar and wind resources. First, PLAs provide better access to and retention of skilled laborers, especially in a limited labor market.8 Studies and reports demonstrate that skilled labor provided through PLAs offer a higher quality of work, increased labor standards, more timely construction, and fewer 8 Greg Lacurci, CNBC: Workers till Quitting At High Rates—And Getting a Big Bump In Pay (Jan. 4, 2023); Jo Constantz, Bloomberg: The Great Resignation Worked: Most Job-Swappers Got a Raise (July 29, 2022); Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill. Econ. Policy Inst.: The Union Advantage During the Construction Labor Shortage 5 (2022). E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 deviations from construction plans.9 Second, PLAs improve workplace safety by offering more apprentice-trained journey workers, which studies have shown lead to fewer injuries.10 Third, PLAs can ensure construction administration is streamlined, which minimizes undue costs, delays, and inefficiencies in construction projects, particularly complex projects such as wind or solar energy generation facilities.11 Finally, PLAs contain nostrike, no-lockout clauses that can prevent project construction delays associated with labor disputes.12 The benefits associated with PLAs, in turn, would have positive impacts for renewable energy projects on public lands, including ensuring responsible and productive construction, and minimizing the potential duration. These improved construction standards will better meet resource management objectives and ensure authorized uses on public lands are meeting the goal of the Energy Act of 2020 to promote the greatest use of solar and wind energy resources. These improved construction standards also are consistent with the BLM’s authority under FLPMA to incorporate right-of-way terms and conditions that, among other things, ‘‘protect Federal property and economic interests,’’ ‘‘manage efficiently the lands . . . subject to the right-of-way,’’ and ‘‘protect lives and property.’’ (43 U.S.C. 1765(b)). Further, as demonstrated by the reports and studies cited above, the use of PLAs leads to higher and more stable wages for workers. These reductions to the rates will further incentivize the use of PLAs by developers and will help to offset higher wages for workers, which, in turn, may help to reduce or eliminate economic hardships for workers who would 9 McFadden, Sai Santosh, and Ronit Shetty: Quantifying the Value of Union Labor in Construction Projects, Independent Project Analysis, 2 and 8–9 (December 2022): https:// acrobat.adobe.com/link/review?uri=urn%3Aaaid% 3Ascds%3AUS%3Ad9e7f15b-9bf9-313f-b4ebde7a1dc11d9f; and Fred B. Kotler: Project Labor Agreements in New York State II: In the Public Interest and of Proven Value, Cornell University ILR School, 10, 19 and 36 (May 1, 2011), https:// ecommons.cornell.edu/bitstream/handle/1813/ 74333/LaborAgreementsinNYS_II.pdf?sequence=1. 10 Emma Waitzman & Peter Philips, UC Berkeley Labor Ctr: Project Labor Agreements and Bidding Outcomes: The Case of Community College Construction in California 10, 16 (2017); Bureau of Labor Statistics, National Census of Occupational Injuries in 2021, USDL–22–2309 (2022) (construction work is second highest for occupational deaths). 11 Dep’t of Labor, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation 20 (2011). 12 Dep’t of Labor, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation 30 (2011). VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 otherwise not benefit from the higher standards and protections in PLAs. Some comments argued against the use of the labor union incentives included in the proposed rule and questioned the BLM’s authority to offer these incentives. Other comments requested additional provisions be added to ensure responsible use of labor. As described above, the BLM has concluded that, under the authority provided in the Energy Act of 2020 and FLPMA, it has discretion to include reductions for the use of PLAs. These reductions will incentivize the use of PLAs, providing for increased assurances of timely, efficient construction; improved worker safety; and higher and more stable wages for workers. The BLM expects to publish additional policy guidance, such as through instruction memoranda, to clarify how qualifying PLAs will be identified, among other things. In providing this reduction in the final rule, the BLM is promoting responsible use of labor and the greatest use of solar and wind energy resources, as authorized by the Energy Act of 2020, by encouraging solar and wind energy development on public lands. Some comments suggested that the rule should apply a tiered incentive for developers based on the percentage of local labor they commit to hire, which could be implemented by certified payroll reports that include employee permanent addresses and in consultation with local officials. Several comments supported the inclusion of a reduction for Union Labor or PLAs. In the proposed rule, the BLM described the potential of adding a 20 percent capacity fee reduction for a holder’s use of Union Labor or on the contingency of a PLA. In this final rule, the BLM has decided to include a reduction for holders who have entered into, or expect to enter into, a PLA for the construction of a project, based on comments and additional support for the benefits of using PLAs to advance infrastructure projects such as renewable energy projects. This additional reduction parallels the domestic content reduction in this rule in how it is applied in the calculation. This reduction is based on the use of a PLA in project construction and would offset some developer costs. The BLM does not include in this final rule the suggested local labor reduction, but the BLM believes the reduction for a PLA may also support the use of local labor. Paragraph (b)(1)(v) explains how the BLM applies the alternative MWh rate and the Domestic Content and PLA reductions from paragraphs (b)(1)(ii), (iii), and (iv) of this section. By default, PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 35659 the BLM will apply the ordinary MWh rate under paragraph (b)(1)(i) and the MWh rate reduction under paragraph (b)(1)(ii). A developer who wished to benefit from the alternative MWh rate, the domestic content reduction, or the PLA reduction will need to submit a request for conditional approval prior to the issuance of a grant or lease, along with sufficient documentation to demonstrate that the development qualifies or may later qualify for these rate reductions. In some cases, the BLM will not be able to determine definitively in advance whether the proponent qualifies for these reductions. The BLM may then conditionally approve the requested reductions, but the reductions will not go into effect until the proponent adequately demonstrates that the facility qualifies for the relevant reduction. If energy generation begins before the holder has demonstrated that the facility qualifies, the BLM will charge the holder the capacity fee absent the reduction. The capacity fee could be updated for subsequent calendar years after the holder demonstrates that the facility qualifies, but the BLM will not refund past payments made before the holder demonstrates that they qualify and rate reductions go into effect. For example, an applicant or presumptive leaseholder (see §§ 2809.13 and 2809.15, below) might request conditional approval of an alternative MWh rate. In that situation, a request for conditional approval for an energy generation facility may be granted if the presumptive leaseholder has entered into or intends to enter into a PPA (see (b)(1)(i) of this section) that has a lower rate than the MWh rate. Documentation submitted to the BLM when requesting conditional approval may include draft or interim PPAs or confirmation in writing from the purchasing party that the parties have entered into negotiations. While the BLM may then conditionally approve the request for an alternative MWh rate, the alternative rate would not go into effect and be used when calculating the payment obligations until the PPA is finalized and the BLM determines, in writing, that the facility qualifies for the alternative rate. The holder’s MWh rate would then be updated for the next year’s billing. Payments for past years would not be adjusted retroactively. In another example of a request for conditional approval, an applicant or presumptive leaseholder might request conditional approval of a Domestic Content reduction. In this example, a request for conditional approval may be granted if the proponent demonstrates that it has firm plans to use items E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35660 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations qualifying for the preference. Documentation submitted to the BLM when requesting conditional approval may include procurement contracts or design documents showing that the facility would qualify for this reduction. While the BLM may then conditionally approve the request for a Domestic Content reduction, the reduction would not go into effect and be used to calculate the proponent’s payment obligations until the proponent submits documentation of actual costs associated with the construction of the facility, such as fulfilled purchase orders and as-built design documents demonstrating installation of the qualifying domestic content items in that facility and the BLM determines, in writing, that the facility actually qualifies for the reduction. The holder’s MWh rate then would be updated for the next year’s billing. Payments for past years would not be adjusted retroactively. Paragraph (b)(2) clarifies that ‘‘E’’ is the annual adjustment factor, which is set at three percent. This is the same adjustment factor used for the annual acreage rent under § 2806.52(a)(1)(iii). See § 2806.52(a) of this preamble for further discussion on the annual adjustment factor. The BLM understands that generally when a solar or wind energy operator begins generating electricity, it has entered into an agreement with a utility or other party to sell its power. It is customary that such agreements include an escalation clause that increases the purchase price of power each year of the agreement. These annual escalations vary by agreement; however, in general, the annual increase is approximately one percent to five percent each year for the contract term to account for gradual decreases in system operational efficiency, operating and maintenance costs, and increases in the retail rate of electricity. There may be some higher annual escalation rates, but that is not common. The BLM determined that a three percent annual adjustment factor is a reasonable escalation for the MWh rate based on a review of the average inflation rate over the previous fifteen years. The BLM considered both an adjustment for inflation that is predictable and an adjustment that changes more precisely with inflation over time. The BLM determined that a set inflationary adjustment that would alter the starting electricity price per MWh by a fixed factor each year was preferrable, because it would increase the predictability of future annual payments. While it is possible that the market price of electricity will deviate from this fixed rate over time, the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 benefit of rate predictability is important to renewable energy deployment on public lands. Future inflation may be higher than the historically low inflation of the decade or more prior to 2019. To accommodate the more recent inflationary trends, the BLM relied on the IDP–GDP average annual change for the most recent fiveyear period, 2018–2022 (estimating 2022 with data for three available quarters), which was 3.36 percent, while taking into account that for the ten-year period preceding 2018, the rate was 1.52 percent. The BLM derived the 3 percent rate in the final rule by rounding to the nearest whole percent of the recent inflationary trends. Some comments requested that the BLM remove the annual adjustment factor or reduce it, possibly using the prior year’s IPD–GDP calculation as an adjustment factor. These comments noted that the BLM should be promoting the greatest use of solar and wind energy resources and maximize commercial interest in development on public lands. Other commenters suggested a higher annual adjustment factor, noting that recent inflation amounts are higher than the three percent proposed. The BLM considered a range of annual adjustment factors, including those based on IPD–GDP calculations. The BLM’s use of three percent aims to capture a reasonable annual adjustment based on changes over time. This rule promotes the greatest use of solar and wind energy resources by applying and offering reductions to the capacity fee for qualifying developments. Additionally, the BLM’s methodology focuses on rate predictability; making a recurring calculation using the IPD–GDP is a disincentive for solar or wind development because future rates change by uncertain amounts making the BLM rates unpredictable. This final rule does not change the annual adjustment factor due to these comments. The regular adjustment factor also provides improved predictability of rates over time for renewable energy developers compared to the BLM’s previous periodic adjustments of the MWh fee, which were based on a combination of the annual weighted average wholesale price per MWh and the adjusted rate of return for certain U.S. Treasury Bonds, both of which are variable. Paragraph (b)(3) clarifies that ‘‘F’’ is the year of the grant or lease term, which is the same number used for the annual acreage rent under § 2806.52(a)(1)(iv). See § 2806.52(a) of PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 this preamble for further discussion on the year of the grant or lease term. Paragraph (b)(4) clarifies that ‘‘G’’ is the rate of return, which is set at seven percent. By setting the rate of return in this rule, the BLM increases the rate predictability of its capacity fee. This rate of return will not adjust during the term of the authorization. In this final rule, the rate of return is the relationship of income to the total value for a granted use of the public land resource. The rate of return accounts for the value of the authorization each year for use of the resource on public lands that is provided to the BLM through an annual payment. A comment recommended that the BLM recalculate the rate of return using a 30-year average rate of return for 10year Treasury Bond rates. The BLM appreciates the suggested recalculation of the rate of return over a 30-year period. The BLM selected the 50-year average of the 10-year Treasury Bond as the reasonable rate to set its rate of return for this rule. See the BLM’s Regulatory Impact Analysis accompanying this final rule for further information on how the BLM calculated the rate of return. No changes were made in this final rule due to this comment. The 50-year simple (i.e., arithmetic) average of the real annual return on 10year Treasury Bonds is approximately seven percent. This 50-year period includes times when the United States went through periods of stagflation, high inflation, economic boom, and relatively calm market conditions. The BLM’s use of the average of the 10-year Treasury Bond rates is a reasonable reflection of a modest return to the government reflective of relatively low risk to the public. The proposed seven percent rate of return is also supported by the Council of Economic Advisors, which estimates a real return to U.S. capital of around seven percent from 1960 to 2014 using data from the National Income Product Accounts and other sources.13 By setting the rate of return in this final rule, it would not be adjusted in the future, except by further rulemaking. One comment suggested that the rate of return stay at two percent as currently provided in BLM Manual 2806.60. The comment further suggested that the proposed increase from two to seven percent does not appear to be reasonable and is inconsistent with the Energy Act of 2020. The updated rate setting 13 Council of Economic Advisers Issue Brief, ‘‘Discounting for Public Policy: Theory and Recent Evidence on the Merits of Updating the Discount Rate’’ (January 2017). E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations methodology in this final rule includes an increased rate of return, consistent with the BLM’s authority under FLPMA to collect fair market value. The change in the rate of return is commensurate with other sectors of the energy market that base their return on a percentage of the commodity or energy generation value. It is appropriate that the rate of return change when transitioning from a capacity fee based on nameplate capacities to one based on the value of energy generation at market. The former rate setting methodology (see BLM Manual 2806.60) implemented the authority of the Energy Act of 2020 by reducing the rate of return to two percent. In this final rule, the BLM is applying the authority of the Energy Act of 2020 to the MWh Rate as reductions under § 2806.52(b) instead of reducing the rate of return. In this final rule, the BLM has determined that reductions under § 2806.52(b) for solar and wind energy are more meaningful than the reductions in the Manual 2806.60 and are necessary to promote the greatest use of solar and wind energy resources on the public lands. The BLM did not change this section of the final rule in response to this comment. Paragraph (b)(5) clarifies that ‘‘H’’ is the annual energy generated on public lands for the right-of-way in question. The BLM will issue a bill to coincide with the calendar year based on the annual certified statement provided to the BLM that gives either the amount of estimated or actual electricity generated by the development. The payment for the first year of energy generation will be based on an estimate of energy generation, and then the BLM will determine final payment for that first year based on actual energy generation. The following years of payments made in advance, pursuant to 504(g) of FLPMA, will be based on the most recent calendar year’s actual energy generation reported on the certified statement. Exception to using actual energy generation is provided for, in certain circumstances, under paragraph (b)(5)(vi) of this section. Paragraph (vii) addresses late payments specific to underestimating energy generation in certain circumstances. Paragraph (b)(5) has changed from the proposed rule due to public comments. The BLM proposed to require developers to provide an estimate for each year of energy generation of a development project to calculate the payment in advance. Those estimated energy generation amounts would be updated after that calendar year using actual energy generation amounts and any over or underpayment would be determined at that time. Revisions to VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 this paragraph now provide in the following subparagraphs that: (i) The holder must submit an annual certified statement to the BLM before the first year of energy generation begins or is scheduled to begin. Thereafter, annual certified statements must be submitted by the end of October. (ii) Prior to the start of energy generation, the holder must submit the annual certified statement containing an estimate of energy generation on the right-of-way (estimate of first year’s energy generation). (iii) Once energy generation has begun, the holder must submit to the BLM an annual certified statement of the most recent calendar year’s actual energy generation on the right-of-way. (iv) The BLM’s calculation for payment of the capacity fee will be based on the certified annual statement. Calculation for payment of the capacity fee for development projects that contain both public and non-public lands will be prorated by multiplying the total energy generated by the percentage of the total development area made up of the right-of-way footprint on public lands. (v) If the year’s actual energy generation exceeds or is less than the amount of energy generation used to bill for the payment in advance, the holder will be billed, credited, or refunded for the underpayment or overpayments pursuant to §§ 2806.13(e) and 2806.16. In no event will the total payment required be less than the annual acreage rent. (vi) The BLM may approve a request by a holder to provide a new estimate of energy generation in certain circumstances. Circumstances would including those when energy generation is expected to be interrupted, such as with planned maintenance activities, where the amount of energy generated is expected to interrupt energy generation by 25 percent or more, or where the right-of-way holder is aware that the energy generation in the subsequent year will exceed the actual energy generation for the previous year by 25 percent or more such that the BLM’s use of the actual generation from the previous year as the basis for a bill would result in an underestimate of more than 25 percent. (vii) The BLM may assess a late payment fee of 10 percent of actual energy generation for the year in which the underestimation occurs. The holder will pay a late payment fee for each year of underestimation if the right-of-way holder underestimates energy generation by 25 percent or more of the actual energy generation or does not provide the BLM with a new estimate PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 35661 when energy production will exceed the previous year’s actual production by more than 25 percent. The BLM may decide not to assess the late payment if the right-of-way holder provides an adequate justification that the underestimation was reasonably unforeseeable prior to payment of the annual bill, consistent with § 2805.12(e). Some comments asserted that penalties for underestimating generation are inappropriate as factors outside of a developer’s control, such as weather or grid related interruptions, may cause unexpected generation shortfalls. Additionally, comments noted that developers have every incentive to maximize production, which may itself cause a developer to underestimate generation. The BLM has revised the rule to reduce the potential that a holder would be subject to a penalty while minimizing the potential for underestimation. Consistent with other comments related to the term length under 2801.9, the BLM has made revisions to § 2806.52(b)(5) that are consistent with revisions made under §§ 2805.12(c)(8) and 2807.17(c). The BLM revised paragraph (vi) and added paragraph (vii) to this final rule due to comments. Pursuant to § 2805.12(c)(8), a holder may receive a notice from the BLM of their noncompliance with the right-ofway and that they are subject to rightof-way termination. Additionally, the BLM may address a holder’s chronic underestimation through existing § 2807.17(a), resulting in suspension or termination of the authorization. The BLM may make such a determination after collecting relevant information, including information provided pursuant to § 2805.12(a)(15). Some comments requested that the rule preserve sensitive competitive information amongst operators of solar and wind energy development projects. These comments suggested that the BLM could allow developers to submit generation data based on Form 923, which is provided to the Energy Information Administration. The final rule does not carry forward the suggested use of Form 923. The BLM disagrees with waiting the additional time to collect actual energy generation and update or validate prior year bill and payments with rights-of-way holders. As suggested by commenters, using Form 923 would delay billing for actual energy generation amount by an additional year, which is not acceptable for the BLM’s responsible stewardship of the public lands. No changes were made due to this comment. Section 2805.12(c)(8) sets the diligent operation standards for solar and wind E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35662 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations energy development projects and provides steps to follow when a holder expects to fail in meeting diligent operation requirements. Holders may follow the steps outlined in this section to ensure compliance with this final rule. Paragraph (b)(6) of this section describes where you may obtain a copy of the current MWh rate schedule for solar and wind energy generation. Paragraph (b)(7) of this section provides for periodic adjustments to the MWh rate. This paragraph applies unless you are an existing holder and elect to continue paying under your current rate adjustment method per § 2806.51(c). Paragraph (b)(7)(i) of this section clarifies that the rate from the MWh rate schedule for the first year of energy generation will not change once your grant or lease is authorized. The annual adjustment factor under § 2806.52(b)(1)(i) applies to the MWh rate during the term of the grant or lease. Any subsequent MWh rate schedule updates will apply to new grants and leases. Paragraph (b)(7)(ii) of this section provides that the MWh rate schedule will be updated once every five years consistent with the timing of acreage rent adjustments. The MWh rate schedule will include the annual adjustment factor for the five-year period it covers. Paragraph (b)(8) of this section provides that the general payment provisions for rents under § 2806.14(a)(4) also apply to the capacity fee. Paragraph (c) applies unless you are an existing grant or leaseholder and elect to continue with your current MW capacity fee adjustment method. The fee is set at the time of authorization or reissuance and not adjusted further except by the annual adjustment factor from § 2806.52(b)(2). Some comments suggested that the BLM should retain discretion under § 2805.12(e) to adjust rent and fee values, including at the request of a right-of-way applicant or holder. While section 2805.12(e)(2) of this final rule does not include a mechanism for applicants or holders to request alternative rent or fee rates in general, the BLM has revised § 2806.52(b)(1)(i) to identify circumstances where the BLM would have discretion to select an alternative MWh rate. Some comments suggested a wide range of potential fee structures to address environmental and economic factors. Some comments also requested that the BLM clarify how the rents and fee numbers were developed. The VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 BLM’s development of the acreage rent and capacity fee was an iterative process that included consideration of the BLM’s legal authority; taxpayer concerns for the collection of reasonable rent for the use of public lands and resources; the BLM’s prior policies for rents and fees and their impact to solar and wind deployment on public lands; and the national renewable energy goals on public lands set in section 3004 of the Energy Act of 2020. The BLM initially solicited comments in September 2021 after which the BLM published interim guidance in Manual section 2806.60—Rent. Some comments requested a publication or annual report from the BLM on the payments it has received from solar and wind energy development projects. This information can be found in the BLM’s annual publication of Public Land Statistics, which enumerates annual revenues from energy resources including wind and solar rents and fees. Some comments requested that the BLM provide fee reductions for projects that are sited on previously disturbed lands or outside of sensitive wildlife habitats. The BLM contemplated various methods and models by which to potentially apply rate reductions in this final rule. Additional information on the alternatives considered may be seen in the proposed rule’s preamble discussion under subpart 2806. The BLM determined that an across-the-board reduction best meets national energy goals. This methodology provides flexibility and financial incentives without regard to where projects may be sited. Having reduced rent and fee rates that are independent of location complements the BLM’s ability to update land use planning, which defines where project applications may be proposed and where projects will not become obsolete if or when technology advances and siting needs shift for economic or environmental reasons. One comment suggested that a holder should be able to select whether they wish to pay an acreage rent or capacity fee. The BLM disagrees with this comment. This final rule clearly provides for both an acreage rent or a capacity fee for solar and wind energy development projects. Generally, the acreage rent is required for the intensity of use and the occupancy, including site control, of the surface of the public lands. The capacity fee reflects the value of the energy generated from the solar or wind energy resource located on public lands. The BLM will collect the greater of either the acreage rent or the capacity fee for a solar or wind energy development. PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 One comment suggested rate reductions be made available for existing right-of-way holders who enter into new PPAs for a project during the term of an authorization, such as when they repower. This final rule provides for greatly increased rate predictability for solar and wind energy development rights-of-way. Under § 2806.52(b)(v), the BLM provides an opportunity for conditionally approving a reduction if it receives a request with sufficient documentation demonstrating that the holder may qualify for the reduction before the BLM issues the right-of-way. No other opportunity for later qualifying for a reduction is made available in this rule as the reductions to its rates are available prior to the BLM issuing the ROW. The BLM believes that the adjustments to improve rate predictability, including allowing for a longer term (see § 2801.9) for certain rights-of-way, will provide for the longer economical life of a particular project. An operator or a holder of an existing authorization may elect to keep their current rate methodology, including future adjustments that may be made, if they do not wish to change to the rate-setting methodology of this final rule. Some comments suggested that the 80 percent reduction of capacity fees without any qualifying stipulations will adversely distort the energy market and land uses. The BLM does not expect this final rule to alter the solar or wind energy markets or uses of public lands adversely. This final rule implements the authority of the Energy Act of 2020 and direction of Executive Order 14008, among others, that set goals to promote the greatest use of solar and wind energy resources on public lands. The rule is intended to incentivize development of wind and solar energy projects on BLM-managed lands. The BLM sees any resulting change that benefits solar or wind in energy markets as a positive development. See Reductions and Discounts under 5.1 of the Regulatory Impact Analysis for further information on the 80 percent reduction and the economic impacts of the rule. Some comments suggested that the BLM should collect fair market value for the use of federal lands under the BLM’s rule. While FLPMA generally requires the BLM to collect the fair market value for the use of the public lands, the Energy Act of 2020 provides the Secretary of the Interior with additional authority to reduce acreage rents and capacity fees, including to less than fair market value in certain circumstances. The BLM is implementing this authority to reduce the financial burden to solar E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations and wind energy developers to promote the national interest of developing a clean energy economy. Section 2806.54 Energy Storage Facilities That are Not Part of a Solar or Wind Energy Development Section 2806.54 clarifies that the rent the BLM determines for an energy storage facility that is not part of a solar or wind energy development facility is based on the linear rent schedule. Energy storage facilities may be authorized separately from a solar or wind energy development facility. In these instances, the BLM will apply the linear rent schedule unless the BLM determines that the linear rent schedule does not apply to the underlying rightof-way use under § 2806.70, such as when the BLM may determine that a small site rent schedule applies to an energy storage facility. The BLM will not charge the rent or fee of a solar or wind energy development right-of-way for an energy storage facility that is separate and independent from a right-of-way for an energy generation facility. Charging a capacity fee would be inappropriate as no energy generation from the facility would be occurring from the use of public lands. Using the pastureland rents for energy storage would also be inappropriate, as use of those acreage rates is intended to be coupled with the capacity fee to determine solar and wind energy generation payments for use of public lands. Sections 2806.60 through 2806.68 are removed from the final rule. Information formerly contained in these sections is now found in sections 2806.50 through 2806.58. Subpart 2807—Grant Administration and Operation ddrumheller on DSK120RN23PROD with RULES6 Section 2807.17 Under what conditions may BLM suspend or terminate my grant? Section 2807.17 of this final rule is updated based upon comments on § 2801.9 regarding term length and updates to § 2805.12 regarding new diligent operation requirements for solar and wind energy development. See the respective sections of this preamble for further information on the term length and the terms and conditions of grants and leases for solar and wind energy. Section 2807.17(c) provides that the BLM may suspend or terminate a rightof-way upon abandonment. The BLM presumes that a right-of-way holder has abandoned its right-of-way by failing to use it for a continuous 5-year period, except for solar and wind energy. Solar and wind energy rights-of-way are VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 presumed to be abandoned after two continuous years of insufficient productivity or upon abandonment. This section is updated consistent with the new provision in § 2805.12(c)(8), which provides for a holder to receive notice of the BLM’s presumption and gives a reasonable time to cure the noncompliance with the diligent operations requirement. Section 2807.20 When must I amend my application, seek an amendment of my grant or lease, or obtain a new grant or lease? Section 2807.20 describes when a right-of-way applicant must seek to amend its application, grant, or lease. Paragraph (b) clarifies that ‘‘except for qualifying energy development grants and leases per § 2806.51(c),’’ the requirements for amending an application or grant are the same as processing a new application, including payment of processing and monitoring cost recovery fees. Section 2806.51(c) provides a unique exception for existing solar and wind energy rights-of-way authorized before this final rule that may convert to the rent adjustment methodology of this final rule. See § 2806.51(c) of this preamble for further information on qualifying authorizations. Paragraph (f) describes how the BLM would administer an approved solar and wind energy grant or lease if the holder requests to change the rent adjustment methodology. Any request would have to be received within 2 years of the date this rule becomes effective and would be processed as an amendment by which the BLM would re-issue the grant or lease and update the terms and conditions under § 2805.12 and rent provisions under §§ 2806.50 through 2806.52. The BLM would be able to collect or use processing and monitoring costs under §§ 2804.14 and 2805.16 for handling the request. See § 2806.51(c) for further discussion regarding requests to use the rent adjustment methodology of this rule. One comment suggested that State and local governments should have a shared decision-making role with the BLM when the BLM considers reissuing a grant or lease to convert the right-of-way over to the new rate adjustment methodology. The BLM does not agree with the suggestion that State or local government offices should share in a decision-making role when the BLM decides whether to authorize a change to the rent adjustment methodology. Re-issuing an authorization under this final rule is an administrative action that will convert existing authorized projects to the new PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 35663 rate setting methodology for the use of BLM-administered public lands and resources. The BLM will continue to engage with the public, and Tribal, Federal, State and local government partners on the BLM’s management of its public lands, as appropriate. The BLM did not change this section of the final rule. Section 2807.21 May I assign or make other changes to my grant or lease? Section 2807.21 describes the requirements for a holder seeking to assign or make other changes to a grant or lease. Paragraph (e) clarifies that when the BLM assigns a right-of-way from one holder to another, it may modify a grant or lease, such as by adding additional terms and conditions. The paragraph exempts solar and wind energy leases from that provision unless modifications are warranted under § 2805.15(e), which provides for changes to terms and conditions as a result of changes in legislation, regulation, or as otherwise necessary to protect the public health or safety or the environment. This final rule removes provisions that distinguished between inside and outside DLAs for solar and wind energy development. The BLM may assign leases inside of DLAs without competition. One comment suggested that the BLM should retain the authority to impose additional requirements on solar and wind projects. The commenter expressed concern that the BLM may be constrained when it comes to regulating a bad operator especially with regards to excepting a bond requirement and that bond requirements should be mandatory on solar and wind projects, so the BLM does not have to clean up sites after company closure or refusal to perform reclamation. The BLM requires a bond for all solar and wind energy grants and leases. The BLM requires this bonding upfront to cover reclamation costs and to enforce the terms and conditions, such as those for rent and capacity fees. Paragraph (e) provides that the BLM, when assigning a grant or lease to a new holder, may modify the right-of-way and add bonding and other requirements, including additional terms and conditions, except for wind and solar leases which the BLM can only modify when warranted as a result of changes in legislation, regulation, or as otherwise necessary to protect public health or safety or the environment as reflected in § 2805.15(e). The BLM also has diligent development and operation requirements, among other terms and conditions, in § 2805.12 that further ensure a holders’ compliance with the E:\FR\FM\01MYR6.SGM 01MYR6 35664 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations right-of-way authorization and all its requirements. The BLM did not change this section of the final rule. ddrumheller on DSK120RN23PROD with RULES6 Subpart 2809—Competitive Process for Solar and Wind Energy Development Applications or Leases Subpart 2809, ‘‘Competitive Process for Leasing Lands for Solar and Wind Energy Development Inside Designated Leasing Areas’’ is dedicated to competitive solar and wind energy processes. In the final rule, Subpart 2809 generally applies the same competitive process both within and outside DLAs. Section 2809.10 Competitive Process for Energy Development Grants and Leases Section 2809.10, ‘‘Competitive process for energy development grants and leases,’’ applies to public lands located both inside and outside of DLAs. Paragraphs (a) through (d) explain that the BLM may conduct a competitive process to consider solar or wind energy development applications or leases: (1) on its own initiative; (2) based on responses to a call for nominations; (3) based on a request submitted by a member of the public in writing; or (4) when it receives two or more competing applications. These provisions incorporate the BLM’s broad discretion under FLPMA to determine under what circumstances it may utilize a competitive process. This section is revised to replace ‘‘offer’’ with ‘‘process’’ to remain consistent with this section’s requirements for solar and wind energy development grant and leases competitive process. The BLM has determined that it will implement its discretion under FLPMA to potentially utilize a competitive process for lands both inside and outside of DLAs and thus standardize a competitive process where competitive interest exists. More specifically, the BLM will use the most appropriate process given the circumstances of a particular location, spurring more competition for the most desirable areas, while continuing to increase solar and wind energy deployment consistent with the statutory direction in the Energy Act of 2020. As proposed, prior paragraph (d) is removed consistent with changes made under § 2804.35(b) and elsewhere in subpart 2809. The BLM has discretion to process applications inside DLAs without going through a competitive process. Accepting applications inside DLAs reduces timelines and costs and removes barriers for considering development projects where there is no competitive interest. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Proposed § 2809.10(e) would have precluded the BLM from holding a competitive process when the BLM has accepted a complete application, received a Plan of Development, entered into a cost recovery agreement, and published an EA or Draft EIS. Industry comments suggested that the BLM commit to not holding a competitive process earlier than in the proposed rule. In response to those comments, the final rule establishes that the BLM will not initiate a competitive process for those lands where the BLM has accepted a completed application, received a Plan of Development, and entered into a cost recovery agreement, while removing the requirement that the BLM must have published an EA or a draft EIS. The final rule also adds to § 2809.10(e) an exception referencing § 2804.25(c). Even where the BLM has accepted a complete application, received a Plan of Development, and entered into a cost recovery agreement, it may nonetheless offer lands in a competitive process if the applicant has not proceeded diligently as required by § 2804.25(c). These amendments give the industry the certainty it needs to proceed with projects while retaining the BLM’s discretion to deny an application or offer lands competitively if the applicant does not proceed diligently. In that way, these amendments balance the BLM’s obligations to incentivize renewable energy development on public lands and to recover a fair return for U.S. taxpayers. Some comments suggested that requiring a competitive leasing process in designated leasing areas has helped ensure that only well-thought-out projects are proposed. These commenters raised concerns that eliminating a required competitive process will cause a rush of poorly planned projects and will decrease use of the designated leasing areas. Several comments argued in favor of requiring a competitive process in designated areas, emphasizing that it shifts the burden from taxpayers to those who stand to profit, validates demand, increases financial return for use of public lands, drives innovation, and ensures transparency and fairness in the process. These comments expressed concerns that non-competitive leasing may discourage investment and lead to inefficiencies. In this final rule, the BLM’s change in the use of competitive processes is intended to provide flexibility in addressing interest in the use of public lands for solar and wind energy and will not allow for or authorize poorly PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 planned projects. The BLM retains its discretion to authorize or deny solar or wind energy development projects. As explained in the preamble to the proposed rule, the requirement to undertake competitive processes for all applications in DLA’s extends the timeline and increases costs, creating a barrier for authorizing projects in areas where there is no competitive interest. The BLM has broad discretion under FLPMA to determine under what circumstances it may utilize a competitive process for lands both inside and outside of DLAs and to use competitive processes only where competitive interest exists. The BLM anticipates that accepting applications in DLAs without the prerequisite of holding a competitive process will likely generate more applications in the most desirable locations. The final rule also provides the BLM with the flexibility to utilize a competitive process where there are multiple competing applications. The purpose of these changes is to ensure that the BLM can use the most appropriate process given the circumstances of a particular location, which the BLM believes will spur more competition for the most desirable areas, while continuing to increase solar and wind energy deployment consistent with the statutory direction in the Energy Act of 2020. For the same reasons, the BLM disagrees with the comments that focusing the BLM’s competitive process and resources to where there is competitive interest on public lands is a negative impact to taxpayers, demand, financial return, innovation, and transparency. This final rule improves transparency over all processes of the BLM’s administration of applications and right-of-way authorizations and achieves the goals set by the Energy Act of 2020 and direction of Executive Order 14008. Moreover, although DLAs represent areas specifically designated for renewable energy development, they are not the only areas where such development may be appropriate, nor are they the only areas where use of a competitive process may be appropriate. These projects are complex and require many different steps and actions to occur to be successful. The BLM believes offering areas outside of DLAs for a competitive process is appropriate and would help to meet the goals of the Energy Act of 2020 and direction of Executive Order 14008. Some comments suggested leasing should not be competitive, or at least only be considered in specific circumstances, such as when multiple applications for the same area are E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations submitted or when certain conditions are met, such as when labor agreements are not used. This section of the final rule clarifies when the BLM may conduct a competitive process, including for competing applications under paragraph (d). The BLM disagrees that attaining an agreement to use certain labor should determine whether the BLM holds a competitive process or not. The BLM’s discretion to hold a competitive process includes when there is competitive interest for that system or land or upon the BLM’s own initiative, among other reasons identified in this section of the rule. Some comments highlighted the interest in a clear and standardized process and suggested that the potential for competition should be limited to avoid deterring investment. In this final rule, the BLM has provided a clear process that the BLM will follow for solar and wind energy development projects when a competitive process is held. However, the BLM does not agree with comments to limit competition. The BLM will generally hold a competitive process where there is a competitive interest, whether it is inside or outside of designated leasing areas, or on its own initiative. Other comments recommended adding steps to ensure no competition exists before processing applications without a competitive process. Suggestions given to the BLM include filing a notice in the local newspaper, online, or in the Federal Register whenever the BLM receives an application requesting any other applications to be submitted. This final rule does not include provisions to require solicitation of public interest with every application submitted to the BLM for a solar or wind energy development. The Energy Act of 2020 and direction of Executive Order 14008 are clear in seeking expedited deployment of renewable energy projects on public lands. Adding provisions in the BLM’s rules that require additional steps to solicit competitive interest where there may not be any may slow the deployment of renewable energy. Historically, the majority of solar and wind rights-of-way authorized on BLM-administered public lands have been authorized after an application process without a competitive process, and there are only six existing competitively issued leases, which is only approximately six percent of authorized development projects on public lands. You may find information on the BLM’s authorized and pending solar and wind energy projects on its website at: https://www.blm.gov/ programs/energy-and-minerals/ VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 renewable-energy/active-renewableprojects. More specifically, since the BLM began using competitive processes for permitting solar leases on BLM public lands, the agency has held five competitive processes for 16 parcels. These have resulted in multiple bids for nine parcels, a single bid for three parcels, and no bids for four parcels. In the circumstances that BLM held a competitive process and received no bids, the BLM had previously received several expressions of interest and applications for those public lands. The BLM then held a competitive auction resulting in no bids for three parcels. The BLM did not change this section of the final rule. A comment requested that the final rule clarify when the BLM will not require an auction. The BLM does not believe additional clarification is necessary, as § 2809.10(e) provides that the BLM would not offer lands through a competitive process when the BLM has accepted a completed application, received a Plan of Development, and entered into a cost recovery agreement. One comment suggested that the final rule clarify that the BLM should be precluded from using a competitive process to award a solar or wind energy development lease or grant on an area of public lands once an applicant has either submitted a right-of-way application for solar or wind energy development or made substantial investments in potentially developing that area of the public lands. While the proposed rule provided that BLM would not offer lands in a competitive process if four criteria were met, this final rule removes the fourth proposed criterion in section (e): ‘‘on publication of an Environmental Assessment or Draft Environmental Statement.’’ The final rule retains the first three, such that the BLM would not offer lands in a competitive process for which it has accepted a complete application (see § 2804.12(j)), received a Plan of Development (see § 2804.12(b)), and entered into a cost recovery agreement (see § 2804.14). This change requires fewer milestones to close the window for holding a competitive process than the proposed rule and improves certainty for interested developers to proceed with applications but it does not move the threshold for prohibiting competitive processes earlier than in the existing regulations as the commenter suggested. In addition to the changes under 2809.10(e), the BLM revised § 2804.25(c) to clarify that the BLM retains discretion to deny an application where the applicant does not proceed diligently. An applicant’s failure to remain diligent PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 35665 in processing an application may result in the BLM denying the application and offering the lands competitively. These amendments balance the BLM’s obligations to incentivize renewable energy development on public lands and to recover a fair return for U.S. taxpayers. A comment suggested that the BLM should not require a competitive process where an applicant’s facilities are located on both private and federal lands and the applicant has secured agreements with the adjacent landowners. This final rule governs the BLM’s administration of applications and authorizations, including competitive processes. The BLM will consider all relevant and available information when determining whether a competitive process is appropriate, including whether separate agreements had already been met for adjacent lands. However, this rule does not preclude the BLM from holding a competitive process when agreements are held for adjacent lands, which would allow developers and adjacent landholders to effectively monopolize the use of the public lands without first obtaining authorization from the BLM. In instances where the BLM believes it is appropriate, it may determine to hold a competitive process. Other commenters suggested that the BLM should only have the discretion to move to a competitive process in the initiation phase of a project and not after an application is complete and the cost recovery is funded. This final rule maintains the BLM’s discretion to determine whether there is a competitive interest in the public lands. In the BLM’s experience, some applications progress more slowly than others once the existing requirements of the BLM rules are met. By requiring a complete application pursuant to § 2804.12(j), a Plan of Development pursuant to § 2804.12(b), and a cost recovery agreement pursuant to § 2804.14, the BLM will help ensure that applicants remain diligent in pursuing their use of the public lands, while preserving discretion to utilize a competitive process. Even after that point, § 2804.25(c) of the final rule clarifies that the BLM retains discretion to deny an application where the applicant does not proceed diligently. These additional conditions will not unreasonably burden diligent applicants and will help identify those applicants who are not working with the BLM to process applications diligently. E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35666 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations Section 2809.11 How will the BLM call for nominations? Section 2809.11 is retitled to improve consistency with this section of the final rule. No changes were made to this section due to comments. Consistent with the change in terminology of § 2809.10, the BLM changed ‘‘offer’’ with ‘‘process’’ throughout this section. Paragraph (a) provides that the BLM may publish a notice in the Federal Register calling for nominations of lands to be offered through a competitive process for solar and wind energy development. Other notification methods may also be used, such as a newspaper of general circulation in the affected area or the internet. The section allows for the BLM’s discretionary use of a competitive process discussed in § 2809.10. The paragraph would also specify information that will be included in a call for nominations as follows: (1) The date, time, and location by which nominations must be submitted; (2) The date by which nominators will be notified of the BLM’s decision on timely submissions; (3) The area or areas for which nominations are being requested; and (4) The qualification for a nominator, which must include at a minimum the requirements for an applicant, see § 2803.10. Paragraph (b) provides the requirements for nominating a parcel of land for a competitive process. Paragraph (b)(1) requires payment of $5 per acre for nominated parcels. The nomination fee is collected by the BLM under its cost recovery authority under Sections 304(b) and 504(g) of FLPMA, and the portion not spent in processing the nomination and preparing for a competitive process may be refunded to the nominator if not successful in the competitive process. These fees reimburse the BLM for the expense of preparing and holding a competitive process. Paragraph (b)(2) requires the nomination to include the nominator’s name and address of record. This information is necessary for the BLM to communicate with the nominator about a future competitive process for the parcel. Paragraph (b)(3) requires that a nomination be accompanied by a legal land description and a map of the parcel of land. This information helps identify nominated parcels for the competitive process. Paragraph (c) provides that the BLM will not accept nomination submissions that do not comply with this section or from submitters who are not qualified per § 2803.10 to hold a grant or lease. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 Paragraph (d) provides that a nomination cannot be withdrawn except by the BLM for cause, in which case the nomination fee would be refunded. Paragraph (e) provides that the decision whether to hold a competitive process in response to a nomination lies in the BLM’s discretion. Some comments requested that the BLM make the nomination fee nonrefundable. One comment further suggested that the BLM require ‘‘skin in the game’’ from project proponents and that the BLM should keep the fee to cover at least any reasonable costs it incurred in pursuing the nomination. The BLM agrees with comments suggesting that the fee should be used in recovering its reasonable costs in processing the nomination and preparing for a competitive process. The BLM’s authority under Sections 304(b) and 504(g) of FLPMA allows for the use of these funds in processing applications. Per existing rules, the BLM may refund the balance, if any, of collected cost recovery funds when they are no longer needed. Please see existing subpart 2804, starting with § 2804.14, for more information on the BLM’s administration of cost recovery fees. Section 2809.12 How will the BLM select and prepare parcels? Section 2809.12 describes how the BLM identifies parcels suitable for competitive processes. The BLM did not make changes to this section of the final rule in response to comments received, except that, consistent with the change in terminology of prior sections, the BLM changed ‘‘offer’’ to ‘‘process’’ throughout this section. The BLM also removed ‘‘on existing’’ when describing land use designations to avoid confusion and clarify that only existing land use designations may be considered. Paragraph (a) clarifies that the BLM may rely on any information it deems relevant in identifying parcels for competitive processes, but also describes more precisely the most common sources of information, which include public nominations and existing land use designations. The BLM is not constrained to consider only these listed sources of information when deciding whether to conduct competitive processes for certain parcels. Paragraph (b) clarifies that the BLM may conduct necessary studies and site evaluation work, including applicable environmental reviews and public meetings, either before or after offering lands for a competitive process. The BLM has sometimes found that the necessary studies and site evaluation work cannot be completed until the PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 competitive process is held and the successful bidder has submitted an application or Plan of Development. The BLM must complete site-specific NEPA analysis even when the BLM has identified a successful bidder as the presumptive leaseholder. The BLM retains discretion to approve, approve with modification, or deny a proposed energy development. The BLM revised the language of proposed paragraph (c) to clarify that it is the BLM’s choice whether to use a competitive process or not and that such choices do not constitute a decision to approve or deny a grant or lease and are not subject to appeal under 43 CFR part 4. A comment suggested that under paragraph (c), the final rule should allow for administrative appeals, as it relates to BLM procedures used to make decisions. Paragraph (c) of the final rule clarifies that the BLM’s choice about whether to use a competitive process is not a decision to grant or deny a rightof-way or otherwise final agency action; instead it represents only an intermediate step that may or may not lead to a decision. The public’s ability to administratively appeal an agency decision to grant or deny a right-of-way is unaffected by this provision. The BLM will continue to provide ample opportunities to the public for engagement throughout both the competitive and non-competitive permitting processes. An appeal may be considered when the BLM issues a decision under 43 CFR part 2800. A comment suggested that allowing for an administrative appeal process to challenge a BLM choice to use a noncompetitive process would assist the BLM in identifying whether there is any competitive interest in the public land, getting a better return for the public. The BLM disagrees with this comment. Administrative appeals may be submitted only for agency decisions (see existing § 2801.10). Additionally, allowing for administrative appeals over interim choices by the BLM about which procedures to follow to reach a decision would likely delay its decisionmaking process substantially. Section 2809.13 How will the BLM conduct competitive processes? Section 2809.13 is retitled from the proposed rule consistent with other changes to replace ‘‘offer’’ with ‘‘process.’’ The change from the proposed rule to read ‘‘process’’ when describing the BLM’s competitive process is made throughout this section when appropriate. This section describes how the BLM conducts competitive processes. E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 Paragraph (b) provides that the BLM publishes a notice of competitive process in the Federal Register and through other notification methods, such as a newspaper of general circulation in the area affected or the internet. Paragraph (b)(7) clarifies that the notice of competitive process would state whether a successful bidder would become a preferred applicant or a presumptive leaseholder. Preferred applicants are required to meet application submission requirements under § 2804.12, and presumptive leaseholders are required to submit a Plan of Development per § 2809.18. The preferred applicants and presumptive leaseholders are discussed further in § 2809.15. Under paragraph (c) of this final rule, the BLM will notify nominators of its decision to conduct a competitive process at least 30 days in advance of the bidding for the lands that were nominated if the nominator has paid the nomination fees and demonstrated qualifications to hold a grant or lease. Some comments suggested that under paragraph (b)(7) the BLM should continue to require a successful bidder to submit a Plan of Development. The BLM agrees with these comments. A Plan of Development is required in this final rule by a presumptive leaseholder under paragraph 2809.15(a)(ii) and by a preferred applicant who would follow the application process for solar and wind energy applications, including the submission of a Plan of Development required under § 2804.25(c). Section 2809.15 How will the BLM select the successful bidder? Section 2809.15 explains how the successful bidder is selected. In this final rule, the distinction between preferred applicants and presumptive leaseholders reflects the fact that the BLM may conduct competitive processes in a variety of circumstances with different outcomes. The distinction between presumptive leaseholder and preferred applicant is intended to ensure that the BLM can expedite approval of proposed projects in areas where the environmental impacts of solar and wind energy development have been previously analyzed and disclosed through a land use planning process. This will help ensure that the BLM does not commit public land resources before completing the necessary analyses. This section is also revised, consistent with other changes in this rule, to refer to ‘‘process’’ where appropriate when describing the BLM’s competitive process. Paragraph (a) of this final rule provides that the highest bidder, prior to VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 any variable offsets, is the successful bidder. Successful bidders may become either the presumptive leaseholder or the preferred applicant. The term ‘‘presumptive leaseholder’’ describes situations in which at least one round of environmental review for solar or wind energy development has been conducted before the competitive process is held, so that the environmental impacts of potential development are relatively well understood before the competitive process is held and the successful bidder has a high likelihood of being able to obtain an authorization to develop its proposed project. As set forth in paragraph (b)(1)(i), a successful bidder would only be designated as a presumptive leaseholder if the lands for which the competitive process is held are located within a DLA and the BLM has indicated in advance that the successful bidder would become a presumptive leaseholder (see also § 2809.13(b)(7)). These requirements would limit the use of the term ‘‘presumptive leaseholder’’ to situations in which the BLM has previously completed an environmental analysis for solar or wind energy development in the area through the land use planning process and has specified in advance (through the notice of competitive process) many of the terms, conditions, and mitigation measures that would need to be incorporated into an approved authorization. A presumptive leaseholder does not have to complete the initial application review stage, which is designed to ensure that the site is generally appropriate for solar or wind energy development. A presumptive leaseholder has site control for a solar or wind energy development, precluding other competing solar or wind energy development projects from siting on that land, unless allowed by the presumptive leaseholder. The BLM would also not process other applications for use of that land unless allowed by the presumptive leaseholder. This final rule also recognizes that even with a presumptive leaseholder, an additional site-specific environmental analysis may be required before the BLM irretrievably commits to allowing a facility to be developed. The BLM retains its full discretion in considering whether to approve a presumptive leaseholder’s proposal based on sitespecific environmental analysis, which would typically be tiered to the areawide environmental analysis accompanying the identification of the area as a DLA. Paragraph (b)(1)(ii) therefore notes that the presumptive leaseholder’s right to develop a project on the site is contingent upon the BLM’s PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 35667 approval of the presumptive leaseholder’s Plan of Development. Once the BLM approves the proposed Plan of Development, following a sitespecific environmental analysis, a lease could be awarded, conferring a right to develop a project on the site, and the presumptive leaseholder would become a leaseholder. In other cases, the BLM could conduct a competitive process without having completed an initial environmental analysis for solar or wind energy development for that area. In such cases, as set forth in paragraph (b)(2), the successful bidder would become the ‘‘preferred applicant’’ and would obtain only the exclusive right to submit an application for solar or wind energy development on that site without further competition from other applicants for solar or wind energy development. Such an application would be processed under subpart 2804 in the same manner as other, noncompetitive applications. The BLM would conduct a full environmental analysis before the preferred applicant may obtain a grant and the right to develop a project on the site. A preferred applicant that fails to meet the requirements of subpart 2804 may lose their status as the preferred applicant, and the BLM may deny their application consistent with § 2804.26. Paragraph (b) provides that a successful bidder becomes a presumptive leaseholder or preferred applicant only after making payments required in paragraph (d) of this section and satisfying the requirements for holding a grant or lease under § 2803.10. The BLM could move on to the next highest bidder or re-offer the lands under § 2809.17 if the successful bidder does not satisfy these requirements. Paragraph (b)(1) describes the requirements to become a presumptive leaseholder, which are that the public lands successfully bid upon are located within a DLA and that the notice of competitive process indicated successful bidders would become presumptive leaseholders. This paragraph also provides that the BLM would only award a presumptive leaseholder a lease if the BLM approves the Plan of Development that is submitted in accordance with § 2804.25(c). Paragraph (b)(2) describes the requirements for a preferred applicant. A successful bidder who does not become a presumptive leaseholder in accordance with paragraph (b)(1) would become a preferred applicant. The BLM would process applications for a grant or lease under § 2809.12. As with presumptive leaseholders, approval of a E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35668 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations preferred applicant’s application is not guaranteed. However, the BLM would not process other applications for solar and wind energy development on lands where a preferred applicant has been identified, unless allowed by the preferred applicant. The BLM may consider issuing authorizations for other uses, such as roadways, testing facilities, recreation permits, or even rights-of-way under MLA authority on the lands for which there is a preferred applicant. Processing authorizations for other uses under Title V of FLPMA would be performed under subpart 2804. Recreation permits and rights-of-way under MLA authority would be processed under parts 2920 and 2880, respectively. In some instances, such as with applications for incompatible uses, the BLM may determine that the proposed uses would be incompatible, and therefore that processing these other applications must wait until it issues a decision on a preferred applicant’s application for solar or wind energy development. Previous paragraphs (b) and (c) are redesignated as (c) and (d) respectively. Redesignated paragraph (c) is not revised; it provides that the BLM will determine variable offsets for the successful bidder in accordance with § 2809.16. Redesignated paragraph (d) provides for bidder payment terms. Paragraph (d)(1) provides for certain payment methods, such as personal check, cashier’s check, certified check, bank draft, or money order, as well as other methods deemed acceptable by the BLM, should be paid to the Department of the Interior—Bureau of Land Management. Paragraph (d)(2) requires payment of 20 percent of the bonus bid and the minimum bid amount by the close of official business hours on the day on which the BLM conducts the competitive process or other time the BLM has specified in its notice. Paragraph (d)(3) requires payment of the balance of the bonus bid within 15 days after the day on which the BLM conducts the competitive process. Variable offsets are applied under paragraph (c) of this section. Such payments are made to the BLM office conducting the competitive process. Paragraph (d)(4) requires payment within 15 days after the day on which the BLM conducts the competitive process to pay: for preferred applicants, the application filing fee under § 2804.12(c) less any application fee already paid under § 2809.11(c)(1); or for presumptive leaseholders, the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 acreage rent for the first full year of the lease as provided in subpart 2806. Paragraph (d)(5) clarifies that the BLM may require successful bidders to pay reasonable costs in addition to the application filing fee when processing an application. Additional reasonable costs may include a Category 6 cost recovery for the BLM to complete processing the application. If a Category 6 cost recovery fee is required, it will be reduced by the amount of the application filing fee already paid. See § 2804.19 of existing regulations for further information on Category 6 cost recovery. Paragraph (e) explains that the successful bidder will not become a preferred applicant or a presumptive leaseholder and the BLM will keep all money that has been submitted with the competitive process if the successful bidder does not satisfy the payment terms under paragraph (d) of this section. In such a case, the BLM could proceed to the next highest bidder or reoffer the lands through a competitive process under § 2809.17. A comment questioned the rationale behind determining the highest bidder as the presumptive leaseholder instead of the BLM making an offer to the highest bidder. The commenter suggested that the BLM would then offer the lease to subsequent bidders if the preceding highest bidder declines. The BLM’s competitive process in this final rule informs prospective bidders what they would be bidding for in advance of a competitive process. The BLM’s required process under this final rule provides important information to prospective bidders up front, reducing uncertainty on what they may bid on. Prospective bidders will be able to bid more confidently with that information. This will also likely result in more and higher bids than would be received if the BLM provided such information after a competitive process and will reduce the need for the BLM to engage the second highest bidder should the highest bidder decline. The BLM understands from a comment that there may have been some confusion on how the rule distinguishes between holding a competitive process and selecting a presumptive leaseholder or preferred applicant. In this final rule, § 2809.15(b) makes clear that both of the following criteria must be met to be a presumptive leaseholder: first, lands offered must be located within a DLA, and second, the notice of competitive process must indicate that bidders are bidding to become a presumptive leaseholder. The requirement that the lands be within a DLA is important because DLAs, by PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 definition, have been subject to prior environmental analysis and a land use plan decision to designate the area for solar or wind energy leasing. The environmental analysis would have identified potential conflicts and assessed the environmental impacts of siting a solar or wind energy generation facility, and through the land use planning process the BLM would have determined any necessary mitigation measures prior to the BLM offering the site for leasing. The requirement that the notice of competitive process must indicate that bidders are bidding to become a presumptive leaseholder, meanwhile, is important because it ensures that the terms and consequences of the competitive process are clear to all parties before the bidding occurs, and because it retains the BLM’s discretion to conduct a competitive process for a preferred applicant, rather than a presumptive leaseholder, even within a DLA. Some comments expressed concern that the BLM continues to determine that processing of applications for ‘‘incompatible’’ uses must wait until it issues a decision for a first-in-line solar or wind energy development and believe this violates the intent of FLPMA. Commenters believed the language of the rule is unclear about whether these other applications are from other applicants for a similar rightof-way or whether it would apply to applications for other land uses. These commenters assert that either scenario is inconsistent with FLPMA’s multiple-use mandate. In this portion of the rule, the BLM’s presumption is that the BLM has already identified a ‘‘preferred applicant’’ or that the lands have already been identified in the BLM’s land use planning process as a DLA. The FLPMA gives BLM discretion as to how it will process applications, including competing ones for the same parcel. This does not violate FLPMA’s multiple-use mandate. Section 2809.16 When do variable offsets apply? Section 2809.16 provides that a successful bidder may be eligible for a variable offset of bonus bids. This section is also revised, consistent with other changes in this rule, to read as ‘‘process’’ where appropriate when describing the BLM’s competitive process. Paragraph (c) in this final rule clarifies to readers that the offsets are not limited explicitly to what is listed and that the BLM may use other factors, including progressive steps towards the listed factors. E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations Paragraph (c)(10) is unchanged except for formatting to account for new paragraphs (c)(11) and (12). Paragraph (c)(11) provides an incentive for use of items that qualify for the Domestic Content preference in solar and wind energy generation facilities on public lands, to complement the fee reduction described in § 2806.52(b)(1)(iii). To qualify for the Domestic Content variable offset, prospective bidders must demonstrate how they will meet the thresholds to qualify for the variable offset. Similar to the Domestic Content reduction for the capacity fee described in 2806.52(b)(1)(iii), the thresholds identified in the notice of competitive process are consistent with the requirements for the domestic content preference in 2 CFR part 184. A prospective bidder is required to provide sufficient documentation to the BLM prior to the competitive process to show how the bidder qualifies or will qualify for this variable offset. This may be documentation in an initial Plan of Development provided to the BLM or other methods discussed in § 2806.52(b)(1)(v) of this preamble. As discussed below, the BLM may hold in suspense the amounts corresponding to the variable offset until construction of the facility is substantially complete or the successful bidder otherwise demonstrates to the BLM that the project has met the domestic content thresholds. Some comments suggested that including a requirement for a domestic content preference as a variable offset would raise the cost to taxpayers. The BLM disagrees with commenters that this rule will increase costs to taxpayers. This final rule does not require bidders or holders to qualify for the Domestic Content preference as a variable offset or other reductions and variable offsets. As the comments were based on an incorrect assumption that the rule requires buying domestic equipment, no change was made in response to comments. Paragraph (c)(12) provides an incentive for use of qualifying PLAs, such as during the construction of a solar or wind energy generation facility on public lands, to complement the fee reduction described in § 2806.52(b)(1)(iv). To receive the PLA variable offset, prospective bidders must demonstrate how they qualify in the notice of competitive process. A prospective bidder is required to provide sufficient documentation to the BLM to show how they qualify, such as in an initial Plan of Development or other methods discussed in § 2806.52(b)(1)(v) of this final rule. The VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 BLM may hold in suspense the amounts corresponding to the variable offset until construction of the facility is substantially complete or the successful bidder can otherwise demonstrate to the BLM that the PLA has been executed for the facility. Some comments supported the use of a PLA as a basis for offering a variable offset. These comments requested that the BLM hold a second competitive process if the BLM does not receive bidders qualifying for a PLA variable offset. This second competitive process would allow for other potential bidders to qualify. The final rule does not limit the number of competitive processes that the BLM may hold. However, the BLM has included PLAs as an optional variable offset. Some comments noted that union labor laws vary from State to State, suggesting that oversight should be by the State. This final rule provides a variable offset for interested bidders when using a qualifying PLA for competitive processes for solar or wind energy. The BLM’s offer of a PLA variable offset does not rely on or necessarily preclude applicable State laws as they may apply to project labor. The BLM may not approve a variable offset from a bidder if it does not comply with applicable laws. Some commenters disagreed with the BLM offering variable offsets, such as for domestic content and the use of union labor, because developers may also receive reduced payments under § 2806.52. This final rule offers a bidder potential benefits from both a variable offset and a capacity fee reduction. The BLM believes these variable offsets will incentivize prospective bidders to initiate projects with known benefits and approaches that will further benefit the public. Moreover, as described above, reductions to the capacity fee under § 2806.52(b) will promote the greatest use of solar and wind energy resources on public lands consistent with 43 U.S.C. 3003. Paragraph (c)(13) provides that the BLM may use other factors when determining whether additional types of variable offsets for a competitive process are appropriate. Some comments requested additional variable offsets to promote responsible wind and solar development, using efficient technology, agreements with local authorities that benefit communities, redevelopment of disturbed sites, and combining or collocating energy infrastructure. The final rule continues to provide an opportunity for additional variable offsets in a competitive process under § 2809.16(c)(13). The BLM will describe PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 35669 the additional variable offsets, including how you may qualify for such additional variable offsets, in the notice of competitive process. Paragraph (e) provides for bidders to qualify for a variable offset after the BLM holds a competitive process. This final rule recognizes that a bidder may not be able to demonstrate the qualifications for some variable offsets to the BLM’s satisfaction until after the BLM holds the competitive process, such as with new provisions in §§ 2809.16(c)(11) or 2809.16(c)(12) for energy development facilities that would contain items qualifying for the Domestic Content preference or use of a PLA. A bidder may conditionally qualify for a variable offset before the competitive process and then later demonstrate their qualification to the BLM and perfect their qualification. The BLM will describe in the notice of competitive process the way a bidder may conditionally qualify for the variable offset and could include methods such as a written statement to the BLM that they intend to qualify for the variable offset. The bidder, if successful, must later demonstrate to the BLM that they have qualified for the variable offset. The BLM may set a deadline in the notice for bidders to demonstrate that the proposed facility qualifies for the variable offset. If the bidder does not qualify for the variable offset in the time provided or the bidder is not able to adequately demonstrate they qualify for the variable offset, the U.S. Government will retain the bid money as the balance of the bonus bid. A comment stated that if the BLM sets a deadline to qualify for a variable offset in the notice of competitive process, there should be a reasonable deadline given to demonstrate qualifications. The BLM agrees with this comment and provides a deadline, including the timeframe to qualify for the variable offset, in its notice of competitive process. See § 2809.16(e) of this part. Section 2809.17 Will the BLM ever reject bids or re-conduct a competitive process? Section 2809.17 identifies situations when the BLM may reject a bid, offer a lease to another bidder, or re-offer a parcel. This section is retitled from the proposed rule, consistent with other changes in the final rule to read ‘‘process’’ when describing the BLM’s competitive process. Paragraph (b) provides that the BLM may make the next highest bidder the successful bidder if the named successful bidder does not satisfy the successful bidder requirements identified under § 2809.15, does not E:\FR\FM\01MYR6.SGM 01MYR6 35670 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 execute the lease, or is for any reason disqualified from holding the lease. As proposed, paragraph (d) is removed from this section as it is unnecessary with other revisions made in this final rule to make public lands inside of DLAs available to application without a competitive process. Section 2809.18 What terms and conditions apply to a solar or wind energy development lease? Section 2809.18 lists the terms and conditions of solar and wind energy leases, which are issued inside of areas classified or allocated for solar or wind energy (e.g., DLAs). Paragraph (a) clarifies that a lease awarded from a competitive process provides site control to a lessee. However, the presumptive leaseholder may not construct any facilities on the right-of-way until the BLM issues a subsequent notice to proceed, see paragraph 2809.15(b)(1)(ii) of this final rule. The term of a lease is consistent with § 2805.11(c) of this final rule, which provides for a reasonable term up to 50 years, considering the cost of the facility, its useful life, and the public purpose it serves. Paragraph (b) provides for rent terms for solar and wind energy leases as specified in § 2806.52. Paragraph (f) provides that lease assignments are applied for under § 2807.21. The BLM will not make any changes to the lease terms or conditions, as provided in § 2807.21(e), except for modifications required under § 2805.15(e). Changes to right-of-way terms or conditions would involve an amendment action by the BLM in addition to the assignment action. One comment recommended that the BLM adjust the terms and conditions with an assignment to provide for land access, lease length, processes, collaboration with other agencies, and decommissioning. This final rule maintains the BLM’s process for assigning leases. Generally, a solar or wind energy lease assignment is an administrative action transferring the lease from a holder to a prospective holder. The BLM’s analysis to approve or approve with modification the development lease includes analyzing the access, lease term length, participation from public and partners, and the end-of-life decommissioning and restoration of the public lands. The BLM does not need to revisit these considerations before assigning a lease unless there are substantial changes that may justify a change to the lease. For example, the BLM may modify a lease under § 2805.15(e), which reserve the BLM’s right to change the terms and VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 conditions as a result in changes in legislation, regulation, or as otherwise necessary to protect public health or safety or the environment. Section 2809.19 Applications in Designated Leasing Areas or on Lands That Later Become Designated Leasing Areas As proposed, Section 2809.19 is removed from the BLM’s rules in its entirety. In this former section, the BLM explained how it would evaluate applications for public lands that later become a DLA. The former section is inconsistent with the changes in this rule that allow for applications in DLAs without first holding a competitive process. Because designation of a DLA does not preclude non-competitive leasing, there is no need for the BLM to automatically suspend a noncompetitive leasing application because the lands at issue are being considered for designation. At the same time, the BLM may in its discretion deny an application or assign the application a low priority under § 2804.35. Some commenters supported the BLM making public lands inside DLAs available for non-competitive leasing by application. These commenters continued to suggest that the BLM should provide public notice regarding how the BLM will handle noncompetitive lease applications. The notice should provide for at least a 30day cutoff date for any expressions of interest regarding a competitive interest for offering lands within the DLA. The BLM agrees with comments that notice to the public is appropriate regarding how the BLM will administer solar and wind energy applications in an area affected by a land use plan amendment. However, each planning action or programmatic analysis is unique, and the BLM will respond to the unique conditions for solar and wind energy applications specific to that plan amendment or programmatic analysis. This may or may not include a period of time in which the BLM would continue to accept applications. Severability Existing § 2801.8 provides: ‘‘If a court holds any provisions of the regulations in this part or their applicability to any person or circumstances invalid, the remainder of these rules and their applicability to other people or circumstances will not be affected.’’ If any portion of this final rule were to be stayed or invalidated by a reviewing court, the remaining elements would continue to provide BLM with important and independently effective tools relating to the administration of its PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 right-of-way and renewable energy programs. Hence, if a court prevents any provision of one part of this rule from taking effect, that should not affect the other parts of the rule. The remaining provisions would remain in force because they could still operate sensibly. For example, the provisions that reduce rents and fees to implement the Energy Act of 2020 may function independently of the rest of the rule. Indeed, each particular change in rents and fees may function independently. Thus, if a court were to invalidate the Domestic Content reduction or Project Labor Agreement reduction, the other rent and fee provisions should remain undisturbed. Similarly, the provisions that reduce rents and fees may function independently of the provisions that allow the BLM to choose whether to conduct competitive processes inside and outside DLAs. V. Procedural Matters Regulatory Planning and Review (Executive Orders 12866 and 13563) and Modernizing Regulatory Review (Executive Order 14094) Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. E.O. 14094 updates the significance criteria in section 3(f) of E.O. 12866. OIRA has determined that this final rule is a ‘‘significant regulatory action’’ within the scope of E.O. 12866, as amended by E.O. 14094. The BLM’s Regulatory Impact Analysis concluded that the rule may have an annual effect on the economy of $200 million or more. These effects are associated with construction of projects induced by this rule. Additionally, the BLM estimated that the rule would have distributional impacts in the form of transfer payments from right-of-way applicants and holders to the BLM. Transfer payments are monetary payments from one group to another that do not affect total resources available to society. While disclosing the estimated transfers are important for describing the distributional effects of the rule, these payments should not be included in the estimated costs and benefits per OMB Circular A–4. For more detailed information, see the Regulatory Impact Analysis for Revisions to 43 CFR 2800 (Regulatory Impact Analysis) prepared for this rule. This Regulatory Impact Analysis has been posted in the docket for the rule on the Federal eRulemaking Portal: https:// E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 www.regulations.gov. In the Searchbox, enter ‘‘RIN 1004–AE78,’’ click the ‘‘Search’’ button, open the Docket Folder, and look under Supporting Documents. E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation’s regulatory system to promote predictability, reduce uncertainty, and use the best, most innovative, and least burdensome tools for achieving regulatory ends. The E.O. directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rule making process must allow for public participation and an open exchange of ideas. The BLM has developed this rule in a manner consistent with these requirements. Regulatory Flexibility Act This rule will not likely have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The RFA generally requires that Federal agencies prepare a regulatory flexibility analysis for rules subject to the ‘‘notice-andcomment’’ rulemaking requirements found in the Administrative Procedure Act (5 U.S.C. 500 et seq.), if the rule would have a significant economic impact, whether detrimental or beneficial, on a substantial number of small entities. See 5 U.S.C. 601–612. Congress enacted the RFA to ensure that government regulations do not unnecessarily or disproportionately burden small entities. Small entities include small businesses, small governmental jurisdictions, and small not-for-profit enterprises. The BLM reviewed the Small Business Size standards for the affected industries. We determined that a small share of the entities in the affected industries are small businesses as defined by the Small Business Act (SBA). However, the BLM believes that the impact on the small entities is not significant. Although the rule could potentially affect a substantial number of small entities, the BLM does not believe that these effects would be economically significant. The rule would benefit small businesses by streamlining the BLM’s processes and reducing annual rent and capacity fee payments. These reductions may motivate investment in additional generation capacity and facilities by VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 freeing up money that would have otherwise been paid to the BLM as rents or fees. The rule also modifies provisions that allow for an entity to request a waiver or reduction to annual rent and capacity fee payments. For the purpose of conducting its review pursuant to the RFA, the BLM believes that the rule would not likely have a ‘‘significant economic impact on a substantial number of small entities,’’ as that phrase is used in 5 U.S.C. 605. Therefore, the BLM has not prepared a final regulatory flexibility analysis. Some comments noted that they believe there has been insufficient analysis on this rule and request the BLM perform an initial and final regulatory flexibility analysis, as it is required by Sections 603 and 604 of the Regulatory Flexibility Act for rules that may have a significant economic impact on a substantial number of small business and governmental entities. Some commenters also believe the BLM has broken down connected and interrelated rule-making processes to avoid significance and therefore has failed to conduct the necessary impacts analysis under the Regulatory Flexibility Act, NEPA, E.O. 12866 and other applicable authorities as required under the Administrative Procedure Act. The BLM determines that solar and wind projects with generating capacities of less than 100 MW have average annual receipts of $5.2 million (solar) and $4.1 million (wind), which falls within the range of receipts identified for small businesses in the SBA size standards. The average size of projects currently under review by the BLM is 500MW. Also, projects smaller than 100MW may still fail to be small businesses if they are owned by larger corporations or governmental entities. While it is reasonable to expect that some small businesses will be affected, it is not expected to be a substantial number. Further, the principal effect will be a reduction in rents and capacity fees for the small businesses—a benefit. In general, the share of rents and capacity fees is small relative to project revenues. Therefore, the benefits are not a significant economic impact on the small businesses. Congressional Review Act This action is subject to the CRA, and BLM will submit a rule report to each chamber of Congress and to the Comptroller General of the United States. This action meets the criteria in 5 U.S.C. 804(2). Comment Summary: In response to the proposed rule, a commenter requested that the BLM explain PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 35671 contradictory conclusions of regulatory impact in accordance with the Congressional Review Act and E.O 12866, and coordinate with local governments and businesses to collect inclusive and broad economic data to make an informed determination. Response: The commenter’s concern has been overtaken because DOI will report to Congress on the promulgation of this rule prior to its effective date. The report will state that the Office of Information and Regulatory Affairs has determined that this rule meets the criteria set forth in 5 U.S.C. 804(2).’’ Unfunded Mandates Reform Act This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments, or the private sector. Under the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1531 et seq.), agencies must prepare a written statement about benefits and costs, prior to issuing a proposed or final rule that may result in aggregate expenditure by State, local, and Tribal governments, or the private sector, of $100 million or more in any 1 year. This rule is not subject to the requirements under the UMRA. The rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or to the private sector in any one year. The rule would not significantly or uniquely affect small governments. A statement containing the information required by the UMRA is not required. One comment requested that the BLM submit documentation that is complete, transparent, and factual for this rulemaking and that is informed by economic data obtained through coordination with local governments and a diverse range of private sector industries, such as grazing, mining and recreation. The resubmitted documentation should support the claim that this rule does not impose an unfunded mandate under the UMRA. If a finding shows that the rule does impose an unfunded mandate, then the BLM must complete a cost and benefit analysis as required by the UMRA. The BLM disagrees that this rule requires resubmitting documentation supporting the BLM’s unfunded mandate determination. This final rule, including its Regulatory Impact Analysis, clearly, transparently, and factually discusses the impacts of the rule, which governs the BLM’s administration of applications and right-of-way grants and E:\FR\FM\01MYR6.SGM 01MYR6 35672 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations leases for solar and wind energy. This rule does not result in Tribal, State, or local governments having to expend funds. Therefore, this rule does not impose an unfunded federal mandate and does not require a cost and benefit analysis. In any event, this rule and the accompanying Regulatory Impact Analysis provide all the information the UMRA requires. Governmental Actions and Interference With Constitutionally Protected Property Right—Takings (E.O. 12630) This rule does not affect a taking of private property or otherwise have taking implications under E.O. 12630. Section 2(a) of E.O. 12630 identifies policies that do not have takings implications, such as those that abolish regulations, discontinue governmental programs, or modify regulations in a manner that lessens interference with the use of private property. The rule would not interfere with private property. A takings implication assessment is not required. Some comments noted that access across federal, state, or county managed lands should not entail encumbrances or restrictions on private property. This final rule does not restrict access across any lands. Through separate environmental review, such as through land use planning, the BLM may consider actions that affect access. Tribal, Federal, State, and local government offices, as well as communities and private citizens will have opportunity to engage in those environmental processes. Federalism (E.O. 13132) Under the criteria in Section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. It does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. A federalism summary impact statement is not required. ddrumheller on DSK120RN23PROD with RULES6 Civil Justice Reform (E.O. 12988) This rule complies with the requirements of E.O. 12988. Specifically, this rule: a. Meets the criteria of Section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and b. Meets the criteria of Section 3(b)(2) requiring that all regulations be written VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 in clear language and contain clear legal standards. Consultation and Coordination With Indian Tribes (E.O. 13175 and Departmental Policy) DOI strives to maintain and strengthen its government-togovernment relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to selfgovernance and Tribal sovereignty. We have evaluated this rule under the DOI’s consultation policy and under the criteria in E.O. 13175 and have determined that it has no substantial direct effects on federally recognized Indian Tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes, and that consultation under the DOI’s Tribal consultation policy is not required. However, consistent with the DOI’s consultation policy (52 Departmental Manual 4) and the criteria in E.O. 13175, the BLM will consult with federally recognized Indian Tribes on any renewable energy project proposals that may have a substantial direct effect on the Tribes. Paperwork Reduction Act The Paperwork Reduction Act (PRA) (44 U.S.C. 3501–3521) generally provides that an agency may not conduct or sponsor and, not withstanding any other provision of law, a person is not required to respond to a collection of information, unless it displays a currently valid OMB control number. Collections of information include any request or requirement that persons obtain, maintain, retain, or report information to an agency, or disclose information to a third party or to the public (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)). This rule contains informationcollection requirements that are subject to review by OMB under the PRA. OMB has generally approved the existing information-collection requirements contained in 43 CFR part 2800 associated with wind and solar rightsof-way grants or leases under OMB control number 1004–0206 (expiration date: June 30, 2026). Additionally, the BLM’s regulations at 43 CFR part 2800 require the use of Standard Form 299 (SF–299), ‘‘Application for Transportation and Utility Systems and Facilities on Federal Lands,’’ for rightof-way applications and the regulations at 43 CFR part 2800. OMB has approved the requirements associated with SF– PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 299 and has assigned control number 0596–0249. This rule does not include any changes to the information-collection requirements currently contained in 43 CFR parts 2800 and 2880 and approved by OMB as noted above. There is a new information-collection requirement contained in 43 CFR 2806.52(b)(5) regarding an annual certified statement. The rule would require that by October of each year wind and solar grant or leaseholders must submit to the BLM a certified statement identifying the first year’s estimated energy generation on public lands and the prior year’s actual energy generation on public lands. The BLM will determine the capacity fee based on the certified statement provided. To prepare the annual certified statement, grant or leaseholders will need to compile information based on capacity fee as instructed in 43 CFR 2806. The information-collection requirements contained in 43 CFR 2800 and 2880 and approved under OMB Control Number 1004–0206 and the aforementioned new informationcollection pertaining to 43 CFR 2806.52(b)(5) are described below. Activities That Require SF–299 The following discussion describes the information-collection activities in this control number that require use of SF–299. Application for a Solar or Wind Energy Development Project Outside Any Designated Leasing Area (43 CFR 2804.12, 2804.25(c), 2804.26(a)(5), and 2804.30(g)); and Application for an Electric Transmission Line With a Capacity of 100 kV or More (43 CFR 2804.12, 2804.25(c), and 2804.26(a)(5)) Section 2804.12(b) applies to solar and wind energy development grants outside any DLA and electric transmission lines with a capacity of 100 kV or more. Section 2804.12(b) includes the following requirements for applications for a solar or wind energy development project outside a DLA and for applications for a transmission line project with a capacity of 100 kV or more: • A discussion of all known potential resource conflicts with sensitive resources and values, including special designations or protections; and • Applicant-proposed measures to avoid, minimize, and compensate for such resource conflicts, if any. Section 2804.12(b) also requires applicants to initiate early discussions with any grazing permittees that may be affected by the proposed project. This E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations requirement stems from FLPMA Section 402(g) (43 U.S.C. 1752(g)) and a BLM grazing regulation (section 4110.4–2(b)) that require 2 years’ prior notice to grazing permittees and lessees before cancellation of their grazing privileges. In addition to the information listed at § 2804.12(b), an application for a solar or wind project, or for a transmission line of at least 100 kV, must include the information listed at §§ 2804.12(a)(1) through (a)(7). Section 2804.25 provides that the BLM will notify an applicant upon receipt of an application and may require the applicant to submit additional information necessary to process the application (such as a Plan of Development or cultural resource surveys). As amended, § 2084.25(c) provides that, for solar or wind energy development projects and transmission lines with a capacity of 100 kV or more, the applicant must commence any required resource surveys or inventories within 1 year of the request date, unless otherwise specified by the BLM. The amended regulation also authorizes an applicant to submit a request for an alternative requirement by showing good cause under § 2804.40. Applications for solar or wind energy development outside any DLA, but not applications for large-scale transmission lines, are subject to a requirement (at § 2804.12(c)(2)) to submit an ‘‘application filing fee’’ of $15 per acre. As defined in an amendment to § 2801.5, an application filing fee is specific to solar and wind energy rightof-way applications. Section 2804.30(e)(4) provides that the BLM will refund the fee, except for the reasonable costs incurred on behalf of the applicant, if the applicant is not a successful bidder in the competitive process outlined in subpart 2804. Section 2804.26(a)(5) provides the authority that allows the BLM to deny an application for a right-of-way grant if the applicant does not have or cannot demonstrate the technical or financial capability to construct the project or operate facilities within the right-ofway. Amendments to that provision list the following ways an applicant may demonstrate their financial and technical capability to construct, operate, maintain, and terminate a project: • Documenting any previous successful experience in construction, operation, and maintenance of similar facilities on either public or non-public lands; • Providing information on the availability of sufficient capitalization to carry out development, including the preliminary study stage of the project VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 and the environmental review and clearance process; or • Providing written copies of conditional commitments of Federal and other loan guarantees; confirmed power purchase agreements; engineering, procurement, and construction contracts; and supply contracts with credible third-party vendors for the manufacture or supply of key components for the project facilities. General Description of a Proposed Project and Schedule for Submittal of a Plan of Development (43 CFR 2804.12(b)(1) and (b)(2)) Sections 2804.12(b)(1) and (b)(2) require applicants for a solar or wind development project outside a DLA to submit the following information, using Form SF–299: • A general description of the proposed project and a schedule for the submission of a Plan of Development (POD) conforming to the POD template at https://www.blm.gov; • A discussion of all known potential resource conflicts with sensitive resources and values, including special designations or protections; and • Proposals to avoid, minimize, and compensate for such resource conflicts, if any. Application for an Energy Site-Specific Testing Grant (43 CFR 2804.12(a), and 2804.30(g)); Application for an Energy Project-Area Testing Grant (43 CFR 2804.12(a), and 2804.30(g)); and Application for a Short-Term Grant (43 CFR 2804.12(a)) Section 2804.12(a) addresses the general requirements of an application for a FLPMA right-of-way grant. Section 2804.30(g) authorizes only one applicant (i.e., a ‘‘preferred applicant’’) to apply for an energy project-area testing grant or an energy site-specific testing grant for land outside any DLA. Each of these grants is for 3 years or less, in accordance with § 2805.11(c)(2). All of these applications must be submitted on SF–299. Applications for project-area grants (but not site-specific grants) are subject to a $2 per-acre application filing fee in accordance with § 2804.12(c)(2). Applicants for shortterm grants for other purposes (such as geotechnical testing and temporary land-disturbing activities) are subject to a processing fee in accordance with § 2804.1. Request To Assign a Solar or Wind Energy Development Right-of-Way (43 CFR 2807.21) Section 2807.21, as amended, provides for assignment, in whole or in PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 35673 part, of any right or interest in a grant or lease for a solar or wind development right-of-way. Actions that may require an assignment include the transfer by the holder (assignor) of any right or interest in the grant or lease to a third party (assignee) or any change in control transaction involving the grant holder or leaseholder, including corporate mergers or acquisitions. The proposed assignee must file an assignment application, using SF–299, and pay application and processing fees. The assignment application must include: • Documentation that the assignor agrees to the assignment; and • A signed statement that the proposed assignee agrees to comply with and be bound by the terms and conditions of the grant that is being assigned and all applicable laws and regulations. Environmental, Technical, and Financial Records, Reports, and Other Information (43 CFR 2805.12(a)(15)) Section 2805.12(a)(15) authorizes the BLM to require a holder of any type of right-of-way to provide, or give the BLM access to, any pertinent environmental, technical, and financial records, reports, and other information. The use of SF– 299 is required. The BLM will use the information for monitoring and inspection activities. Application for Renewal of a Solar or Wind Energy Development Grant or Lease (43 CFR 2805.14(g) and 2807.22) Section 2805.14(g) provides that a holder of a right-of-way grant, which includes solar or wind energy generating facilities, may apply for renewal in accordance with § 2807.22. Section 2807.22(c) provides that an application to renew a grant must include the same information, on SF– 299, that is necessary for a new application. It also provides that processing fees, in accordance with § 2804.14, as amended, apply to these renewal applications. Sections 2807.22(a) and (b) provide that an application for renewal of any right-ofway grant or lease, including a solar or wind energy development grant or lease, must be submitted at least 120 calendar days before the grant or lease expires. The application must show that the grantee or lessee is complying with the renewal terms and conditions (if any), with the other terms, conditions, and stipulations of the grant or lease, and with other applicable laws and regulations. The application also must explain why a renewal of the grant or lease is necessary. E:\FR\FM\01MYR6.SGM 01MYR6 35674 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 Request for Amendment, Assignment, or Other Change (FLPMA) (43 CFR 2807.11(b) and (d) and 2807.21) Section 2807.11(b) requires a holder of any type of right-of-way grant to contact the BLM to seek an amendment to the grant under § 2807.20 and obtain the BLM’s approval before beginning any activity that is a ‘‘substantial deviation’’ from what is authorized. Section 2807.11(d) requires contacting the BLM to request an amendment to the pertinent right-of-way grant or lease and prior approval whenever sitespecific circumstances or conditions result in the need for changes to an approved right-of-way grant or lease, Plan of Development, site plan, mitigation measures, or construction, operation, or termination procedures that are not ‘‘substantial deviations.’’ Section 2807.21 authorizes assignment of a grant or lease with the BLM’s approval. It also authorizes the BLM to require a grant or leaseholder to file new or revised information in circumstances that include, but are not limited to: • Transactions within the same corporate family; • Changes in the holder’s name only; and • Changes in the holder’s articles of incorporation. A request for an amendment of a right-of-way, using SF–299, is required in cases of a substantial deviation (for example, a change in the boundaries of the right-of-way, major improvements not previously approved by the BLM, or a change in the use of the right-of-way). Other changes, such as changes in project materials, or changes in mitigation measures within the existing, approved right-of-way area, must be submitted to the BLM for review and approval. In order to assign a grant, the proposed assignee must file an assignment application and follow the same procedures and standards as for a new grant or lease, as well as pay application and processing fees. In order to request a name change, the holder will be required to file an application and follow the same procedures and standards as for a new grant or lease and pay processing fees, but no application fee is required. The following documents are also required in the case of a name change: • A copy of the court order or legal document effectuating the name change of an individual; or • If the name change is for a corporation, a copy of the corporate resolution proposing and approving the name change, a copy of a document showing acceptance of the name change VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 by the State in which incorporated, and a copy of the appropriate resolution, order, or other document showing the name change. In all these cases, the BLM will use the information to monitor and inspect rights-of-way, and to maintain current data. Activities That Do Not Require Any Form Preliminary Application Review Meetings for a Large-Scale Right-of-Way (43 CFR 2804.12(b)(4)) ‘‘Preliminary application review meetings’’ are required after submission of an application for a large-scale rightof-way. A large-scale right-of-way is for solar or wind energy development outside a DLA, or for a transmission line with a capacity of 100 kV or more. Within 6 months from the date that the BLM receives the cost recovery fee for an application for a large-scale project, the applicant must schedule and hold at least two preliminary application review meetings. In the first meeting, the BLM will collect information from the applicant to supplement the application on subjects such as the general project proposal. The BLM will also discuss with the applicant subjects such as the status of the BLM’s land use planning for the lands involved, potential siting issues or concerns, potential environmental issues or concerns, potential alternative site locations, and the right-of-way application process. In the second meeting, the applicant and the BLM will meet with appropriate Federal and State agencies and Tribal and local governments to facilitate coordination of potential environmental and siting issues and concerns. The applicant and the BLM may agree to hold additional preliminary application review meetings. Application for Renewal of an Energy Project-Area Testing Grant or Other Short-Term Grant (43 CFR 2805.11(c)(2)(ii), 2805.14(h), and 2807.22) Section 2805.11(c)(2)(ii) provides that holders of energy project-area testing grants may seek renewal of those grants. The initial term for such a grant is 3 years or less, with the option to renew for one additional 3-year period. For other short-term grants, such as for geotechnical testing and temporary land-disturbing activities, the initial term is 3 years or less. Short-term grants include an option for renewal. Section 2805.14(h) provides that applications to renew an energy projectarea testing grant must include an PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 energy development application submitted in accordance with § 2801.9(d)(2). Cost recovery fees in accordance with § 2804.14, as amended, apply to these renewal applications. Section 2807.22 provides that an application for renewal of any right-ofway grant or lease, including an energy project-area testing grant or a short-term grant, must be submitted at least 120 calendar days before the grant or lease expires. The application must show that the grantee or lessee is complying with the renewal terms and conditions (if any), with the other terms, conditions, and stipulations of the grant or lease, and with other applicable laws and regulations. The application also must explain why a renewal of the grant or lease is necessary. Showing of Good Cause (43 CFR 2804.40 and 2805.12) Under § 2804.40, an applicant for a FLPMA right-of-way grant who is unable to meet any of the requirements in subpart 2804 may request approval for an alternative requirement from the BLM. Any such request is not approved until the applicant receives BLM approval in writing. This type of request to the BLM must: (a) Show good cause for the applicant’s inability to meet a requirement; (b) Suggest an alternative requirement and explain why that requirement is appropriate; and (c) Be received in writing by the BLM in a timely manner, before the deadline to meet a particular requirement has passed. The BLM will use the information to determine whether to apply an alternative requirement. Other showings of good cause are authorized or may be required by § 2805.12, which requires due diligence in development and operations of any right-of-way grant or lease. In accordance with § 2805.12(c)(6) and (c)(8), the BLM will notify the holder before suspending or terminating a right-of-way for lack of due diligence. This notice will provide the holder with a reasonable opportunity to correct any noncompliance or to start or resume use of the right-of-way. A showing of good cause will be required in response. That showing must include: • Reasonable justification for any delays in construction or reductions in energy generation (for example, delays in equipment delivery, legal challenges, and acts of God); • The anticipated date for the completion of construction or resumption of energy generation; and E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 evidence of progress toward the start or resumption of construction; and • A request for extension of the timelines in the approved POD or extension of the period in which the holder must satisfy the minimum energy threshold. Section 2805.12(e), as amended, applies as soon as a right-of-way holder anticipates noncompliance with stipulation, term, or condition of the approved right-of-way grant or lease, or in the event of noncompliance with any such stipulation, term, or condition. In these circumstances, the holder must notify the BLM in writing and show good cause for the noncompliance, including an explanation of the reasons for the noncompliance. In addition, the holder may request that the BLM consider alternative stipulations, terms, or conditions. Any request for an alternative stipulation, term, or condition must comply with applicable law in order to be considered. Any proposed alternative to applicable bonding requirements must provide the United States with adequate financial assurance for potential liabilities associated with the right-ofway grant or lease. Any such request is not approved until the holder receives the BLM’s approval in writing. Bonding Requirements (43 CFR 2805.20) Section 2805.20 provides that the bond amount for projects other than a solar or wind energy lease under subpart 2809 (i.e., inside a DLA) will be determined based on the preparation of a reclamation cost estimate that includes the cost to the BLM to administer a reclamation contract and review it periodically for adequacy. Section 2805.20(a)(5) provides that the reclamation cost estimate must include at a minimum: • Remediation of environmental liabilities such as use of hazardous materials waste and hazardous substances, herbicide use, the use of petroleum-based fluids, and dust control or soil stabilization materials; • The decommissioning, removal, and proper disposal, as appropriate, of any improvements and facilities; and • Interim and final reclamation, revegetation, recontouring, and soil stabilization. Sections 2805.20(b) and 2805.20(c) identify specific bond requirements for solar and wind energy development respectively outside of DLAs. A holder of a solar or wind energy grant outside of a DLA will be required to submit a reclamation cost estimate to help the BLM determine the bond amount. For solar energy development grants outside of DLAs, the bond amount will be no VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 less than $10,000 per acre. For wind energy development grants outside of DLAs, the bond amount will be no less than $10,000 per authorized turbine with a nameplate generating capacity of less than one Megawatt (MW), and no less than $20,000 per authorized turbine with a nameplate generating capacity of one MW or greater. Section 2805.20(d) separates site- and project-area testing authorization bond requirements from § 2805.20(c). Meteorological and other instrumentation facilities are required to be bonded at no less than $2,000 per location. These bond amounts are the same as standard bond amounts for leases required under § 2809.18(e)(3). Annual Certified Statement (43 CFR 2806.52(b)(5))—New Information Collection The rule requires that by October of each year, wind and solar grant or leaseholders must submit to the BLM a certified statement identifying the first year’s estimated energy generation on public lands and the prior year’s actual energy generation on public lands. The BLM will determine the capacity fee based on the certified statement provided. To prepare the annual certified statement, grant or leaseholders will need to compile information based on the capacity fee as instructed in subpart 2806. This is the only new information-collection requirement contained in this rule. Nomination of a Parcel of Land Inside a Designated Leasing Area (43 CFR 2809.11) Sections 2809.10 and 2809.11 authorize the BLM, on its own initiative, to offer land through a competitive process for solar or wind energy development. These regulations also authorize the BLM to solicit nominations for such development by publishing a notice in the Federal Register. To nominate a parcel under this process, the nominator must be qualified to hold a right-of-way under 43 CFR 2803.10. After publication of a notice by the BLM, anyone meeting the qualifications may submit a nomination for a specific parcel of land to be developed for solar or wind energy. There is a fee of $5 per acre for each nomination. The following information is required: • The nominator’s name and personal or business address; • The legal land description; and • A map of the nominated lands. The BLM will use the information to communicate with the nominator and to determine whether to proceed with a competitive process. PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 35675 Plan of Development for a Solar or Wind Energy Development Lease Inside a Designated Leasing Area (43 CFR 2809.18) Section 2809.l8(c) requires the holder of a lease for solar or wind energy development to submit a Plan of Development (POD) within 2 years of the lease issuance date. The POD must be consistent with the development schedule and other requirements in the POD template posted at https:// www.blm.gov; and must address all predevelopment and development activities. Section 2809.18(d) requires the holder of a solar or wind energy development lease for land inside a DLA to pay reasonable costs for the BLM or other Federal agencies to review and approve the POD and monitor the lease. To expedite review and monitoring, the holder may notify the BLM in writing of an intention to pay the full actual costs incurred by the BLM. Request for Amendment, Assignment, or Other Change (MLA) (43 CFR 2886.12(b) and (d) and 43 CFR 2887.11) Sections 2886.12 and 2887.11 pertain to holders of rights-of-way and temporary use permits authorized under the MLA. A temporary use permit authorizes a holder of a MLA right-ofway to use land temporarily in order to construct, operate, maintain, or terminate a pipeline, or for purposes of environmental protection or public safety. See § 2881.12. The regulations require these holders to contact the BLM: • Before engaging in any activity that is a ‘‘substantial deviation’’ from what is authorized; • Whenever site-specific circumstances or conditions arise that result in the need for changes that are not substantial deviations; • When the holder submits a certification of construction; • Before assigning, in whole or in part, any right or interest in a grant or lease; • Before any change in control transaction involving the grant- or leaseholder; and • Before changing the name of a holder (i.e., when the name change is not the result of an underlying change in control of the right-of-way). A request for an amendment of a right-of-way or temporary use permit is required in cases of a substantial deviation (e.g., a change in the boundaries of the right-of-way, major improvements not previously approved by the BLM, or a change in the use of the right-of-way). Other changes, such E:\FR\FM\01MYR6.SGM 01MYR6 35676 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES6 as changes in project materials, or changes in mitigation measures within the existing, approved right-of-way area are required to be submitted to the BLM for review and approval. In order to assign a grant, the proposed assignee must file an assignment application and follow the same procedures and standards as for a new grant or lease, as well as pay processing fees. In order to request a name change, the holder will be required to file an application and follow the same procedures and standards as for a new grant or lease and pay processing fees, but no application fee is required. The following documents are also required in the case of a name change: • A copy of the court order or legal document effectuating the name change of an individual; or • If the name change is for a corporation, a copy of the corporate resolution proposing and approving the name change, a copy of a document showing acceptance of the name change by the State in which incorporated, and a copy of the appropriate resolution, order, or other document showing the name change. In all these cases, the BLM will use the information gathered for monitoring and inspection purposes, and to maintain current data on rights-of-way. Certification of Construction (43 CFR 2886.12(f)) A certification of construction is a document a holder of an MLA right-ofway must submit to the BLM after finishing construction of a facility, but before operations begin. The BLM will use the information to verify that the holder has constructed and tested the facility to ensure that it complies with the terms of the right-of-way and is in accordance with applicable Federal and State laws and regulations. The information-collection request for this rule has been submitted to OMB for review under 44 U.S.C. 3507(d). You may view the information-collection request(s) at https://www.reginfo.gov/ public/do/PRAMain. As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies to comment on any aspect of this information-collection, including: • Whether the collection of information is necessary for the proper functioning of the BLM, including whether the information will have practical utility; • The accuracy of the BLM’s estimate of the burden of collecting the information, including the validity of the methodology and assumptions used; VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 • The quality, utility, and clarity of the information to be collected; and • How to minimize the informationcollection burden on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other forms of information technology. Currently, the information-collection requirements contained in 43 CFR parts 2800 and 2880 and approved under OMB control number 1004–0206 are estimated as follows: 3,042 annual responses; 47,112, annual burden hours; and $2,182,302 annual cost burden. We are projecting a burden increase of 75 new annual responses and 150 new annual burden hours as result of this rule. This burden hour increase would result from a new information collection requirement contained in § 2806.52(b)(5) pertaining to the annual certified statement. This new information collection is needed to help the BLM more accurately determine the capacity fee based on the certified statement provided. The final rule also removes an existing information collection previously contained in 43 CFR 2809.11(c) titled, Expression of Interest in a Parcel of Land Inside a Designated Leasing Area. The removal of this information collection results in the reduction of 1 annual response and 4 annual burden hours. Therefore, we estimate that the final rule will result in a net increase of 74 annual responses and 226 annual burden hours. We are also adjusting the burden for two existing and unchanged information collections to reflect more accurately the burden those activities would involve the industry. These adjustments include the following: • Preliminary Application Review Meetings for 2 public meetings for a Large-Scale Right-of-Way (43 CFR 2804.12(b)(4)). The average response time is adjusted from 2 hours to 4 hours. This adjustment resulted in a 40-hour burden increase (from 40 hours to 80 hours). • Environmental, Technical, and Financial Records, Reports, and Other Information (43 CFR 2805.12(a)(15)). We have added a 50 percent increase in the hours required to prepare reports (from 4 per response to 6 per response). This resulted in an increasing the estimated annual burden hours for these activities from 80 hours to 120 hours. There are no projected changes to the non-hour cost burdens as a result of this rule. The resulting new estimated total burdens for OMB Control Number 1004–0206 are provided below. PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 Title of Collection: Competitive Processes, Terms, and Conditions for Leasing Public Lands for Solar and Wind Energy Development (43 CFR parts 2800 and 2880). OMB Control Number: 1004–0206. Form Number: SF–299 (Burden approved by OMB in Request for Common Form under OMB Control Number 0596–0249). Type of Review: Revision of a currently approved collection of information. Respondents/Affected Public: Private sector (applicants for and holders of wind and solar rights-of-way grants or leases on Federal public lands. Respondent’s Obligation: Required to obtain or retain a benefit. Frequency of Collection: On occasion and annually for the Annual Certified Statement in 43 CFR 2806.52(i). Number of Respondents: 75. Annual Responses: 3,116. Annual Burden Hours: 47,338. Annual Burden Cost: $2,182,302. If you want to comment on the information-collection requirements this in this rule, please send your comments and suggestions on this informationcollection request within 30 days of publication of this final rule in the Federal Register to OMB at www.reginfo.gov. Click on the link, ‘‘Currently under Review—Open for Public Comments.’’ National Environmental Policy Act These proposed regulatory amendments are of an administrative or procedural nature and thus are eligible to be categorically excluded from the requirement to prepare an EA or an EIS. See 43 CFR 46.205 and 46.210(i). They do not present any of the extraordinary circumstances listed at 43 CFR 46.215. Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (Executive Order 13211) Federal agencies are to prepare and submit to OMB a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order, and (2) Is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) Is designated by the Administrator of OIRA as a significant energy action. The BLM reviewed the rule and determined that it is not likely a significant energy action as defined by E.O. 13211. While the rights-of-way affected by this rule are for solar and E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations wind energy generation, the rule is limited in scope and would not likely have a significant, adverse effect on the supply, distribution, or use of energy from these sources. The rule would not result in a shortfall in supply, price increases, or increase the use of foreign supplies. Authors The principal authors of this rule are: Jayme M. Lopez, BLM National Renewable Energy Coordination Office; Jeremy Bluma, BLM National Renewable Energy Coordination Office; Radford Schantz, Division of Lands, Realty and Cadastral Survey; Patrick Lee, DOI, Office of Policy Analysis; Jeff Holdren, BLM Division of Lands, Realty and Cadastral Survey; Darrin King, BLM Division of Regulatory Affairs; Jennifer Noe, BLM Division of Regulatory Affairs, assisted by the DOI Office of the Solicitor. This action by the Principal Deputy Assistant Secretary is taken pursuant to an existing delegation of authority. Steven H. Feldgus, Ph.D., Principal Deputy Assistant Secretary, Land and Minerals Management. List of Subjects in 43 CFR Part 2800 Electric power, Highways and roads, Penalties, Public lands and rights-ofway, Reporting and recordkeeping requirements. Accordingly, for the reasons stated in the preamble, the BLM amends 43 CFR part 2800 as set forth below: PART 2800—RIGHTS–OF–WAY UNDER THE FEDERAL LAND POLICY AND MANAGEMENT ACT 1. The authority citation for part 2800 is revised to read as follows: ■ Authority: 43 U.S.C. 1733, 1740, 1763, 1764, and 3003. Subpart 2801—General information 2. Amend § 2801.5: a. In paragraph (a) by adding the acronym for ‘‘FLPMA’’ in alphabetical order; ■ b. In paragraph (b) by: ■ i. Removing the term ‘‘Act’’; ■ ii. Adding in alphabetical order the terms ‘‘Domestic Content’’ and ‘‘Capacity fee’’; ■ iii. Revising the term for ‘‘Grant’’; ■ iv. Removing the term ‘‘Megawatt (mw) capacity fee’’; ■ v. Revising the terms ‘‘Megawatt hour (MWh) rate’’ and ‘‘Reasonable costs’’; and ■ vi. Adding in alphabetical order the terms ‘‘Renewable energy coordination office (RECO)’’, ‘‘Solar or wind energy development’’, and ‘‘Solar or wind energy lease’’. The additions and revisions to read as follows: ddrumheller on DSK120RN23PROD with RULES6 ■ ■ VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 § 2801.5 What acronyms and terms are used in the regulations in this part? (a) * * * FLPMA means the Federal Land Policy and Management Act of 1976, as amended (43 U.S.C. 1701 et seq.). * * * * * (b) * * * Domestic Content reduction means an item or product that qualifies for the domestic content preference under the Build America, Buy America Act, Public Law 117–58, 135 Stat. 429, §§ 70901 through 70927 (Nov. 15, 2021), and the implementing guidance at 2 CFR part 184. Capacity fee is the fee charged to right-of-way holders once energy production commences that is based on the production of energy on public lands from solar and wind energy generating facilities. * * * * * Grant means an authorization or instrument (e.g., easement, license, or permit) the BLM issues under Title V of the Federal Land Policy and Management Act, 43 U.S.C. 1761 et seq., and any authorization or instrument the BLM and its predecessors issued for like purposes before October 21, 1976, under then existing statutory authority, except for solar or wind energy leases. It does not include authorizations issued under the Mineral Leasing Act (30 U.S.C. 185). * * * * * Megawatt hour (MWh) rate means the 5 calendar-year average of the annual average wholesale electricity prices per MWh for the major trading hubs serving the 11 western States of the continental United States. * * * * * Reasonable costs has the meaning found in Section 304(b) of FLPMA. * * * * * Renewable energy coordination office (RECO) means one of the National, State, district, or field offices established by the Secretary under 43 U.S.C. 3002(a) that is responsible for implementing a program for improving Federal permit coordination with respect to solar, wind, and geothermal projects on BLM-administered land, and such other activities as the Secretary determines necessary. * * * * * Solar or wind energy development means the use of public lands to generate electricity from solar or wind energy resources. It includes the construction, operation, maintenance, and decommissioning of any such facilities, as well as the subsequent reclamation of the site. Solar or wind energy lease means any right-of-way issued for solar or wind PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 35677 energy development in an area classified or allocated for solar or wind energy (i.e., a designated leasing area) in a resource management plan. * * * * * ■ 3. Amend § 2801.6 by revising paragraph (a)(1) to read as follows: § 2801.6 Scope. (a) * * * (1) Grants or leases for necessary transportation or other systems and facilities that are in the public interest and require the use of public lands for the purposes identified in 43 U.S.C. 1761, and administering, amending, assigning, monitoring, renewing, and terminating them; * * * * * ■ 4. Amend § 2801.9 by revising paragraphs (d) introductory text, (d)(3) and (4), and adding paragraph (d)(6) to read as follows: § 2801.9 When do I need a grant? * * * * * (d) All systems, facilities, and related activities for energy generation, storage, or transmission projects are specifically authorized as follows: * * * * * (3) Energy generation facilities, including solar and wind energy development facilities, are authorized with a right-of-way grant or lease that may be issued for up to 50 years (plus initial partial year of issuance); (4) Energy storage facilities, which are separate from energy generation facilities, are authorized with a right-ofway grant that may be issued for up to 50 years; * * * * * (6) Electric transmission lines with a capacity of 100 kV or more are authorized with a right-of-way grant that may be issued for up to 50 years. ■ 5. Revise the heading for subpart 2802 to read as follows: Subpart 2802—Lands Available for FLPMA Grants or Leases 6. Amend § 2802.11 by revising paragraphs (b) introductory text and (b)(1) and adding paragraphs (b)(10) and (11) to read as follows: ■ § 2802.11 How does the BLM designate right-of-way corridors and designated leasing areas? * * * * * (b) When determining which public lands may be suitable for right-of-way corridors or designated leasing areas, the BLM may consider various factors, including: E:\FR\FM\01MYR6.SGM 01MYR6 35678 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations (1) Federal, State, Tribal, and local land use plans, and applicable Federal, State, Tribal, and local laws; * * * * * (10) Access to electric transmission; and (11) Whether there are areas for solar and wind energy development with low potential for conflict with resources or uses due to environmental, cultural, and other relevant criteria, which the BLM will identify by: (i) Assessing the demand for new or expanded areas; (ii) Applying environmental, cultural, and other screening criteria; and (iii) Analyzing proposed areas through the land use planning process described in part 1600 of this chapter. * * * * * ■ 7. Amend § 2803.10 by revising paragraph (c) to read as follows: § 2803.10 Who may hold a grant or lease? * * * * * (c) Of legal age and authorized to do business in the State or States where the right-of-way you seek is located. ■ 8. Revise § 2803.12 to read as follows: § 2803.12 What happens to my grant or lease if I die? (a) If a grant holder dies, any inheritable interest in a grant or lease will be distributed under State law. (b) If the receiver of a grant or lease is not qualified to hold a grant or lease under § 2803.10 of this subpart, the BLM will recognize the receiver as grant or leaseholder for up to two years, subject to full compliance with all terms, conditions, and stipulations. During that period, the receiver must either become qualified or divest itself of the interest. Subpart 2804—Applying for FLPMA Grants 9. Amend § 2804.12 by revising paragraphs (c) and (f) and adding paragraph (j) to read as follows: ■ § 2804.12 What must I do when submitting my application? ddrumheller on DSK120RN23PROD with RULES6 * * * * * (c) You must meet additional requirements when applying for a solar or wind energy development or shortterm right-of-way, as follows: (1) Pay an application filing fee of $2 per acre for short-term right-of-way applications or $15 per acre for solar or wind energy development applications. The BLM will apply the application filing fee toward the processing fees described in §§ 2804.14 through 2804.22. The BLM will refund the balance of any application filing fee at VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 the end of the BLM’s application review process if the application filing fee exceeds the amount of the processing fee. (2) Pay additional reasonable costs in addition to payment of the application filing fee when processing your application, pursuant to § 2804.14. A processing or monitoring Category 6 cost recovery fee may be reduced by the application filing fee paid when submitting an application. * * * * * (f) The BLM may require you to submit additional information at any time while processing your application. The BLM will identify additional information in a written deficiency notice asking you to provide the information within a specified time pursuant to § 2804.25(c). * * * * * (j) Your application will not be complete until you have met or addressed the requirements of this section to the satisfaction of the BLM. The BLM will notify you in writing when your application is complete. ■ 10. Revise § 2804.22 to read as follows: § 2804.22 How will the availability of funds affect the timing of the BLM’s processing your application? (a) If the BLM has insufficient funds to process your application, we will not continue to process it until funds become available or you elect to pay full actual costs under § 2804.14(f) of this part. (b) The BLM may deny your application if we have not received requested reasonable costs for processing your application within 90 days. (c) If your cost recovery agreement provides that a portion of the funds you pay will be used in the hiring of additional staff or contractors, such funds may not be refundable. ■ 11. Revise § 2804.23 to read as follows: § 2804.23 What costs am I responsible for when the BLM decides to use a competitive process for lands included in my application? If the BLM decides to use a competitive process for lands included in your application and your application is in: (a) Processing Categories 1 through 4. You must reimburse the Federal Government for processing costs as if the other application or applications had not been filed. (b) Processing Category 6. You are responsible for processing costs identified in your application. If the PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 BLM cannot readily separate costs, such as costs associated with preparing environmental analyses, you and any competing applicants must pay an equal share, or a proportion agreed to in writing among all applicants and the BLM. If you agree to share the costs that are common to your application and that of a competing applicant, and the competitor does not pay the agreed upon amount, you are liable for the entire amount due. You must pay the entire processing fee in advance. The BLM will not process your application until we receive the advance payments. ■ 12. Amend § 2804.25 by revising paragraphs (c), (e)(2), (e)(4), (e)(5), and (f)(3) to read as follows: § 2804.25 How will the BLM process my application? * * * * * (c) The BLM may require you to submit additional information necessary to process the application. This information may include a detailed construction, operation, rehabilitation, and environmental protection plan (i.e., a POD), and any needed cultural resource surveys or inventories for threatened or endangered species. If the BLM needs more information, the BLM will identify this information in a written deficiency notice asking you to provide the additional information within a specified period of time. The failure to provide additional information requested by the BLM under this section may result in the BLM denying your application pursuant to § 2804.26. (e) * * * (2) If your application is for solar or wind energy development; (i) Hold a local public meeting if there is no other public meeting or opportunity for early engagement on the project, such as those completed when complying with the National Environmental Policy Act (NEPA). (ii) Prioritize the application in accordance with § 2804.35; and (iii) Evaluate the application based on the information provided by the applicant and input from other parties, such as Federal, State, Tribal, and local government agencies, as well as comments received in preliminary application review meetings held under § 2804.12(b)(4) and any public meeting held under paragraph (e)(1) of this section. Based on these evaluations, the BLM will either deny your application or continue processing it. * * * * * (4) Complete appropriate NEPA compliance for the application, as required by 43 CFR part 46 and 40 CFR chapter V, subchapter A; E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations (5) Determine whether your proposed use complies with applicable Federal laws; * * * * * (f) * * * (3) The segregation period may not exceed 2 years from the date of publication in the Federal Register of the notice initiating the segregation, unless the state director determines and documents in writing, prior to the expiration of the segregation period, that an extension is necessary for the orderly administration of the public lands. If the state director determines an extension is necessary, the BLM will extend the segregation for up to 2 years by publishing a notice in the Federal Register, prior to the expiration of the initial segregation period. A segregation will not be extended unless the application is complete and cost recovery has been received. Segregations under this part may only be extended once and the total segregation period may not exceed 4 years. ■ 13. Amend § 2804.26 by revising the section heading, paragraphs (a)(4) and (9) and adding paragraph (a)(10), and removing paragraph (c). The revisions and additions read as follows: § 2804.26 Under what circumstances may the BLM deny my application? (a) * * * (4) Issuing the grant would be inconsistent with FLPMA, other laws, or these or other regulations; * * * * * (10) You fail to pay costs for processing your application within 90 days of receiving the BLM’s request for funds under § 2804.22(b). * * * * * § 2804.30 ■ [Removed and Reserved] 14. Remove and reserve § 2804.30. § 2804.31 [Removed and Reserved] 15. Remove and reserve § 2804.31. ■ 16. Revise § 2804.35 to read as follows: ■ ddrumheller on DSK120RN23PROD with RULES6 § 2804.35 Application prioritization for solar and wind energy development rightsof-way. (a) The BLM will prioritize the processing of applications to ensure that agency resources are allocated to applications with the greatest potential for approval and implementation. The BLM’s prioritization of an application is not a decision and is not subject to appeal under 43 CFR part 4. (b) The BLM will consider relevant criteria when prioritizing applications, including the following: VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 (1) Whether the proposed project is located within an area preferred for solar or wind energy development, such as designated leasing areas, which include solar energy zones, development focus areas, and renewable energy development areas; (2) Whether the proposed project is likely to avoid adverse impacts to or conflicts with known resources or uses on or adjacent to public lands, and includes specific measures designed to further mitigate impacts or conflicts; (3) Whether the proposed project is in conformance with the governing BLM land use plans; (4) Whether the proposed project is consistent with relevant State, Tribal, and local government laws, plans, or priorities; (5) Whether the proposed project incorporates the best management practices set forth in the applicable BLM land use plans and other BLM plans and policies; and (6) Any other circumstances or prioritization criteria identified by the BLM in subsequent policy guidance or management direction through land use planning. (c) The BLM will prioritize your complete application based on all available information, including information you provide to the BLM in the application or in response to deficiency notices, and information provided to the BLM in public meetings or consultations. (d) The BLM may re-prioritize your application at any time. ■ 17. Amend § 2804.40 by revising the introductory text to read as follows: § 2804.40 Alternative requirements. If you are unable to meet any of the application requirements in this subpart, you may request approval for an alternative requirement from the BLM. Any such request is not approved until you receive BLM approval in writing. Your request to the BLM must: * * * * * Subpart 2805—Terms and Conditions of Grants 18. Amend § 2805.10 by revising paragraph (c) to read as follows: ■ § 2805.10 How will I know whether the BLM has approved or denied my application or if my bid for a solar or wind energy development grant or lease is successful or unsuccessful? * * * * * (c) If you agree with the terms and conditions of the unsigned grant or lease, you should sign and return it to the BLM with any payment required PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 35679 under § 2805.16. The BLM will issue the right-of-way by signing the grant or lease and transmitting it to you, if the regulations in this part, including § 2804.26, remain satisfied. * * * * * ■ 19. Amend § 2805.11 by revising the section heading and paragraphs (c)(2) introductory text and (c)(2)(iv) and (v) and adding paragraph (b)(4) to read as follows: § 2805.11 contain? What does a grant or lease * * * * * (c) * * * (2) Specific terms for energy grants and leases, such as solar or wind energy development projects, are as follows: * * * * * (iv) Energy generation facilities, including solar or wind energy development facilities, are authorized with a grant or lease for up to 50 years (plus initial partial year of issuance), subject to the terms and conditions including but not limited to § 2805.12(c); and (v) Energy storage facilities which are separate from energy generation facilities are authorized with a right-ofway grant for up to 50 years, subject to the terms and conditions including but not limited to § 2805.12(c); * * * * * (4) Electric transmission lines with a capacity of 100 kV or more are authorized with a right-of-way grant for up to 50 years. * * * * * ■ 20. Amend § 2805.12 by adding paragraph (c)(8) and by revising paragraph (e)(2) to read as follows: § 2805.12 What terms and conditions must I comply with? * * * * * (c) * * * (8) Comply with the operational standards in this section for solar or wind energy development projects on public lands. The holder of a grant or lease for solar or wind energy development is authorized to operate for the purpose of generating energy. Diligent operation requires the holder to annually maintain at least 75 percent of energy generation capacity for the authorized development. Failure to meet this required generation in continuous two calendar year period during the term of the grant or lease may support suspension or termination of the grant or lease under §§ 2807.17 through 2807.19. Before suspending or terminating the authorization, the BLM will send you a notice that gives you a reasonable opportunity to correct any E:\FR\FM\01MYR6.SGM 01MYR6 35680 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations noncompliance or to start or resume use of the right-of-way (see § 2807.18). In response to this notice, you must: (i) Provide reasonable justification for any reductions in energy generation (for example, delays in equipment delivery, legal challenges, and Acts of God); (ii) Provide the anticipated date in which production of energy generation will resume; and (iii) Submit a written request under paragraph (e) of this section for extension of the period in which the holder must satisfy the minimum energy threshold. If you do not comply with the requirements of paragraph (c)(8) of this section, the BLM may deny your request for an extension of the period for complying with the minimum energy generation threshold. * * * * * (e) * * * (2) You may also request that the BLM consider alternative stipulations, terms, or conditions, other than rents or fees, and except as provided in § 2806.52(b)(1)(i). Any proposed alternative stipulation, term, or condition must comply with applicable law in order to be considered. Any proposed alternative to applicable bonding requirements must provide the United States with adequate financial assurance for potential liabilities associated with your right-of-way grant or lease. Any such request is not approved until you receive BLM approval in writing. 21. Revise § 2805.13 to read as follows: ■ § 2805.13 When is a grant or lease effective? A grant is effective after both you and the BLM sign it. You must accept its terms and conditions in writing and pay any necessary rent and monitoring fees as set forth in subpart 2806 of this part and § 2805.16 of this subpart. Your written acceptance constitutes an agreement between you and the BLM that your right to use the public lands, as specified in the grant or lease, is subject to the terms and conditions of the grant or lease and applicable laws and regulations. 22. Amend § 2805.14 by revising the section heading and paragraph (g) to read as follows: ddrumheller on DSK120RN23PROD with RULES6 ■ * * * * (g) Apply to renew your right-of-way grant or lease under § 2807.22; * * * * * VerDate Sep<11>2014 19:07 Apr 30, 2024 Jkt 262001 23. Amend § 2806.10 by revising the section heading and adding paragraph (c) to read as follows: ■ § 2806.10 What rent must I pay for my grant or lease? * * * * * (c) You must pay rent for your grant or lease using the per-acre rent schedule for linear right-of-way grants (see § 2806.20) unless a separate rent schedule is established for your use, such as for communication sites per § 2806.30 or solar and wind energy development per § 2806.50. The BLM may also determine that these schedules do not apply to your right-of-way pursuant to § 2806.70. ■ 24. Amend § 2806.12 by revising paragraphs (a)(1) introductory text, (a)(2), and (b) to read as follows: greater of the acreage rent or the capacity fee that would be due in a given year, and must be paid in advance each year. The acreage rent will be calculated consistent with § 2806.11 and prorated consistent with § 2806.12(a). The capacity fee will vary depending on the project’s annual energy generation on public lands and will be calculated consistent with § 2806.52(b). Any underpayment will be billed pursuant to § 2806.13 and any overpayment will be credited pursuant to § 2806.16. ■ 27. Amend § 2806.51 by revising the section heading and paragraph (c) to read as follows: § 2806.51 Grant and lease rate adjustments. (a) * * * (1) If your grant or lease is effective on: * * * * * (2) If your grant or lease allows for multiyear payments, such as a shortterm grant issued for energy site-specific testing, you may request that your initial rent bill be for the full term instead of the initial rent bill periods provided under paragraph (a)(1)(i) or (ii) of this section. (b) You must make all rent payments for rights-of-way according to the payment plan described in § 2806.24. * * * * * ■ 25. Amend § 2806.20 by revising paragraph (c) to read as follows: * * * * (c) If you hold a right-of-way for solar or wind energy development that is in effect prior to July 1, 2024, you may either request that the BLM apply the annual rent and fee set forth in § 2806.52 or use the rate methodology applicable to your authorization immediately prior to this rule. If you wish to use the annual rent and fee set forth in § 2806.52, your request must be received by the BLM before July 1, 2026. The BLM will continue to apply the rate in effect immediately prior to this rule unless it receives your request to use the rate adjustments in this part. A request to change your rate methodology will include your agreement to a re-issuance of the grant or lease with updated Terms and Conditions found under this part, pursuant to § 2807.20(f). ■ 28. Amend § 2806.52 by revising the section heading, the introductory text and paragraphs (a), (b), and (c) to read as follows: § 2806.20 What is the rent for a linear right-of-way grant? § 2806.52 Annual rents and fees for solar and wind energy development. * You must pay the greater of either an annual acreage rent or a capacity fee. The acreage rent and capacity fee are determined as follows: (a) Acreage rent. The BLM will calculate the acreage rent for your grant or lease by multiplying the number of acres of the authorized area (rounded up to the nearest tenth of an acre) by the annual per-acre rate for the year in which the payment is due. (1) Per-acre rate. The annual per-acre rate for your grant or lease is calculated using the State per-acre value from the solar or wind energy acreage rent schedule, the encumbrance factor, the year of the grant or lease term, and the annual adjustment factor. The calculation for determining the annual per-acre rate is A × B × [(1 + C) ∧ D] where: § 2806.12 When and where do I pay rent? * * * * (c) You may obtain a copy of the current Per Acre Rent Schedule from any BLM state, district, or field office or by writing the address found under § 2804.14(c) of this part. We also post the current rent schedule at https:// www.blm.gov. ■ 26. Revise the undesignated center heading that precedes § 2806.50 and § 2806.50 to read as follows: Solar and Wind Energy Development Rights-of-Way § 2805.14 What rights does a right-of-way grant or lease convey? * Subpart 2806—Annual Rents and Payments § 2806.50 Rents and fees for solar and wind energy development. If you hold a right-of-way for solar or wind energy development, you must pay an annual rent and fee in accordance with this section and subpart. The annual rent and fee is the PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 * E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations (i) A is the state per-acre value from the solar or wind energy acreage rent schedule published by the BLM for the year on which your right-of-way grant or lease is issued and is based on the National Agricultural Statistics Service (NASS) Survey of Pastureland Rents. The BLM will prepare the rent schedule by averaging the NASS reported pastureland rents for the most recent 5year period, using only those years for which rent is reported by NASS. The BLM will update the rent schedule every 5 years consistent with the timing of rent adjustments under § 2806.22. (ii) B is the encumbrance factor, which is 100 percent for solar energy and 5 percent for wind energy; (iii) C is the annual adjustment factor, which is 3 percent; and, (iv) D is the year of the grant or lease term, which is the number of years the grant or lease has been authorized. For example, the first year (whether partial or full year) would be 0 and the second year would be 1. (2) You may obtain a copy of the current solar or wind energy acreage rent schedule from any BLM state, district, or field office or by writing the address found under § 2804.14(c) of this part, Attention: Renewable Energy Coordination Office. The BLM also posts the current solar energy acreage rent schedule at https://www.blm.gov. (b) Capacity fee. (1) The capacity fee is calculated using the MWh rate or the alternative MWh rate, the MWh rate reduction, the domestic content reduction, the Project Labor Agreement (PLA) reduction, the rate of return, the year of the grant or lease, the annual adjustment factor, and the annual power generated on the right-of-way. You must pay the capacity fee annually, beginning the year in which electricity generation begins or is scheduled to begin in the approved POD, whichever comes first, unless the acreage rent (see paragraph (a) of this section) exceeds the capacity fee in a given year. The calculation for determining the capacity fee is A × B × C × D × [(1 + E) ∧F] × G × H where: (i) A is the MWh rate or the alternative MWh rate. The MWh rate is the annual weighted average wholesale price per MWh for the major trading hubs serving the 11 Western States of the continental United States for the full 5 calendar-year period preceding the year in which your grant or lease was issued, rounded to the nearest dollar increment (see paragraph (7)). An Alternative MWh rate may be approved by the BLM if you have entered into a power purchase agreement, such as with a utility, and that rate is lower than the MWh rate. You must provide proof of the lower rate to the BLM, and if the VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 BLM determines the lower rate is appropriate, the alternative MWh rate will be used in place of the MWh rate. (ii) B is the MWh rate reduction, which is equal to 80 percent for fee payments due before 2036. Starting 2036, the MWh rate reduction for new authorizations transitions to 20 percent, as follows: TABLE 1 TO PARAGRAPH (b)(1)(ii) Calendar year MWh rate reduction (%) 2035 .................. 2036 .................. 2037 .................. 2038 and beyond .............. B— calculation multiplier (%) 80 60 40 20 40 60 20 80 (iii) C is the Domestic Content reduction, which is equal to 1.0 for fee payments when a holder’s project does not qualify for the domestic content reduction. C is equal to 0.8 when the holder can demonstrate that a facility qualifies for the domestic content reduction. A facility qualifies for the domestic content reduction if a holder documents that the facility would qualify as ‘‘Produced in the United States’’, consistent with 2 CFR part 184. (iv) D is the factor for the Project Labor Agreement reduction, which is equal to 1.0 for fee payments when the holder does not execute a PLA. D is equal to 0.8 if the holder executes a PLA for the construction of the project. (v) Request for conditional approval: Alternative MWh rate, Domestic Content reduction and PLA reduction. The alternative MWh rate, the Domestic Content reduction and PLA reduction (paragraphs (b)(1)(ii) and (iii) and (iv) of this section) may only be applied if a request for conditional approval is received by the BLM prior to the issuance of a grant or lease. A request for conditional approval must be submitted with sufficient documentation to demonstrate that the development qualifies or may later qualify for the rate reductions. A request for conditional approval is subject to the holder demonstrating, to the satisfaction of the BLM’s Authorized Officer, that the development qualifies. If energy generation begins before the holder has demonstrated that the facility qualifies, the BLM will charge the holder the full capacity fee, without the alternative MWh rate, Domestic Content reduction, or PLA reduction. The capacity fee may be updated for subsequent calendar years after the holder demonstrates that the facility qualifies, but the BLM will not refund past payments made before PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 35681 the alternative MWh rate, domestic content reduction, or PLA reduction went into effect. (2) E is the annual adjustment factor, which is 3 percent. (3) F is the year of the grant or lease term, which is the number of years the grant or lease has been authorized. For example, the first year (whether partial or full year) would be 0 and the second year would be 1. (4) G is the rate of return, which is 7 percent. (5) H is the annual energy generated on the right-of-way and will be provided to the BLM by the grant or leaseholder in an annual certified statement. The BLM will bill to coincide with the start of the calendar year. The first-year payment in advance will be based on estimated energy generation and the BLM will determine final payment for the first year based on actual energy generation. Subsequent payments in advance will be based on the most recent calendar year’s actual energy generation reported on the certified statement, unless exception is approved in paragraph (vi) of this section. (i) The holder must submit the annual certified statement to the BLM before the first year of energy generation begins or is scheduled to begin as approved in the Plan of Development, whichever comes first. Certified annual statements must be submitted to the BLM by October, each year. (ii) Prior to the start of energy generation, the holder must submit to the BLM in the certified statement the estimated energy generation of the development for the first year. (iii) Once energy generation has begun, the holder must submit to the BLM in the certified statement the most recent calendar year’s actual energy generation of the development. (iv) The BLM will calculate the capacity fee from the certified statement. For projects that include generation on public and non-public lands, the holder will prorate the total energy generation by the percentage of the right-of-way footprint on public lands relative to the total development area footprint. (v) If the year’s actual energy generation exceeds or is less than the amount of energy generation used to bill for the payment in advance, the holder will be billed, credited, or refunded for the underpayment or overpayments pursuant to §§ 2806.13(e) and 2806.16. In no event will the total payment be less than the annual acreage rent. (vi) The BLM may approve a request made by a right-of-way holder to provide a new estimate of energy generation to the BLM in the annual E:\FR\FM\01MYR6.SGM 01MYR6 ddrumheller on DSK120RN23PROD with RULES6 35682 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations certified statement to use for billing the next year’s payment in advance if: the right-of-way holder has planned maintenance activities, or other interruptions to energy generation, that would reduce the amount of energy generated by 25 percent or more; or, the right-of-way holder is aware that the energy generation in the subsequent year will exceed the actual energy generation for the previous year by 25 percent or more. See § 2805.12(c)(8)(i) through (iii) for the steps to follow when failing to meet diligent operation requirements. (vii) If the right-of-way holder underestimates energy generation by 25 percent or more of the actual energy generation or does not provide the BLM with a new estimate when energy production will exceed the previous year’s actual production by more than 25 percent, the BLM may assess the holder a late payment fee of 10 percent of the actual generation for each year of underestimation. This section applies unless the BLM has approved a request to provide a new estimate under § 2806.52(b)(5)(vi), and the approved new estimate does not underestimate energy generation by 25 percent or more of actual energy generation or if the holder can provide the BLM with justification consistent with § 2805.12(e). (6) MWh rate schedule. You may obtain a copy of the current MWh rate schedule from any BLM state, district, or field office or by writing the address found under § 2804.14(c) of this part, Attention: Renewable Energy Coordination Office. The BLM also posts the current MWh rate schedule at https://www.blm.gov. (7) Periodic adjustments. (i) The MWh rate applicable to your right-of-way will be the MWh rate in effect the first year for your grant or lease and will not be updated with subsequent MWh rate schedule adjustments. The MWh rate applicable to your right-of-way will only be updated each year by the annual adjustment factor under paragraph (b)(2) of this section. (ii) The MWh rate schedule for new grants and leases will be adjusted once every 5 years consistent with the timing of rent adjustments under § 2806.22 of this part and consistent with paragraph (b)(1) of this section. (8) The general payment provisions for rents described in this subpart, except for § 2806.14(a)(4), also apply to the capacity fee. (c) Implementation of the acreage rent and capacity fee. The rates for acreage rent and capacity fees apply to all grants and leases issued after the effective date of this rule, and to existing grants and VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 leases if the holder elects to continue paying under the rate setting methodology established at the time of your authorization per § 2806.51(c). * * * * * ■ 29. Add an undesignated center heading between §§ 2806.52 and 2806.54 and revise § 2806.54 to read as follows: Renewable Energy Rights-of-Way § 2806.54 Rent for energy storage facilities that are not part of a solar or wind energy development facility. Rent for energy storage facilities that are not part of a solar or wind energy development facility will be determined pursuant to the linear rent formula set forth in § 2806.23. The BLM may determine your rent pursuant to § 2806.70 if we determine the linear rent schedule does not apply. § § 2806.60 through 2806.68 [Removed] 30. Remove the undesignated center heading ‘‘Wind Energy Rights-of-Way’’ and §§ 2806.60 through 2806.68. ■ Subpart 2807—Grant Administration and Operation 31. Amend § 2807.17 by revising paragraph (c) to read as follows: ■ § 2807.17 Under what conditions may BLM suspend or terminate my grant or lease? * * * * * (c) Your failure to use your right-ofway for its authorized purpose for any continuous 5-year period creates a presumption of abandonment, except for solar and wind energy rights-of-way. Consistent with § 2805.12(c)(8), a presumption of abandonment or insufficient productivity of a grant or lease for a solar or wind energy generation occurs for any continuous two calendar-year period. ■ 32. Amend § 2807.20 by revising paragraph (b) and adding paragraph (f) to read as follows: § 2807.20 When must I amend my application, seek an amendment of my grant or lease, or obtain a new grant or lease? * * * * * (b) The requirements to amend an application or grant are the same as those for a new application, including paying processing and monitoring fees and rent according to §§ 2804.14, 2805.16, and 2806.10, except for solar and wind energy development grants and leases per § 2806.51(c) requesting a rent adjustment addressed under paragraph (f) of this section. * * * * * PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 (f) A request to the BLM per § 2806.51(c) to adjust your solar or wind energy rates must be received before July 1, 2026. The BLM will re-issue your grant or lease, without further review, for the remainder of your existing term consistent with the requirements of this part, including processing and monitoring costs under §§ 2804.14 and 2805.16, the terms and conditions under § 2805.12, and rent provision under § 2806.50. ■ 33. Amend § 2807.21 by revising paragraph (e) to read as follows: § 2807.21 May I assign or make other changes to my grant or lease? * * * * * (e) Your assignment is not recognized until the BLM approves it in writing. We will approve the assignment if doing so is in the public interest. We may modify the grant or lease or add bonding and other requirements, including additional terms and conditions, to the grant or lease when approving the assignment, except that we may only modify solar or wind energy leases where modification is warranted under § 2805.15(e). We may decrease rents if the new holder qualifies for an exemption (see § 2806.14) or waiver or reduction (see § 2806.15) and the previous holder did not. Similarly, we may increase rents if the previous holder qualified for an exemption or waiver or reduction and the new holder does not. If we approve the assignment, the benefits and liabilities of the grant or lease apply to the new grant or leaseholder. * * * * * ■ 34. Revise the heading of subpart 2809 to read as follows: Subpart 2809—Competitive Process for Solar and Wind Energy Development Applications or Leases 35. Revise § 2809.10 to read as follows: ■ § 2809.10 Competitive process for energy development grants and leases. (a) The BLM may conduct a competitive process for solar and wind energy development grants or leases on its own initiative; or (b) The BLM may solicit nominations for public lands to be included in a competitive process by publishing a call for nominations under § 2809.11(a); or (c) You may request that the BLM conduct a competitive process by submitting a request in writing that complies with § 2809.11(b); or (d) The BLM may conduct a competitive process if it receives two or more competing applications. E:\FR\FM\01MYR6.SGM 01MYR6 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations (e) Except where an applicant has failed to timely provide information requested by the BLM under § 2804.25(c), the BLM will not offer lands in a competitive process for which the BLM has accepted a complete application, received a Plan of Development, and entered into a cost recovery agreement. ■ 36. Revise § 2809.11 to read as follows: ddrumheller on DSK120RN23PROD with RULES6 § 2809.11 How will the BLM call for nominations? (a) Call for nominations. The BLM may publish a call for nominations for lands to be included in a competitive process. The BLM will publish this notice in the Federal Register and may also use other notification methods, such as a newspaper of general circulation in the area affected, or the internet. The Federal Register notice and any other notices will include: (1) The date, time, and location by which nominations must be submitted; (2) The date by which nominators will be notified of the BLM’s decision on timely submissions; (3) The area or areas within which nominations are being requested; and (4) The qualification for a nominator, which must include, at a minimum, the requirements for an applicant, see § 2803.10. (b) Nomination submission. Nominations for lands to be included in a competitive process must be in writing, and include the following: (1) A refundable nomination fee of $5 per acre; (2) The nominator’s name and personal or business address. The name of only one citizen, association, partnership, corporation, or municipality may appear as the nominator. All communications relating to submissions will be sent to that name and address, which constitutes the nominator’s name and address of record; and (3) The legal land description and a map of the nominated lands. The lands nominated may be the entire area or part of the area made available under the call for nominations. (c) The BLM will not accept your submission if it does not comply with the requirements of this section, or if you are not qualified to hold a grant or lease under § 2803.10. (d) Withdrawing a nomination. A nomination cannot be withdrawn, except by the BLM for cause, in which case the nomination fee will be refunded. (e) The BLM may decide whether to conduct an offer for nominated lands. VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 37. Revise § 2809.12 to read as follows: ■ § 2809.12 How will the BLM select and prepare parcels? (a) The BLM will identify parcels for a competitive process based on information received in public nominations, land use designations, and on any other information it deems relevant. (b) The BLM and other Federal agencies, as applicable, may conduct necessary studies and site evaluation work, including applicable environmental reviews and public meetings, before offering lands in a competitive process. (c) The BLM’s choice to conduct a competitive process is not a decision to grant or deny a right-of-way application and is not subject to appeal under 43 CFR part 4. ■ 38. Amend § 2809.13 by revising paragraphs (b)(7) and (c) to read as follows: § 2809.13 How will the BLM conduct competitive processes? * * * * * (b) * * * (7) The terms and conditions of the process, including whether a successful bidder will become a preferred applicant or a presumptive leaseholder; the requirements for the successful bidder to submit an application, see § 2804.12, or a Plan of Development, see § 2809.18; and any mitigation requirements, including compensatory mitigation. (c) We will notify you in writing of our decision to conduct a competitive process at least 30 days prior to the competitive process if you nominated lands that are included in the process, paid the nomination fees, and demonstrated your qualifications to hold a grant or lease as required by § 2809.11. ■ 39. Amend § 2809.15 by: ■ a. Revising paragraph (a); ■ b. Removing paragraph (d); ■ c. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), respectively; ■ d. Adding a new paragraph (b); and ■ e. Revising newly redesignated paragraphs (d)(1) through (4); ■ f. Adding paragraph (d)(5); and ■ f. Revising paragraph (e). The revisions and addition read as follows: § 2809.15 How will the BLM select the successful bidder? (a) The bidder with the highest total bid, prior to any variable offset, is the successful bidder, and may become the PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 35683 preferred applicant or the presumptive leaseholder in accordance with § 2809.15(b). (b) The successful bidder will become the presumptive leaseholder or preferred applicant only after making the payments required in paragraph (d) and satisfying the requirements of this section and § 2803.10. If the successful bidder does not satisfy these requirements, the BLM may make the next highest bidder the successful bidder under § 2809.17(b) or re-offer the lands under § 2809.17(d). (1) Presumptive leaseholder. (i) The successful bidder will become a presumptive leaseholder if: (A) The lands for which the bidder has successfully bid are located within a designated leasing area; and, (B) The notice of the competitive process indicated that a successful bidder will become a presumptive leaseholder. (ii) A presumptive leaseholder will be awarded a lease only if the presumptive leaseholder submits a proposed Plan of Development in accordance with § 2804.25(c) and the proposed Plan of Development is approved by the BLM. (2) Preferred applicant. A successful bidder who does not become a presumptive leaseholder in accordance with § 2809.15(b)(1) may become a preferred applicant. The preferred applicant’s application for a grant or lease will be processed for the parcel identified in the submission under § 2809.12(b). Approval of the application is not guaranteed and is solely at the BLM’s discretion. The BLM will not process other applications for solar and wind energy development on lands where a preferred applicant has been identified, unless allowed by the preferred applicant. * * * * * (d) * * * (1) Make payments by personal check, cashier’s check, certified check, bank draft, or money order, or by other means deemed acceptable by the BLM, payable to the Department of the Interior— Bureau of Land Management; (2) By the close of official business hours on the day on which the BLM conducts the competitive process or such other time as the BLM may have specified in the offer notices, submit for each parcel: (3) Within 15 calendar days after the day on which the BLM conducts the competitive process, submit the balance of the bonus bid (after the variable offsets are applied under paragraph (c) of this section) to the BLM office conducting the process; and (4) Within 15 calendar days after the day on which the BLM conducts the E:\FR\FM\01MYR6.SGM 01MYR6 35684 Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules and Regulations competitive process, submit the application filing fee under § 2804.12(c) less the application fee submitted under § 2809.11(c)(1) (if you are the preferred applicant), or submit the acreage rent for the first full year of the lease as provided in part 2806 (if you are the presumptive leaseholder). (5) You may be required to pay reasonable costs in addition to payment of the application filing fee when processing your application, pursuant to § 2804.14. A processing or monitoring Category 6 cost recovery fee may be reduced by the application filing fee paid when submitting an application. (e) The successful bidder will not become the preferred applicant or be offered a lease and the BLM will keep all money that has been submitted with the competitive process if the successful bidder does not satisfy the requirements of paragraph (d) of this section. In this case, the BLM may make the next highest bidder the successful bidder under § 2809.17(b) or re-offer the lands. ■ 40. Amend § 2809.16 by redesignating paragraph (c)(11) as paragraph (c)(13), revising paragraphs (c) introductory text and (c)(10), adding paragraphs (c)(11) and (12), revising newly redesignated paragraph (c)(13), and adding paragraph (e) to read as follows: § 2809.16 When do variable offsets apply? * * * * (c) The variable offset may be based on the following factors, including progressive steps towards: * * * * * ddrumheller on DSK120RN23PROD with RULES6 * VerDate Sep<11>2014 18:32 Apr 30, 2024 Jkt 262001 (10) Public benefits; (11) Use of items qualifying for the Domestic Content preference; (12) Use of a project labor agreement; and (13) Other factors. * * * * * (e) If the successful bidder’s eligibility for a variable offset cannot be verified until a later time, the BLM may require the successful bidder to submit the full bid amount, without taking into account the variable offset, and hold the amount of the variable offset in suspense. The amount of the bonus bid corresponding to the variable offset will be refunded or credited to the successful bidder once the successful bidder has demonstrated that it has qualified for the variable offset. The BLM may set a deadline in the notice of competitive process by which the successful bidder must demonstrate its qualifications. 41. Amend § 2809.17 by revising paragraph (b) and removing paragraph (d) to read as follows: ■ § 2809.17 Will the BLM ever reject bids or re-conduct a competitive process? * * * * * (b) We may make the next highest bidder the successful bidder if the first successful bidder does not satisfy the requirements of § 2809.15, does not execute the lease, or is for any reason disqualified from holding the lease. * * * * * PO 00000 Frm 00052 Fmt 4701 Sfmt 9990 42. Amend § 2809.18 by revising the introductory text and paragraphs (a), (b), and (f) to read as follows: ■ § 2809.18 What terms and conditions apply to a solar and wind energy development lease? The lease will be issued subject to the following terms and conditions: (a) Site control. A lease provides site control to the leaseholder. The term of your lease will be consistent with § 2805.11(b) and will terminate on December 31 of the final year of the lease term. You may submit an application for renewal under § 2805.14(g). A leaseholder may not construct any facilities on the right-ofway until the BLM issues a notice to proceed or other written form of approval to begin surface disturbing activities. (b) Rent. You must pay any rent as specified in § 2806.52. * * * * * (f) Assignments. You may apply to assign your lease under § 2807.21, and if an assignment is approved, the BLM will not make any changes to the lease terms or conditions, as provided for by § 2807.21(e), except for modifications required under § 2805.15(e). * * * * * § 2809.19 ■ [Removed] 43. Remove § 2809.19. [FR Doc. 2024–08099 Filed 4–30–24; 8:45 am] BILLING CODE 4331–29–P E:\FR\FM\01MYR6.SGM 01MYR6

Agencies

[Federal Register Volume 89, Number 85 (Wednesday, May 1, 2024)]
[Rules and Regulations]
[Pages 35634-35684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08099]



[[Page 35633]]

Vol. 89

Wednesday,

No. 85

May 1, 2024

Part VI





Department of the Interior





-----------------------------------------------------------------------





Bureau of Land Management





-----------------------------------------------------------------------





43 CFR Part 2800





Rights-of-Way, Leasing, and Operations for Renewable Energy; Final Rule

Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Rules 
and Regulations

[[Page 35634]]


-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 2800

[BLM_HQ_FRN_MO# 4500177145]
RIN 1004-AE78


Rights-of-Way, Leasing, and Operations for Renewable Energy

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule updates procedures governing the BLM's 
renewable energy and right-of-way programs, focusing on two main 
topics. The first topic is solar and wind energy generation rents and 
fees, implementing new authority from the Energy Act of 2020 to 
``reduce acreage rental rates and capacity fees, or both, for existing 
and new wind and solar authorizations'' and making certain findings 
required by the statute. The second topic is expanding agency 
discretion to process applications for solar and wind energy generation 
rights-of-way inside designated leasing areas (DLAs). In addition to 
these two main topics, this final rule makes technical changes, 
corrections, and clarifications to the regulations. This final rule 
will update the BLM's procedures governing the BLM's administration of 
rights-of-way issued under Title V of the Federal Land Policy and 
Management Act (FLPMA), including for solar and wind energy 
applications and development authorizations.

DATES: This rule is effective July 1, 2024.

FOR FURTHER INFORMATION CONTACT: Jayme Lopez, Interagency Coordination 
Liaison, by phone at (520) 235-4581, or by email at [email protected] for 
information relating to the BLM Renewable Energy programs and 
information about the final rule. Please use ``RIN 1004-AE78'' in the 
subject line. Individuals in the United States who are deaf, deafblind, 
hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or 
TeleBraille) to access telecommunications relay services. Individuals 
outside the United States should use the relay services offered within 
their country to make international calls to the point-of-contact in 
the United States.

SUPPLEMENTARY INFORMATION:
I. Executive Summary
II. Background
III. Discussion of Public Comments on the Proposed Rule
IV. Section-by-Section Discussion
V. Procedural Matters

I. Executive Summary

    In 2021, the Bureau of Land Management (BLM) initiated preliminary 
activities related to rulemaking through listening sessions seeking 
public comment on the BLM's potential use of the Energy Act of 2020 (43 
U.S.C. 3003) authority to ``reduce acreage rental rates and capacity 
fees'' to ``promote the greatest use of wind and solar energy 
resources.'' In May 2022, the BLM published BLM Manual section 2806.60 
as interim guidance to implement that authority from the Energy Act of 
2020 pending completion of this final rule. On June 16, 2023, the BLM 
published a proposed rule (88 FR 39726 \1\) in the Federal Register, 
that, among other things, proposed updates to the BLM's methodology for 
determining acreage rents and capacity fees for solar and wind energy 
development projects, including providing opportunities for reductions 
to rents and fees under the authority of the Energy Act of 2020. The 
BLM also proposed more flexibility in how the BLM processes 
applications for solar and wind energy development inside DLAs, and 
updates to how to prioritize solar and wind energy applications. The 
proposed rule also suggested technical changes, corrections, and 
clarifications to the existing right-of-way regulations. After 
considering comments on the proposed rule and other factors, the BLM 
prepared this final rule.
---------------------------------------------------------------------------

    \1\ https://www.federalregister.gov/documents/2023/06/16/2023-12178/rights-of-way-leasing-and-operations-for-renewable-energy.
---------------------------------------------------------------------------

II. Background

    The BLM's governing regulations for rights-of-way, including for 
solar and wind energy generation, are found at Title 43 CFR part 2800. 
These regulations were last comprehensively updated by a final rule 
published in the Federal Register on December 19, 2016, ``Competitive 
Processes, Terms, and Conditions for Leasing Public Lands for Solar and 
Wind Energy Development and Technical Changes and Corrections'' (81 FR 
92122). That final rule built upon existing rights-of-way regulations 
and policies to expand BLM's ability to responsibly facilitate solar 
and wind energy development.
    Most recently, the BLM amended components of 43 CFR part 2800 under 
its final rule, ``Update of the Communications Uses Program, Cost 
Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-Way,'' 
(89 FR 25922) on April 12, 2024. That final rule updated BLM 
regulations to enhance the communications uses program, update its cost 
recovery fee schedules, and add provisions governing the development 
and approval of operations, maintenance, and fire prevention plans and 
agreements for rights-of-way for electric transmission and distribution 
facilities (i.e., powerlines). That final rule also included technical 
changes to certain sections that this renewable energy rule proposed to 
make changes to, as will be discussed further in the section-by-section 
discussion of this final rule.

Solar and Wind Energy Rents and Fees

    Title V of FLPMA (43 U.S.C. 1761-1772) generally requires grant 
holders, leaseholders, or both (holders) to ``pay in advance the fair 
market value'' for use of the public lands, subject to certain 
exceptions. The Energy Act of 2020, 43 U.S.C. 3003, introduced a new 
exception to FLPMA's fair market value requirement, authorizing the 
Secretary to ``reduce acreage rental rates and capacity fees, or both, 
for existing and new wind and solar authorizations'' if the agency 
makes certain findings. These findings can include that the existing 
rates ``exceed fair market value,'' ``impose economic hardships'' or 
``limit commercial interest in a competitive lease sale or right-of-way 
grant,'' or ``that a reduced rental rate or capacity fee is necessary 
to promote the greatest use of wind and solar energy resources.'' 43 
U.S.C. 3003(b)(1)(A)-(C) and 3003(b)(2).
    As reflected in this final rule, the BLM determined that the 
changes to the acreage rents and capacity fees for solar and wind 
energy right-of-way authorizations are needed to ``promote the greatest 
use of wind and solar energy resources'' and maximize ``commercial 
interest'' in lease sales and right-of-way grants. Reducing the acreage 
rent and capacity fee in this final rule will encourage solar and wind 
energy development with a goal of increasing the share of clean energy 
that is part of the United States' domestic power infrastructure as 
authorized by the Energy Act of 2020 and directed by Executive Orders 
14008 and 14057. This will be done by decreasing the costs for 
developers to construct and operate solar and wind energy development, 
allowing them to increase investments in new facilities and thus 
promote additional development. These changes will result in the most 
additional deployment of solar and wind energy development (see 
Regulatory Impact Analysis 3.1.D). The BLM's determination is supported 
by a regulatory impact analysis of economic impacts, public comments 
received on

[[Page 35635]]

the proposed rule, and the BLM's experience with solar and wind energy 
development on public lands.
    Reductions in costs will also benefit smaller-scale projects or 
projects that are on the margins of being economically profitable. 
Additionally, the BLM expects that the rule will not only increase 
interest among renewable energy developers to use BLM-administered 
public lands, but it will decrease the cost for developers such that 
they may be able to invest in additional wind and solar projects on 
Tribal, State, or private lands. Further, the decrease in cost to 
developers is expected to translate, over time, to a reduction in the 
average cost per MW of solar and wind energy, which will make solar- 
and wind-generated energy more competitive with other energy sources 
and will stabilize or even reduce the cost of energy to consumers, even 
as the cost of other energy sources may experience increased 
volatility.
    The BLM also determined that the authority provided under the 
Energy Act of 2020, 43 U.S.C. 3003, supports two other reductions to 
the capacity fees under two potentially qualifying circumstances: (1) a 
Domestic Content reduction when a grant holder or lease holder 
demonstrates the use of American-made iron, steel, construction 
materials, or manufactured products in the construction of the project 
consistent with the requirements set forth in this final rule; and (2) 
a reduction for Project Labor Agreements (PLAs), i.e., when the holder 
uses PLAs to hire labor for the development and construction of a solar 
or wind development. The additional, voluntary reductions offered in 
this final rule advance the Energy Act of 2020 goal of promoting the 
greatest use of solar and wind energy resources. First, a Domestic 
Content reduction will provide an incentive to use components made or 
manufactured in the United States in the construction of the solar or 
wind energy development project by offsetting those costs, which, if 
broadly adopted, could increase demand for domestically produced 
renewable energy parts and materials and, over the long term, lead to 
decreased costs for parts and materials, decreased reliance on 
potentially volatile foreign-sourced parts and materials, and 
ultimately increased economic certainty for and promotion of wind and 
solar energy resources on public lands. Second, the PLA reduction will 
incentivize good labor practices and in turn lead to responsible and 
productive construction, minimize the potential duration, and improve 
construction standards, thereby promoting the greatest use of wind and 
solar resources. These reductions will also incentivize project 
proponents to advance other Congressional and Administration goals that 
strengthen the use of American products and manufacturing and the 
associated labor markets.
    Therefore, reductions in the final rule that rely upon authority 
from the Energy Act of 2020 include an 80 percent reduction to the MWh 
rate when setting the capacity fee and the two additional reductions to 
the capacity fee for which right-of-way holders may qualify: a 20 
percent Domestic Content reduction and a 20 percent PLA reduction. The 
MWh rate reduction applies to projects when they are permitted (or 
grants or rights-of-way are re-issued under 2806.51(c)) and continues 
for the life of the grant. The MWh rate reduction will be 80 percent 
through 2035, 60 percent for new authorizations in 2036, 40 percent for 
new authorizations in 2037, and 20 percent for new authorizations in 
2038 and beyond. Additional information on the MWh rate is found under 
the discussions of Sec. Sec.  2801.5 and 2806.52(b) of this preamble, 
as well as more broadly under part 2806 of this preamble.
    This final rule also codifies a new rate-setting methodology for 
solar and wind energy development projects. Under this rule, the BLM 
will collect from right-of-way holders the greater of either an acreage 
rent or a capacity fee. The BLM will assess acreage rent by applying 
the rate schedule, based on a survey of values for pastureland from the 
National Agricultural Statistics Service (NASS) Cash Rents Survey, to 
the number of acres that the right-of-way authorizes for use. Capacity 
fees reflect the value of generating electricity from solar and wind 
energy resources, which are quantified by the number of megawatt hours 
(MWh) of electricity produced from public lands. In this rule, the BLM 
has changed the definition of capacity to move away from the maximum 
capacity that a solar facility could produce and towards ensuring that 
the capacity fee reflects the actual capacity for solar or wind energy 
generation of a site covered by a given right-of-way grant or lease, 
taking into consideration environmental or other factors that may 
impact generation capacity of the site, including weather, servicing, 
and Acts of God. As provided in the final rule, the BLM will determine 
the capacity fee by considering the wholesale prices for major trading 
hubs serving 11 western States, and documentation concerning the price 
received by the right-of-way holder under a Power Purchase Agreement.
    The final rule provides that, when issuing a grant or lease for 
solar or wind energy development, or a renewal of such grant or lease, 
the BLM will set the per-acre rate and the MWh rate (including 
applicable reductions). The acreage rent and capacity fee will be 
adjusted annually, however, using an annual adjustment factor set at 
the beginning of the grant or lease term. Upon renewal of a right-of-
way, the per-acre rate and the MWh rate and reductions would be updated 
based on the then-current rates, as well as any applicable reductions 
for which the right-of-way holder qualifies at that time.
    Existing right-of-way holders may elect to continue using their 
current rate setting methodology, which may be updated periodically for 
changes in the market, or change to the new rate setting methodology in 
this final rule. Otherwise, the new rate setting methodology would only 
apply to new or renewed rights-of-way. If an existing right-of-way 
holder elects to change to the new rate setting methodology, that 
methodology will apply until the end of the right-of-way term.
    This final rule bases the capacity fee for solar and wind energy 
generation facilities on actual energy generation at each facility 
rather than on nameplate capacity. The BLM believes this change more 
accurately reflects the actual capacity for energy production of an 
individual project based on a developer's selection of technology, 
project design, and the solar or wind resource available at a 
particular site. This change to the capacity fee indexes the required 
payment to the projects' energy generation, being greater when the 
project generates more energy and less when it generates less.
    This rule improves payment predictability for grant and 
leaseholders by revising the key data used for determining the acreage 
rent and the capacity fee--the state-wide pastureland rent values and 
the wholesale price of electricity--at the time the right-of-way is 
issued. In doing so, the per-acre and MWh rates are set for the term of 
the right-of-way and only adjusted by the annual adjustment factor and, 
in the case of the capacity fee, by the holder's actual annual energy 
production. See preamble Sec. Sec.  2806.50 and 2805.52 for a more 
detailed discussion of the BLM's proposed methodology for determining 
the acreage rent and capacity fee.

Solar and Wind Energy Applications Inside Designated Leasing Areas

    In this final rule, the BLM clarifies that it will review and 
process applications, including on a non-

[[Page 35636]]

competitive basis, for proposed solar and energy generation rights-of-
way inside DLAs, which are defined at 43 CFR 2801.5(b). The BLM retains 
discretion to conduct competitive processes, either inside or outside 
of DLAs, where the authorized officer decides to do so. In the proposed 
rule, the BLM used the terms ``competitive offer'' and ``competitive 
process'' interchangeably. To provide clarity and minimize confusion, 
the final rule uses only the term ``competitive process'' to describe 
the method by with the BLM will offer parcels in a competitive bidding 
process. To learn more about BLM's DLAs, see the 2012 Western Solar 
Plan (https://blmsolar.anl.gov/documents/solar-peis/), which identified 
approximately 285,000 acres of agency preferred development locations 
(i.e., DLAs) with high potential for solar energy production and low 
conflicts with other resources and uses. Subsequently, the BLM 
designated approximately 388,000 acres of preferred development 
locations for solar energy in California through the 2016 Desert 
Renewable Energy Conservation Plan (https://blmsolar.anl.gov/documents/drecp/) and over 192,000 acres of preferred development locations for 
solar, wind, and geothermal energy in Arizona through the 2017 
Restoration Design Energy Project. Currently, the BLM is in the process 
of updating its 2012 Western Solar Plan to, among other things, make 
programmatic planning decisions for solar development on BLM-
administered lands in 11 western states, including Arizona, California 
(exclusive of the area covered by the Desert Renewable Energy 
Conservation Plan), Colorado, Idaho, Montana, Nevada, New Mexico, Utah, 
Oregon, Washington, and Wyoming (See https://eplanning.blm.gov/eplanning-ui/project/2022371/510).
    Under this final rule, if no competitive interest exists for a 
particular parcel, the BLM may issue leases without a competitive 
process. This change to the rule provides the BLM with increased 
flexibility and discretion to issue grants and leases through either 
competitive or non-competitive processes across all public lands inside 
and outside of DLAs, which is expected to maximize interest in 
renewable energy leasing and accelerate the deployment of solar and 
wind energy on the public lands. See subpart 2809 for a discussion of 
the competitive process for solar and wind energy.

Need for the Rule

    FLPMA provides the BLM with comprehensive authority for the 
administration and protection of the public lands and their resources 
and directs that the public lands be managed ``on the basis of multiple 
use and sustained yield'' unless otherwise provided by law (43 U.S.C. 
1732(a)). Further, FLPMA authorizes the BLM to issue rights-of-way on 
the public lands for electric generation systems, including solar and 
wind energy generation systems, and mandates that the United States 
receive fair market value for the use of the public lands and their 
resources unless otherwise provided for by statute (43 U.S.C. 1764(g)).
    On December 27, 2020, the Energy Act of 2020 was enacted, 
establishing a minimum goal of ``authoriz[ing] production of not less 
than 25 gigawatts of electricity from wind, solar, and geothermal 
energy projects by not later than 2025'' on Federal lands. 43 U.S.C. 
3004. Current information regarding the BLM's approved energy 
development projects and number of gigawatts is available on its 
website.\2\ The Energy Act of 2020 also provides the BLM with new 
authority to reduce rates below fair market value based on specific 
findings, including ``that a reduced rental rate or capacity fee is 
necessary to promote the greatest use of wind and solar energy 
resources'' 43 U.S.C. 3003(b)(2). The BLM has determined that reduced 
rates and fees are necessary to promote the greatest use of wind and 
solar energy resources, and this rule seeks to implement such 
reductions consistent with the direction in the Energy Act of 2020.
---------------------------------------------------------------------------

    \2\ https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects.
---------------------------------------------------------------------------

    On January 27, 2021, President Biden issued Executive Order (E.O.) 
14008, ``Tackling the Climate Crisis at Home and Abroad.'' Section 207 
of E.O. 14008, titled ``Renewable Energy on Public Lands and in 
Offshore Waters,'' instructs DOI ``to increase renewable energy 
production on (public) lands.''
    The changes in this rulemaking will provide clearer direction for 
the BLM in processing proposed renewable energy right-of-way 
applications on public lands while also supporting the goals of the 
Energy Act of 2020 and E.O. 14008.

Statutory Authority

    Section 310 of FLPMA (43 U.S.C. 1740) authorizes the Secretary to 
promulgate regulations to carry out the purposes of FLPMA and other 
laws applicable to public lands. Section 302 of FLPMA (43 U.S.C. 1732) 
also provides comprehensive authority for the administration and 
protection of the public lands and their resources and directs that the 
public lands be managed ``under principles of multiple use and 
sustained yield,'' unless otherwise provided by law (43 U.S.C. 
1732(a)). Sections 501, 504, and 505 of FLPMA authorize the Secretary 
to grant rights-of-way on public lands; to issue regulations governing 
such rights-of-way and charge rent for such rights-of-way; and to 
impose terms and conditions on rights-of-way grants, respectively (43 
U.S.C. 1761, 1764, and 1765). Sections 304 and 504 of FLPMA (43 U.S.C. 
1734(b) and 1764(g)) also authorize the BLM to collect funds from 
right-of-way applicants or holders to reimburse the agency for its 
costs incurred while working on a proposed or authorized right-of-way. 
As defined by FLPMA, the term ``right-of-way'' includes an easement, 
lease, permit, or license to occupy, use, or traverse public lands (43 
U.S.C. 1702(f)). See Title V of FLPMA (43 U.S.C. 1761-1772).
    The Energy Act of 2020 authorizes the Secretary to reduce acreage 
rental rates and capacity fees if the Secretary makes certain findings, 
which can include that the existing rates ``impose economic hardships'' 
or ``limit commercial interest in a competitive lease sale or right-of-
way grant,'' or ``that a reduced rental rate or capacity fee is 
necessary to promote the greatest use of wind and solar energy 
resources'' (43 U.S.C. 3003).

III. Discussion of Public Comments on the Proposed Rule

    This section of the preamble briefly summarizes broad and general 
comments on the proposed rule and the BLM's responses. Comment 
responses within this section of the preamble have been grouped and 
summarized by category that would apply to one or more sections of this 
final rule. You will find additional comments that are more specific to 
sections of this final rule, and their responses, in Section IV 
(Section-by-Section Discussion) of this preamble.

Solar and Wind Energy Rents and Fees--Part 2806

    Summary of Comments: While several commenters supported the 
proposal for reduced rents and fees, other commenters questioned the 
need for reduced rents and fees and requested more research and 
discussion to determine if current costs exceed fair market value, 
impose economic hardships, limit commercial interest, are not 
competitively priced, or

[[Page 35637]]

disincentivize the greatest use of wind and solar energy resources.
    Response: Under the Energy Act of 2020 (43 U.S.C. 3003(b)), 
Congress recognized the need to promote wind and solar energy projects 
on Federal lands, giving the Secretary the authority to reduce acreage 
rental rates, capacity fees, or both if she determines that ``the 
existing rates (A) exceed fair market value; (B) impose economic 
hardships; (C) limit commercial interest in a competitive lease sale or 
right-of-way grant; or (D) are not competitively priced compared to 
other available land;'' or that a reduction is ``necessary to promote 
the greatest use of wind and solar energy resources.'' 43 U.S.C. 
3003(b)(1)-(2). The BLM considered whether capacity fee reductions are 
necessary to promote the greatest use of wind and solar energy 
resources and has determined reductions are necessary. This final rule 
describes how the capacity fee reductions will increase interest in and 
incentivize wind and solar energy development on public lands and 
thereby accelerate deployment of renewable energy resources in the 
United States. This final rule also includes changes to the BLM's rate-
setting methodology that improve future rate predictability (see 
Regulatory Impact Analysis) and reduce potential for economic 
hardships.
    Summary of Comments: Commenters suggested that the BLM should not 
speculate on the economic impacts of the proposed rule or requested 
additional analysis and use of additional sources to back up statements 
made.
    Response: The BLM prepared an economic analysis for the proposed 
rule and then completed a Regulatory Impact Analysis for this final 
rule that provides a transparent analysis of the anticipated economic 
consequences for this rulemaking. This analysis informs the agency 
decision, including whether this rulemaking would accomplish its goals. 
For further information on the economic impacts of this rule, please 
see the Regulatory Impact Analysis that is available with a search at 
regulations.gov of this Regulatory Identifying Number ``1004-AE78.''
    Summary of Comments: Commenters suggested rents and fees should be 
increased rather than decreased due to the environmental impacts of 
solar and wind energy development, as well as their incompatibility 
with other uses. Some further suggested that reducing fees on projects 
that are on the margins of being profitable creates the risk of 
projects failing and not being properly removed and rehabilitated.
    Response: The BLM disagrees with the commenters' suggestion that 
rents and fees should be increased rather than decreased. As explained 
in more detail in the previous section on Solar and Wind Energy Rents 
and Fees, the Energy Act of 2020 (43 U.S.C. 3003) provides the BLM with 
authority to reduce acreage rents and capacity fees, including for the 
purpose of promoting the greatest use of wind and solar resources. The 
BLM has determined that reductions in acreage rents and capacity fees 
will promote wind and solar resources and is within the BLM's 
discretion under the Energy Act of 2020. Further, the BLM has carefully 
considered its final rule and concluded that decreasing rents and fees 
is necessary to accomplish the goals set forth by Congress in the 
Energy Act of 2020, by the President in E.O. 14008, and by the 
Secretary in Secretary's Order 3399. Congress set a national goal for 
renewable energy production on Federal land, directing the Secretary to 
seek to issue permits authorizing production of not less than 25 
gigawatts of electricity from wind, solar, and geothermal energy 
projects on Federal land by not later than 2025. 43 U.S.C. 3004. 
Congress further provided the Secretary with discretion to reduce the 
acreage rental rates and capacity fees, including where necessary to 
promote the greatest use of solar and wind energy resources on BLM-
administered public lands, which would advance the goals set by the 
Energy Act of 2020, as well as those in E.O. 13990, ``Protecting Public 
Health and the Environment and Restoring Science to Tackle the Climate 
Crisis,'' 86 FR 7037; E.O. 14008, ``Tackling the Climate Crisis at Home 
and Abroad,'' 86 FR 7619; and Secretary's Order 3399, ``Department-Wide 
Approach to the Climate Crisis and Restoring Transparency and Integrity 
to the Decision-Making Process.'' The use of public lands for energy 
generation systems is specifically contemplated in the FLPMA and the 
Energy Act of 2020. The BLM considers the potential environmental 
effects of solar or wind energy development when conducting land use 
planning and evaluating project applications, not when identifying 
appropriate rental rates and fees for development projects. The BLM 
considers and analyzes environmental impacts of proposed energy 
development, including appropriate mitigation measures, before 
authorizing any such project. Additionally, the BLM does not believe 
there is any correlation between reductions in capacity fees and the 
ability of project proponents to properly remove and remediate 
facilities. Any applicable fee reductions contemplated in this rule 
would not alter a project proponent's obligations to provide for 
adequate bonding associated with construction and remediation 
associated with terminated or abandoned facilities, as required by 43 
CFR 2805.12(b), 2805.20, and 2809.18(e).
    Summary of Comments: Commenters noted that reducing rents and fees 
for renewable energy projects on public lands would economically impact 
the developers of similar projects on private or Tribal lands and could 
impact property values.
    Response: This final rule changes the BLM's administrative 
processes and rates for solar and wind energy development projects on 
public lands. While the final rule is intended to encourage solar and 
wind energy development on the public lands, it would be speculative 
for the BLM to attempt to analyze whether and to what extent there may 
be secondary impacts to solar and wind energy development on private or 
Tribal property. This is particularly the case due to the wide variety 
of factors that influence developers' decisions about whether and where 
to pursue solar and wind energy projects, including, but not limited 
to, state, Tribal, and local permitting requirements, the ability to 
enter into power purchase or offtake agreements, the availability of 
existing or proposed transmission, and project-specific financing 
considerations. Notwithstanding these different factors, the final rule 
will generally decrease costs for developers on public lands, which may 
permit them to pursue additional opportunities for development on 
Tribal, state, and private lands and thereby further promote the 
greatest use of solar and wind energy.
    Summary of Comments: Some comments asked about rate changes that 
would occur after 2036. Commenters raised four specific issues that the 
2036 rate change causes. First, some commenters asserted that rates 
after 2036 would run higher than fair market value and are therefore a 
violation of FLPMA's requirement that the BLM charge no more than fair 
market value. Second, some commenters asserted that the Secretary's 
authority to reduce rates under the Energy Act extends beyond 2035, and 
America's need for renewable energy, set by Congressional and 
Presidential goals, would require incentives beyond 2036. Third, some 
commenters asserted that the 2036 rate increase would discourage right-
of-way renewals after that year. Last, some commenters asserted that 
the BLM has

[[Page 35638]]

not adequately explained why it is choosing to phase out the final 
rule's rate reductions in 2036.
    Response: This final rule helps lead the way to accomplishing the 
national goal of a carbon pollution-free electricity sector by 2035, as 
highlighted in Executive Orders 14008 and 14057. Based on its review of 
comments, the BLM has modified the sunset provision in the final rule. 
Instead of immediately transitioning the capacity fee reduction from 80 
percent to 20 percent, the final rule will lower the reduction by 20 
percentage points per year over a period of three years starting in 
2036. Instituting a phased sunset period to the 80 percent reduction in 
the capacity fee is appropriate as the renewable energy industry may no 
longer need this reduction to achieve the greatest use of wind and 
solar on public lands, and progress toward our national goal of a 
carbon-pollution free electricity sector may indicate that a reduction 
is no longer warranted. After the sunset period ends, this final rule 
will continue to provide a 20 percent reduction for solar and wind 
energy development projects. The BLM will evaluate progress towards 
reaching national goals and the benefit of the reduction before 2036 
and could reinitiate rulemaking to adjust incentives, including 
extending them beyond 2036.
    The BLM believes that knowing beforehand what the rates are for a 
facility and the increased predictability of those rates in the future 
will improve the economic certainty for project development and support 
a developer's or operator's decisions in power purchasing, financing, 
and other agreements that are necessary for a successful renewable 
energy project. This would be the same for existing authorization 
holders who choose to change to this new rate setting methodology, as 
well as for authorization renewals. Lastly, the BLM believes that the 
economics for renewable energy will continue to improve over time, and 
that the magnitude of such a reduction in 2036 is uncertain.

Lands Available for Solar and Wind Energy Applications

    Summary of Comments: Some commenters recommended that the BLM 
further restrict renewable energy development outside of solar energy 
zones and prohibit such development close to sensitive habitats or 
recreation areas. Commenters stated that competitive offers should not 
be allowed outside of designated zones.
    Response: Through the National Environmental Policy Act (NEPA) 
process, the BLM considers the environmental impacts of proposed uses 
on the public lands, including solar and wind energy development, to 
inform the BLM decisions to deny, approve, or approve with modification 
the proposed use. The BLM will include terms and conditions as 
appropriate to address resource and environmental impacts of the 
project. The BLM also performs broader analysis to inform whether 
certain lands may be made available for that use through the land use 
planning process required by FLPMA, 43 U.S.C. 1712. As described 
further below, the BLM's ongoing planning process to update to its 2012 
Western Solar Plan \3\ will amend BLM land use plans in 11 Western 
States (Arizona, California, Colorado, Idaho, Montana, Nevada, New 
Mexico, Oregon, Utah, Washington, and Wyoming), or portions thereof, to 
identify new priority areas for solar energy development, variance 
areas, and public lands that are excluded from solar energy 
development, and to update requirements that holders must comply with, 
including for sensitive resources and uses that the BLM has previously 
authorized. This rulemaking does not make land use planning decisions--
including determining whether areas should be excluded from solar and 
wind energy development because they would impact sensitive habitats or 
recreation areas--which are completed under a separate BLM process. 
This rulemaking does not change the competitive process outside of 
designated zones, but rather aligns the competitive process for solar 
and wind applications across all areas within and outside of designated 
areas. The BLM believes that where competitive interest exists--for 
example, in the form of multiple overlapping applications or a high 
level of interest in a general area--competitive processes should be 
used, regardless of whether the lands are in a DLA, to advance the 
projects that are most likely to proceed to development.
---------------------------------------------------------------------------

    \3\ https://www.federalregister.gov/documents/2022/12/08/2022-26659/notice-of-intent-to-prepare-a-programmatic-environmental-impact-statement-to-evaluate-utility-scale.
---------------------------------------------------------------------------

    Summary of Comments: Commenters noted that the BLM references solar 
energy zones from the 2012 Western Solar Plan in the proposed rule 
without discussing that the 2012 Plan is now under revision and will 
include an additional 5 states (Idaho, Montana, Oregon, Washington, and 
Wyoming). Commenters requested that the BLM coordinate the rulemaking 
process with the land use planning effort accompanying the Western 
Solar Programmatic Environmental Impact Statement (Western Solar PEIS), 
recognizing the various alternatives being considered and the impacts 
that each (Western Solar PEIS vs. proposed rule) have on the other. 
Commenters believed many of the changes in this rule that refer to 
decisions or processes that occur prior to project approval are 
currently being considered as part of the Western Solar PEIS plan 
amendment process and may be better suited for the PEIS.
    Response: This rulemaking effort and the Western Solar PEIS are two 
separate actions that complement one another, but they have different 
goals, are subject to different authorities, and will address different 
aspects of the ROW authorization process. This final rule sets out how 
the BLM will process applications and calculate rents, in order to 
implement new authorities and meet National goals established in the 
Energy Act and directed by Executive Order 14008 for both wind and 
solar energy development. This rulemaking does not make land use 
planning decisions. In contrast, the plan amendment process associated 
with the Western Solar PEIS focuses exclusively on solar development on 
public lands through a separate process governed by Section 202 of 
FLPMA (43 U.S.C. 1712) and the BLM resource management planning 
regulations at 43 CFR 1610, et seq. to update the BLM's Western Solar 
Plan. That programmatic land use planning process will consider 
updating the BLM's Western Solar Plan, with a primary focus on 
identifying the best locations for utility-scale solar energy 
development, as well as restrictions and mitigation applicable to such 
development, on BLM-managed public lands in 11 Western States. The 
BLM's land use planning decisions, including any amendments to plans, 
will comply with applicable laws and regulations.
    Comment Summary: The BLM understands from comments it has received 
that some believe that the proposed rule has insufficient analysis 
under E.O. 12866. These comments suggest that the BLM must coordinate 
more closely with local governments to collect economic data.
    Response: The BLM appreciates the interest and engagement from 
partners across the multiple landscapes in the United States, however 
the BLM disagrees with comments that additional coordination must be 
performed with local governments for this rulemaking. This rule governs 
the BLM's administration of applications and authorizations for solar 
and wind energy development projects on public lands. While the rule 
does have some financial

[[Page 35639]]

implications with adjustments to the BLM's rates, these are transfer 
payments as explained more fully in the Regulatory Impact Analysis 
accompanying this final rule and would not materially affect the 
resources available to the American economy. The BLM will continue to 
engage with the public it serves, and its many partners through BLM's 
public processes, including project-specific analysis and programmatic 
and land use planning analysis through NEPA. No change made based on 
these comments.

Need for the Rule

    Summary of Comments: Commenters requested the BLM include a more 
meaningful explanation of the necessity of this rulemaking, including 
technical data that supports a need for increased preferences and 
favorable treatment for lease terms. Commenters stated that solar 
development is not in line with FLPMA and does not allow for multiple 
use on public lands.
    Response: The BLM received new authority and guidance from Congress 
(Energy Act of 2020) and direction from the President (Executive Order 
14008, among others) to promote renewable energy generation on public 
lands. This rule implements the new authority and direction for 
management of the public lands. The BLM disagrees with the comments 
suggesting that solar energy development is inconsistent with FLPMA's 
multiple use mandate. In managing the public lands, the BLM is not 
required to make every parcel of land available for all purposes. 
Consistent with FLPMA's multiple use mandate, the BLM has discretion 
through land use planning to identify areas that are available for, or 
excluded from, solar or wind energy development and to evaluate each 
proposed solar or wind energy development through a site-specific 
environmental analysis, including the need for environmental 
mitigation, as part of the decision-making process prior to issuing a 
grant or lease.
    Summary of Comments: Other commenters stated that they believe the 
BLM must improve its approach to facilitating renewable energy 
development to meet congressional goals. Other commenters expressed a 
belief that the free market would provide better solutions to 
greenhouse gas emissions and the climate crisis without authorizing 
projects on public land or providing additional incentives to site 
projects on public land.
    Response: The BLM does not agree that the free market alone would 
provide better solutions to greenhouse gas emissions and the climate 
crisis. Additionally, the approach suggested by commenters would be 
inconsistent with direction from Congress and the President to promote 
renewable energy generation on public lands. Particularly, the Energy 
Act of 2020, which is aimed at facilitating and promoting further 
development of wind and solar energy on Federal lands, specifically 
directs the BLM to ``issue permits that, in total, authorize production 
of not less than 25 gigawatts of electricity from wind, solar, and 
geothermal energy projects by not later than 2025, through management 
of public lands and administration of Federal laws,'' 43 U.S.C. 3004(b) 
(emphasis added). Additionally, as described above, on January 27, 
2021, President Biden issued E.O. 14008, ``Tackling the Climate Crisis 
at Home and Abroad.'' Section 207 of E.O. 14008, titled ``Renewable 
Energy on Public Lands and in Offshore Waters,'' instructs DOI ``to 
increase renewable energy production on [public] lands.'' This final 
rule updates and improves the BLM's approach to facilitating renewable 
energy development on public lands based on lessons learned from 
implementation of the 2016 rule as well as changes in National 
renewable energy goals and the maturation of energy market over the 
past eight years. This update to the BLM's rules improves the BLM's 
orderly administration of public lands and helps reach the goals set by 
Congress and at the direction of the President. The BLM expects to 
continue working with the public to provide better solutions to 
resource concerns, such as greenhouse gas emissions and climate change, 
to best manage the public lands and its resources. Addressing such 
resource solutions are not part of this rulemaking.
    Summary of Comments: Commenters stated that the current market 
conditions, state and Federal mandates and regulations, and demand for 
green energy makes reducing fees unnecessary and that the BLM has 
failed to explain why the reductions are necessary.
    Response: The changes in this rule clarify how the BLM will process 
renewable energy right-of-way applications on public lands while 
supporting the goals of the Energy Act of 2020 and direction from the 
President (E.O. 14008 and 14057). Through the BLM's experience 
administering solar and wind energy development rights-of-way, the BLM 
understands the importance of stable and predictable rates for the term 
of an authorization. The BLM expects that the rule will help to meet 
national renewable goals more expeditiously. The BLM expects that the 
rule will not only increase interest among renewable energy developers 
to use BLM-administered public lands, but will decrease the cost for 
developers such that they may be able to invest in additional wind and 
solar projects on Tribal, State, or private lands. The BLM explains 
more fully the need for the rule and its reductions in the section-by-
section discussion portion of this rule under subpart 2806.
    Summary of Comments: A commenter stated that section 3003(b) of the 
Energy Act does not explicitly authorize the Secretary of the Interior 
to reduce right-of-way rents and fees below fair market value and that 
Congress did not explicitly repeal, amend, or supersede FLPMA's 
unequivocal fair market value requirement. They questioned if the 
Energy Act supersedes FLPMA's fair market value requirement for rights-
of-way.
    Response: The BLM disagrees with the comments suggesting that the 
Energy Act of 2020 does not authorize the Secretary to reduce right-of-
way rents and fees below fair market value. First, a plain reading of 
the Energy Act authorizes the Secretary to reduce rental rates and 
capacity fees below fair market value. Specifically, it authorizes the 
Secretary to reduce ``acreage rental rates, capacity fees, and other 
recurring annual fees in total'' for solar and wind energy generation 
projects on BLM-managed public lands under a broad set of 
circumstances. Additionally, Congress presumably understood the fair 
market value requirement in FLPMA, and the discretion in the Energy Act 
to reduce rental rates and capacity fees is as a modification of that 
existing requirement. The reductions authorized in Section 3003 of the 
Energy Act would be meaningless if Congress intended the reductions to 
be limited by FLPMA's general requirement to collect fair market value 
for rights-of-way.

Statutory Authority

    Summary of Comments: One commenter expressed concern that this 
proposed rule will set precedent for a similar issue DOI is trying to 
address under the Fluid Mineral Leases and Leasing process.
    Response: This final rule modifies procedures that are specific to 
identifying rental rates and capacity fees for wind and solar 
authorizations; it does not apply to or set a precedent for other BLM 
authorizations or processes, including those under the Mineral Leasing 
Act (MLA).
    Summary of Comments: Another commenter requested information about 
how this final rule interacts with other BLM rules and administration

[[Page 35640]]

directives, including the Conservation and Landscape Health Rule, 
Secretary's Order 3362, Improving Habitat Quality in Western Big-Game 
Winter Range and Migration Corridors (Feb. 9, 2018), and BLM 
Instruction Memorandum 2023-005 Change 1, Habitat Connectivity on 
Public Lands (Nov. 18, 2022).
    Response: This final rule updates the processes used in the BLM's 
orderly administration of the public lands. Any decisions made in 
connection with right-of-way grants following the procedures laid out 
in this rule will also be subject to all other applicable legal 
requirements and administrative directives, including the Conservation 
and Landscape Health Rule, Secretary's Order 3362, and BLM policies and 
guidance.

National Environmental Policy Act (NEPA)

    Comment Summary: Commenters requested the BLM prepare a NEPA 
analysis to evaluate the environmental effects of the final rule, 
including because extraordinary circumstances (43 CFR 46.215) apply and 
therefore reliance on a Categorical Exclusion is not appropriate.
    Response: The BLM disagrees with comments that an environmental 
assessment or environmental impact statement analysis under NEPA is 
required, or that extraordinary circumstances apply to this rulemaking. 
The BLM has determined that the categorical exclusion at 43 CFR 
46.210(i), which excludes, ``regulations . . . that are of an 
administrative, financial, legal, technical, or procedural nature; or 
whose environmental effects are too broad, speculative, or conjectural 
to lend themselves to meaningful analysis and will later be subject to 
the NEPA process, either collectively or case-by-case,'' applies to 
this final rule. The BLM has reviewed the extraordinary circumstances 
listed in 43 CFR 46.215 and determined that none applies. This 
categorical exclusion documentation is provided on the BLM's ePlanning 
web page at the following URL: https://eplanning.blm.gov/eplanning-ui/project/2016102/510. As such, the final rule fits within the 
categorical exclusion for rules, regulations, or policies to establish 
bureau-wide administrative procedures, program processes, or 
instructions. This final rule does not authorize any project or other 
on-the-ground activity and therefore would have no significant 
individual or cumulative effect on the quality of the human 
environment. At such time that specific solar or wind energy 
development projects are proposed, the BLM will consider those proposed 
actions in compliance with NEPA.
    Comment Summary: Some commenters suggested that there should not be 
a requirement of a published environmental assessment (EA) or 
environmental impact statement (EIS) before foreclosing the opportunity 
to hold a competitive offer. Some commenters believed the BLM should 
require analysis of a competitive offer through an EIS to identify and 
disclose the impacts of such an action.
    Response: The BLM is not required to perform environmental analyses 
on whether to hold a competitive process; nonetheless, in Sec.  
2809.12(b) the BLM reserves the right to complete a NEPA analysis 
before holding a competitive process. The BLM does not typically 
complete a NEPA analysis for a competitive leasing process, but at 
least one NEPA analysis will be completed before authorizing solar or 
wind energy development. Determining that there may be competitive 
interest and utilizing a competitive process is administrative and 
procedural only, does not trigger the need to prepare an environmental 
analysis under NEPA or have any significant effect on the human 
environment, and is simply based on whether there is adequate interest 
from more than one applicant. The BLM would complete a land use 
planning and NEPA analysis were it to change allocations in a current 
land use plan to allocate areas of public lands to either allow or 
exclude solar or wind energy development--a process the BLM is 
currently undertaking regarding solar energy for 11 western states by 
updating the 2012 Western Solar Plan through a PEIS.
    For example, in the case of solar or wind energy development 
leasing, the BLM must first identify public lands as a designated 
leasing area for solar or wind energy development through a land use 
planning process with an associated NEPA analysis. If the BLM receives 
competitive interest in those lands, the BLM would hold a competitive 
process to determine the presumptive leaseholder. Alternatively, the 
BLM may determine that the NEPA analysis for a designated leasing area 
should be updated to reflect new or changing circumstances and in turn 
may offer such lands competitively to determine a preferred applicant. 
Upon determining the presumptive leaseholder or preferred applicant, 
the BLM would then complete a NEPA analysis before determining whether 
to authorize the wind or solar energy generation project proposed. For 
either the presumptive leaseholder or preferred applicant, even if the 
BLM does not complete a NEPA analysis to consider whether to hold a 
competitive process, the resulting project will be subject to multiple 
NEPA analyses before it is approved.
    Additional comments: Additional comments and their responses are 
found in Section IV (Section-by-Section Discussion) of this preamble.
    The BLM is a multiple-use agency, and solar and wind energy 
development is one of the many uses for which the BLM manages the 
public lands. While all comments that the BLM received are important, 
this final rule does not respond to those that are out of scope for the 
action the BLM is taking. Comments that are out of scope for this 
rulemaking include those regarding project-specific considerations, 
state laws and authorities, national energy policies and priorities 
that do not affect solar and wind energy or the public lands, engaging 
in specific partnerships, general statements of support or opposition 
to the rule which do not require a detailed response, and availability 
and distribution of financial resources, among others that are not 
specific to the BLM's administration of solar and wind energy 
development applications and rights-of-way and rate-setting.
    The BLM will continue to engage with the public and Tribal, 
Federal, State, and local government partners on the BLM's management 
of its public lands, as appropriate. Subsequent actions that the BLM 
may take will be subject to the policies, laws, and regulations in 
place at that time, including those for consultation, environmental 
review, and entering into agreements or partnerships with others.

IV. Section-by-Section Discussion

43 CFR Part 2800 Rights-of-Way Authorized Under FLPMA

    Part 2800 of the CFR describes requirements for rights-of-way 
issued under Title V of FLPMA. This final rule revises the per acre 
rent and per MWh capacity fee schedules for solar and wind energy 
development rights-of-way. It updates the application process for 
public lands and focuses the BLM's competitive processes to places 
where there is competitive interest. This final rule also includes the 
principles for prioritizing solar and wind energy applications, 
establishing criteria for a ``complete application,'' and corrects or 
clarifies existing regulations.
    The BLM conducted extensive public and Tribal outreach on this rule 
both prior to its publication as a proposed rule and during the public 
comment period on the proposed rule. Prior to the

[[Page 35641]]

publication of the proposed rule, the BLM notified Tribes in August 
2021 of its upcoming rule and requested any comments and concerns that 
Tribes may have on such a rule. The BLM then held three public 
listening sessions in September 2021 on its potential use of the Energy 
Act of 2020 authority. The BLM also requested and received feedback 
from the public on preferred alternatives to use of the Energy Act of 
2020 authority in its Manual 2806.60, ``Rent,'' which was later 
published in May 2022 after three public listening sessions and public 
review and comment on the draft Manual. The BLM published its proposed 
rule in June 2023, receiving nearly 900 comments after holding three 
virtual public meetings. The BLM also sent Tribes another notice about 
the rulemaking in July 2023, requesting Tribal input and whether there 
was any interest to consult on the rule. No Tribes responded with 
interest to consult on the BLM's rulemaking.
Section 2801.5 What acronyms and terms are used in the regulations in 
this part?
    The existing Sec.  2801.5 contains the acronyms and defines the 
terms used in this part of the regulations. The BLM proposed to remove, 
revise, and add acronyms and terms to this section. Section 2801.5 of 
this final rule has some revisions in response to comments that are 
discussed further in this section for each respective revision.
    Under this section, several commenters recommended the BLM engage 
relevant stakeholders and industry experts to ensure definitions 
accurately reflect industry practices and standards. The BLM regularly 
engages, and will continue to engage with, industry; Tribal, Federal, 
State and local authorities; and resource experts to supplement its 
knowledge about renewable energy and market advancements. The BLM 
sought public comment on the proposed rule and will seek public comment 
on any changes to its acronyms and terms in future rulemakings.
    The BLM received comments requesting the BLM consider the full life 
cycle of materials, energy inputs and technology types, and resource 
and land use footprints, and suggesting that labeling all wind and 
solar energy as renewable energy is misleading. The BLM agrees that it 
should analyze land use footprints and resource impacts of proposed 
projects on public lands. However, analyzing the full life cycle of 
materials, energy inputs, and technology types are addressed by other 
parts of the Federal government where such analysis is within their 
expertise. The BLM also believes that for purposes of this final rule, 
all solar and wind energy generation projects are renewable energy 
development projects insofar as they use a natural resource on public 
lands that is not depleted to produce power.
    One comment suggested that the BLM should include a definition for 
``current land use plan'' to mean ``a document developed through a 
formal planning process to guide the management of activities and uses 
of public lands that has been approved, amended, or recertified within 
the past ten years.'' The BLM has separate rules governing its land use 
planning processes found at 43 CFR Chapter V, Subchapter A, that 
provides definitions related to the BLM's land use planning. 
Accordingly, the BLM did not make changes in response to that comment 
since they are out of scope for this rule under 43 CFR part 2800.
    Commenters suggested that the term ``economic hardship'' under 43 
U.S.C. 3003 should be defined in this final rule and that the BLM 
should require proof of economic hardship for rent and fee reductions. 
The BLM does not define economic hardship in this rule as suggested. 
Each instance of hardship is unique to a holder and their circumstances 
and will be assessed on a case-by-case basis. The BLM does not intend 
to define hardship (economically, financially, or otherwise) so as not 
to unintentionally preclude reasonable requests to consider hardship.
    Commenters stated that the proposed rule uses unclear language and 
is inconsistent with underlying resource management plans, agency 
guidance, and regulatory frameworks, and requested the BLM use more 
specific language such as pastureland, rangeland, habitat, or other 
terminology to denote the uses of the landscape. The BLM disagrees with 
the commenters' suggestion that the proposed rule uses unclear language 
and that the rule should include other definitions in this final rule. 
The BLM's use of ``pastureland rents'' comes from the name of the 
survey data used as the basis in determining the acreage rent in this 
final rule: The NASS Survey of Pastureland Rents. This is a newer 
source of data from NASS that was not available in the original 2012 
Western Solar Plan or when the BLM promulgated its 2016 rule for solar 
and wind energy and has not yet carried through to other guidance 
materials from the BLM. It is appropriate for the BLM to use this 
terminology in describing the data used and its source in the 
regulations. Future BLM guidance and actions would include this 
terminology as appropriate.
    Commenters requested the BLM settle on one standard term 
(``preferred renewable energy development areas'') for the preferred 
renewable energy project locations to avoid conflicts with other 
resources and uses. Commenters also suggested that the definitions for 
``variance areas'' and ``exclusion areas'' should be added to the rule. 
The BLM understands the interest in defining such terms and has already 
done so in its land use planning efforts, such as the ongoing Solar 
Energy PEIS effort to update the 2012 Western Solar Plan. The BLM 
believes these terms are best identified and defined as part of the 
land use planning process and is not making any changes to this rule 
due to comments.
    Paragraph (a) of this final rule provides for the acronyms and 
paragraph (b) provides for the terms used in this part. The final rule 
would remove, revise, and add certain terms to the BLM's acronyms and 
definitions found in part 2800.
    This final rule adds the acronym ``FLPMA'' to paragraph (a) meaning 
the Federal Land Policy and Management Act of 1976, as amended (43 
U.S.C. 1701 et seq.). This acronym replaces the term ``Act'' from 
paragraph (b), providing clarity as to which act the BLM is 
referencing.
    The BLM received no substantive comments on replacing the term 
``Act'' with ``FLPMA,'' and therefore this final rule makes no changes 
to the proposed rule.
    This final rule removes definitions of ``Megawatt (MW) capacity 
fee,'' ``Net capacity factor,'' ``Megawatt hour (MWh) price,'' ``Rate 
of return,'' and ``Hours per year.'' The BLM no longer charges a 
megawatt capacity fee based on solar and wind energy generation 
facility nameplate capacity; definitions related to the nameplate 
capacity fee are removed. The BLM did not make changes to the 
definitions in the final rule.
    Some commenters noted inconsistencies related to the terms ``Rate 
of Return'' and ``Hours per year.'' Commenters pointed out that the 
proposed rule stated that these terms would be removed from Sec.  
2801.5(b), noting the paragraph numbering for the Federal Register 
instructions were confusing whether the terms were removed or not. The 
BLM agrees with commenters and has revised the Federal Register 
instructions, removing the proposed instruction number vi, ``removing 
paragraphs (1) and (2) in the term ``Megawatt rate'' and redesignating

[[Page 35642]]

paragraphs (3) and (4) as paragraphs (1) and (2). There are no 
paragraphs for the revised term, and removing the instructions is 
consistent with the proposed definition. The BLM did not make any other 
changes to this definition in the final rule.
    This final rule adds the term ``Capacity fee'' to mean the fee 
based on the amount of electricity produced from solar or wind energy 
resources on the public lands. This is consistent with the BLM's change 
implementing a capacity fee that is based on electricity production. 
There were no substantive comments on the term, and the BLM did not 
make changes to this definition in the final rule.
    The BLM includes in this final rule a new term ``Domestic Content 
reduction'' to define the circumstances in which a holder meets the 
domestic content criteria and thus qualifies for a fee reduction. This 
final rule includes changes to the term for ``domestic content'' to 
mean an item or product that qualifies for the Buy America preference 
as set forth in Section 70914 of the Build America, Buy American (BABA) 
Act, Public Law 117-58, 135 Stat. 429, Sec. Sec.  70901-70927 (Nov. 15, 
2021), and implementing guidance at 2 CFR part 184. The final rule 
modifies the definition for ``domestic content'' from the definition of 
``domestic end product,'' as that term is used in Section 52.225-1 of 
the Federal Acquisition Regulations (FAR) (48 CFR 52.225-1) in the 
proposed rule, to the criteria for ``domestic content preference'' 
provided in the BABA Act and 2 CFR part 184. As described below, the 
qualifying definition in this final rule offers clarity and consistency 
among Federal programs regarding what constitutes domestic content and 
therefore is appropriate to apply to determine when a holder may obtain 
a fee reduction as identified under Sec.  2806.52(b).
    The BLM has determined that offering a Domestic Content reduction 
will further promote the greatest use of solar and wind resources 
because it will support the development of secure, reliable domestic 
supply chains while also reducing economic hardships for developers. As 
discussed in the preamble to the proposed rule, uncertainty in global 
supply chain dynamics, as seen in recent years, can delay deployment of 
solar and wind energy development projects on public lands (88 FR 
39726, 39740-39742). By offsetting some of the costs of domestically 
sourced parts and materials, the Domestic Content reduction will 
insulate developers from global supply chain shocks of all kinds by 
reducing the economic dependence of developers on global supply chains 
and will also support the efforts of domestic suppliers. In this way, 
the proposed Domestic Content reduction supports the transition to more 
reliable domestic supply chains that will, in turn, increase interest 
in developing solar and wind energy projects throughout the country, 
including on public lands (43 U.S.C. 3003(b)(1)(C)), and thereby would 
promote the development of solar and wind energy resources on public 
lands (43 U.S.C. 3003(b)(2)).
    Similar to the BLM's use in the proposed rule of a definition for 
Buy American based on section 52.225-1(b) of the FAR, this final rule's 
use of the term ``domestic content,'' following the BABA Act and 2 CFR 
part 184, identifies the components of projects through categories--
iron or steel products, manufactured products, or construction 
material--that must be produced or manufactured in the United States in 
order to qualify for the Domestic Content reduction. The BABA Act 
applies to Federal financial assistance funds for ``infrastructure 
projects,'' which require the use of material produced in the United 
States. The Office of Management and Budget (OMB) published its final 
guidance implementing the BABA Act on August 23, 2023, under 2 CFR part 
184. Generally, under 2 CFR 184.4(e), a ``domestic content'' preference 
would apply to three separate product categories: (i) iron or steel 
products; (ii) manufactured products; and (iii) construction materials. 
The OMB's guidance defines each of these categories and makes clear how 
a proponent satisfies the categorical requirements to demonstrate that 
the components of an infrastructure project meet the domestic content 
standards. This final rule uses the term ``domestic content'' as a 
catch-all term to refer to items for which the holder might satisfy the 
Domestic Content reduction based on the definitions established 2 CFR 
part 184.
    Some commenters suggested that the proposed Buy American definition 
should be revised to reflect eligibility for the reduction to mimic the 
guidance published by the Treasury Department and Internal Revenue 
Service for the domestic content bonus credit from section 13701 of the 
Inflation Reduction Act (IRA), 117 Public Law 169, 136 Stat. 1818 (Aug. 
16, 2022). Other commenters requested the BLM utilize a domestic 
content definition that incentivizes the use of domestically 
manufactured core solar components, as laid out in Section 13502 of the 
Inflation Reduction Act. Commenters also urged the BLM to refine its 
approach and apply more robust origin standards to its domestic content 
proposal.
    The BLM has considered the various comments suggesting different 
definitions for what constitutes American-made products for the 
purposes of this reduction. In response to this public input, the BLM 
has changed from the FAR definition to the BABA Act (and implementing 
guidance at 2 CFR part 184) definition for the domestic content 
preference. The BLM is aware that the Treasury Department and Internal 
Revenue Service have issued guidance about the domestic content bonus 
under the Inflation Reduction Act for clean energy projects and 
facilities that meet American manufacturing and sourcing requirements. 
However, that guidance describes an intent to propose regulations that 
have not yet been finalized. This final rule's definition for domestic 
content aligns with definitions in other Federal programs with 
oversight over domestic products and content. This approach will 
promote consistency among these Federal programs, reducing the 
potential for unintended consequences resulting from conflicting 
definitions. As noted above, the BABA Act definition focuses on 
construction materials and components for infrastructure projects and 
is closely aligned with the type of projects covered in this final 
rule.
    The final rule revises the term ``grant'' to reflect that solar or 
wind energy leases are not covered under the definition. The change 
provides clarity for where the BLM will issue a solar or wind energy 
grant and where a solar or wind energy lease will be issued.
    Commenters suggested the term ``lease'' is unnecessary and to use 
``grants'' instead, as the difference between a lease and a grant under 
the proposed rule is the location of a right-of-way either inside or 
outside a DLA. As identified in the BLM's 2012 Western Solar Plan, 
leases will be issued in areas designated for leasing under the 
relevant land use plan. The BLM disagrees with these comments and 
retains the distinction between solar and wind energy grants and leases 
in this final rule based on location of their issuance. The BLM did not 
make any change to this definition in the final rule.
    This final rule adds the term ``Capacity fee'' to mean the fee 
based on the amount of electricity produced from solar or wind energy 
resources on the public lands. This is consistent with the BLM's change 
implementing a capacity fee that is based on electricity production. 
There were no substantive

[[Page 35643]]

comments on the term, and the BLM did not make changes to this 
definition in the final rule.
    The final rule revises the definition of the term ``Megawatt hour 
(MWh) rate'' to mean the five-calendar-year average of the annual 
weighted average wholesale prices per MWh for major trading hubs 
serving the 11 western states of the continental United States. This 
revision is consistent with the BLM's change to implement a capacity 
fee for solar and wind energy development projects.
    Some commenters were unclear whether the BLM had revised the 
definition of ``Megawatt hour (MWh) rate'' in the existing regulations, 
as Sec.  2801.5(b) currently does not define that term. Commenters 
presumed that the BLM proposes to revise the existing definition of 
``Megawatt rate.'' The BLM understands the confusion raised by these 
comments. The BLM revises the term ``Megawatt rate'' to ``Megawatt hour 
(MWh) rate'' in this final rule, consistent with the change to 
implement a capacity fee for solar and wind energy development 
projects. The BLM did not make any other changes to this definition in 
the final rule.
    This final rule revises the term ``Reasonable costs'' to be 
consistent with the rule change replacing the words ``the Act'' with 
the acronym ``FLPMA.'' There were no substantive comments on the term, 
and the BLM did not make changes to this definition in the final rule.
    ``Renewable Energy Coordination Office (RECO)'' is added in this 
final rule to mean one of the National, State, district, or field 
offices established by the Secretary under 43 U.S.C. 3002(a) that is 
responsible for implementing a program to improve Federal permitting 
coordination with respect to eligible projects on covered land and such 
other activities as the Secretary determines necessary. There were no 
substantive comments on the term, and the BLM did not make changes to 
this definition in the final rule.
    This final rule includes the new term ``solar or wind energy 
development'' to mean the use of public lands to generate electricity 
from solar or wind energy resources on public lands. This definition 
clarifies that the term ``energy development'' refers to uses of public 
lands that directly involve the generation of electricity on public 
lands. This definition clarifies which right-of-way grants and leases 
are subject to the conditions in Section 50265(b)(1) of the IRA, which 
apply to ``a right-of-way for wind or solar energy development on 
Federal land.''
    Commenters suggested revising the definition of ``solar or wind 
energy development'' to include language from the BLM's recent 
Instruction Memorandum 2023-036, Inflation Reduction Act Conditions for 
Issuing Rights-of-Way for Solar or Wind Energy Development (April 23, 
2023), according to which solar or wind energy development ``does not 
include site-testing, communication sites, transmission lines, gen-tie 
lines, pipelines, roads, installation of batteries and other energy 
storage systems, or other uses that might indirectly support energy 
production or transmission.'' The BLM does not agree that adding 
additional language to the definition is necessary for this final rule. 
This rule and the BLM's policies were written to complement each other 
in how the BLM administers applications and rights-of-way for such 
projects. The BLM did not make a change to this definition in the final 
rule.
    This final rule adds ``Solar and wind energy lease'' to mean any 
right-of-way issued under Title V of FLPMA within an area identified in 
a BLM land use plan as a DLA. Any right-of-way not issued within an 
area identified as a DLA would be a grant. The BLM received comments on 
this term, which are discussed with regard to the definition of 
``grant'' in this final rule. The BLM did not make changes to this 
definition in the final rule.

Section 2801.6 Scope

    Section 2801.6 describes the scope of 43 CFR part 2800's 
applicability. Paragraph (a)(1) of this final rule includes the 
additional language ``or leases'' describing that this part applies to 
both authorization types: grants and leases.
    A comment requested the following language be added to Sec.  2801.6 
Scope: ``Applications for transportation or utility right-of-way 
crossing conservation system units, national recreation areas, or 
national conservation areas in Alaska are subject to the provisions of 
Title XI of the Alaska National Interest Lands Conservation Act and 43 
CFR part 36.''
    This rule focuses on the BLM's generally applicable process for 
administering applications and rights-of-way for solar and wind energy 
development projects on the public lands. It does not modify or amend 
other applicable statutory or regulatory requirements, and the BLM 
would comply with all such requirements during the process set forth in 
this rule. The BLM made no changes to this section in the final rule 
based upon public comments.

Section 2801.9 When do I need a grant or lease?

    Section 2801.9 explains when a grant or lease is required for 
systems or facilities located on public lands. Paragraph (d) of this 
final rule extends the term for solar or wind energy development 
authorizations up to 50 years, and authorizations for other uses that 
support solar or wind energy development, to up to 50 years, and make 
other technical changes. Paragraph (d)(3) provides that solar or wind 
energy development facilities authorized with a grant or lease may be 
issued for up to 50 years (plus initial partial year of issuance). 
Paragraph (d)(4) provides that energy storage facilities that are 
authorized separate from an energy generation facility are authorized 
with a right-of-way grant for up to 50 years. Paragraph (d)(6) provides 
that electric transmission lines with a capacity of 100 kV or more are 
authorized with a right-of-way grant for up to 50 years. The BLM did 
not make a change to this section of the final rule.
    Commenters raised concerns with a 50-year authorization term for 
large development projects because, they suggested, the longer the 
public lands are occupied by a wind or solar project the longer it will 
likely take for those lands to fully recover after removing the 
project. Commenters also suggested that the longer-term authorization 
may unreasonably occupy the public lands with a solar or wind energy 
development when preferable or newer energy technology could be 
deployed there.
    The BLM disagrees with comments that assert the increase of the 
maximum term of an authorization from 30 years to 50 years is 
inappropriate because preferable technology may be desired at that 
location in the future. The BLM acknowledges that recovery of impacts 
might be greater for a 50-year right-of-way term. However, the BLM will 
analyze the environmental impacts of each proposed project, including 
the end of project life activities such as reclamation and restoration 
of public lands, under NEPA, and will consider the appropriate term for 
each proposed right-of-way, before deciding whether to approve for deny 
a proposed right-of-way for energy development. Additionally, BLM notes 
that most of the ground-disturbing impacts of solar or wind development 
come during the construction phase, so the environmental effects of a 
50-year authorization are therefore likely to be similar to the effects 
of a 30-year authorization with respect to recovery. Any such impacts, 
however, will be

[[Page 35644]]

considered on a case-by-case basis, in compliance with NEPA, when the 
BLM evaluates each proposed project. Through this process, the BLM will 
consider the reasonably foreseeable use of public lands, including the 
technology proposed by an applicant and the environmental consequences 
of that use, when deciding whether and for what duration to authorize 
solar or wind energy development on the public lands.
    Some commenters argued against increasing the maximum term length 
for a right-of-way and expressed concerns about the economic and 
environmental impacts and the lifespan of energy generation equipment. 
Commenters suggested that a longer term to an authorization may not be 
appropriate due to the shorter lifespans of solar panels and wind 
turbines (30 years for solar and 20-25 years for wind), and that a 
shorter initial term, like the current 30-year term, instead of 50 
years may be more suitable.
    The BLM understands the concerns raised by commenters regarding the 
proposal to increase the maximum term length for solar and wind energy 
development authorizations. In the BLM's experience, the lifespan of 
solar and wind energy projects has been increasing over time as the 
technologies advance. When the BLM last updated its rules for solar and 
wind energy in 2016, the lifespan of a solar or wind project was 
approximately 20 years. The 30-year term was appropriate for such a 
length, considering the amount of time necessary to construct a project 
and then the expected time to decommission and reclaim and restore the 
public lands during the authorization term. With increasing lifespans 
of solar and wind equipment, a longer-term right-of-way is appropriate. 
See recent Berkeley National Laboratory, Results from a Survey of U.S. 
Wind Industry Professionals,⁴ and the Department of 
Energy's, Photovoltaics End-of-Life Action Plan,⁵ for a 
discussion of wind and solar energy project lifespans.
---------------------------------------------------------------------------

    \4\ https://emp.lbl.gov/publications/benchmarking-anticipated-wind-project.
    \5\ https://www.energy.gov/sites/default/files/2022-03/Solar-Energy-Technologies-Office-PV-End-of-Life-Action-Plan_0.pdf.
---------------------------------------------------------------------------

    However, the BLM has made changes to other parts of the rule to 
address the commenters' concerns about dedicating public lands for up 
to 50 years to certain projects or uses that, over time, may become 
less efficient, see a significant decrease in production, or become 
entirely inactive. These changes also address concerns about public 
lands being used unlawfully for purposes other than those identified in 
the ROW grant (e.g., a former solar or wind generating site being used 
for equipment storage). In particular, the changes impose conditions 
aimed at ensuring diligent operations on the public lands, see Sec.  
2805.12(c)(8). These are in addition to the BLM's existing diligent 
development requirements under Sec.  2805.12(c)(7).
    Commenters suggested that the BLM evaluate changes to the 
environment or technology during the term of an authorization after it 
has been approved. The BLM did not adopt this suggestion. Once the BLM 
issues a final decision, the BLM would only re-address technological 
changes or environmental impacts during the term of an authorization if 
the BLM undertakes a new decision-making process, such as in response 
to a ROW holder's proposed change in technology. The BLM's original 
analysis for a proposed facility considers the environmental effects of 
the facility and technology proposed by the applicant for the term of 
the proposed authorization, informing the BLM's decision to deny, 
approve, or approve with modification the proposed project. Any 
subsequent changes in equipment used at the site that would result in 
changes to environmental impacts that may occur after the BLM issues 
its decision, would be analyzed at the time the BLM considers issuing a 
new decision, based on the relevant information available at that time. 
The BLM may complete a new decision-making process to adjust the terms 
and conditions of the authorization under existing Sec.  2805.15(e) 
under certain circumstances, such as a change to legislation or 
regulations, when necessary to protect public safety, an environmental 
change (e.g., new threatened or endangered species listing), or if 
proposed changes to technology may result in additional or different 
environmental impacts.
    One comment requested clarification on how Sec.  2801.9 may be 
modified based on outcomes of the ongoing update to the Western Solar 
Plan. The analysis of environmental impacts of energy development and 
decisions made in updating the Western Solar Plan do not affect this 
final rule, which that provides BLM procedures and requirements when 
administering applications and authorizations for solar and wind energy 
development projects.
    Some comments suggested that proposed energy storage facilities and 
proposed energy generation facilities should be reviewed in separate 
NEPA documents due to differences in fire risk and toxicity concerns. 
While it is beyond the scope of this rulemaking to speculate as to how 
the BLM will comply with NEPA when evaluating individual projects, the 
BLM agrees that energy storage facilities may have environmental 
impacts that are distinct from those posed by energy generation 
facilities. Nevertheless, the BLM can prepare a single NEPA document to 
evaluate impacts from energy generation facilities and energy storage 
facilities and may find it appropriate to do so in certain 
circumstances.

Subpart 2802--Lands Available for FLPMA Grants or Leases

    The BLM proposed to revise the title of subpart 2802 to include 
``or leases'' to clarify for readers that public lands are available 
for both grants and leases, consistent with other revisions in this 
rule regarding leases. No comments were received on this, and the BLM 
did not make changes to the final rule.

Section 2802.11 How does the BLM designate right-of-way corridors and 
DLAs?

    Section 2802.11 explains how the BLM designates right-of-way 
corridors and DLAs through its land use planning process. This section 
includes a non-exhaustive list of factors the BLM could consider when 
designating such areas under its land use planning process described in 
43 CFR part 1600. Other technical changes in Sec.  2802.11(b) improve 
readability and consistency between the BLM's regulatory authority 
under part 2800 and its statutory authority under FLPMA. The BLM did 
make changes to this section of the final rule.
    Paragraph (b)(1) is unchanged from the proposed rule and includes 
Tribal land use plans that BLM reviews for consistency when it is 
developing, amending, or revising a land use plan in accordance with 
Section 202(c)(9) of FLPMA (43 U.S.C. 1712(c)(9)).
    Paragraphs (b)(10) and (b)(11) add criteria that the BLM may 
consider when designating new leasing areas for solar and wind energy. 
Paragraph (b)(10) adds ``access to electric transmission,'' and 
paragraph (b)(11) provides for consideration of relatively large areas 
where energy development is feasible and there is a low potential for 
conflict due to environmental, cultural, and other relevant criteria, 
including assessing the demand for new or expanded areas; applying 
environmental, cultural, and other screening criteria; and analyzing 
proposed areas through the land use planning process described in part 
1600.
    The BLM received comments about whether the BLM's proposal to carry 
forward three of the four criteria from

[[Page 35645]]

the 2012 Western Solar Plan is consistent with other BLM planning 
actions. The BLM carried these three criteria forward from the 2012 
Western Solar Plan, which is consistent with other BLM plans 
identifying solar and wind energy development areas.
    Some commenters suggested that the BLM redesignate proposed 
paragraph (b)(11) as paragraph (b) and redesignate existing paragraphs 
(b)-(d) as newly designated paragraphs (c)-(e). The BLM did not change 
the rule due to this comment. Reorganizing the paragraphs as suggested 
would be confusing to a reader as considerations for solar energy would 
no longer be located together in one subparagraph. The BLM did revise 
paragraph (b)(11) to clarify that the factors BLM considers include 
``whether there are areas'' consistent with revisions under paragraph 
(b).
    One comment requested that wording be amended to ``clarify that BLM 
may require sharing a gen-tie right of way subject to reasonable 
terms.'' The term ``gen-tie'' refers to a generation interconnect 
transmission line that connects the original source electric generation 
(for the purposes of this rule, a wind or solar energy development) to 
the transmission system. These gen-tie lines are typically less than 5 
miles long and require a right-of-way grant if they cross public lands. 
The BLM retains authority under 43 CFR 2805.15(b) to allow or not allow 
such common use of the right-of-way.
    Commenters suggested that the BLM alter the language of proposed 
Sec.  2802.11(b), which identifies factors or criteria that the BLM may 
consider when designating an area of public land as a right-of-way 
corridor or a DLA. Some commenters recommended replacing the proposed 
term ``may'' with ``must.'' Other commenters suggested expressly 
incorporating all of the considerations listed in 43 U.S.C. 1712(c), 
which governs criteria for consideration by BLM when it prepares land 
use plans, to this section. Other commenters suggested that the BLM add 
transmission and electric infrastructure to the list of criteria or 
factors. Finally, some commenters agreed with the language in the 
proposed rule, which provides a non-exclusive list of factors or 
criteria that the BLM may consider when designating a corridor or a 
DLA.
    After considering comments on this section, the BLM did make some 
changes to this paragraph in the final rule. While Sec.  2802.11(b) 
provides examples of criteria that the BLM may consider, some of the 
listed criteria might not be relevant in all cases, and the BLM may 
consider additional factors or criteria as appropriate. Further, the 
BLM's land use planning regulations, 43 CFR 1600, provide additional 
direction for complying with the requirements of Section 202 of FLPMA, 
43 U.S.C. 1712. The BLM did not add transmission and electric 
infrastructure to the list of criteria or factors because the proposed 
rule already included ``access to electric transmission,'' which is 
retained as a criterion or factor in the final rule. However, the BLM 
revised paragraph (b) to replace ``factors the BLM may consider 
include, but are not limited to, the following'' to read as ``the BLM 
may consider various factors, including'' to clarify what the BLM 
considers when designating such areas.
    Commenters suggested that adding three criteria to a list of other 
criteria for the BLM to consider may create confusion. Some commenters 
supported the BLM adding paragraphs (b)(10) and (b)(11) to provide more 
detail of what and how the BLM considers when designating new leasing 
areas. Other commenters requested the BLM evaluate criteria for 
designating exclusion areas in addition to the criteria for designating 
DLAs and right-of-way corridors. The BLM believes that adding the three 
additional criteria for consideration when designated corridors and 
leasing areas is appropriate and provides for transparency when the BLM 
begins its land use planning processes to designate leasing areas. The 
BLM does not agree that exclusion criteria are appropriate when 
identifying DLAs. However, paragraph (d) of the existing regulations 
provides broad discretion for the BLM to identify areas where the BLM 
will not allow rights-of-way, which may include criteria to identify 
exclusion areas during the land use planning process. During the land 
use planning process, the BLM engages Federal, Tribal, State, and local 
government partners and the public to inform and clarify the factors 
analyzed when considering whether to designate exclusion areas. 
Including these criteria in the final rule will minimize the confusion 
that may arise in the future.
    Some comments requested that the final rule include additional 
criteria for designating exclusion and avoidance or variance areas. 
Commenters suggested that including these criteria would encourage the 
appropriate designation of such areas and thus focus on processing 
right-of-way applications only in areas where development is best 
suited. The BLM disagrees with commenters that additional criteria for 
designating exclusion and avoidance or variance areas should be 
included in the final rule. Such criteria do not need to be included in 
the final rule and are better suited for policy (e.g., instruction 
memoranda), which can be implemented consistent with this rule and 
other applicable regulatory authority and environmental analysis, while 
also providing appropriate flexibility in the process. Further, 
exclusion criteria are based on the environmental impacts of a program 
on the public lands, which are identified through a NEPA analysis, such 
as the ongoing Western Solar PEIS that is updating the 2012 Western 
Solar Plan. Lastly, this final rule updates its prioritization 
principles under 2804.35, which were not in place in 2012 with the 
Western Solar Plan. The BLM believes that with the robust public 
engagement, prioritization principles, and other preliminary 
application review meetings, holding a variance process is not 
necessary in administering applications for solar and wind energy 
development.

Section 2803.10 Who may hold a grant or lease?

    Section 2803.10 provides the criteria for who may hold a grant or 
lease. In this final rule, the BLM clarifies that a holder who is of 
legal age and authorized to do business in one State must also meet 
this requirement in each other State in which the right-of-way grant 
they seek is located. No comments were received on this section, and 
the BLM did not make changes to this section of the final rule.

Section 2803.12 What happens to my grant if I die?

    In the notice of proposed rulemaking for this rule, the BLM 
proposed to add new paragraph (a) and redesignate existing paragraphs 
(a) and (b) as paragraphs (b) and (c). This final rule does not carry 
forward those proposed revisions because another final rule included 
revisions that addressed those concerns. The BLM's final rule ``Update 
of the Communications Uses Program, Cost Recovery Fee Schedules, and 
Section 512 of FLPMA for Rights-of-Way,'' (89 FR 25922) [April 12, 
2024] updated Sec.  2803.12 to remove reference to applications in the 
section title and paragraph (a).
    This final rule retitles this section and revises paragraphs (a) 
and (b) to include ``or lease'' clarifying that this section applies to 
both grants and leases.
    Paragraph (b) of this final rule replaces the word ``distributee'' 
with ``receiver'' to improve clarity to readers that when the BLM 
distributes a grant or lease, the instrument would be received by the 
holder. This final rule also includes the provision that unqualified 
receivers of a right-of-way

[[Page 35646]]

must comply with all terms, conditions, and stipulations.
    One comment suggested that the BLM clarify paragraph (b) to state 
that distribution will take place under state law in the state where 
the grant or lease is located. Including this suggested change could be 
inaccurate and potentially unenforceable. The BLM's rules should not 
dictate distribution of a lease as an inheritable interest in all 
instances.

Section 2804.12 What must I do when submitting my application?

    Section 2804.12 explains what an applicant must do when submitting 
a right-of-way application. The BLM proposed changes to paragraphs (c) 
and proposed to add paragraphs (f) and (j). The BLM did make a change 
to this section of the final rule.
    Paragraph (c) provides for additional requirements for solar and 
wind energy development or short-term rights-of-way. Paragraph (c)(1) 
requires payment of an application filing fee for solar and wind energy 
development and short-term applications as an initial payment toward 
cost recovery payments. The BLM will refund the balance of the 
application filing fee if it exceeds the processing costs. Paragraph 
(c)(1) is revised for readability and now reads ``payment toward cost 
recovery'' instead of ``payment towards cost recovery.'' Paragraph 
(c)(2) requires payment of additional reasonable costs in addition to 
application filing fees. See existing Sec.  2804.14 of this part for 
further information on reasonable costs in processing an application. 
Payment of category 6 cost recovery fees--which are based on full costs 
and are collected if the BLM has determined that processing efforts 
will take more than 64 hours to complete--may be reduced by the 
application filing fee that is paid when submitting an application.
    Some comments requested lower fees for application submittal. 
Another comment suggested that the BLM keep the application fee until 
all ``reasonable costs'' are paid before any refund is given. Under the 
existing regulations, application filing fees are a payment of 
reasonable costs for the United States to process an application and 
are intended to discourage applicants from unnecessarily applying for 
more land than is reasonable for a solar or wind energy development. As 
updated by this final rule, these application filing fees continue to 
be a payment of reasonable costs and may now clearly be applied to the 
processing fees, such as through a cost recovery agreement. Any 
overpayment of these costs may be reimbursed to the applicant or 
carried to cover the inspection and monitoring of the right-of-way, if 
authorized. Entering into a cost recovery agreement requires action by 
the BLM and applicant to complete, including the prioritization of an 
application under Sec.  2804.35 by the BLM and payment of reasonable 
costs identified by the BLM in a cost recovery agreement.
    Multiple comments suggested the BLM issue a cost recovery agreement 
within a certain timeframe, such as 30 days of receiving the required 
information. The BLM agrees that it is important for the BLM to be 
responsive to applicants who have provided the required information 
under this section. The proposed rule added paragraph (j) providing 
that an application is complete when an applicant submits the required 
information under this section. Upon receiving a complete application, 
the BLM would determine what cost recovery amounts would be necessary, 
and whether that should be under a cost recovery agreement. See Sec.  
2804.14 for further information. The BLM would notify an applicant 
within 30 days pursuant to Sec.  2804.25(d) whether processing their 
application will take longer than 60 calendar days and what the 
expected processing timeframe is for the application. Section 2804.19 
of the BLM's right-of-way regulations provides that the BLM and 
applicant work together to establish and issue the cost recovery 
agreement; the length of that process can vary widely based on a number 
of variables including project complexity, analysis of the needs from a 
cost recovery agreement, and needed inputs from the developer. As noted 
under the previous comment response, entering into a cost recovery 
agreement requires action by the BLM and applicant to complete, 
including prioritization under Sec.  2804.35 by the BLM and payment of 
reasonable costs identified by the BLM in a cost recovery agreement.
    Section 2804.12(f) of this final rule clarifies that the BLM may 
require additional information at any time while processing an 
application. Additional information may be necessary, such as 
environmental resource data. The BLM will issue a deficiency notice 
pursuant to existing Sec.  2804.25(c) to inform applicants of 
additional information requirements.
    Comments requested that the BLM provide clear application 
requirements and limit the BLM's ability to request additional 
information beyond those requirements. The BLM believes that the 
existing rules clearly state what is required for applications under 
2804.10, What Should I do before I file my application?; in Sec.  
2804.11, Where do I file my grant application?; and as updated by this 
final rule, Sec.  2804.12, What must I do when submitting my 
application? Paragraph (f) of this final rule provides that BLM may 
request additional information while processing an application. 
Additional information may be requested under 2804.25(c) after an 
application is determined to be complete pursuant to added paragraph 
(j) of this final rule.
    Paragraph (j) describes that a complete application meets or 
addresses the requirements of Sec.  2804.12, as appropriate for the 
application submitted. Some comments asked the BLM to clarify the 
definition of ``complete application'' in paragraph (j). The BLM 
believes that new paragraph (j) clearly describes what a complete 
application is. Upon satisfying the requirements of this section, the 
BLM will provide the applicant notice in writing that the application 
is complete.
    Some commenters suggested that the BLM provide a determination of 
application completeness within specified timeframes to promote a 
timelier application process. The BLM agrees that it is important to 
remain diligent in processing an application. However, the BLM did not 
propose to implement any timeframes for determining an application is 
complete as this section of the rules applies to applications for all 
rights-of-way, not just solar or wind energy applications. Reasonable 
expectations for timely and diligent application requirements will vary 
depending on the complexity of processing a certain type of system or 
use on the public lands.

Section 2804.14 What is the processing fee for a grant application?

    The BLM recently published its final rule ``Update of the 
Communications Uses Program, Cost Recovery Fee Schedules, and Section 
512 of FLPMA for Rights-of-Way'' (89 FR 25922) [April 12, 2024]. In 
that final rule, the BLM updated its address within this section. The 
proposed updates that the BLM included in this rulemaking are no longer 
necessary. No comments were received, and the BLM did not make a change 
to this section in this final rule.

Section 2804.22 How will the availability of funds affect the timing of 
the BLM's processing?

    Section 2804.22 of this final rule clarifies how the availability 
of funds may affect the BLM's schedule for processing an application. 
Paragraph (a) clarifies that when the BLM is processing an application, 
it will not continue to process the application until funds become 
available or the applicant

[[Page 35647]]

elects to pay full actual costs under Sec.  2804.14(f). Paragraph (b) 
provides that the BLM may deny an application after 90 days if it has 
requested reasonable costs for processing an application and the 
proponent has failed to provide funds for reimbursement. The BLM did 
not change this section of the final rule.
    One commenter supported denying applications for which fees had not 
been paid. Such a procedure, the commenter suggested, would 
disincentivize applicants from submitting applications that they do not 
intend to diligently process. While the BLM will not deny an 
application without cause, as described in more detail under Sec.  
2804.26, the BLM agrees that failure to diligently pursue an 
application, including unfunded application cost recovery agreements, 
and incomplete applications, among other reasons are good cause for 
denying an application. Denying applications for these reasons would 
deter applicants from submitting applications for projects that they do 
not intend to diligently pursue. Paragraph (c) of this final rule 
provides that funds paid towards the cost recovery agreement for a 
project may not be refundable. Such funds would be those identified in 
the cost recovery agreement for hiring additional staff or contractors 
and agreed to by the applicant or right-of-way holder.
    Some comments supported the idea of cost recovery agreements that 
would allow the BLM to hire additional staff or contractors to aid in 
application processing and reduce processing times. This requirement 
helps ensure that there is available funding to the United States for 
reasonable costs of the government, including those BLM hiring and 
contracting decisions made to support processing applications.

Section 2804.23 What costs am I responsible for when the BLM decides to 
use a competitive process for my application?

    Section 2804.23 of the final rule describes what costs an applicant 
is responsible for when the BLM decides to use a competitive process. 
Paragraph (b) requires, for cost recovery processing categories one 
through four, payment of cost recovery processing fees as if the other 
applications had not been filed. Paragraph (c) clarifies who is 
responsible for processing costs within processing category six.
    The BLM did not make a change to this section of the final rule.
    One comment suggested the language be changed to read, ``What costs 
am I responsible for if the BLM decides to use a competitive process 
for my application?'' The BLM considered this change in title to the 
section and believes that the proposed naming of this section is clear 
with respect to what costs the applicant will be responsible for when 
the BLM determines it will use a competitive process.

Section 2804.25 How will the BLM process my application?

    In the final rule, the BLM revised Sec.  2804.25(c) to add that, if 
an applicant fails to comply with a deficiency notice under this 
section, the BLM may deny the application. To ensure that developers 
proceed diligently after entering into a cost recovery agreement, Sec.  
2804.25(c)(1) requires applicants to ``commence any required resource 
surveys or inventories within one year of the request date, unless 
otherwise specified by the BLM.'' If the applicant fails to comply with 
a deficiency notice under that provision, the BLM may deny the 
application. See Sec.  2804.26(a)(9). To clarify that the BLM retains 
the discretion to deny an application where the applicant does not 
proceed diligently, the final rule adds to Sec.  2804.25(c): ``Failure 
to meet requirements under this section may result in the BLM denying 
your application pursuant to Sec.  2804.26.''
    This added provision clarifies that the BLM retains the discretion 
to deny an application where the applicant does not proceed diligently. 
This change is consistent with changes made to Sec.  2809.10(e) 
regarding when the BLM will no longer hold a competitive process. 
Together these amendments give the industry the certainty it needs to 
proceed with projects while retaining the BLM's discretion to deny an 
application or offer lands competitively if the applicant does not 
proceed diligently. In that way, these amendments balance the BLM's 
obligations to incentivize renewable energy development on public lands 
and to recover a fair return for U.S. taxpayers.
    In this section, the BLM proposed removing a mandatory public 
meeting that is unique to solar and wind energy rights-of-way 
applications and is in addition to other public participation that 
would occur as part of the BLM's environmental review process. 
Paragraph (e)(2) describes public meeting requirements for solar or 
wind energy right-of-way applications. In the final rule, paragraph 
(e)(2) provides that the BLM may hold a local public meeting if there 
is no other public meeting or opportunity for early engagement. In 
other words, the final rule would require the BLM to hold a public 
meeting, offering the public opportunity to engage early, though the 
BLM could satisfy this requirement by holding a public scoping meeting 
or other public meeting that facilitates early engagement by the 
public.
    Commenters suggested that the BLM provide a website of applications 
and authorizations for interested parties so that they could receive 
up-to-date information on the applications and authorized projects. The 
BLM agrees with comments about maintaining a site that is accessible to 
the public on existing and proposed (i.e., applications for) projects 
on public lands. The BLM currently maintains an active web page at 
https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects where the public may access the most recent 
information on applications for solar, wind, and geothermal development 
projects, gen-tie-lines, upcoming lease sales, and other relevant 
application and development information about these sites.
    Some comments supported the removal of the requirement that BLM 
hold pre-processing public meetings, noting that solar and wind energy 
technologies are better known now than they have been previously and 
that these meetings are unnecessary. The BLM also received comments 
that did not support removing that requirement. These comments 
expressed concerns that by removing this public meeting the BLM would 
be excluding the public and should instead increase outreach to the 
public in the area affected by these proposed development projects. To 
address these concerns, the BLM has changed the regulatory text in 
paragraph (e)(2)(i) to ensure that a public meeting is held if there is 
no other opportunity for the public's early engagement. The BLM also 
would retain discretion to hold additional public meetings under Sec.  
2804.25(e).
    Paragraph (e)(4) is updated to replace ``the National Environmental 
Policy Act (NEPA)'' with ``NEPA,'' consistent with the changes in 
paragraph (e)(2) of this section. The BLM updates the reference in this 
final rule, consistent with changes that CEQ has made to its 
regulations, such that 40 CFR parts 1501 through 1508 are now referred 
to as 40 CFR Chapter V, Subchapter A.
    Paragraph (e)(5) provides that the BLM will determine whether the 
proposed use complies with applicable Federal laws.
    Paragraph (f) addresses the segregation of lands within a right-of-
way application. Paragraph (f)(3) now provides that a segregation may 
be extended when an application is complete and cost recovery has been 
received.

[[Page 35648]]

    Some comments suggested that the 2-year segregation limit is 
appropriate, that the BLM should begin NEPA within 2 years of 
segregating the lands, and that such limitations should be consistent 
with the NEPA timeline requirements within the Fiscal Responsibility 
Act. The BLM agrees that the agency should be diligent in processing 
applications, including initiating NEPA. Because separate legal 
authority and policy guidance applies to NEPA compliance procedures, 
including applicable timelines to complete the NEPA process, the BLM 
did not make a change to this paragraph of the final rule in response 
to these comments.
    Some comments suggested additional language should be added to 
establish timelines and deadlines supporting quick action in processing 
applications. Section 2804.25(c) in the existing regulations provides 
specific due diligence requirements for applications. Unless another 
timeline is specified by the BLM, applicants have one year to complete 
certain actions, and the BLM may deny an application for failure to 
comply with the one-year requirement or other specified timeframe for 
submitting necessary information to the BLM. The BLM believes this 
timeline is generally adequate to promote the timely processing of 
applications and permitting of solar and wind development projects and 
to ensure that developers cannot hold public lands by submitting, but 
not diligently pursuing, an application, thus precluding other uses of 
such lands. The BLM did not change the final rule in response to these 
comments.
    The BLM received requests to revise the rule to require automatic 
segregation once an applicant has filed a complete application and has 
paid the required application fees and grant extensions past the four-
year mark. Changing the method to segregate lands and the timeframes of 
those segregations is outside the scope of this rule. The BLM did not 
propose to change the method and timing of segregation, but only to 
make this paragraph consistent with new provisions in the final rule 
for complete applications and cost recovery.

Section 2804.26 Under what circumstances may the BLM deny my 
application?

    Section 2804.26 of this final rule explains the circumstances under 
which the BLM may deny an application.
    Paragraph (a)(4), consistent with this final rule replacing the 
term ``the Act'' with ``FLPMA'' discussed under Sec.  2801.5, provides 
that the BLM may deny your application if issuing the grant would be 
inconsistent with applicable law or regulation.
    The BLM did not carry forward paragraph (a)(9) of the proposed rule 
because the BLM's final rule, ``Update of the Communications Uses 
Program, Cost Recovery Fee Schedules, and Section 512 of FLPMA for 
Rights-of-Way,'' 89 FR 25922 (April 12, 2024) revised the BLM 
regulations at Sec.  2804.26(a) to add the same provision allowing the 
BLM to deny applications that fail to comply with a deficiency notice . 
Thus, the revision in the proposed rule that would have added this 
provision is no longer necessary.
    Paragraph (10) incorporate requirements of this final rule that are 
discussed elsewhere. Paragraph (a)(10) provides that an application may 
be denied for failing to pay costs, as noted in Sec.  2804.22(b).
    As proposed, paragraph (c) is removed in this final rule. Any 
request for an alternative requirement received after an application 
has been denied is not a timely request. Requests for an alternative 
requirement must be timely. See Sec.  2804.40(c) for further 
information on timely requests.
    The BLM received a comment recommending that the BLM add another 
provision following section (a)(4), suggesting that this new provision 
address protection of special conservation areas managed by the BLM or 
other federal or state agencies. The BLM believes that including the 
suggested change to this section is unnecessary. The BLM's process to 
deny an application under this section is addressed in the existing 
regulations at Sec.  2804.26. The BLM's management of special 
conservation and other sensitive areas is generally determined through 
the BLM's resource management planning and NEPA processes. The BLM 
retains broad authority to deny an application on the basis that it 
would not be in the public interest, which may also address this 
concern to deny certain applications.

Section 2804.30 [Removed and Reserved]

    Section 2804.30 is removed and reserved in this final rule. No 
comments were received on this section and the BLM did not make any 
changes to this section in the final rule. Prior Sec.  2804.30 
addressed competitive leasing inside of designated areas. The content 
of the prior Sec.  2804.30 is now duplicative of this final rule in 
Sec. Sec.  2809.13, 2809.14, and 2809.17.

Section 2804.31 [Removed and Reserved]

    Section 2804.31 is removed and reserved in this final rule. Prior 
Sec.  2804.31 addressed competitive process for site testing. This 
portion of the rule was not used since first put in place in 2016 and 
is removed. The BLM may still hold competitive processes for site 
testing if there is a competitive interest or other reasons as 
identified in Sec.  2809.10 of this final rule.
    Some comments supported the removal of competitive processes for 
site testing grants, and other commenters suggested that the section 
may be useful in local field office decision making in the future. The 
BLM agrees that retaining requirements for competitive processes 
related to solar and wind energy is important. Subpart 2809 of this 
final rule provides the requirements for solar and wind energy 
competitive processes, which includes the requirements of this section.

Section 2804.35 Application Prioritization for Solar and Wind Energy 
Development Rights-of-Way

    Section 2804.35 is retitled to ``Application prioritization for 
solar and wind energy development rights-of-way.'' This section 
provides for the relative importance of different criteria that vary 
from location to location, giving weight to local resource issues and 
circumstances that are not equally relevant for every application. 
Additionally, there are practical concerns for the BLM when processing 
solar and wind energy applications. This section provides that the 
relevant criteria are to be applied holistically to prioritize 
applications in a manner that would facilitate environmentally 
responsible projects and ensure that agency workloads are allocated 
appropriately. The revised section would also explicitly recognize that 
the BLM may identify additional criteria in guidance, which may be 
national in scope or specific to an area.
    Paragraph (a) clarifies that the purpose of prioritizing 
applications is to allocate agency resources to processing applications 
that have the greatest potential for approval and implementation. The 
BLM revised this section from the proposed rule to clarify that the 
BLM's prioritization of an application is not a decision and is not 
subject to appeal under 43 CFR part 4.
    One commenter asked whether the BLM's prioritization process might 
hinder development of renewable energy and potentially conflict with 
national priorities for renewable energy deployment. The BLM is 
endeavoring to

[[Page 35649]]

increase the responsible deployment of renewable energy on the public 
lands consistent with congressional and presidential direction. In 
addition, the BLM must continue to manage public lands under the 
principles of multiple use and sustained yield unless otherwise 
provided by law (43 U.S.C. 1732(a)). The prioritization criteria 
support national renewable energy goals by helping the BLM to consider 
applications for the projects that are most likely to succeed and 
ensure the BLM's continued stewardship of the public lands.
    Paragraph (b) identifies criteria that the BLM may consider when 
prioritizing applications. This section provides discretion to the BLM 
as to how best to apply the criteria to prioritize processing solar or 
wind energy generation applications.
    Some comments suggested prioritizing applications for projects 
inside DLAs. Other comments suggested other criteria that should be 
considered when prioritizing applications, such as the presence of 
existing leasing agreements and rights-of-way, whether the application 
complies with all state and federal regulations, the size or location 
of the project, project features, proximity to transmission, and 
protection of natural resources.
    The BLM believes that these considerations are important, but no 
changes to the regulatory text are warranted since these considerations 
were already included in the proposed rule. The six listed criteria in 
the rule provide flexibility in how the BLM may apply the criteria for 
applications in the BLM's varied landscapes on which a resource may 
have different sensitivities in one location as compared to another 
location. Prioritizing projects based on siting in designated or 
preferred areas is addressed in paragraph (b)(1). The BLM addressed 
comments concerning existing leasing agreements or rights-of-way in the 
BLM's application processing steps in subpart 2804 of these rules. 
Paragraph (b)(4) addresses commenter suggestions regarding prioritizing 
applications based on compliance with federal regulation. Paragraphs 
(b)(2) and (b)(5) address the size or location, project features, 
proximity to electric transmission, and the protection of natural 
resources.
    Several comments requested clarity on the application of the 
prioritization criteria, including a description of the relative 
importance of each criterion. Other commenters also suggested that they 
believe the BLM should be prohibited from prioritizing applications 
based on additional criteria that are not expressly listed in this 
section of the rule. In the BLM's experience, the relative importance 
of different criteria may vary from location to location due to 
resource considerations. Likewise, not all prioritization criteria are 
equally relevant for every application. The BLM has intentionally not 
set specific preferences or weights for the criteria it will apply when 
prioritizing applications. This final rule confirms that the BLM will 
consider the prioritization criteria holistically when considering 
applications, and that the BLM may establish additional criteria 
through local or national policy guidance.
    In the final rule, the BLM changed paragraph (b) to refer to 
``criteria'' instead of ``factors'' as proposed. This change is 
consistent with the BLM's use of the term ``criteria'' in paragraph 
(b)(6).
    The first criterion is whether the proposed project is located 
within an area preferred for such development, such as a DLA. The BLM 
may reasonably presume that development projects proposed within these 
areas are more likely to proceed to approval as they pose less severe 
resource conflicts than other lands.
    Some comments suggested that wind energy is disadvantaged since 
there are no wind energy designated leasing areas or equivalents. The 
BLM disagrees with these comments. First, the 2016 Desert Renewable 
Energy Conservation Plan (https://blmsolar.anl.gov/documents/drecp/) 
designated more than 192,000 acres of preferred development locations 
for solar, wind, and geothermal energy. Additionally, the criteria are 
not given specific preferences or weights when compared with one 
another, and, as such, the BLM would take into account the lack of wind 
DLAs when prioritizing wind energy development applications.
    The second criterion is whether the proposed development avoids 
adverse impacts to or conflicts with known resources or uses on or 
adjacent to public lands and includes specific measures designed to 
further mitigate impacts or conflicts. When submitting an application 
to the BLM, the applicant must address known potential adverse resource 
conflicts, including those for sensitive resources and values that are 
the basis for special designations and protections, as well as 
potential conflicts with existing uses on or adjacent to the proposed 
energy generation facility. Under section 2804.12(b)(2), the applicant 
must also include specific measures to mitigate impacts or conflicts 
with resources and uses. Including this information is necessary for 
the BLM to determine that an application is complete. While subsequent 
consultation, public comment, and environmental review processes may 
reveal unknown resource or use conflicts, based on previous experience 
permitting wind and solar projects on public land, the BLM understands 
that projects with fewer known conflicts are more likely to proceed to 
approval and successful implementation.
    The third criterion is whether the proposed project is in 
conformance with the governing BLM land use plans. Applications 
identify whether the proposed project is in conformance with the 
governing land use plan or would require an amendment or revision to 
the plan. The BLM may, in its discretion, consider applications for 
solar or wind energy generation facilities that would require an 
amendment or a revision to the governing land use plan under part 1600 
of these regulations. However, such application could require greater 
resources to process and could present resource conflicts, which would 
result in a lower priority.
    The fourth criterion is whether the proposed project is consistent 
with relevant State, local, and Tribal government laws, plans, or 
priorities. The purpose of this determination is not to enforce these 
State, local, or Tribal laws, plans, or priorities, but rather to 
promote comity and identify projects that are more likely to be 
successfully approved. In addition, applying this principle helps to 
ensure that the BLM takes into account the existing resource knowledge 
and expertise that may be available through State, local, and Tribal 
plans and priorities. To carry out this prioritization, the BLM may 
enter into or rely on existing agreements with State, local, or Tribal 
governments.
    Some comments suggested that prioritization of an application 
should be subject to Tribal consultation. The BLM engages Federally 
recognized Tribes early in the application process under Sec.  
2804.12(b)(4), which allows Tribes to participate in preliminary 
application review meetings with the BLM and provide early information 
to the BLM about an application. Additionally, under paragraph (b)(4), 
the BLM will consider ``whether the proposed project is consistent with 
relevant State, Tribal, and local government laws, plans, or 
priorities,'' which may also include consultation with Tribes. Finally, 
the BLM acknowledges that E.O. 13175 sets forth criteria for when the 
BLM is required to consult with Tribes, and the BLM is committed to 
consulting with Tribes whenever such consultation is required

[[Page 35650]]

under the E.O., without regard to whether that requirement is 
specifically articulated in this rule.
    The fifth criterion is whether the proposed project incorporates 
the best management practices set forth in the applicable BLM land use 
plans and other BLM plans and policies. This principle ensures that the 
BLM takes into account the knowledge and expertise that has gone into 
formulating these existing plans and policies. Should an application 
require amending a BLM land use or other plan, it is likely to require 
more time and effort to process.
    The sixth criterion considers any other circumstances or 
prioritization criteria identified by the BLM in subsequent policy 
guidance or land use planning for an area.
    Paragraph (c) provides that the BLM will prioritize applications, 
once complete (as described in Sec.  2804.12(j) of this part). The 
BLM's prioritization may use any available information provided in the 
application or its Plan of Development, applicant responses to 
deficiency notices, and information provided to the BLM in public 
meetings or by other Federal agencies and State, local, or Tribal 
governments.
    Paragraph (d) clarifies the BLM discretion to re-categorize an 
application's priority at any time. Re-categorizing an application may 
be based on new information that the BLM has received or on changes the 
applicant has made to the application. Re-categorizing an application 
may also be based on the BLM's need to adjust its workload, if 
circumstances warrant such re-prioritization.
    Some comments expressed concern that denying or de-prioritizing an 
application prior to any final land use designation, such as those 
which may be made in the ongoing update to the 2012 Western Solar Plan, 
is inappropriate or pre-decisional. Comments further expressed that 
pending applications should not be denied before land use designations 
are made. The BLM is not constrained by ongoing or potential future 
land use planning processes, but it must manage public lands in 
conformance with the land use plans currently in effect. Accordingly, 
the BLM generally will not deny or deprioritize an application based on 
non-conformance with a future or ongoing land use planning effort. The 
criteria in the rule refer to consideration of governing land use 
plans. The BLM would deny or de-prioritize an application pursuant to 
its broad discretion in considering right-of-way applications based on 
existing information and existing land use plans. At the same time, the 
BLM retains authority to deny an application based on appropriate 
information even if the project would conform to the applicable land 
use plan, including, for example, where an application conflicts with 
current management policies that have not yet been incorporated into a 
land use plan.
    Some comments suggested that the BLM should adopt a first-come, 
first-served system when processing applications or self-prioritization 
by an applicant for multiple applications within a single BLM field 
office. While in practice the BLM often processes applications on a 
first-come, first-served basis, it retains discretion to prioritize 
applications according to other considerations including input from an 
applicant about their applications. In practice, the BLM has observed 
that the prioritization of projects, particularly in Field and District 
Offices with high workloads, provides a number of benefits for the BLM 
and applicants. In coordinating with applicants, the BLM discusses 
workload capacities and will receive input from developers on the 
priority of their applications and whether there is a specific 
preferred order. Due to the many factors the BLM considers in this 
decision, however, the BLM's determination on a project's priority for 
processing may be different than that requested by a particular 
developer. Targeting workloads for BLM staff and management facilitates 
accelerated decision-making for those solar and wind energy development 
proposals with the greatest technical and financial feasibility and the 
least anticipated natural and cultural resource conflicts and increases 
consistency in processing project applications for the BLM and 
applicant. As detailed in the discussion of subpart 2809 in this rule, 
the BLM may also determine that there is a competitive interest for a 
right-of-way or system and hold a competitive process.

Section 2804.40 Alternative Requirements

    Section 2804.40 of this final rule provides for situations when an 
applicant requests alternative requirements from the BLM if the 
requestor is unable to meet the requirements of this subpart. The final 
rule clarifies that this section applies specifically to the BLM's 
consideration of alternatives to the application requirements set forth 
in subpart 2804. Other requirements related to rights-of-way, such as 
the requirement to pay rent as set forth in subpart 2806, cannot be 
adjusted under this section. The BLM did not make a change to this 
section of the final rule.
    Some commenters suggested that state and local governments should 
be brought into the decision-making process if an applicant is unable 
to meet the application requirements and they request an alternative to 
one or more application requirements. It is the BLM's responsibility to 
determine whether an alternative requirement for the application 
process should be allowed. Through agreements, including with 
cooperating agencies, the BLM engages with Tribal, Federal, State, and 
local government offices when it considers solar and wind energy 
development projects. The BLM would inform such partners of any changes 
to its requirements. Additionally, the BLM will consider under this 
section only requests for alternatives to modify the alternative 
requirements found in part 2804--Applying for FLPMA Grants. Requests to 
modify other requirements, including those identified in a decision 
authorizing a right-of-way, such as terms and conditions, cannot be 
approved under this section. This would include requests for 
alternative access.

Section 2805.10 How will I know whether the BLM has approved or denied 
my application or if my bid for a solar or wind energy development 
grant or lease is successful or unsuccessful?

    Section 2805.10 of this final rule clarifies that agency decisions 
about whether to approve rights-of-way are generally administratively 
appealable while the issuance of a right-of-way grant or lease itself 
is not an opportunity for appeal.
    Paragraph (c) of this final rule clarifies that ``The BLM will 
issue the right-of-way by signing the grant or lease and transmitting 
it to you.'' The BLM's act of returning the signed instrument to the 
holder constitutes the ``issuance'' of the right-of-way. Identifying 
the point in time at which the right-of-way is ``issued'' is important 
for calculating when the term of a right-of-way begins to run (see 
Sec.  2805.11) and when the holder's obligation to pay rent begins (see 
Sec.  2806.12). Identifying the point at which the right-of-way is 
``issued'' is also important for clarifying which actions are subject 
to the conditions in Section 50265(b)(1) of the IRA, which imposes 
conditions on when the Secretary may ``issue a right-of-way for wind or 
solar energy development on Federal land.'' The BLM did not make a 
change to this section of the final rule.

[[Page 35651]]

Section 2805.11 What does a grant or lease contain?

    Section 2805.11 of this final rule revises the right-of-way 
authorization term length for certain facilities, and the final rule 
includes minor updates to the proposed rule to improve technical 
clarity. No change was made in this section of the final rule due to 
public comment.
    The BLM's final rule ``Update of the Communications Uses Program, 
Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-
Way,'' 89 FR 25922 (April 12, 2024), updated Sec.  2805.11 to 
redesignate paragraph (b) to paragraph (c). Proposed revisions from 
this rule under Sec.  2805.11(b) are now finalized under 2805.11(c) 
consistent with the redesignation of this paragraph.
    Redesignated Sec.  2805.11(c) addresses the duration of rights-of-
way. Section 2805.11(c)(2) provides specific terms for solar and wind 
energy grants and leases. Paragraphs (c)(2)(iv), (c)(2)(v), and (c)(4) 
now show the maximum terms for solar and wind energy generation 
facilities, energy storage facilities that are separate from energy 
generation facilities, and electric transmission lines with a capacity 
of 100 kV or more. The term for a grant or lease for these types of 
authorizations may be up to 50 years. Revisions under this section are 
consistent with those made under Sec.  2801.9(d).
    Paragraph (c)(2)(iv) is updated for the maximum term for both 
grants and leases, for up to 50 years (plus initial partial year of 
issuance).
    Paragraph (c)(2)(v) is updated for the maximum term for rights-of-
way for energy storage facilities that are separate from energy 
generation facilities. Although the BLM generally treats energy storage 
facilities as linear rights-of-way, rather than solar or wind energy 
development rights-of-way, for purposes such as rent calculation, the 
BLM believes that the longer term of ``up to 50 years,'' commensurate 
with the maximum term for solar or wind energy development rights-of-
way, will facilitate the transition to cleaner sources of energy in the 
United States.
    Paragraph (c)(4) would be added to update the term for electric 
transmission lines with a capacity of 100 kV or more, for up to 50 
years, commensurate with the term for solar and wind energy development 
projects and energy storage facilities that are separate from energy 
generation facilities.
    Some comments sought clarification on whether a presumptive 
leaseholder's (which is defined at Sec.  2809.15(b)(1)) control of the 
property would preclude other uses, such as grazing or recreation, or 
during any period when use is not immediately initiated. Prior to the 
competitive process, a prospective bidder would be informed as to 
whether they were bidding on a location with existing authorized uses, 
such as recreation or grazing or other known casual uses. The BLM's 
identification of a presumptive leaseholder or issuance of a lease 
would not automatically exclude authorized uses. Rather, the BLM must 
follow its existing processes prior to ending existing uses; for 
example, in the context of livestock grazing, notice and cancellation 
is provided, subject to any required public comment periods.
    The BLM understands from comments it has received that there is 
some confusion whether solar and wind energy developments may also be 
projects. In the final rule, the BLM revised paragraph (b)(2) to add 
``projects'' to clarify that solar and wind energy developments may be 
projects.

Section 2805.12 What terms and conditions must I comply with?

    Section 2805.12 of this final rule lists certain terms and 
conditions that apply to all right-of-way grants and leases. The BLM 
revised this section to address public comments regarding the term 
length authorized for certain facilities. The BLM also included 
revisions to prevent a holder's non-use of the public lands for the 
authorized energy generation facilities.
    Paragraph (c)(8) is added to this final rule addressing concerns 
raised in relation to Sec.  2801.9(d) regarding the longer term for 
grants and leases. This rule provides diligent operation requirements 
wherein the holder of a solar or wind energy development grant or lease 
must maintain at least 75 percent of energy generation capacity for the 
authorized facility for the grant or lease term. A failure to meet this 
operational capacity for two consecutive years may support the 
suspension or termination of the grant or lease under Sec. Sec.  
2807.17 through 2807.19. The BLM would send notice to the grant or 
leaseholder with a reasonable opportunity to correct any noncompliance 
with the diligent operation requirement, including resuming use of the 
right-of-way.
    The BLM believes it is reasonable to establish a requirement that 
solar and wind energy generation developments must operate within 75 
percent of their generation capacity, allowing a 25 percent operational 
change for each year. \6\ This allows a solar or wind operator to 
safely accommodate operational changes related to unforeseen 
circumstances and maximize their energy production without the need to 
coordinate with the BLM for normal operations. A sustained reduction in 
output, such as for anomalous storm years or changes to a development's 
technology, that reduce the energy generation below 75 percent of the 
project's capacity would require coordination with the BLM to update 
project information. The energy generation capacity is first 
established by the right-of-way holder under section 2806.52(b)(5) in 
the first annual certified statement, and then informed by subsequent 
years' operational capacities in the annual statement. Since the BLM 
bills in advance for a calendar year (see part 2806 for further 
information on solar and wind energy capacity fee), the BLM believes 
that this operational standard is appropriate for the orderly 
administration of the public lands and to ensure appropriate use of its 
resources.
---------------------------------------------------------------------------

    \6\ As demonstrated in a 2018 NREL study, forecast modeling for 
solar photovoltaic and wind energy developments is generally within 
10 percent of expected capacities over a one-year period. https://www.nrel.gov/docs/fy23osti/79498.pdf, Solar PV, Wind Generation, and 
Load Forecasting Dataset for ERCOT 2018: Performance-Based Energy 
Resource Feedback, Optimization, and Risk Management 
(P.E.R.F.O.R.M.)
---------------------------------------------------------------------------

    In response to the BLM's notice, a holder must provide reasonable 
justification for the reductions in energy generation, such as delays 
in equipment delivery, legal challenges, or Acts of God. Holders must 
also provide the anticipated date when energy generation will resume 
and a request for extension under paragraph (e) for an extension of 
operations period to satisfy the two-year diligent operation 
requirements of paragraph (c)(8). The BLM may deny a request for 
extension for failure to comply with this section.
    The BLM will use the annual certified statement required under 
Sec.  2806.52(b)(5) to determine whether a holder has been meeting the 
minimum energy generation capacity for the diligent operation 
requirement. Under paragraph 2806.52(b)(5)(vi), the holder must notify 
the BLM if they will reduce the amount of energy generated by 25 
percent or more for that year. Two consecutive years with reduced 
energy generation would support the BLM's notice to the grant or 
leaseholder of noncompliance with the diligent operation requirement.
    Paragraph (e)(2) of this final rule clarifies that the option of 
requesting alternative stipulations, terms, or conditions does not 
apply to terms or conditions related to rents or fees. As with requests 
for alternative application requirements under Sec.  2804.40, requests

[[Page 35652]]

for alternative stipulations, terms, or conditions under Sec.  2805.12 
are limited to technical obligations of the applicant or holder and not 
to the holder's obligation to compensate the United States for the use 
of the public lands and their resources. Requests for exemptions or 
deviations from the general rent provisions of subpart 2806 should be 
made under provisions of that subpart that specifically address such 
exemptions or deviations, such as existing Sec.  2806.15(c) (not 
revised in this rulemaking), which sets forth a procedure for asking 
the BLM State Director to waive or reduce a holder's rent payment, or 
Sec.  2806.52(b)(1)(i), which describes certain circumstances under 
which the BLM may calculate the capacity fee based on an alternative 
MWh rate.
    A comment suggested that the fees could be based on third-party 
evaluations, such as an appraisal. The BLM considered whether an 
appraisal specific to each authorization would be appropriate and 
determined that using such a process would be costly and add 
considerable time to the processing of an application. The BLM chose 
not to use an appraisal, except when it determines under Sec.  2806.70 
that its rent schedules do not apply to the underlying right-of-way 
use. For example, if the BLM receives a right-of-way application 
requesting a permit for a long-term landscape art installation, the 
schedules for transmission, solar or wind energy development, or 
communications sites would not apply, and the BLM may elect to use an 
appraisal to determine the appropriate rent. This final rule also 
provides for a specific alternative MWh rate for determining the 
capacity fee under Sec.  2805.62(b)(1)(i) for development projects that 
use a Power Purchase Agreement (PPA). Such agreements must be provided 
to the BLM for review. If the BLM determines the lower rate is 
appropriate, it will use such agreements in place of the calculated MWh 
rate. The BLM did not make a change in response to this comment.
    A comment requested that the BLM require applicants to include PLAs 
and add union labor protections as a term and condition of solar and 
wind energy rights-of-way. In this final rule, the BLM has elected to 
provide an opportunity for holders to receive capacity fee reductions 
under certain conditions, including where the holder can show it is 
using PLAs for the construction of the planned facility (see Sec.  
2806.52(b)), consistent with the reduction authority under the Energy 
Act of 2020. However, in administering the public lands, the BLM is 
making such compliance voluntary, offering the capacity fee reduction 
to incentivize the use of PLAs for solar and wind energy development 
projects instead of mandating compliance with such a term. The BLM 
believes this voluntary option provides opportunities to a wide variety 
of potential holders and recognizes the effort of those who qualify for 
such reductions consistent with criteria in Sec.  2806.52(b). No change 
was made in the final rule due to this comment.

Section 2805.13 When is a grant or lease effective?

    Section 2805.13 of this final rule includes a minor technical 
clarification to the title and section, adding ``or lease,'' to build 
consistency for authorization term lengths inside and outside of DLAs.
    The BLM received comments opposing this section regarding term 
length of authorizations. One comment recommended the BLM extend the 
maximum term from 30 years to 50 years only for leases inside DLAs. 
Another comment opposed extending the maximum term to 50 years for any 
authorization. The BLM addressed this and other similar comments under 
Sec.  2801.9 of this preamble.

Section 2805.14 What rights does a right-of-way grant or lease convey?

    Section 2805.14 of this final rule clarifies that the term ``right-
of-way'' is the category of authorizations that generally are issued as 
a grant or a lease under Title V of FLPMA. This clarity has become 
increasingly important for the internal and external understanding of 
right-of-way authorizations with the passage of new legislation. The 
BLM did not receive comments on this section.
    The title is revised to ``What rights does a right-of-way grant or 
lease convey?'' The title clarifies that this section applies to both 
grants and leases.
    Paragraph (g) removes the text ``solar or wind energy development'' 
and adds ``right-of-way'' to now read as ``right-of-way grant or 
lease.'' This section provides for when an applicant applies to renew 
any right-of-way grant or lease under Sec.  2807.22.

Section 2805.16 If I hold a grant or lease, what monitoring fees must I 
pay?

    The BLM's final rule ``Update of the Communications Uses Program, 
Cost Recovery Fee Schedules, and Section 512 of FLPMA for Rights-of-
Way'' 89 FR 25922 (April 12, 2024) updated the BLM Headquarters address 
in Sec.  2805.16. Thus, the proposed rule's update to the BLM 
Headquarters address is no longer necessary. The BLM did not receive 
comments on this section and did not include it in the final rule.

Subpart 2806 Annual Rents and Payments

    Subpart 2806 of this final rule clarifies that the term ``right-of-
way'' is the category of authorizations that are generally issued as a 
grant or a lease under Title V of FLPMA. This clarity has become 
increasingly important for the internal and external understanding of 
right-of-way authorizations with the passage of new legislation.
    In subpart 2806, the BLM sets the acreage rent and capacity fee 
calculation methodologies for solar and wind energy development rights-
of-way. Section 504(g) of FLPMA, 43 U.S.C. 1764(g), requires right-of-
way holders, subject to several narrow exceptions, ``to pay in advance 
the fair market value'' for the use of the public lands. Section 102(a) 
of FLPMA, 43 U.S.C. 1701(a), clarifies that ``it is the policy of the 
United States that . . . the United States receive fair market value of 
the use of the public lands and their resources unless otherwise 
provided for by statute.'' The BLM has consistently taken the position 
that this statutory mandate includes the authority to charge acreage 
rent and capacity fees that reflect the fair market value of the public 
lands and their resources. For example, the preamble to the BLM's 2016 
Final Rule, Competitive Processes, Terms, and Conditions for Leasing 
Public Lands for Solar and Wind Energy Development and Technical 
Changes and Corrections, explained that ``(t)he BLM has determined that 
the most appropriate way to obtain fair market value is through the 
collection of multicomponent fee [sic] that comprises an acreage rent, 
a MW capacity fee, and, where applicable, a minimum and a bonus bid for 
lands offered competitively . . . . [T]he collection of this 
multicomponent fee will ensure that the BLM obtains fair market value 
for the BLM authorized uses of the public lands, including for solar 
and wind energy generation.'' 81 FR 92122, 92134 (Dec. 19, 2016). In 
that final rule, the BLM further explained that the use of a 
multicomponent rent and fee structure that comprises an acreage rent, a 
MW capacity fee, and in some cases also a minimum and a bonus bid 
assists the BLM in achieving important objectives, including 
identifying and capturing fair market value for the use of public land, 
providing a consistent approach with other categories of public land 
uses, encouraging efficient use of the public lands by reducing 
relative costs for comparable projects using fewer acres, and employing 
an approach

[[Page 35653]]

consistent with existing policies and regulations governing the BLM's 
renewable energy program. See id. The multicomponent fee of this final 
rule will continue to advance important objectives that serve the 
public interest, including allowing the BLM to capture fair market 
value for use of the land (subject to reductions pursuant to Energy Act 
of 2020 authority).
    In the Energy Act of 2020, 43 U.S.C. 3003, Congress amended the 
fair market value requirement of Section 504(g) of FLPMA by providing 
the Secretary with discretion to ``consider acreage rental rates, 
capacity fees, and other recurring annual fees in total when evaluating 
existing rates paid for the use of Federal land'' for solar and wind 
energy projects and reduce acreage rental rates and capacity fees if 
the Secretary makes certain findings, including ``that a reduced rental 
rate or capacity fee is necessary to promote the greatest use of wind 
and solar energy resources.'' Consistent with FLPMA and the Energy Act 
of 2020, the BLM will continue to charge solar and wind energy rights-
of-way acreage rent and capacity fees. The final rule implements a 
methodology that bases rent and fee rates on local land values and 
wholesale energy market prices. This methodology also supports the 
direction in the Energy Act of 2020, 43 U.S.C. 3004, of meeting 
national clean energy objectives, including the congressional goal of 
permitting 25 GW of renewable energy by 2025 on Federal lands through 
reductions in rental rates and capacity fees. As described in the 
section-by-section discussion for subpart 2806, this final rule is 
utilizing the authority in 43 U.S.C. 3003 to adjust the fair market 
value requirement through reductions in rental rates and capacity fees 
for solar and wind energy projects on public lands.
    Under the final rule, acreage rent rates for solar and wind energy 
rights-of-way are determined using the NASS Cash Rents Survey, which 
reflects a nominal value of the land at the time the right-of-way is 
issued and prior to commercial use. This per-acre land rental value 
will be multiplied by an encumbrance factor (which differentiates 
between solar and wind energy facilities) and an annual adjustment 
factor that accounts for changes in the value of the land over the 
lifetime of the right-of-way due to inflation and similar factors. 
Because the NASS Cash Rents Survey used for solar and wind acreage 
rents reflects a valuation of annual rent, no rate of return is applied 
when determining solar and wind energy acreage rents. The acreage rent 
rate reflects a nominal value of the land to continue to maintain site 
control after the right-of-way is issued.
    Once a solar or wind energy generation facility is utilizing the 
solar or wind resources on public land to produce electricity, the BLM 
may charge the capacity fee for the right-of-way unless the acreage 
rent remains higher than the fee. The capacity fee is determined in 
part using the annual MWh production multiplied by either wholesale 
power pricing information or pricing figures specific to a project's 
PPA to determine the market value of the electricity generated from the 
project. The wholesale power pricing information or other pricing basis 
variables in the BLM's calculation, like the pastureland rental value 
based on the NASS Cash Rents Survey used for calculating acreage rents, 
will be fixed at the time the right-of-way is issued and will be 
updated using a fixed annual adjustment factor. This market value of 
the electricity generated will then be multiplied by a rate of return 
based on a percentage of wholesale pricing and by certain qualifying 
fee reductions to arrive at a capacity fee for the authorized project.
    Some comments suggested that fees should be compared with the fees 
associated with other energy sources instead of being based on the per-
acre values for pastureland. Other comments expressed support for the 
BLM using the NASS Cash Rents Survey to calculate acreage rent rates. 
The BLM manages different energy sources, e.g., oil and gas and 
geothermal, consistent with the applicable laws for each. As such, rent 
and fee values promulgated in regulations consider differences under 
law. Solar and wind energy generation facilities on public lands are 
authorized under Title V of the FLPMA (43 U.S.C. 1761-1771) and its 
implementing regulations at 43 CFR part 2800. Section 504(g) of FLPMA 
generally sets the requirements for how the BLM will collect rents and 
fees for use of the public lands and their resources through a right-
of-way. These requirements differ from those in the MLA (30 U.S.C. 181 
et seq.) and the Geothermal Steam Act (30 U.S.C. 1001 et seq.), and 
thus a comparison of fees for production of these different energy 
sources on public lands would be inappropriate and irrelevant. In this 
final rule, the BLM updates rents and fees for solar and wind energy 
development rights-of-way under the authority provided by FLPMA to 
reflect the fair market value for use of the public lands and their 
resources by using acreage rental rates that reflect local land values 
prior to commercial electricity production through using pastureland 
cash rent survey values by NASS. The BLM then applies its authority 
under the Energy Act of 2020 to provide reductions that are necessary 
to promote the greatest use of wind and solar energy resources.
    One comment suggested that the proposed rule should not offer 
acreage rent and capacity fee reductions to projects outside DLAs and 
instead should implement project-specific reductions and other 
incentives to promote responsible development inside DLAs. DLAs are 
locations on public lands that the BLM has designated through the land 
use planning process as priority areas for solar and/or wind energy 
development. Limiting acreage rent and capacity fee reductions to DLAs 
would not, however, meet the Energy Act of 2020's direction to promote 
the greatest use of wind and solar resources. To date, the BLM has only 
allocated DLAs for solar facilities on public lands within six 
southwestern states for locations that are predominately favorable for 
thermal solar projects (i.e., concentrated solar). The BLM currently 
has no DLAs allocated for solar in other states. Furthermore, the BLM 
has no DLAs allocated for wind energy development on public lands in 
any state. The BLM determined that limiting rent and fee reductions to 
only DLAs would be sub-optimal in supporting clean energy goals. As 
such, the final rule will provide for rent and fee reductions on public 
lands both inside and outside DLAs, which will serve the BLM's purpose 
of promoting the greatest use of wind and solar energy resources on 
public lands.
    One comment suggested that subpart 2806 should not eliminate fair 
market value for rental and leases on public lands or the competitive 
bid process. The commenter did not support incentivizing renewable 
development for a specific project by eliminating the competitive 
leasing process. Contrary to the commenter's suggestion, this final 
rule does not eliminate the BLM's ability to utilize a competitive bid 
process for solar and wind energy development. The final rule adjusts 
the competitive process requirements for wind and solar energy 
development proposals within DLAs by aligning it to be consistent with 
agency discretion for utilizing a competitive process outside DLAs when 
the BLM's authorized officer decides to use a competitive process.
    Some comments suggested that this rule should generally raise fees 
for developers and require more upfront mitigation money to address 
long term environmental issues. Related

[[Page 35654]]

comments suggested that the BLM should establish an environmental 
mitigation fund in addition to rents and fees to accommodate the high 
probability of direct and cumulative impacts. The BLM considered these 
comments and is not making these suggested changes. The BLM believes 
such changes are unnecessary because the final rule does not limit the 
BLM's existing authority and ability to appropriately impose mitigation 
requirements as a component of the terms, conditions, and stipulations 
for a solar or wind energy development. The BLM will continue to 
require appropriate mitigation and conditions of approval to address 
environmental impacts for right-of-way grants and leases without 
further requirements promulgated under this final rule.
    Other commenters stated that the BLM should implement a minimum 
efficiency criterion to ensure that consumers receive the necessary 
amount of power to keep up with demand. The BLM disagrees with comments 
suggesting that the BLM should regulate how efficiently a project must 
operate. Developing a project is a complex process that depends on 
several factors, including the availability and cost of appropriate 
technology. The BLM has included a provision in this final rule that 
sets an operational standard requiring a development project to 
annually maintain at least 75 percent of its energy generation 
capacity. See Sec.  2805.12(c)(8) for further information on the 
operational standards for solar and wind energy development projects on 
public lands.

Section 2806.10 What rent must I pay for my grant or lease?

    Section 2806.10 of this final rule provides a minor technical 
clarification described below. The BLM did not receive comments on this 
section and has made no changes to it in the final rule.
    Section 2806.10 provides rent requirements that apply to all grants 
and leases, requiring payment in advance, consistent with Section 
504(g) of FLPMA, as amended. New Sec.  2806.10(c) would clarify to a 
reader that the per acre rent schedule for linear right-of-way grants 
must be used unless a separate rent schedule is established for your 
use--such as with communication sites under Sec.  2806.30 or solar and 
wind energy development facilities per Sec.  2806.50--or the BLM 
determines under Sec.  2806.70 that its rent schedules do not apply to 
the underlying right-of-way use.

Section 2806.12 When and where do I pay rent?

    Section 2806.12 of this final rule provides a minor technical 
clarification as described below. The BLM did not receive comments on 
this section and has made no changes to it in the final rule.
    Paragraphs 2806.12(a) and (b) describe the proration of rent for 
the first year of a grant and the schedule for payment of rents. 
Paragraphs 2806.12(a) and (b) would be revised by deleting the term 
``non-linear,'' which is not defined in the regulations, to clarify 
that these provisions apply to all right-of-way grants or leases.

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

    Section 2806.20 of this final rule clarifies the BLM's mailing 
address. Section 2806.20(c) addresses how to obtain a current rent 
schedule for linear rights-of-way. This paragraph provides the BLM's 
mailing address of record by reference to Sec.  2804.14(c).

Solar and Wind Energy Development Rights-of-Way

    The existing regulations contain two undesignated center headings 
to organize and differentiate sections pertaining to solar (see 
existing Sec. Sec.  2806.50 through 58) and wind (see existing 
Sec. Sec.  2806.60 through 68) energy rights-of-way. The final rule 
revises those sections and undesignated headings to provide a single 
set of provisions for all solar and wind energy development rights-of-
way. The rent, fee, and payment requirements under the final rule are 
discussed in the following sections and are identical for solar and 
wind except for the difference in the encumbrance factor used in 
calculating the acreage rent that is discussed under Sec.  2806.52(a). 
Sections 2806.50 through 2806.58 address solar and wind energy rents 
and capacity fees.
    The final rule updates the acreage rent and capacity fee 
calculation methods to improve predictability of rates for solar and 
wind energy development projects on public land. The combined rent and 
fee calculation methodologies have the flexibility to meet FLPMA's fair 
market value requirement while also applying calculation factors to 
reduce rates to promote the greatest use of wind and solar energy 
resources on the public lands consistent with the Energy Act of 2020.
    The final rule retains flexibility to utilize different data 
sources for electricity market values over time. Developers of solar 
and wind energy on public lands will have improved rate predictability 
over the term of an authorization. This is accomplished by establishing 
an acreage rate and capacity fee rate at the beginning of a grant or 
lease term with upfront built-in rate adjustments and by indexing the 
capacity fee to the annual energy production.
    The BLM's acreage rent is the average of the state-wide pastureland 
rent from the NASS Cash Rent Survey. The acreage rent is the minimum 
payment made to the BLM each year by the developer. See Sec.  
2806.52(a) for further information on the acreage rent.
    The capacity fee, based on wholesale power prices, serves to 
compensate the United States for long-term site control and the 
production value of the electricity generated by solar and wind energy 
projects on public lands. The capacity fee will be collected annually, 
but only when the capacity fee exceeds the acreage rent for the year. 
See Sec.  2806.52(b) for further information on the capacity fee.
    The final rule includes certain reductions that may be applied 
under the authority granted to the Secretary in the Energy Act of 2020, 
which provides that annual acreage rent and capacity fees may be 
reduced if the Secretary determines that a reduced rental rate or 
capacity fee is necessary to promote the greatest use of wind and solar 
energy resources, among other reasons. Adjustments to the capacity fee 
from the MWh rate reduction, The Domestic Content reduction, and PLA 
reduction are discussed in greater detail in Sec.  2806.52(b)(1)(ii) 
through (iv). The BLM has determined that the rate reductions in this 
final rule would help to promote the greatest use of wind and solar 
energy resources on public lands.

Section 2806.50 Rents and Fees for Solar and Wind Energy Development

    Section 2806.50 of the final rule requires the holder of a solar or 
wind energy right-of-way to pay in advance the greater of either an 
annual acreage rent or a capacity fee, consistent with Section 504(g) 
of FLPMA (43 U.S.C. 1764(g)). There are no provisions in this rule for 
a phased-in rent or fee.
    The acreage rent or capacity fee, as applicable, is calculated 
based on the requirements found in Sec. Sec.  2806.11 and 2806.12. The 
acreage rent is calculated according to the formula set forth in Sec.  
2806.52(a), while the capacity fee is calculated according to the 
formula set forth in Sec.  2806.52(b).
    Some comments expressed concern that this rule creates negative 
market incentives by keeping acreage rents and capacity fees 
artificially low. These

[[Page 35655]]

commenters suggest that the BLM should implement a consistent yearly 
increase in acreage rent and capacity fees based on initial rates, with 
reductions provided only for projects in specific circumstances, such 
as siting within solar zones or on disturbed lands, and with strong 
commitments to domestic content. The BLM is cognizant that the rent and 
fee rate structure is important for promoting the greatest use of wind 
and solar energy resources and is a critical component to providing 
short- to medium-term stability for emerging energy markets. There is a 
strong public interest in maintaining rate predictability for 
electricity generating entities that are subject to long-term 
interconnect and PPAs. This final rule sets rates that are also 
increased annually, through the annual adjustment factor (see Sec.  
2806.52(b)(2)). The annual adjustment continues through the term of the 
authorization. Additionally, this final rule provides an opportunity 
for rate reductions for all solar and wind energy development projects 
that further the goals of the Energy Act of 2020, which is to authorize 
25 gigawatts of renewable energy on Federal lands by 2025 and further 
national clean energy priorities. The BLM did not make a change to this 
section of the final rule.

Section 2806.51 Grant and Lease Rate Adjustments

    Section 2806.51's title is changed from the proposed rule to 
clarify that this section applies to all grants and leases. This 
section provides for right-of-way grant and leaseholders to transition 
to the new rate making under this final rule through an affirmative 
request to the BLM. Absent a request, they would retain the rate 
setting method in effect prior to this final rule.
    Paragraph (c) informs holders of existing solar or wind energy 
development rights-of-way that they may request the new rate 
methodology in this final rule be applied to their existing grant or 
lease. Existing holders have two years from the date this final rule 
becomes effective to request a change to the new rate making method. 
The BLM will continue to apply the grant holder's or lessee's current 
rate methodology if a timely request is not received.
    The BLM received a comment that does not support any rate reduction 
based on an estimation of energy generated because all rates should be 
assessed on actual production. The BLM has the administrative 
flexibility to collect payment in advance based on estimated energy. 
The amount the BLM may collect for the right-of-way may change once the 
BLM determines the actual energy production on the right-of-way. The 
BLM will reconcile any difference in the amount due and credit any 
overpayment, and right-of-way grant holders and lessees are liable for 
any underpayment. See Sec.  2806.52(b)(5) of this rule for the BLM's 
annual certified statement that provides more information about the 
estimated and actual energy generation. The BLM did not change this 
section of the final rule in response to this comment.
    Some comments recommended that the final rule cap the total amount 
of reduction in acreage rents and capacity fees that an individual 
leaseholder can claim for a right-of-way. The final rule does not cap 
the number or level of reductions an applicant or holder may qualify 
for; however, the final rule does require that the BLM collect no less 
than the acreage rent for the right-of-way each year, notwithstanding 
the number of reductions that apply to the grant per Sec.  2806.52(b). 
The BLM did not change this section of the final rule in response to 
this comment.
    Some comments suggested that rate reductions may be achieved 
without any changes to where the BLM sources its market pricing data. 
In the final rule, the BLM preserves its discretion to change the 
source of market data. In the BLM's experience, access to such 
information may change over time. For this final rule, the BLM is using 
the Energy Information Administration pricing data that may be found at 
https://www.eia.gov/electricity/wholesale/. Energy Information 
Administration data is free and open to the public, increasing 
transparency into the BLM's rate schedule. The BLM did not change to 
this section of the final rule in response to this comment.
    Some comments recommended that the BLM seek to increase 
domestically sourced products and materials and that the BLM should use 
this rule to mandate robust domestic content thresholds for projects 
permitted on Federal land. The BLM agrees with these commenters' 
interest in increased use of domestic content for solar and wind energy 
development projects. This final rule includes a financial incentive in 
the form of a ``Domestic Content reduction'' under Sec.  
2806.52(b)(1)(iii) to encourage holders to use components made or 
manufactured in the United States in the construction of the solar or 
wind energy project. This capacity fee reduction is intended to offset 
costs associated with using only iron, steel, manufactured products, 
and construction materials incorporated into the project that are 
produced in the United States consistent with the direction in the 
Energy Act of 2020. The BLM anticipates that this proposed capacity fee 
reduction would increase economic certainty for renewable energy 
projects on BLM-managed public lands. By incentivizing the use of 
domestically made parts and materials in exchange for a reduced 
capacity fee, the BLM expects to reduce costs for developers that 
choose to incorporate domestically produced materials into their 
projects. The BLM believes that this reduction will help increase 
demand for domestically produced renewable energy parts and materials. 
These intended outcomes would serve to promote the greatest use of wind 
and solar energy resources on public lands. Currently, wind and solar 
energy developers face a choice between relying on foreign-sourced 
parts and materials or paying higher prices for domestically sourced 
parts and materials, if available. (See for example the Department of 
Energy's Solar Photovoltaics--Supply Chain Deep Dive Assessment, 
available at https://www.energy.gov/sites/default/files/2022-02/Solar%20Energy%20Supply%20Chain%20Report%20-%20Final.pdf). As seen in 
recent years, uncertainty in global supply chain dynamics has the 
potential to delay deployment of solar and wind energy development 
projects on public lands. Using incentives to create demand for 
American-made renewable energy parts and materials will help develop 
domestic supply chains and reduce impacts on renewable energy 
deployment on public lands from potential supply chain delays. The BLM 
believes that incentivizing the use of parts and materials that qualify 
for the Domestic Content reduction will increase the responsible 
deployment of renewable energy and will increase commercial interest in 
the use of public lands, promoting the development of solar and wind 
energy resources on public lands. This final rule changes the 
definition used for domestic content to align with the BABA Act and 
implementing guidance at 2 CFR 184. See Sec.  2806.52(b) for further 
information on the domestic content reduction.
    Some comments suggested that a broad approach to rate reductions 
may have revenue implications and fail to guarantee that taxpayers 
obtain a fair return for the utilization of our public lands. 
Consistent with congressional and presidential direction, the BLM is 
endeavoring to increase the responsible deployment of renewable energy 
on the public lands and as part of that direction has been authorized 
to reduce rents and fees to promote the greatest

[[Page 35656]]

use of wind and solar resources on public lands. As part of this 
rulemaking process, the BLM carefully deliberated on how to implement 
the directives and new authorities while maintaining a reasonable 
return for the use of the public lands and their resources. Following 
the BLM's implementation of previous rate reductions in calendar year 
2022 for solar and wind energy development projects, the agency 
received feedback which generally indicated that overall costs for 
permitting, development, and operations on Federal public lands were 
still perceived as a barrier to entry and a disincentive to the BLM's 
ability to promote solar and wind deployment on public lands. The BLM 
believes the fee reductions will assist in removing barriers inhibiting 
deployment of solar and wind development on public lands.

Section 2806.52 Annual Rents and Fees for Solar and Wind Energy 
Development

    Section 2806.52 of this final rule describes the BLM's methodology 
to determine the acreage rent and capacity fee for solar and wind 
development rights-of-way. Payment is required of the greater of either 
an acreage rent, which is calculated in advance of authorization, or a 
capacity fee, which is calculated upon the start of energy generation. 
This section was revised based on public comments.
    Section 2806.52(a) provides that acreage rent would be determined 
by multiplying the number of acres authorized for a project (rounded up 
to the nearest tenth) by the state-specific per-acre rate from the 
solar and wind energy acreage rent schedule in effect at the time a 
grant or lease is issued. The acreage rent would be the minimum yearly 
payment for a grant or lease and would not be required if the capacity 
fee under paragraph (b) of this section exceeds the acreage rent.
    Paragraph (a)(1) explains that the per-acre rate is calculated by 
multiplying the state-specific per-acre value by the encumbrance factor 
and a factor that reflects the compound annual adjustment since the 
start of the grant or lease term, according to the formula A x B x ((1 
+ C) [supcaret] D)).
    Paragraph (a)(1)(i) identifies ``A'' as the per-acre rate, using 
the state-specific per-acre value from the solar or wind energy acreage 
rent schedule for the state where a project is located for the year 
when the grant or lease is issued. The average per acre value will be 
determined using the NASS pastureland rents reported within the 
previous 5-year period. The BLM will update the acreage rent schedule 
and its per-acre rate every 5 years consistent with the timing of rent 
adjustments under Sec.  2806.22 for the linear rents schedule. Based on 
the pastureland rent value in the NASS Cash Rents Survey through 2021, 
the most recent 5-year average ranges from $2.10 per acre in Arizona to 
$12.60 per acre in California with a median value of $6.62 per acre in 
the Western States. The next year the BLM will update its rent schedule 
will be for calendar year 2026.
    Using Nevada as an example for how the BLM will average NASS 
pastureland rents, assume that NASS reported values of $10.00, $13.00, 
and $10.00 per acre respectively for 2019, 2020, and 2021. NASS 
reported values during the 5-year period only for those 3 years and did 
not report values for 2017 and 2018. In that case, the BLM would 
average the reported values using three years for that 5-year period, 
which would equate to $11.00 per acre.
    The per-acre rate charged to the right-of-way holder for a grant or 
lease will not change once calculated and the authorization is issued. 
Rates for an existing authorization will not change with updates to the 
acreage rent schedule; instead, the acreage rent will be adjusted by 
the annual adjustment factor, ``C'' in the formula above, under 
2806.52(a)(1)(iii).
    Paragraph (a)(1)(ii) identifies ``B'' in the formula above as the 
encumbrance factor. The encumbrance factor is applied to account for 
the intensity of the solar or wind development's surface use of the 
public lands. In the final rule, solar energy generation facilities are 
subject to a 100 percent encumbrance factor and wind energy generation 
facilities are subject to a five percent encumbrance factor. The 100 
percent encumbrance factor for solar facilities reflects a greater 
intensity of development on the surface of public lands and a virtual 
exclusion of other uses on the right-of-way. The five percent 
encumbrance factor for wind facilities recognizes that a wind energy 
facility only partially encumbers the land, allowing other uses to co-
exist.
    Some comments suggest that a lower encumbrance value for solar is 
appropriate, noting that facilities may incorporate design elements or 
construction methods that reduce impacts to resources, such as raised 
fences for wildlife passage or vegetation disturbance caps. The BLM 
appreciates that projects incorporating such improvements may cause 
fewer impacts to public land resources. However, the BLM disagrees that 
such improvements reduce the encumbrance factor, which is based on the 
occupancy of the land and impact to other uses of the land. Solar 
energy developments have a greater occupancy of the land and impact to 
other uses because they preclude the majority and sometimes all other 
uses. This encumbrance factor for solar energy developments is 
appropriate for public lands, and the BLM retains its 100 percent 
encumbrance factor for this rule.
    One comment asserted that the proposed encumbrance value of five 
percent for wind energy is too low and should be set around 50 percent 
and that if the BLM decreases the encumbrance factor from 10 percent, 
the BLM should a explain its rationale in this rule. Others believed 
the encumbrance factor should be lower, asserting that a mid-point 
encumbrance factor of 3 percent is appropriate based on the Department 
of Energy's Wind Vision analysis. The BLM considered the intensity of 
the surface use and exclusion of other uses when setting the 
encumbrance factor in this final rule. While the commenters that 
advocated for a 50 percent encumbrance factor did not provide data 
supporting that figure, the National Renewable Energy Laboratory has 
found that generally ``only a small fraction of that area (<1%-4%) is 
estimated to be directly impacted or permanently occupied by physical 
wind energy infrastructure.'' \7\ In practice, the BLM has found that, 
based on geography or project design, and effect on other uses, the 
encumbrance may be more or less than that reported by NREL occupied 
land percentages and therefore set a five percent encumbrance factor 
for wind energy.
---------------------------------------------------------------------------

    \7\ https://www.nrel.gov/news/program/2022/nrel-explores-the-dynamic-nature-of-wind-deployment-and-land-use.html.
---------------------------------------------------------------------------

    Paragraph (a)(1)(iii) clarifies that ``C'' in the formula above is 
the annual adjustment factor, which is three percent, and Paragraph 
(a)(1)(iv) clarifies that ``D'' is the year of the grant or lease term, 
where the first year (whether partial or a full year) would be 0 (that 
is, there is no inflation for the first year of the term). Under the 
final rule, the annual adjustment factor would be fixed at three 
percent and compounded annually for the term of the authorization.
    Paragraph (a)(2) describes where you may obtain a copy of the 
current per-acre rates for the solar and wind energy rent schedule.
    Paragraph (b) describes that the capacity fee is calculated by 
multiplying the MWh rate or the alternative MWh rate (which is 
described below), the MWh rate reduction, the Domestic Content 
reduction, PLA reduction, the

[[Page 35657]]

rate of return, and the annual power generated on public lands for the 
grant or lease in question (measured in MWh) by a factor that reflects 
the compound annual adjustment. The capacity fee is required to be paid 
annually beginning in the first year that generation begins for the 
energy generation facility. There will be no capacity fee levied for 
the first year or any other year if the acreage rent exceeds the 
capacity fee. The formula for calculating the annual capacity fee is A 
x B x C x D x [(1 + E) [supcaret]F] x G x H.
    Paragraph (b)(1)(i) describes that ``A'' is either the MWh rate, an 
amount determined based on the average of the annual weighted average 
wholesale price per MWh for the major trading hubs serving the 11 
Western States of the continental United States, or the alternative MWh 
rate. The MWh rate is calculated based on the wholesale prices from the 
full five calendar-year period preceding the most recent MWh rate 
adjustment before the right-of-way was issued, rounded to the nearest 
dollar. There is no MWh rate phase-in for energy generation facilities 
except for existing holders that elect to continue paying under their 
current rate adjustment method per Sec.  2806.51(c).
    The BLM may use an alternative MWh rate when a grant or leaseholder 
enters into a PPA with a utility for a price per MWh that is lower than 
the average of the annual weighted average wholesale price. In those 
instances, the BLM will determine if the rate in the PPA is appropriate 
to use instead of the MWh rate. For example, an alternative MWh rate 
may not be appropriate if a utility issues itself a PPA for its solar 
or wind energy development. If the rate in the PPA is appropriate, then 
the BLM would set an alternative MWh rate for the grant or lease at the 
rate in the PPA.
    The BLM received a request to remove the BLM's discretion to use an 
alternative MWh rate rather than a MWh rate calculated on the average 
wholesale pricing as described under Sec.  2806.52(b)(1)(i). The BLM 
provides an opportunity for an alternative MWh rate in this rule in the 
event that there is a difference between wholesale pricing (energy 
pricing at market) compared to the negotiated pricing that may be 
achieved in a PPA. The BLM understands from a recent report from 
Lawrence Berkeley National Lab (available at https://emp.lbl.gov/utility-scale-solar/) that PPA pricing may be less than wholesale 
market pricing. The BLM does not want to disincentivize reasonable 
development on public lands or more favorable power purchase rates, 
which would be contrary to national goals set by law and directed by 
executive order, by disincentivizing such actions. However, the BLM 
also wishes to ensure it retains the discretion necessary to ensure 
that an alternative MWh rate is appropriate. The BLM did not make 
changes in the final rule due to these comments.
    In paragraph (b)(1)(ii), ``B'' is the MWh rate reduction. The final 
rule sets the capacity fee at 20 percent of the wholesale price per MWh 
or alternative MWh rate through calendar year 2035. This reduction is 
consistent with the authority provided in the Energy Act of 2020 
allowing the Secretary to reduce acreage rental rates and capacity fees 
if, among other things, the Secretary determines ``that a reduced 
rental rate or capacity fee is necessary to promote the greatest use of 
wind and solar energy resources.'' Further, this reduction would help 
BLM meet the goal under the Energy Act of 2020 of ``authoriz[ing] 
production of not less than 25 gigawatts of electricity from wind, 
solar, and geothermal projects by not later than 2025.'' Implementing 
this reduction is necessary to promote the greatest use of wind and 
solar energy resources and maximize commercial interest in lease sales 
by lowering the entry cost of prospective energy generating facilities. 
Additionally, implementing this reduction puts the rates the BLM 
charges closer to what the BLM charged developers in 2007 and 2008 when 
interest in solar and wind energy development on public lands began to 
increase. The reduced rates and new rate setting methodology lower the 
potential that existing right-of-way holders who agreed to terms and 
conditions for using public lands that were later updated based on 
market changes will experience economic hardship as a result of those 
adjustments. This final rule uses predetermined adjustments instead.
    For example, the MWh rate reduction for a newly authorized solar or 
wind energy grant or lease in 2035 will be set at 20 percent of the 
wholesale price per MWh or alternative MWh rate. This will yield a 
continued 80 percent reduction through the end of that authorization's 
term consistent with the Energy Act of 2020 authority.
    Starting in 2036, the BLM will begin to transition the MWh rate 
reduction to 20 percent by 2038. The MWh rate reduction will be reduced 
to 60 percent for new projects authorized in 2036, 40 percent for new 
projects authorized in 2037, and 20 percent for new projects authorized 
in 2038 and beyond. The rates for existing authorizations will not 
change with this transition to a 20 percent reduction. For example, an 
authorization for solar or wind energy development in 2037 would 
receive a 40 percent reduction through the end of the authorization's 
term. The BLM would similarly apply this reduction to authorizations it 
issues based on the year of issuance.
    Some comments suggested the transition from an 80 percent MWh rate 
reduction to a 20 percent MWh rate reduction appears arbitrary and 
without grounding in economic analysis of market conditions and 
suggested instead allowing the 80 percent reduction to continue until a 
future rulemaking. The BLM understands the concerns raised by the 
commenters regarding the change to the reduction in the proposed rule. 
However, the BLM disagrees that the 80 percent MWh rate reduction 
should continue until a future rulemaking. Instituting a phased sunset 
period to the 80 percent reduction in the capacity fee is appropriate 
as the renewable energy industry may no longer need this reduction to 
achieve the greatest use of wind and solar on public lands, and 
progress toward our national goal of a carbon-pollution free 
electricity sector may indicate that a reduction is no longer 
warranted. In this final rule, the BLM is revising the transition from 
MWh rate reduction from 80 percent to 20 percent over several years. 
This transition would lessen the year-over-year rate change until 2038, 
when the MWh rate reduction would remain at 20 percent. The BLM will 
evaluate progress towards reaching national goals before 2036 and could 
reinitiate rulemaking to adjust incentives, including extending them 
beyond 2036, if appropriate under the authority in the Energy Act of 
2020 or other applicable authority.
    In paragraph (b)(1)(iii), ``C'' is the Domestic Content reduction. 
This paragraph is revised consistent with the changes discussed under 
Sec.  2801.5. As explained previously, the BLM is promoting the 
development of solar and wind energy resources on public lands by 
offsetting some of the costs of using items and materials produced in 
the United States in the construction of solar and wind energy 
development facilities. The BABA Act, Public Law 117-58, 135 Stat. 429, 
Sec. Sec.  70901 through 70927 (Nov. 15, 2021) and the implementing 
regulations at 2 CFR part 184, describe certain categories of items or 
products that are eligible for the domestic content preference. As 
noted in Sec.  2801.5, the BLM adopts the term ``domestic content'' to 
refer to the items and materials associated with the construction of a 
solar or wind energy facility on public lands that are eligible for the 
domestic content preference. Paragraph (b)(1)(iii) of Sec.  2806.52 of 
the BLM's regulation would reduce the

[[Page 35658]]

capacity fee for solar or wind energy generation facilities if the 
holder can demonstrate that the construction of the facilities for the 
right-of-way--excluding labor costs--qualify as produced in the United 
States as described in 2 CFR 184.4. The Domestic Content reduction is 
20 percent for facilities qualifying for the domestic content 
preference defined in 2 CFR part 184. To qualify for this capacity fee 
reduction, the percent of the energy generation facility's total cost 
that consists of items qualifying for the domestic content preference 
would have to meet or exceed the ``Produced in the United States'' 
requirements in 2 CFR 184.3. Generally, this would mean that: (1) all 
manufacturing processes for iron or steel products used as a component 
of the project occurred in the United States; (2) manufactured products 
(a) were manufactured in the United States, and (b) the cost of the 
components of the manufactured product that are mined, produced, or 
manufactured in the United States is greater than 55 percent of the 
total cost of the manufactured product, as determined in 2 CFR 184.5; 
and (3) all manufacturing processes for construction materials occurred 
in the United States, as defined in 2 CFR 184.6. The holder would have 
to provide sufficient documentation (e.g., purchase orders for end 
products, materials, and supplies of the facility; as-built or 
construction plans) to demonstrate that the products used in the energy 
generation facility meet the thresholds identified in 2 CFR part 184.
    Once an energy generation facility qualifies for a Domestic Content 
reduction, the facility will continue to benefit from the reduction for 
the term of the grant or lease. The BLM will only revisit the reduction 
at the time of an assignment, amendment, or renewal of an energy 
generation facility grant or lease to determine what reduction, if any, 
it may qualify for. The BLM will apply the criteria defining the 
domestic content preference and the components of construction for the 
version of 2 CFR part 184 in effect at the time the right-of-way is 
issued unless OMB amends that guidance in the future in such a way that 
the current definition contemplated in this final rule no longer 
provides a clear meaning. In that circumstance, the BLM will apply the 
most recent version of 2 CFR part 184 that provides a workable 
definition until such time as the BLM is able to amend its rules.
    In addition to changing the definition to qualify for a domestic 
content reduction from a FAR to a BABA-based definition, this final 
rule only provides for a single 20 percent reduction that interested 
parties qualify for if they meet the requirements of 2 CFR part 184 
instead of the incremental reduction that the BLM had proposed. Under 
the BABA definition described above, projects qualify for the domestic 
content preference by meeting or exceeding specific materials 
requirements. As this is a binary qualification, an incremental 
reduction would be untenable. Further, using a single reduction based 
on the BABA threshold will provide for simpler implementation of the 
regulation and more clarity to applicants.
    One comment suggested that the BLM use the Electronic Product 
Environmental Assessment Tool (EPEAT) product registry for photovoltaic 
module use in development projects and any Domestic Content reduction. 
EPEAT is a global label managed by the Global Electronics Council that 
identifies environmentally sustainable electronic products. Currently, 
however, EPEAT only covers a narrow set of products and construction 
material related to solar development facilities (specifically, 
photovoltaic modules and inverters) and does not cover any materials 
related to wind energy generation facilities. As a result, requiring 
applicants to use EPEAT-registered products for renewable energy 
facilities on public lands could frustrate the goals of the Domestic 
Content reduction. Further, such a requirement would not serve the 
purposes Energy Act of 2020 or relevant direction in Executive Orders 
because it would limit the technology that could be deployed on public 
lands. The BLM may, however, consider such criteria for the Domestic 
Content reduction in the future once the EPEAT covers a broader range 
of solar and wind energy materials. The BLM made no changes to the 
final rule due to this comment.
    Some comments suggested that the BLM should require proof of 
compliance with the domestic content incentive prior to reducing rates. 
The BLM agrees with these comments and will require confirmation that 
the holder seeking to obtain this reduction satisfies the qualifying 
definitions the BLM is utilizing: the standard in 2 CFR part 184. See 
Sec.  2806.52(b)(5) regarding conditional approvals where the BLM makes 
it clear that approval will be granted by the BLM once it has been 
demonstrated to the satisfaction of the BLM that the facility qualifies 
for the reduction.
    Some comments suggested that rate reductions in the final rule 
should be consistent with the IRA. The BLM considered a reduction based 
on the domestic content bonus tax credits in the IRA and its definition 
of Buy America bonus tax credits. The BLM is aware that the Treasury 
Department has issued guidance about the domestic content bonus under 
the IRA for clean energy projects and facilities that meet American 
manufacturing and sourcing requirements. However, that guidance 
describes an intent to propose regulations that have not yet been 
finalized, and this final rule's definition for domestic content aligns 
with definitions in other Federal programs with oversight over domestic 
products and content. No changes were made due to these comments.
    Paragraph (b)(1)(iv) is ``D'', the Project Labor Agreement 
reduction. The BLM is promoting the development of solar and wind 
energy resources on public lands by offsetting some of the costs when 
using a PLA during construction of solar and wind energy development 
projects consistent with authority under the Energy Act of 2020. The 
BLM's approach also is consistent with the policy direction in 
Executive Order 14063 directing Federal agencies to use PLAs in 
connection with large-scale construction projects to promote economy 
and efficiency in the context of Federal procurement. A PLA is a pre-
hire collective bargaining agreement negotiated between one or more 
construction unions and one or more construction employers that 
establishes the terms and conditions of employment for a specific 
construction project, consistent with 29 U.S.C. 158(f).
    The 20 percent reduction of the capacity fee offered in this final 
rule to incentivize the use of a PLA is necessary to promote the 
greatest use of solar and wind energy resources on public land, as 
authorized by the Energy Act of 2020 (43 U.S.C. 3003(b)(2). In 
particular, PLAs lead to better and more efficient outcomes in the 
construction of solar and wind energy projects in the following ways, 
which in turn leads to the greatest use of solar and wind resources. 
First, PLAs provide better access to and retention of skilled laborers, 
especially in a limited labor market.\8\ Studies and reports 
demonstrate that skilled labor provided through PLAs offer a higher 
quality of work, increased labor standards, more timely construction, 
and fewer

[[Page 35659]]

deviations from construction plans.\9\ Second, PLAs improve workplace 
safety by offering more apprentice-trained journey workers, which 
studies have shown lead to fewer injuries.\10\ Third, PLAs can ensure 
construction administration is streamlined, which minimizes undue 
costs, delays, and inefficiencies in construction projects, 
particularly complex projects such as wind or solar energy generation 
facilities.\11\ Finally, PLAs contain no-strike, no-lockout clauses 
that can prevent project construction delays associated with labor 
disputes.\12\
---------------------------------------------------------------------------

    \8\ Greg Lacurci, CNBC: Workers till Quitting At High Rates--And 
Getting a Big Bump In Pay (Jan. 4, 2023); Jo Constantz, Bloomberg: 
The Great Resignation Worked: Most Job-Swappers Got a Raise (July 
29, 2022); Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill. 
Econ. Policy Inst.: The Union Advantage During the Construction 
Labor Shortage 5 (2022).
    \9\ McFadden, Sai Santosh, and Ronit Shetty: Quantifying the 
Value of Union Labor in Construction Projects, Independent Project 
Analysis, 2 and 8-9 (December 2022): https://acrobat.adobe.com/link/review?uri=urn%3Aaaid%3Ascds%3AUS%3Ad9e7f15b-9bf9-313f-b4eb-de7a1dc11d9f; and Fred B. Kotler: Project Labor Agreements in New 
York State II: In the Public Interest and of Proven Value, Cornell 
University ILR School, 10, 19 and 36 (May 1, 2011), https://ecommons.cornell.edu/bitstream/handle/1813/74333/LaborAgreementsinNYS_II.pdf?sequence=1.
    \10\ Emma Waitzman & Peter Philips, UC Berkeley Labor Ctr: 
Project Labor Agreements and Bidding Outcomes: The Case of Community 
College Construction in California 10, 16 (2017); Bureau of Labor 
Statistics, National Census of Occupational Injuries in 2021, USDL-
22-2309 (2022) (construction work is second highest for occupational 
deaths).
    \11\ Dep't of Labor, Implementation of Project Labor Agreements 
in Federal Construction Projects: An Evaluation 20 (2011).
    \12\ Dep't of Labor, Implementation of Project Labor Agreements 
in Federal Construction Projects: An Evaluation 30 (2011).
---------------------------------------------------------------------------

    The benefits associated with PLAs, in turn, would have positive 
impacts for renewable energy projects on public lands, including 
ensuring responsible and productive construction, and minimizing the 
potential duration. These improved construction standards will better 
meet resource management objectives and ensure authorized uses on 
public lands are meeting the goal of the Energy Act of 2020 to promote 
the greatest use of solar and wind energy resources. These improved 
construction standards also are consistent with the BLM's authority 
under FLPMA to incorporate right-of-way terms and conditions that, 
among other things, ``protect Federal property and economic 
interests,'' ``manage efficiently the lands . . . subject to the right-
of-way,'' and ``protect lives and property.'' (43 U.S.C. 1765(b)). 
Further, as demonstrated by the reports and studies cited above, the 
use of PLAs leads to higher and more stable wages for workers. These 
reductions to the rates will further incentivize the use of PLAs by 
developers and will help to offset higher wages for workers, which, in 
turn, may help to reduce or eliminate economic hardships for workers 
who would otherwise not benefit from the higher standards and 
protections in PLAs.
    Some comments argued against the use of the labor union incentives 
included in the proposed rule and questioned the BLM's authority to 
offer these incentives. Other comments requested additional provisions 
be added to ensure responsible use of labor. As described above, the 
BLM has concluded that, under the authority provided in the Energy Act 
of 2020 and FLPMA, it has discretion to include reductions for the use 
of PLAs. These reductions will incentivize the use of PLAs, providing 
for increased assurances of timely, efficient construction; improved 
worker safety; and higher and more stable wages for workers. The BLM 
expects to publish additional policy guidance, such as through 
instruction memoranda, to clarify how qualifying PLAs will be 
identified, among other things. In providing this reduction in the 
final rule, the BLM is promoting responsible use of labor and the 
greatest use of solar and wind energy resources, as authorized by the 
Energy Act of 2020, by encouraging solar and wind energy development on 
public lands.
    Some comments suggested that the rule should apply a tiered 
incentive for developers based on the percentage of local labor they 
commit to hire, which could be implemented by certified payroll reports 
that include employee permanent addresses and in consultation with 
local officials. Several comments supported the inclusion of a 
reduction for Union Labor or PLAs. In the proposed rule, the BLM 
described the potential of adding a 20 percent capacity fee reduction 
for a holder's use of Union Labor or on the contingency of a PLA. In 
this final rule, the BLM has decided to include a reduction for holders 
who have entered into, or expect to enter into, a PLA for the 
construction of a project, based on comments and additional support for 
the benefits of using PLAs to advance infrastructure projects such as 
renewable energy projects. This additional reduction parallels the 
domestic content reduction in this rule in how it is applied in the 
calculation. This reduction is based on the use of a PLA in project 
construction and would offset some developer costs. The BLM does not 
include in this final rule the suggested local labor reduction, but the 
BLM believes the reduction for a PLA may also support the use of local 
labor.
    Paragraph (b)(1)(v) explains how the BLM applies the alternative 
MWh rate and the Domestic Content and PLA reductions from paragraphs 
(b)(1)(ii), (iii), and (iv) of this section. By default, the BLM will 
apply the ordinary MWh rate under paragraph (b)(1)(i) and the MWh rate 
reduction under paragraph (b)(1)(ii). A developer who wished to benefit 
from the alternative MWh rate, the domestic content reduction, or the 
PLA reduction will need to submit a request for conditional approval 
prior to the issuance of a grant or lease, along with sufficient 
documentation to demonstrate that the development qualifies or may 
later qualify for these rate reductions. In some cases, the BLM will 
not be able to determine definitively in advance whether the proponent 
qualifies for these reductions. The BLM may then conditionally approve 
the requested reductions, but the reductions will not go into effect 
until the proponent adequately demonstrates that the facility qualifies 
for the relevant reduction. If energy generation begins before the 
holder has demonstrated that the facility qualifies, the BLM will 
charge the holder the capacity fee absent the reduction. The capacity 
fee could be updated for subsequent calendar years after the holder 
demonstrates that the facility qualifies, but the BLM will not refund 
past payments made before the holder demonstrates that they qualify and 
rate reductions go into effect.
    For example, an applicant or presumptive leaseholder (see 
Sec. Sec.  2809.13 and 2809.15, below) might request conditional 
approval of an alternative MWh rate. In that situation, a request for 
conditional approval for an energy generation facility may be granted 
if the presumptive leaseholder has entered into or intends to enter 
into a PPA (see (b)(1)(i) of this section) that has a lower rate than 
the MWh rate. Documentation submitted to the BLM when requesting 
conditional approval may include draft or interim PPAs or confirmation 
in writing from the purchasing party that the parties have entered into 
negotiations. While the BLM may then conditionally approve the request 
for an alternative MWh rate, the alternative rate would not go into 
effect and be used when calculating the payment obligations until the 
PPA is finalized and the BLM determines, in writing, that the facility 
qualifies for the alternative rate. The holder's MWh rate would then be 
updated for the next year's billing. Payments for past years would not 
be adjusted retroactively.
    In another example of a request for conditional approval, an 
applicant or presumptive leaseholder might request conditional approval 
of a Domestic Content reduction. In this example, a request for 
conditional approval may be granted if the proponent demonstrates that 
it has firm plans to use items

[[Page 35660]]

qualifying for the preference. Documentation submitted to the BLM when 
requesting conditional approval may include procurement contracts or 
design documents showing that the facility would qualify for this 
reduction. While the BLM may then conditionally approve the request for 
a Domestic Content reduction, the reduction would not go into effect 
and be used to calculate the proponent's payment obligations until the 
proponent submits documentation of actual costs associated with the 
construction of the facility, such as fulfilled purchase orders and as-
built design documents demonstrating installation of the qualifying 
domestic content items in that facility and the BLM determines, in 
writing, that the facility actually qualifies for the reduction. The 
holder's MWh rate then would be updated for the next year's billing. 
Payments for past years would not be adjusted retroactively.
    Paragraph (b)(2) clarifies that ``E'' is the annual adjustment 
factor, which is set at three percent. This is the same adjustment 
factor used for the annual acreage rent under Sec.  2806.52(a)(1)(iii). 
See Sec.  2806.52(a) of this preamble for further discussion on the 
annual adjustment factor.
    The BLM understands that generally when a solar or wind energy 
operator begins generating electricity, it has entered into an 
agreement with a utility or other party to sell its power. It is 
customary that such agreements include an escalation clause that 
increases the purchase price of power each year of the agreement. These 
annual escalations vary by agreement; however, in general, the annual 
increase is approximately one percent to five percent each year for the 
contract term to account for gradual decreases in system operational 
efficiency, operating and maintenance costs, and increases in the 
retail rate of electricity. There may be some higher annual escalation 
rates, but that is not common. The BLM determined that a three percent 
annual adjustment factor is a reasonable escalation for the MWh rate 
based on a review of the average inflation rate over the previous 
fifteen years. The BLM considered both an adjustment for inflation that 
is predictable and an adjustment that changes more precisely with 
inflation over time. The BLM determined that a set inflationary 
adjustment that would alter the starting electricity price per MWh by a 
fixed factor each year was preferrable, because it would increase the 
predictability of future annual payments. While it is possible that the 
market price of electricity will deviate from this fixed rate over 
time, the benefit of rate predictability is important to renewable 
energy deployment on public lands. Future inflation may be higher than 
the historically low inflation of the decade or more prior to 2019. To 
accommodate the more recent inflationary trends, the BLM relied on the 
IDP-GDP average annual change for the most recent five-year period, 
2018-2022 (estimating 2022 with data for three available quarters), 
which was 3.36 percent, while taking into account that for the ten-year 
period preceding 2018, the rate was 1.52 percent. The BLM derived the 3 
percent rate in the final rule by rounding to the nearest whole percent 
of the recent inflationary trends.
    Some comments requested that the BLM remove the annual adjustment 
factor or reduce it, possibly using the prior year's IPD-GDP 
calculation as an adjustment factor. These comments noted that the BLM 
should be promoting the greatest use of solar and wind energy resources 
and maximize commercial interest in development on public lands. Other 
commenters suggested a higher annual adjustment factor, noting that 
recent inflation amounts are higher than the three percent proposed.
    The BLM considered a range of annual adjustment factors, including 
those based on IPD-GDP calculations. The BLM's use of three percent 
aims to capture a reasonable annual adjustment based on changes over 
time. This rule promotes the greatest use of solar and wind energy 
resources by applying and offering reductions to the capacity fee for 
qualifying developments. Additionally, the BLM's methodology focuses on 
rate predictability; making a recurring calculation using the IPD-GDP 
is a disincentive for solar or wind development because future rates 
change by uncertain amounts making the BLM rates unpredictable. This 
final rule does not change the annual adjustment factor due to these 
comments.
    The regular adjustment factor also provides improved predictability 
of rates over time for renewable energy developers compared to the 
BLM's previous periodic adjustments of the MWh fee, which were based on 
a combination of the annual weighted average wholesale price per MWh 
and the adjusted rate of return for certain U.S. Treasury Bonds, both 
of which are variable.
    Paragraph (b)(3) clarifies that ``F'' is the year of the grant or 
lease term, which is the same number used for the annual acreage rent 
under Sec.  2806.52(a)(1)(iv). See Sec.  2806.52(a) of this preamble 
for further discussion on the year of the grant or lease term.
    Paragraph (b)(4) clarifies that ``G'' is the rate of return, which 
is set at seven percent. By setting the rate of return in this rule, 
the BLM increases the rate predictability of its capacity fee. This 
rate of return will not adjust during the term of the authorization. In 
this final rule, the rate of return is the relationship of income to 
the total value for a granted use of the public land resource. The rate 
of return accounts for the value of the authorization each year for use 
of the resource on public lands that is provided to the BLM through an 
annual payment.
    A comment recommended that the BLM recalculate the rate of return 
using a 30-year average rate of return for 10-year Treasury Bond rates. 
The BLM appreciates the suggested recalculation of the rate of return 
over a 30-year period. The BLM selected the 50-year average of the 10-
year Treasury Bond as the reasonable rate to set its rate of return for 
this rule. See the BLM's Regulatory Impact Analysis accompanying this 
final rule for further information on how the BLM calculated the rate 
of return. No changes were made in this final rule due to this comment.
    The 50-year simple (i.e., arithmetic) average of the real annual 
return on 10-year Treasury Bonds is approximately seven percent. This 
50-year period includes times when the United States went through 
periods of stagflation, high inflation, economic boom, and relatively 
calm market conditions. The BLM's use of the average of the 10-year 
Treasury Bond rates is a reasonable reflection of a modest return to 
the government reflective of relatively low risk to the public. The 
proposed seven percent rate of return is also supported by the Council 
of Economic Advisors, which estimates a real return to U.S. capital of 
around seven percent from 1960 to 2014 using data from the National 
Income Product Accounts and other sources.\13\ By setting the rate of 
return in this final rule, it would not be adjusted in the future, 
except by further rulemaking.
---------------------------------------------------------------------------

    \13\ Council of Economic Advisers Issue Brief, ``Discounting for 
Public Policy: Theory and Recent Evidence on the Merits of Updating 
the Discount Rate'' (January 2017).
---------------------------------------------------------------------------

    One comment suggested that the rate of return stay at two percent 
as currently provided in BLM Manual 2806.60. The comment further 
suggested that the proposed increase from two to seven percent does not 
appear to be reasonable and is inconsistent with the Energy Act of 
2020. The updated rate setting

[[Page 35661]]

methodology in this final rule includes an increased rate of return, 
consistent with the BLM's authority under FLPMA to collect fair market 
value. The change in the rate of return is commensurate with other 
sectors of the energy market that base their return on a percentage of 
the commodity or energy generation value. It is appropriate that the 
rate of return change when transitioning from a capacity fee based on 
nameplate capacities to one based on the value of energy generation at 
market. The former rate setting methodology (see BLM Manual 2806.60) 
implemented the authority of the Energy Act of 2020 by reducing the 
rate of return to two percent. In this final rule, the BLM is applying 
the authority of the Energy Act of 2020 to the MWh Rate as reductions 
under Sec.  2806.52(b) instead of reducing the rate of return. In this 
final rule, the BLM has determined that reductions under Sec.  
2806.52(b) for solar and wind energy are more meaningful than the 
reductions in the Manual 2806.60 and are necessary to promote the 
greatest use of solar and wind energy resources on the public lands. 
The BLM did not change this section of the final rule in response to 
this comment.
    Paragraph (b)(5) clarifies that ``H'' is the annual energy 
generated on public lands for the right-of-way in question. The BLM 
will issue a bill to coincide with the calendar year based on the 
annual certified statement provided to the BLM that gives either the 
amount of estimated or actual electricity generated by the development. 
The payment for the first year of energy generation will be based on an 
estimate of energy generation, and then the BLM will determine final 
payment for that first year based on actual energy generation. The 
following years of payments made in advance, pursuant to 504(g) of 
FLPMA, will be based on the most recent calendar year's actual energy 
generation reported on the certified statement. Exception to using 
actual energy generation is provided for, in certain circumstances, 
under paragraph (b)(5)(vi) of this section. Paragraph (vii) addresses 
late payments specific to underestimating energy generation in certain 
circumstances.
    Paragraph (b)(5) has changed from the proposed rule due to public 
comments. The BLM proposed to require developers to provide an estimate 
for each year of energy generation of a development project to 
calculate the payment in advance. Those estimated energy generation 
amounts would be updated after that calendar year using actual energy 
generation amounts and any over or underpayment would be determined at 
that time. Revisions to this paragraph now provide in the following 
subparagraphs that:
    (i) The holder must submit an annual certified statement to the BLM 
before the first year of energy generation begins or is scheduled to 
begin. Thereafter, annual certified statements must be submitted by the 
end of October.
    (ii) Prior to the start of energy generation, the holder must 
submit the annual certified statement containing an estimate of energy 
generation on the right-of-way (estimate of first year's energy 
generation).
    (iii) Once energy generation has begun, the holder must submit to 
the BLM an annual certified statement of the most recent calendar 
year's actual energy generation on the right-of-way.
    (iv) The BLM's calculation for payment of the capacity fee will be 
based on the certified annual statement. Calculation for payment of the 
capacity fee for development projects that contain both public and non-
public lands will be prorated by multiplying the total energy generated 
by the percentage of the total development area made up of the right-
of-way footprint on public lands.
    (v) If the year's actual energy generation exceeds or is less than 
the amount of energy generation used to bill for the payment in 
advance, the holder will be billed, credited, or refunded for the 
underpayment or overpayments pursuant to Sec. Sec.  2806.13(e) and 
2806.16. In no event will the total payment required be less than the 
annual acreage rent.
    (vi) The BLM may approve a request by a holder to provide a new 
estimate of energy generation in certain circumstances. Circumstances 
would including those when energy generation is expected to be 
interrupted, such as with planned maintenance activities, where the 
amount of energy generated is expected to interrupt energy generation 
by 25 percent or more, or where the right-of-way holder is aware that 
the energy generation in the subsequent year will exceed the actual 
energy generation for the previous year by 25 percent or more such that 
the BLM's use of the actual generation from the previous year as the 
basis for a bill would result in an underestimate of more than 25 
percent.
    (vii) The BLM may assess a late payment fee of 10 percent of actual 
energy generation for the year in which the underestimation occurs. The 
holder will pay a late payment fee for each year of underestimation if 
the right-of-way holder underestimates energy generation by 25 percent 
or more of the actual energy generation or does not provide the BLM 
with a new estimate when energy production will exceed the previous 
year's actual production by more than 25 percent. The BLM may decide 
not to assess the late payment if the right-of-way holder provides an 
adequate justification that the underestimation was reasonably 
unforeseeable prior to payment of the annual bill, consistent with 
Sec.  2805.12(e).
    Some comments asserted that penalties for underestimating 
generation are inappropriate as factors outside of a developer's 
control, such as weather or grid related interruptions, may cause 
unexpected generation shortfalls. Additionally, comments noted that 
developers have every incentive to maximize production, which may 
itself cause a developer to underestimate generation. The BLM has 
revised the rule to reduce the potential that a holder would be subject 
to a penalty while minimizing the potential for underestimation. 
Consistent with other comments related to the term length under 2801.9, 
the BLM has made revisions to Sec.  2806.52(b)(5) that are consistent 
with revisions made under Sec. Sec.  2805.12(c)(8) and 2807.17(c). The 
BLM revised paragraph (vi) and added paragraph (vii) to this final rule 
due to comments.
    Pursuant to Sec.  2805.12(c)(8), a holder may receive a notice from 
the BLM of their noncompliance with the right-of-way and that they are 
subject to right-of-way termination. Additionally, the BLM may address 
a holder's chronic underestimation through existing Sec.  2807.17(a), 
resulting in suspension or termination of the authorization. The BLM 
may make such a determination after collecting relevant information, 
including information provided pursuant to Sec.  2805.12(a)(15).
    Some comments requested that the rule preserve sensitive 
competitive information amongst operators of solar and wind energy 
development projects. These comments suggested that the BLM could allow 
developers to submit generation data based on Form 923, which is 
provided to the Energy Information Administration. The final rule does 
not carry forward the suggested use of Form 923. The BLM disagrees with 
waiting the additional time to collect actual energy generation and 
update or validate prior year bill and payments with rights-of-way 
holders. As suggested by commenters, using Form 923 would delay billing 
for actual energy generation amount by an additional year, which is not 
acceptable for the BLM's responsible stewardship of the public lands. 
No changes were made due to this comment.
    Section 2805.12(c)(8) sets the diligent operation standards for 
solar and wind

[[Page 35662]]

energy development projects and provides steps to follow when a holder 
expects to fail in meeting diligent operation requirements. Holders may 
follow the steps outlined in this section to ensure compliance with 
this final rule.
    Paragraph (b)(6) of this section describes where you may obtain a 
copy of the current MWh rate schedule for solar and wind energy 
generation.
    Paragraph (b)(7) of this section provides for periodic adjustments 
to the MWh rate. This paragraph applies unless you are an existing 
holder and elect to continue paying under your current rate adjustment 
method per Sec.  2806.51(c).
    Paragraph (b)(7)(i) of this section clarifies that the rate from 
the MWh rate schedule for the first year of energy generation will not 
change once your grant or lease is authorized. The annual adjustment 
factor under Sec.  2806.52(b)(1)(i) applies to the MWh rate during the 
term of the grant or lease. Any subsequent MWh rate schedule updates 
will apply to new grants and leases.
    Paragraph (b)(7)(ii) of this section provides that the MWh rate 
schedule will be updated once every five years consistent with the 
timing of acreage rent adjustments. The MWh rate schedule will include 
the annual adjustment factor for the five-year period it covers.
    Paragraph (b)(8) of this section provides that the general payment 
provisions for rents under Sec.  2806.14(a)(4) also apply to the 
capacity fee.
    Paragraph (c) applies unless you are an existing grant or 
leaseholder and elect to continue with your current MW capacity fee 
adjustment method. The fee is set at the time of authorization or re-
issuance and not adjusted further except by the annual adjustment 
factor from Sec.  2806.52(b)(2).
    Some comments suggested that the BLM should retain discretion under 
Sec.  2805.12(e) to adjust rent and fee values, including at the 
request of a right-of-way applicant or holder. While section 
2805.12(e)(2) of this final rule does not include a mechanism for 
applicants or holders to request alternative rent or fee rates in 
general, the BLM has revised Sec.  2806.52(b)(1)(i) to identify 
circumstances where the BLM would have discretion to select an 
alternative MWh rate.
    Some comments suggested a wide range of potential fee structures to 
address environmental and economic factors. Some comments also 
requested that the BLM clarify how the rents and fee numbers were 
developed. The BLM's development of the acreage rent and capacity fee 
was an iterative process that included consideration of the BLM's legal 
authority; taxpayer concerns for the collection of reasonable rent for 
the use of public lands and resources; the BLM's prior policies for 
rents and fees and their impact to solar and wind deployment on public 
lands; and the national renewable energy goals on public lands set in 
section 3004 of the Energy Act of 2020. The BLM initially solicited 
comments in September 2021 after which the BLM published interim 
guidance in Manual section 2806.60--Rent.
    Some comments requested a publication or annual report from the BLM 
on the payments it has received from solar and wind energy development 
projects. This information can be found in the BLM's annual publication 
of Public Land Statistics, which enumerates annual revenues from energy 
resources including wind and solar rents and fees.
    Some comments requested that the BLM provide fee reductions for 
projects that are sited on previously disturbed lands or outside of 
sensitive wildlife habitats. The BLM contemplated various methods and 
models by which to potentially apply rate reductions in this final 
rule. Additional information on the alternatives considered may be seen 
in the proposed rule's preamble discussion under subpart 2806. The BLM 
determined that an across-the-board reduction best meets national 
energy goals. This methodology provides flexibility and financial 
incentives without regard to where projects may be sited. Having 
reduced rent and fee rates that are independent of location complements 
the BLM's ability to update land use planning, which defines where 
project applications may be proposed and where projects will not become 
obsolete if or when technology advances and siting needs shift for 
economic or environmental reasons.
    One comment suggested that a holder should be able to select 
whether they wish to pay an acreage rent or capacity fee. The BLM 
disagrees with this comment. This final rule clearly provides for both 
an acreage rent or a capacity fee for solar and wind energy development 
projects. Generally, the acreage rent is required for the intensity of 
use and the occupancy, including site control, of the surface of the 
public lands. The capacity fee reflects the value of the energy 
generated from the solar or wind energy resource located on public 
lands. The BLM will collect the greater of either the acreage rent or 
the capacity fee for a solar or wind energy development.
    One comment suggested rate reductions be made available for 
existing right-of-way holders who enter into new PPAs for a project 
during the term of an authorization, such as when they repower. This 
final rule provides for greatly increased rate predictability for solar 
and wind energy development rights-of-way. Under Sec.  2806.52(b)(v), 
the BLM provides an opportunity for conditionally approving a reduction 
if it receives a request with sufficient documentation demonstrating 
that the holder may qualify for the reduction before the BLM issues the 
right-of-way. No other opportunity for later qualifying for a reduction 
is made available in this rule as the reductions to its rates are 
available prior to the BLM issuing the ROW. The BLM believes that the 
adjustments to improve rate predictability, including allowing for a 
longer term (see Sec.  2801.9) for certain rights-of-way, will provide 
for the longer economical life of a particular project. An operator or 
a holder of an existing authorization may elect to keep their current 
rate methodology, including future adjustments that may be made, if 
they do not wish to change to the rate-setting methodology of this 
final rule.
    Some comments suggested that the 80 percent reduction of capacity 
fees without any qualifying stipulations will adversely distort the 
energy market and land uses. The BLM does not expect this final rule to 
alter the solar or wind energy markets or uses of public lands 
adversely. This final rule implements the authority of the Energy Act 
of 2020 and direction of Executive Order 14008, among others, that set 
goals to promote the greatest use of solar and wind energy resources on 
public lands. The rule is intended to incentivize development of wind 
and solar energy projects on BLM-managed lands. The BLM sees any 
resulting change that benefits solar or wind in energy markets as a 
positive development. See Reductions and Discounts under 5.1 of the 
Regulatory Impact Analysis for further information on the 80 percent 
reduction and the economic impacts of the rule.
    Some comments suggested that the BLM should collect fair market 
value for the use of federal lands under the BLM's rule. While FLPMA 
generally requires the BLM to collect the fair market value for the use 
of the public lands, the Energy Act of 2020 provides the Secretary of 
the Interior with additional authority to reduce acreage rents and 
capacity fees, including to less than fair market value in certain 
circumstances. The BLM is implementing this authority to reduce the 
financial burden to solar

[[Page 35663]]

and wind energy developers to promote the national interest of 
developing a clean energy economy.

Section 2806.54 Energy Storage Facilities That are Not Part of a Solar 
or Wind Energy Development

    Section 2806.54 clarifies that the rent the BLM determines for an 
energy storage facility that is not part of a solar or wind energy 
development facility is based on the linear rent schedule. Energy 
storage facilities may be authorized separately from a solar or wind 
energy development facility. In these instances, the BLM will apply the 
linear rent schedule unless the BLM determines that the linear rent 
schedule does not apply to the underlying right-of-way use under Sec.  
2806.70, such as when the BLM may determine that a small site rent 
schedule applies to an energy storage facility.
    The BLM will not charge the rent or fee of a solar or wind energy 
development right-of-way for an energy storage facility that is 
separate and independent from a right-of-way for an energy generation 
facility. Charging a capacity fee would be inappropriate as no energy 
generation from the facility would be occurring from the use of public 
lands. Using the pastureland rents for energy storage would also be 
inappropriate, as use of those acreage rates is intended to be coupled 
with the capacity fee to determine solar and wind energy generation 
payments for use of public lands.
    Sections 2806.60 through 2806.68 are removed from the final rule. 
Information formerly contained in these sections is now found in 
sections 2806.50 through 2806.58.

Subpart 2807--Grant Administration and Operation

Section 2807.17 Under what conditions may BLM suspend or terminate my 
grant?

    Section 2807.17 of this final rule is updated based upon comments 
on Sec.  2801.9 regarding term length and updates to Sec.  2805.12 
regarding new diligent operation requirements for solar and wind energy 
development. See the respective sections of this preamble for further 
information on the term length and the terms and conditions of grants 
and leases for solar and wind energy.
    Section 2807.17(c) provides that the BLM may suspend or terminate a 
right-of-way upon abandonment. The BLM presumes that a right-of-way 
holder has abandoned its right-of-way by failing to use it for a 
continuous 5-year period, except for solar and wind energy. Solar and 
wind energy rights-of-way are presumed to be abandoned after two 
continuous years of insufficient productivity or upon abandonment. This 
section is updated consistent with the new provision in Sec.  
2805.12(c)(8), which provides for a holder to receive notice of the 
BLM's presumption and gives a reasonable time to cure the noncompliance 
with the diligent operations requirement.

Section 2807.20 When must I amend my application, seek an amendment of 
my grant or lease, or obtain a new grant or lease?

    Section 2807.20 describes when a right-of-way applicant must seek 
to amend its application, grant, or lease.
    Paragraph (b) clarifies that ``except for qualifying energy 
development grants and leases per Sec.  2806.51(c),'' the requirements 
for amending an application or grant are the same as processing a new 
application, including payment of processing and monitoring cost 
recovery fees. Section 2806.51(c) provides a unique exception for 
existing solar and wind energy rights-of-way authorized before this 
final rule that may convert to the rent adjustment methodology of this 
final rule. See Sec.  2806.51(c) of this preamble for further 
information on qualifying authorizations.
    Paragraph (f) describes how the BLM would administer an approved 
solar and wind energy grant or lease if the holder requests to change 
the rent adjustment methodology. Any request would have to be received 
within 2 years of the date this rule becomes effective and would be 
processed as an amendment by which the BLM would re-issue the grant or 
lease and update the terms and conditions under Sec.  2805.12 and rent 
provisions under Sec. Sec.  2806.50 through 2806.52. The BLM would be 
able to collect or use processing and monitoring costs under Sec. Sec.  
2804.14 and 2805.16 for handling the request. See Sec.  2806.51(c) for 
further discussion regarding requests to use the rent adjustment 
methodology of this rule.
    One comment suggested that State and local governments should have 
a shared decision-making role with the BLM when the BLM considers re-
issuing a grant or lease to convert the right-of-way over to the new 
rate adjustment methodology. The BLM does not agree with the suggestion 
that State or local government offices should share in a decision-
making role when the BLM decides whether to authorize a change to the 
rent adjustment methodology. Re-issuing an authorization under this 
final rule is an administrative action that will convert existing 
authorized projects to the new rate setting methodology for the use of 
BLM-administered public lands and resources. The BLM will continue to 
engage with the public, and Tribal, Federal, State and local government 
partners on the BLM's management of its public lands, as appropriate. 
The BLM did not change this section of the final rule.

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

    Section 2807.21 describes the requirements for a holder seeking to 
assign or make other changes to a grant or lease.
    Paragraph (e) clarifies that when the BLM assigns a right-of-way 
from one holder to another, it may modify a grant or lease, such as by 
adding additional terms and conditions. The paragraph exempts solar and 
wind energy leases from that provision unless modifications are 
warranted under Sec.  2805.15(e), which provides for changes to terms 
and conditions as a result of changes in legislation, regulation, or as 
otherwise necessary to protect the public health or safety or the 
environment. This final rule removes provisions that distinguished 
between inside and outside DLAs for solar and wind energy development. 
The BLM may assign leases inside of DLAs without competition.
    One comment suggested that the BLM should retain the authority to 
impose additional requirements on solar and wind projects. The 
commenter expressed concern that the BLM may be constrained when it 
comes to regulating a bad operator especially with regards to excepting 
a bond requirement and that bond requirements should be mandatory on 
solar and wind projects, so the BLM does not have to clean up sites 
after company closure or refusal to perform reclamation. The BLM 
requires a bond for all solar and wind energy grants and leases. The 
BLM requires this bonding upfront to cover reclamation costs and to 
enforce the terms and conditions, such as those for rent and capacity 
fees. Paragraph (e) provides that the BLM, when assigning a grant or 
lease to a new holder, may modify the right-of-way and add bonding and 
other requirements, including additional terms and conditions, except 
for wind and solar leases which the BLM can only modify when warranted 
as a result of changes in legislation, regulation, or as otherwise 
necessary to protect public health or safety or the environment as 
reflected in Sec.  2805.15(e). The BLM also has diligent development 
and operation requirements, among other terms and conditions, in Sec.  
2805.12 that further ensure a holders' compliance with the

[[Page 35664]]

right-of-way authorization and all its requirements. The BLM did not 
change this section of the final rule.

Subpart 2809--Competitive Process for Solar and Wind Energy Development 
Applications or Leases

    Subpart 2809, ``Competitive Process for Leasing Lands for Solar and 
Wind Energy Development Inside Designated Leasing Areas'' is dedicated 
to competitive solar and wind energy processes. In the final rule, 
Subpart 2809 generally applies the same competitive process both within 
and outside DLAs.

Section 2809.10 Competitive Process for Energy Development Grants and 
Leases

    Section 2809.10, ``Competitive process for energy development 
grants and leases,'' applies to public lands located both inside and 
outside of DLAs. Paragraphs (a) through (d) explain that the BLM may 
conduct a competitive process to consider solar or wind energy 
development applications or leases: (1) on its own initiative; (2) 
based on responses to a call for nominations; (3) based on a request 
submitted by a member of the public in writing; or (4) when it receives 
two or more competing applications. These provisions incorporate the 
BLM's broad discretion under FLPMA to determine under what 
circumstances it may utilize a competitive process. This section is 
revised to replace ``offer'' with ``process'' to remain consistent with 
this section's requirements for solar and wind energy development grant 
and leases competitive process.
    The BLM has determined that it will implement its discretion under 
FLPMA to potentially utilize a competitive process for lands both 
inside and outside of DLAs and thus standardize a competitive process 
where competitive interest exists. More specifically, the BLM will use 
the most appropriate process given the circumstances of a particular 
location, spurring more competition for the most desirable areas, while 
continuing to increase solar and wind energy deployment consistent with 
the statutory direction in the Energy Act of 2020.
    As proposed, prior paragraph (d) is removed consistent with changes 
made under Sec.  2804.35(b) and elsewhere in subpart 2809. The BLM has 
discretion to process applications inside DLAs without going through a 
competitive process. Accepting applications inside DLAs reduces 
timelines and costs and removes barriers for considering development 
projects where there is no competitive interest.
    Proposed Sec.  2809.10(e) would have precluded the BLM from holding 
a competitive process when the BLM has accepted a complete application, 
received a Plan of Development, entered into a cost recovery agreement, 
and published an EA or Draft EIS. Industry comments suggested that the 
BLM commit to not holding a competitive process earlier than in the 
proposed rule. In response to those comments, the final rule 
establishes that the BLM will not initiate a competitive process for 
those lands where the BLM has accepted a completed application, 
received a Plan of Development, and entered into a cost recovery 
agreement, while removing the requirement that the BLM must have 
published an EA or a draft EIS.
    The final rule also adds to Sec.  2809.10(e) an exception 
referencing Sec.  2804.25(c). Even where the BLM has accepted a 
complete application, received a Plan of Development, and entered into 
a cost recovery agreement, it may nonetheless offer lands in a 
competitive process if the applicant has not proceeded diligently as 
required by Sec.  2804.25(c). These amendments give the industry the 
certainty it needs to proceed with projects while retaining the BLM's 
discretion to deny an application or offer lands competitively if the 
applicant does not proceed diligently. In that way, these amendments 
balance the BLM's obligations to incentivize renewable energy 
development on public lands and to recover a fair return for U.S. 
taxpayers.
    Some comments suggested that requiring a competitive leasing 
process in designated leasing areas has helped ensure that only well-
thought-out projects are proposed. These commenters raised concerns 
that eliminating a required competitive process will cause a rush of 
poorly planned projects and will decrease use of the designated leasing 
areas. Several comments argued in favor of requiring a competitive 
process in designated areas, emphasizing that it shifts the burden from 
taxpayers to those who stand to profit, validates demand, increases 
financial return for use of public lands, drives innovation, and 
ensures transparency and fairness in the process. These comments 
expressed concerns that non-competitive leasing may discourage 
investment and lead to inefficiencies.
    In this final rule, the BLM's change in the use of competitive 
processes is intended to provide flexibility in addressing interest in 
the use of public lands for solar and wind energy and will not allow 
for or authorize poorly planned projects. The BLM retains its 
discretion to authorize or deny solar or wind energy development 
projects. As explained in the preamble to the proposed rule, the 
requirement to undertake competitive processes for all applications in 
DLA's extends the timeline and increases costs, creating a barrier for 
authorizing projects in areas where there is no competitive interest. 
The BLM has broad discretion under FLPMA to determine under what 
circumstances it may utilize a competitive process for lands both 
inside and outside of DLAs and to use competitive processes only where 
competitive interest exists. The BLM anticipates that accepting 
applications in DLAs without the prerequisite of holding a competitive 
process will likely generate more applications in the most desirable 
locations. The final rule also provides the BLM with the flexibility to 
utilize a competitive process where there are multiple competing 
applications. The purpose of these changes is to ensure that the BLM 
can use the most appropriate process given the circumstances of a 
particular location, which the BLM believes will spur more competition 
for the most desirable areas, while continuing to increase solar and 
wind energy deployment consistent with the statutory direction in the 
Energy Act of 2020.
    For the same reasons, the BLM disagrees with the comments that 
focusing the BLM's competitive process and resources to where there is 
competitive interest on public lands is a negative impact to taxpayers, 
demand, financial return, innovation, and transparency. This final rule 
improves transparency over all processes of the BLM's administration of 
applications and right-of-way authorizations and achieves the goals set 
by the Energy Act of 2020 and direction of Executive Order 14008. 
Moreover, although DLAs represent areas specifically designated for 
renewable energy development, they are not the only areas where such 
development may be appropriate, nor are they the only areas where use 
of a competitive process may be appropriate. These projects are complex 
and require many different steps and actions to occur to be successful. 
The BLM believes offering areas outside of DLAs for a competitive 
process is appropriate and would help to meet the goals of the Energy 
Act of 2020 and direction of Executive Order 14008.
    Some comments suggested leasing should not be competitive, or at 
least only be considered in specific circumstances, such as when 
multiple applications for the same area are

[[Page 35665]]

submitted or when certain conditions are met, such as when labor 
agreements are not used. This section of the final rule clarifies when 
the BLM may conduct a competitive process, including for competing 
applications under paragraph (d). The BLM disagrees that attaining an 
agreement to use certain labor should determine whether the BLM holds a 
competitive process or not. The BLM's discretion to hold a competitive 
process includes when there is competitive interest for that system or 
land or upon the BLM's own initiative, among other reasons identified 
in this section of the rule.
    Some comments highlighted the interest in a clear and standardized 
process and suggested that the potential for competition should be 
limited to avoid deterring investment. In this final rule, the BLM has 
provided a clear process that the BLM will follow for solar and wind 
energy development projects when a competitive process is held. 
However, the BLM does not agree with comments to limit competition. The 
BLM will generally hold a competitive process where there is a 
competitive interest, whether it is inside or outside of designated 
leasing areas, or on its own initiative.
    Other comments recommended adding steps to ensure no competition 
exists before processing applications without a competitive process. 
Suggestions given to the BLM include filing a notice in the local 
newspaper, online, or in the Federal Register whenever the BLM receives 
an application requesting any other applications to be submitted. This 
final rule does not include provisions to require solicitation of 
public interest with every application submitted to the BLM for a solar 
or wind energy development. The Energy Act of 2020 and direction of 
Executive Order 14008 are clear in seeking expedited deployment of 
renewable energy projects on public lands. Adding provisions in the 
BLM's rules that require additional steps to solicit competitive 
interest where there may not be any may slow the deployment of 
renewable energy. Historically, the majority of solar and wind rights-
of-way authorized on BLM-administered public lands have been authorized 
after an application process without a competitive process, and there 
are only six existing competitively issued leases, which is only 
approximately six percent of authorized development projects on public 
lands. You may find information on the BLM's authorized and pending 
solar and wind energy projects on its website at: https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects. More specifically, since the BLM began using competitive 
processes for permitting solar leases on BLM public lands, the agency 
has held five competitive processes for 16 parcels. These have resulted 
in multiple bids for nine parcels, a single bid for three parcels, and 
no bids for four parcels. In the circumstances that BLM held a 
competitive process and received no bids, the BLM had previously 
received several expressions of interest and applications for those 
public lands. The BLM then held a competitive auction resulting in no 
bids for three parcels. The BLM did not change this section of the 
final rule.
    A comment requested that the final rule clarify when the BLM will 
not require an auction. The BLM does not believe additional 
clarification is necessary, as Sec.  2809.10(e) provides that the BLM 
would not offer lands through a competitive process when the BLM has 
accepted a completed application, received a Plan of Development, and 
entered into a cost recovery agreement.
    One comment suggested that the final rule clarify that the BLM 
should be precluded from using a competitive process to award a solar 
or wind energy development lease or grant on an area of public lands 
once an applicant has either submitted a right-of-way application for 
solar or wind energy development or made substantial investments in 
potentially developing that area of the public lands. While the 
proposed rule provided that BLM would not offer lands in a competitive 
process if four criteria were met, this final rule removes the fourth 
proposed criterion in section (e): ``on publication of an Environmental 
Assessment or Draft Environmental Statement.'' The final rule retains 
the first three, such that the BLM would not offer lands in a 
competitive process for which it has accepted a complete application 
(see Sec.  2804.12(j)), received a Plan of Development (see Sec.  
2804.12(b)), and entered into a cost recovery agreement (see Sec.  
2804.14). This change requires fewer milestones to close the window for 
holding a competitive process than the proposed rule and improves 
certainty for interested developers to proceed with applications but it 
does not move the threshold for prohibiting competitive processes 
earlier than in the existing regulations as the commenter suggested.
    In addition to the changes under 2809.10(e), the BLM revised Sec.  
2804.25(c) to clarify that the BLM retains discretion to deny an 
application where the applicant does not proceed diligently. An 
applicant's failure to remain diligent in processing an application may 
result in the BLM denying the application and offering the lands 
competitively. These amendments balance the BLM's obligations to 
incentivize renewable energy development on public lands and to recover 
a fair return for U.S. taxpayers.
    A comment suggested that the BLM should not require a competitive 
process where an applicant's facilities are located on both private and 
federal lands and the applicant has secured agreements with the 
adjacent landowners. This final rule governs the BLM's administration 
of applications and authorizations, including competitive processes. 
The BLM will consider all relevant and available information when 
determining whether a competitive process is appropriate, including 
whether separate agreements had already been met for adjacent lands. 
However, this rule does not preclude the BLM from holding a competitive 
process when agreements are held for adjacent lands, which would allow 
developers and adjacent landholders to effectively monopolize the use 
of the public lands without first obtaining authorization from the BLM. 
In instances where the BLM believes it is appropriate, it may determine 
to hold a competitive process.
    Other commenters suggested that the BLM should only have the 
discretion to move to a competitive process in the initiation phase of 
a project and not after an application is complete and the cost 
recovery is funded. This final rule maintains the BLM's discretion to 
determine whether there is a competitive interest in the public lands. 
In the BLM's experience, some applications progress more slowly than 
others once the existing requirements of the BLM rules are met. By 
requiring a complete application pursuant to Sec.  2804.12(j), a Plan 
of Development pursuant to Sec.  2804.12(b), and a cost recovery 
agreement pursuant to Sec.  2804.14, the BLM will help ensure that 
applicants remain diligent in pursuing their use of the public lands, 
while preserving discretion to utilize a competitive process. Even 
after that point, Sec.  2804.25(c) of the final rule clarifies that the 
BLM retains discretion to deny an application where the applicant does 
not proceed diligently. These additional conditions will not 
unreasonably burden diligent applicants and will help identify those 
applicants who are not working with the BLM to process applications 
diligently.

[[Page 35666]]

Section 2809.11 How will the BLM call for nominations?

    Section 2809.11 is retitled to improve consistency with this 
section of the final rule. No changes were made to this section due to 
comments. Consistent with the change in terminology of Sec.  2809.10, 
the BLM changed ``offer'' with ``process'' throughout this section.
    Paragraph (a) provides that the BLM may publish a notice in the 
Federal Register calling for nominations of lands to be offered through 
a competitive process for solar and wind energy development. Other 
notification methods may also be used, such as a newspaper of general 
circulation in the affected area or the internet. The section allows 
for the BLM's discretionary use of a competitive process discussed in 
Sec.  2809.10. The paragraph would also specify information that will 
be included in a call for nominations as follows:
    (1) The date, time, and location by which nominations must be 
submitted;
    (2) The date by which nominators will be notified of the BLM's 
decision on timely submissions;
    (3) The area or areas for which nominations are being requested; 
and
    (4) The qualification for a nominator, which must include at a 
minimum the requirements for an applicant, see Sec.  2803.10.
    Paragraph (b) provides the requirements for nominating a parcel of 
land for a competitive process. Paragraph (b)(1) requires payment of $5 
per acre for nominated parcels. The nomination fee is collected by the 
BLM under its cost recovery authority under Sections 304(b) and 504(g) 
of FLPMA, and the portion not spent in processing the nomination and 
preparing for a competitive process may be refunded to the nominator if 
not successful in the competitive process. These fees reimburse the BLM 
for the expense of preparing and holding a competitive process.
    Paragraph (b)(2) requires the nomination to include the nominator's 
name and address of record. This information is necessary for the BLM 
to communicate with the nominator about a future competitive process 
for the parcel.
    Paragraph (b)(3) requires that a nomination be accompanied by a 
legal land description and a map of the parcel of land. This 
information helps identify nominated parcels for the competitive 
process.
    Paragraph (c) provides that the BLM will not accept nomination 
submissions that do not comply with this section or from submitters who 
are not qualified per Sec.  2803.10 to hold a grant or lease.
    Paragraph (d) provides that a nomination cannot be withdrawn except 
by the BLM for cause, in which case the nomination fee would be 
refunded.
    Paragraph (e) provides that the decision whether to hold a 
competitive process in response to a nomination lies in the BLM's 
discretion.
    Some comments requested that the BLM make the nomination fee non-
refundable. One comment further suggested that the BLM require ``skin 
in the game'' from project proponents and that the BLM should keep the 
fee to cover at least any reasonable costs it incurred in pursuing the 
nomination. The BLM agrees with comments suggesting that the fee should 
be used in recovering its reasonable costs in processing the nomination 
and preparing for a competitive process. The BLM's authority under 
Sections 304(b) and 504(g) of FLPMA allows for the use of these funds 
in processing applications. Per existing rules, the BLM may refund the 
balance, if any, of collected cost recovery funds when they are no 
longer needed. Please see existing subpart 2804, starting with Sec.  
2804.14, for more information on the BLM's administration of cost 
recovery fees.

Section 2809.12 How will the BLM select and prepare parcels?

    Section 2809.12 describes how the BLM identifies parcels suitable 
for competitive processes. The BLM did not make changes to this section 
of the final rule in response to comments received, except that, 
consistent with the change in terminology of prior sections, the BLM 
changed ``offer'' to ``process'' throughout this section. The BLM also 
removed ``on existing'' when describing land use designations to avoid 
confusion and clarify that only existing land use designations may be 
considered.
    Paragraph (a) clarifies that the BLM may rely on any information it 
deems relevant in identifying parcels for competitive processes, but 
also describes more precisely the most common sources of information, 
which include public nominations and existing land use designations. 
The BLM is not constrained to consider only these listed sources of 
information when deciding whether to conduct competitive processes for 
certain parcels.
    Paragraph (b) clarifies that the BLM may conduct necessary studies 
and site evaluation work, including applicable environmental reviews 
and public meetings, either before or after offering lands for a 
competitive process. The BLM has sometimes found that the necessary 
studies and site evaluation work cannot be completed until the 
competitive process is held and the successful bidder has submitted an 
application or Plan of Development. The BLM must complete site-specific 
NEPA analysis even when the BLM has identified a successful bidder as 
the presumptive leaseholder. The BLM retains discretion to approve, 
approve with modification, or deny a proposed energy development.
    The BLM revised the language of proposed paragraph (c) to clarify 
that it is the BLM's choice whether to use a competitive process or not 
and that such choices do not constitute a decision to approve or deny a 
grant or lease and are not subject to appeal under 43 CFR part 4.
    A comment suggested that under paragraph (c), the final rule should 
allow for administrative appeals, as it relates to BLM procedures used 
to make decisions. Paragraph (c) of the final rule clarifies that the 
BLM's choice about whether to use a competitive process is not a 
decision to grant or deny a right-of-way or otherwise final agency 
action; instead it represents only an intermediate step that may or may 
not lead to a decision. The public's ability to administratively appeal 
an agency decision to grant or deny a right-of-way is unaffected by 
this provision. The BLM will continue to provide ample opportunities to 
the public for engagement throughout both the competitive and non-
competitive permitting processes. An appeal may be considered when the 
BLM issues a decision under 43 CFR part 2800.
    A comment suggested that allowing for an administrative appeal 
process to challenge a BLM choice to use a non-competitive process 
would assist the BLM in identifying whether there is any competitive 
interest in the public land, getting a better return for the public. 
The BLM disagrees with this comment. Administrative appeals may be 
submitted only for agency decisions (see existing Sec.  2801.10). 
Additionally, allowing for administrative appeals over interim choices 
by the BLM about which procedures to follow to reach a decision would 
likely delay its decision-making process substantially.

Section 2809.13 How will the BLM conduct competitive processes?

    Section 2809.13 is retitled from the proposed rule consistent with 
other changes to replace ``offer'' with ``process.'' The change from 
the proposed rule to read ``process'' when describing the BLM's 
competitive process is made throughout this section when appropriate.
    This section describes how the BLM conducts competitive processes.

[[Page 35667]]

Paragraph (b) provides that the BLM publishes a notice of competitive 
process in the Federal Register and through other notification methods, 
such as a newspaper of general circulation in the area affected or the 
internet. Paragraph (b)(7) clarifies that the notice of competitive 
process would state whether a successful bidder would become a 
preferred applicant or a presumptive leaseholder. Preferred applicants 
are required to meet application submission requirements under Sec.  
2804.12, and presumptive leaseholders are required to submit a Plan of 
Development per Sec.  2809.18. The preferred applicants and presumptive 
leaseholders are discussed further in Sec.  2809.15.
    Under paragraph (c) of this final rule, the BLM will notify 
nominators of its decision to conduct a competitive process at least 30 
days in advance of the bidding for the lands that were nominated if the 
nominator has paid the nomination fees and demonstrated qualifications 
to hold a grant or lease.
    Some comments suggested that under paragraph (b)(7) the BLM should 
continue to require a successful bidder to submit a Plan of 
Development. The BLM agrees with these comments. A Plan of Development 
is required in this final rule by a presumptive leaseholder under 
paragraph 2809.15(a)(ii) and by a preferred applicant who would follow 
the application process for solar and wind energy applications, 
including the submission of a Plan of Development required under Sec.  
2804.25(c).

Section 2809.15 How will the BLM select the successful bidder?

    Section 2809.15 explains how the successful bidder is selected. In 
this final rule, the distinction between preferred applicants and 
presumptive leaseholders reflects the fact that the BLM may conduct 
competitive processes in a variety of circumstances with different 
outcomes. The distinction between presumptive leaseholder and preferred 
applicant is intended to ensure that the BLM can expedite approval of 
proposed projects in areas where the environmental impacts of solar and 
wind energy development have been previously analyzed and disclosed 
through a land use planning process. This will help ensure that the BLM 
does not commit public land resources before completing the necessary 
analyses. This section is also revised, consistent with other changes 
in this rule, to refer to ``process'' where appropriate when describing 
the BLM's competitive process.
    Paragraph (a) of this final rule provides that the highest bidder, 
prior to any variable offsets, is the successful bidder. Successful 
bidders may become either the presumptive leaseholder or the preferred 
applicant.
    The term ``presumptive leaseholder'' describes situations in which 
at least one round of environmental review for solar or wind energy 
development has been conducted before the competitive process is held, 
so that the environmental impacts of potential development are 
relatively well understood before the competitive process is held and 
the successful bidder has a high likelihood of being able to obtain an 
authorization to develop its proposed project. As set forth in 
paragraph (b)(1)(i), a successful bidder would only be designated as a 
presumptive leaseholder if the lands for which the competitive process 
is held are located within a DLA and the BLM has indicated in advance 
that the successful bidder would become a presumptive leaseholder (see 
also Sec.  2809.13(b)(7)). These requirements would limit the use of 
the term ``presumptive leaseholder'' to situations in which the BLM has 
previously completed an environmental analysis for solar or wind energy 
development in the area through the land use planning process and has 
specified in advance (through the notice of competitive process) many 
of the terms, conditions, and mitigation measures that would need to be 
incorporated into an approved authorization. A presumptive leaseholder 
does not have to complete the initial application review stage, which 
is designed to ensure that the site is generally appropriate for solar 
or wind energy development. A presumptive leaseholder has site control 
for a solar or wind energy development, precluding other competing 
solar or wind energy development projects from siting on that land, 
unless allowed by the presumptive leaseholder. The BLM would also not 
process other applications for use of that land unless allowed by the 
presumptive leaseholder.
    This final rule also recognizes that even with a presumptive 
leaseholder, an additional site-specific environmental analysis may be 
required before the BLM irretrievably commits to allowing a facility to 
be developed. The BLM retains its full discretion in considering 
whether to approve a presumptive leaseholder's proposal based on site-
specific environmental analysis, which would typically be tiered to the 
area-wide environmental analysis accompanying the identification of the 
area as a DLA. Paragraph (b)(1)(ii) therefore notes that the 
presumptive leaseholder's right to develop a project on the site is 
contingent upon the BLM's approval of the presumptive leaseholder's 
Plan of Development. Once the BLM approves the proposed Plan of 
Development, following a site-specific environmental analysis, a lease 
could be awarded, conferring a right to develop a project on the site, 
and the presumptive leaseholder would become a leaseholder.
    In other cases, the BLM could conduct a competitive process without 
having completed an initial environmental analysis for solar or wind 
energy development for that area. In such cases, as set forth in 
paragraph (b)(2), the successful bidder would become the ``preferred 
applicant'' and would obtain only the exclusive right to submit an 
application for solar or wind energy development on that site without 
further competition from other applicants for solar or wind energy 
development. Such an application would be processed under subpart 2804 
in the same manner as other, non-competitive applications. The BLM 
would conduct a full environmental analysis before the preferred 
applicant may obtain a grant and the right to develop a project on the 
site. A preferred applicant that fails to meet the requirements of 
subpart 2804 may lose their status as the preferred applicant, and the 
BLM may deny their application consistent with Sec.  2804.26.
    Paragraph (b) provides that a successful bidder becomes a 
presumptive leaseholder or preferred applicant only after making 
payments required in paragraph (d) of this section and satisfying the 
requirements for holding a grant or lease under Sec.  2803.10. The BLM 
could move on to the next highest bidder or re-offer the lands under 
Sec.  2809.17 if the successful bidder does not satisfy these 
requirements.
    Paragraph (b)(1) describes the requirements to become a presumptive 
leaseholder, which are that the public lands successfully bid upon are 
located within a DLA and that the notice of competitive process 
indicated successful bidders would become presumptive leaseholders. 
This paragraph also provides that the BLM would only award a 
presumptive leaseholder a lease if the BLM approves the Plan of 
Development that is submitted in accordance with Sec.  2804.25(c).
    Paragraph (b)(2) describes the requirements for a preferred 
applicant. A successful bidder who does not become a presumptive 
leaseholder in accordance with paragraph (b)(1) would become a 
preferred applicant. The BLM would process applications for a grant or 
lease under Sec.  2809.12. As with presumptive leaseholders, approval 
of a

[[Page 35668]]

preferred applicant's application is not guaranteed. However, the BLM 
would not process other applications for solar and wind energy 
development on lands where a preferred applicant has been identified, 
unless allowed by the preferred applicant.
    The BLM may consider issuing authorizations for other uses, such as 
roadways, testing facilities, recreation permits, or even rights-of-way 
under MLA authority on the lands for which there is a preferred 
applicant. Processing authorizations for other uses under Title V of 
FLPMA would be performed under subpart 2804. Recreation permits and 
rights-of-way under MLA authority would be processed under parts 2920 
and 2880, respectively. In some instances, such as with applications 
for incompatible uses, the BLM may determine that the proposed uses 
would be incompatible, and therefore that processing these other 
applications must wait until it issues a decision on a preferred 
applicant's application for solar or wind energy development.
    Previous paragraphs (b) and (c) are redesignated as (c) and (d) 
respectively. Redesignated paragraph (c) is not revised; it provides 
that the BLM will determine variable offsets for the successful bidder 
in accordance with Sec.  2809.16.
    Redesignated paragraph (d) provides for bidder payment terms. 
Paragraph (d)(1) provides for certain payment methods, such as personal 
check, cashier's check, certified check, bank draft, or money order, as 
well as other methods deemed acceptable by the BLM, should be paid to 
the Department of the Interior--Bureau of Land Management.
    Paragraph (d)(2) requires payment of 20 percent of the bonus bid 
and the minimum bid amount by the close of official business hours on 
the day on which the BLM conducts the competitive process or other time 
the BLM has specified in its notice.
    Paragraph (d)(3) requires payment of the balance of the bonus bid 
within 15 days after the day on which the BLM conducts the competitive 
process. Variable offsets are applied under paragraph (c) of this 
section. Such payments are made to the BLM office conducting the 
competitive process.
    Paragraph (d)(4) requires payment within 15 days after the day on 
which the BLM conducts the competitive process to pay: for preferred 
applicants, the application filing fee under Sec.  2804.12(c) less any 
application fee already paid under Sec.  2809.11(c)(1); or for 
presumptive leaseholders, the acreage rent for the first full year of 
the lease as provided in subpart 2806.
    Paragraph (d)(5) clarifies that the BLM may require successful 
bidders to pay reasonable costs in addition to the application filing 
fee when processing an application. Additional reasonable costs may 
include a Category 6 cost recovery for the BLM to complete processing 
the application. If a Category 6 cost recovery fee is required, it will 
be reduced by the amount of the application filing fee already paid. 
See Sec.  2804.19 of existing regulations for further information on 
Category 6 cost recovery.
    Paragraph (e) explains that the successful bidder will not become a 
preferred applicant or a presumptive leaseholder and the BLM will keep 
all money that has been submitted with the competitive process if the 
successful bidder does not satisfy the payment terms under paragraph 
(d) of this section. In such a case, the BLM could proceed to the next 
highest bidder or re-offer the lands through a competitive process 
under Sec.  2809.17.
    A comment questioned the rationale behind determining the highest 
bidder as the presumptive leaseholder instead of the BLM making an 
offer to the highest bidder. The commenter suggested that the BLM would 
then offer the lease to subsequent bidders if the preceding highest 
bidder declines. The BLM's competitive process in this final rule 
informs prospective bidders what they would be bidding for in advance 
of a competitive process. The BLM's required process under this final 
rule provides important information to prospective bidders up front, 
reducing uncertainty on what they may bid on. Prospective bidders will 
be able to bid more confidently with that information. This will also 
likely result in more and higher bids than would be received if the BLM 
provided such information after a competitive process and will reduce 
the need for the BLM to engage the second highest bidder should the 
highest bidder decline.
    The BLM understands from a comment that there may have been some 
confusion on how the rule distinguishes between holding a competitive 
process and selecting a presumptive leaseholder or preferred applicant. 
In this final rule, Sec.  2809.15(b) makes clear that both of the 
following criteria must be met to be a presumptive leaseholder: first, 
lands offered must be located within a DLA, and second, the notice of 
competitive process must indicate that bidders are bidding to become a 
presumptive leaseholder. The requirement that the lands be within a DLA 
is important because DLAs, by definition, have been subject to prior 
environmental analysis and a land use plan decision to designate the 
area for solar or wind energy leasing. The environmental analysis would 
have identified potential conflicts and assessed the environmental 
impacts of siting a solar or wind energy generation facility, and 
through the land use planning process the BLM would have determined any 
necessary mitigation measures prior to the BLM offering the site for 
leasing. The requirement that the notice of competitive process must 
indicate that bidders are bidding to become a presumptive leaseholder, 
meanwhile, is important because it ensures that the terms and 
consequences of the competitive process are clear to all parties before 
the bidding occurs, and because it retains the BLM's discretion to 
conduct a competitive process for a preferred applicant, rather than a 
presumptive leaseholder, even within a DLA.
    Some comments expressed concern that the BLM continues to determine 
that processing of applications for ``incompatible'' uses must wait 
until it issues a decision for a first-in-line solar or wind energy 
development and believe this violates the intent of FLPMA. Commenters 
believed the language of the rule is unclear about whether these other 
applications are from other applicants for a similar right-of-way or 
whether it would apply to applications for other land uses. These 
commenters assert that either scenario is inconsistent with FLPMA's 
multiple-use mandate.
    In this portion of the rule, the BLM's presumption is that the BLM 
has already identified a ``preferred applicant'' or that the lands have 
already been identified in the BLM's land use planning process as a 
DLA. The FLPMA gives BLM discretion as to how it will process 
applications, including competing ones for the same parcel. This does 
not violate FLPMA's multiple-use mandate.

Section 2809.16 When do variable offsets apply?

    Section 2809.16 provides that a successful bidder may be eligible 
for a variable offset of bonus bids. This section is also revised, 
consistent with other changes in this rule, to read as ``process'' 
where appropriate when describing the BLM's competitive process.
    Paragraph (c) in this final rule clarifies to readers that the 
offsets are not limited explicitly to what is listed and that the BLM 
may use other factors, including progressive steps towards the listed 
factors.

[[Page 35669]]

    Paragraph (c)(10) is unchanged except for formatting to account for 
new paragraphs (c)(11) and (12).
    Paragraph (c)(11) provides an incentive for use of items that 
qualify for the Domestic Content preference in solar and wind energy 
generation facilities on public lands, to complement the fee reduction 
described in Sec.  2806.52(b)(1)(iii). To qualify for the Domestic 
Content variable offset, prospective bidders must demonstrate how they 
will meet the thresholds to qualify for the variable offset. Similar to 
the Domestic Content reduction for the capacity fee described in 
2806.52(b)(1)(iii), the thresholds identified in the notice of 
competitive process are consistent with the requirements for the 
domestic content preference in 2 CFR part 184. A prospective bidder is 
required to provide sufficient documentation to the BLM prior to the 
competitive process to show how the bidder qualifies or will qualify 
for this variable offset. This may be documentation in an initial Plan 
of Development provided to the BLM or other methods discussed in Sec.  
2806.52(b)(1)(v) of this preamble. As discussed below, the BLM may hold 
in suspense the amounts corresponding to the variable offset until 
construction of the facility is substantially complete or the 
successful bidder otherwise demonstrates to the BLM that the project 
has met the domestic content thresholds.
    Some comments suggested that including a requirement for a domestic 
content preference as a variable offset would raise the cost to 
taxpayers. The BLM disagrees with commenters that this rule will 
increase costs to taxpayers. This final rule does not require bidders 
or holders to qualify for the Domestic Content preference as a variable 
offset or other reductions and variable offsets. As the comments were 
based on an incorrect assumption that the rule requires buying domestic 
equipment, no change was made in response to comments.
    Paragraph (c)(12) provides an incentive for use of qualifying PLAs, 
such as during the construction of a solar or wind energy generation 
facility on public lands, to complement the fee reduction described in 
Sec.  2806.52(b)(1)(iv). To receive the PLA variable offset, 
prospective bidders must demonstrate how they qualify in the notice of 
competitive process. A prospective bidder is required to provide 
sufficient documentation to the BLM to show how they qualify, such as 
in an initial Plan of Development or other methods discussed in Sec.  
2806.52(b)(1)(v) of this final rule. The BLM may hold in suspense the 
amounts corresponding to the variable offset until construction of the 
facility is substantially complete or the successful bidder can 
otherwise demonstrate to the BLM that the PLA has been executed for the 
facility.
    Some comments supported the use of a PLA as a basis for offering a 
variable offset. These comments requested that the BLM hold a second 
competitive process if the BLM does not receive bidders qualifying for 
a PLA variable offset. This second competitive process would allow for 
other potential bidders to qualify. The final rule does not limit the 
number of competitive processes that the BLM may hold. However, the BLM 
has included PLAs as an optional variable offset.
    Some comments noted that union labor laws vary from State to State, 
suggesting that oversight should be by the State. This final rule 
provides a variable offset for interested bidders when using a 
qualifying PLA for competitive processes for solar or wind energy. The 
BLM's offer of a PLA variable offset does not rely on or necessarily 
preclude applicable State laws as they may apply to project labor. The 
BLM may not approve a variable offset from a bidder if it does not 
comply with applicable laws.
    Some commenters disagreed with the BLM offering variable offsets, 
such as for domestic content and the use of union labor, because 
developers may also receive reduced payments under Sec.  2806.52. This 
final rule offers a bidder potential benefits from both a variable 
offset and a capacity fee reduction. The BLM believes these variable 
offsets will incentivize prospective bidders to initiate projects with 
known benefits and approaches that will further benefit the public. 
Moreover, as described above, reductions to the capacity fee under 
Sec.  2806.52(b) will promote the greatest use of solar and wind energy 
resources on public lands consistent with 43 U.S.C. 3003.
    Paragraph (c)(13) provides that the BLM may use other factors when 
determining whether additional types of variable offsets for a 
competitive process are appropriate.
    Some comments requested additional variable offsets to promote 
responsible wind and solar development, using efficient technology, 
agreements with local authorities that benefit communities, 
redevelopment of disturbed sites, and combining or collocating energy 
infrastructure. The final rule continues to provide an opportunity for 
additional variable offsets in a competitive process under Sec.  
2809.16(c)(13). The BLM will describe the additional variable offsets, 
including how you may qualify for such additional variable offsets, in 
the notice of competitive process.
    Paragraph (e) provides for bidders to qualify for a variable offset 
after the BLM holds a competitive process. This final rule recognizes 
that a bidder may not be able to demonstrate the qualifications for 
some variable offsets to the BLM's satisfaction until after the BLM 
holds the competitive process, such as with new provisions in 
Sec. Sec.  2809.16(c)(11) or 2809.16(c)(12) for energy development 
facilities that would contain items qualifying for the Domestic Content 
preference or use of a PLA. A bidder may conditionally qualify for a 
variable offset before the competitive process and then later 
demonstrate their qualification to the BLM and perfect their 
qualification. The BLM will describe in the notice of competitive 
process the way a bidder may conditionally qualify for the variable 
offset and could include methods such as a written statement to the BLM 
that they intend to qualify for the variable offset. The bidder, if 
successful, must later demonstrate to the BLM that they have qualified 
for the variable offset. The BLM may set a deadline in the notice for 
bidders to demonstrate that the proposed facility qualifies for the 
variable offset. If the bidder does not qualify for the variable offset 
in the time provided or the bidder is not able to adequately 
demonstrate they qualify for the variable offset, the U.S. Government 
will retain the bid money as the balance of the bonus bid.
    A comment stated that if the BLM sets a deadline to qualify for a 
variable offset in the notice of competitive process, there should be a 
reasonable deadline given to demonstrate qualifications. The BLM agrees 
with this comment and provides a deadline, including the timeframe to 
qualify for the variable offset, in its notice of competitive process. 
See Sec.  2809.16(e) of this part.

Section 2809.17 Will the BLM ever reject bids or re-conduct a 
competitive process?

    Section 2809.17 identifies situations when the BLM may reject a 
bid, offer a lease to another bidder, or re-offer a parcel. This 
section is retitled from the proposed rule, consistent with other 
changes in the final rule to read ``process'' when describing the BLM's 
competitive process.
    Paragraph (b) provides that the BLM may make the next highest 
bidder the successful bidder if the named successful bidder does not 
satisfy the successful bidder requirements identified under Sec.  
2809.15, does not

[[Page 35670]]

execute the lease, or is for any reason disqualified from holding the 
lease.
    As proposed, paragraph (d) is removed from this section as it is 
unnecessary with other revisions made in this final rule to make public 
lands inside of DLAs available to application without a competitive 
process.

Section 2809.18 What terms and conditions apply to a solar or wind 
energy development lease?

    Section 2809.18 lists the terms and conditions of solar and wind 
energy leases, which are issued inside of areas classified or allocated 
for solar or wind energy (e.g., DLAs).
    Paragraph (a) clarifies that a lease awarded from a competitive 
process provides site control to a lessee. However, the presumptive 
leaseholder may not construct any facilities on the right-of-way until 
the BLM issues a subsequent notice to proceed, see paragraph 
2809.15(b)(1)(ii) of this final rule. The term of a lease is consistent 
with Sec.  2805.11(c) of this final rule, which provides for a 
reasonable term up to 50 years, considering the cost of the facility, 
its useful life, and the public purpose it serves.
    Paragraph (b) provides for rent terms for solar and wind energy 
leases as specified in Sec.  2806.52.
    Paragraph (f) provides that lease assignments are applied for under 
Sec.  2807.21. The BLM will not make any changes to the lease terms or 
conditions, as provided in Sec.  2807.21(e), except for modifications 
required under Sec.  2805.15(e). Changes to right-of-way terms or 
conditions would involve an amendment action by the BLM in addition to 
the assignment action.
    One comment recommended that the BLM adjust the terms and 
conditions with an assignment to provide for land access, lease length, 
processes, collaboration with other agencies, and decommissioning. This 
final rule maintains the BLM's process for assigning leases. Generally, 
a solar or wind energy lease assignment is an administrative action 
transferring the lease from a holder to a prospective holder. The BLM's 
analysis to approve or approve with modification the development lease 
includes analyzing the access, lease term length, participation from 
public and partners, and the end-of-life decommissioning and 
restoration of the public lands. The BLM does not need to revisit these 
considerations before assigning a lease unless there are substantial 
changes that may justify a change to the lease. For example, the BLM 
may modify a lease under Sec.  2805.15(e), which reserve the BLM's 
right to change the terms and conditions as a result in changes in 
legislation, regulation, or as otherwise necessary to protect public 
health or safety or the environment.

Section 2809.19 Applications in Designated Leasing Areas or on Lands 
That Later Become Designated Leasing Areas

    As proposed, Section 2809.19 is removed from the BLM's rules in its 
entirety. In this former section, the BLM explained how it would 
evaluate applications for public lands that later become a DLA. The 
former section is inconsistent with the changes in this rule that allow 
for applications in DLAs without first holding a competitive process. 
Because designation of a DLA does not preclude non-competitive leasing, 
there is no need for the BLM to automatically suspend a non-competitive 
leasing application because the lands at issue are being considered for 
designation. At the same time, the BLM may in its discretion deny an 
application or assign the application a low priority under Sec.  
2804.35.
    Some commenters supported the BLM making public lands inside DLAs 
available for non-competitive leasing by application. These commenters 
continued to suggest that the BLM should provide public notice 
regarding how the BLM will handle non-competitive lease applications. 
The notice should provide for at least a 30-day cutoff date for any 
expressions of interest regarding a competitive interest for offering 
lands within the DLA. The BLM agrees with comments that notice to the 
public is appropriate regarding how the BLM will administer solar and 
wind energy applications in an area affected by a land use plan 
amendment. However, each planning action or programmatic analysis is 
unique, and the BLM will respond to the unique conditions for solar and 
wind energy applications specific to that plan amendment or 
programmatic analysis. This may or may not include a period of time in 
which the BLM would continue to accept applications.

Severability

    Existing Sec.  2801.8 provides: ``If a court holds any provisions 
of the regulations in this part or their applicability to any person or 
circumstances invalid, the remainder of these rules and their 
applicability to other people or circumstances will not be affected.'' 
If any portion of this final rule were to be stayed or invalidated by a 
reviewing court, the remaining elements would continue to provide BLM 
with important and independently effective tools relating to the 
administration of its right-of-way and renewable energy programs. 
Hence, if a court prevents any provision of one part of this rule from 
taking effect, that should not affect the other parts of the rule. The 
remaining provisions would remain in force because they could still 
operate sensibly.
    For example, the provisions that reduce rents and fees to implement 
the Energy Act of 2020 may function independently of the rest of the 
rule. Indeed, each particular change in rents and fees may function 
independently. Thus, if a court were to invalidate the Domestic Content 
reduction or Project Labor Agreement reduction, the other rent and fee 
provisions should remain undisturbed. Similarly, the provisions that 
reduce rents and fees may function independently of the provisions that 
allow the BLM to choose whether to conduct competitive processes inside 
and outside DLAs.

V. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563) and 
Modernizing Regulatory Review (Executive Order 14094)

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) in the Office of Management 
and Budget will review all significant rules. E.O. 14094 updates the 
significance criteria in section 3(f) of E.O. 12866.
    OIRA has determined that this final rule is a ``significant 
regulatory action'' within the scope of E.O. 12866, as amended by E.O. 
14094.
    The BLM's Regulatory Impact Analysis concluded that the rule may 
have an annual effect on the economy of $200 million or more. These 
effects are associated with construction of projects induced by this 
rule. Additionally, the BLM estimated that the rule would have 
distributional impacts in the form of transfer payments from right-of-
way applicants and holders to the BLM. Transfer payments are monetary 
payments from one group to another that do not affect total resources 
available to society. While disclosing the estimated transfers are 
important for describing the distributional effects of the rule, these 
payments should not be included in the estimated costs and benefits per 
OMB Circular A-4.
    For more detailed information, see the Regulatory Impact Analysis 
for Revisions to 43 CFR 2800 (Regulatory Impact Analysis) prepared for 
this rule. This Regulatory Impact Analysis has been posted in the 
docket for the rule on the Federal eRulemaking Portal: https://

[[Page 35671]]

www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE78,'' click 
the ``Search'' button, open the Docket Folder, and look under 
Supporting Documents.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the Nation's regulatory system to promote 
predictability, reduce uncertainty, and use the best, most innovative, 
and least burdensome tools for achieving regulatory ends. The E.O. 
directs agencies to consider regulatory approaches that reduce burdens 
and maintain flexibility and freedom of choice for the public where 
these approaches are relevant, feasible, and consistent with regulatory 
objectives. E.O. 13563 emphasizes further that regulations must be 
based on the best available science and that the rule making process 
must allow for public participation and an open exchange of ideas. The 
BLM has developed this rule in a manner consistent with these 
requirements.

Regulatory Flexibility Act

    This rule will not likely have a significant economic effect on a 
substantial number of small entities under the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.). The RFA generally requires that 
Federal agencies prepare a regulatory flexibility analysis for rules 
subject to the ``notice-and-comment'' rulemaking requirements found in 
the Administrative Procedure Act (5 U.S.C. 500 et seq.), if the rule 
would have a significant economic impact, whether detrimental or 
beneficial, on a substantial number of small entities. See 5 U.S.C. 
601-612. Congress enacted the RFA to ensure that government regulations 
do not unnecessarily or disproportionately burden small entities. Small 
entities include small businesses, small governmental jurisdictions, 
and small not-for-profit enterprises.
    The BLM reviewed the Small Business Size standards for the affected 
industries. We determined that a small share of the entities in the 
affected industries are small businesses as defined by the Small 
Business Act (SBA). However, the BLM believes that the impact on the 
small entities is not significant. Although the rule could potentially 
affect a substantial number of small entities, the BLM does not believe 
that these effects would be economically significant.
    The rule would benefit small businesses by streamlining the BLM's 
processes and reducing annual rent and capacity fee payments. These 
reductions may motivate investment in additional generation capacity 
and facilities by freeing up money that would have otherwise been paid 
to the BLM as rents or fees. The rule also modifies provisions that 
allow for an entity to request a waiver or reduction to annual rent and 
capacity fee payments.
    For the purpose of conducting its review pursuant to the RFA, the 
BLM believes that the rule would not likely have a ``significant 
economic impact on a substantial number of small entities,'' as that 
phrase is used in 5 U.S.C. 605. Therefore, the BLM has not prepared a 
final regulatory flexibility analysis.
    Some comments noted that they believe there has been insufficient 
analysis on this rule and request the BLM perform an initial and final 
regulatory flexibility analysis, as it is required by Sections 603 and 
604 of the Regulatory Flexibility Act for rules that may have a 
significant economic impact on a substantial number of small business 
and governmental entities. Some commenters also believe the BLM has 
broken down connected and interrelated rule-making processes to avoid 
significance and therefore has failed to conduct the necessary impacts 
analysis under the Regulatory Flexibility Act, NEPA, E.O. 12866 and 
other applicable authorities as required under the Administrative 
Procedure Act.
    The BLM determines that solar and wind projects with generating 
capacities of less than 100 MW have average annual receipts of $5.2 
million (solar) and $4.1 million (wind), which falls within the range 
of receipts identified for small businesses in the SBA size standards. 
The average size of projects currently under review by the BLM is 
500MW. Also, projects smaller than 100MW may still fail to be small 
businesses if they are owned by larger corporations or governmental 
entities. While it is reasonable to expect that some small businesses 
will be affected, it is not expected to be a substantial number. 
Further, the principal effect will be a reduction in rents and capacity 
fees for the small businesses--a benefit. In general, the share of 
rents and capacity fees is small relative to project revenues. 
Therefore, the benefits are not a significant economic impact on the 
small businesses.

Congressional Review Act

    This action is subject to the CRA, and BLM will submit a rule 
report to each chamber of Congress and to the Comptroller General of 
the United States. This action meets the criteria in 5 U.S.C. 804(2).
    Comment Summary: In response to the proposed rule, a commenter 
requested that the BLM explain contradictory conclusions of regulatory 
impact in accordance with the Congressional Review Act and E.O 12866, 
and coordinate with local governments and businesses to collect 
inclusive and broad economic data to make an informed determination.
    Response: The commenter's concern has been overtaken because DOI 
will report to Congress on the promulgation of this rule prior to its 
effective date. The report will state that the Office of Information 
and Regulatory Affairs has determined that this rule meets the criteria 
set forth in 5 U.S.C. 804(2).''

Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments, or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local, or Tribal governments, or the private sector. Under the Unfunded 
Mandates Reform Act (UMRA) (2 U.S.C. 1531 et seq.), agencies must 
prepare a written statement about benefits and costs, prior to issuing 
a proposed or final rule that may result in aggregate expenditure by 
State, local, and Tribal governments, or the private sector, of $100 
million or more in any 1 year.
    This rule is not subject to the requirements under the UMRA. The 
rule does not contain a Federal mandate that may result in expenditures 
of $100 million or more for State, local, and Tribal governments, in 
the aggregate, or to the private sector in any one year. The rule would 
not significantly or uniquely affect small governments. A statement 
containing the information required by the UMRA is not required.
    One comment requested that the BLM submit documentation that is 
complete, transparent, and factual for this rulemaking and that is 
informed by economic data obtained through coordination with local 
governments and a diverse range of private sector industries, such as 
grazing, mining and recreation. The resubmitted documentation should 
support the claim that this rule does not impose an unfunded mandate 
under the UMRA. If a finding shows that the rule does impose an 
unfunded mandate, then the BLM must complete a cost and benefit 
analysis as required by the UMRA. The BLM disagrees that this rule 
requires resubmitting documentation supporting the BLM's unfunded 
mandate determination. This final rule, including its Regulatory Impact 
Analysis, clearly, transparently, and factually discusses the impacts 
of the rule, which governs the BLM's administration of applications and 
right-of-way grants and

[[Page 35672]]

leases for solar and wind energy. This rule does not result in Tribal, 
State, or local governments having to expend funds. Therefore, this 
rule does not impose an unfunded federal mandate and does not require a 
cost and benefit analysis. In any event, this rule and the accompanying 
Regulatory Impact Analysis provide all the information the UMRA 
requires.

Governmental Actions and Interference With Constitutionally Protected 
Property Right--Takings (E.O. 12630)

    This rule does not affect a taking of private property or otherwise 
have taking implications under E.O. 12630. Section 2(a) of E.O. 12630 
identifies policies that do not have takings implications, such as 
those that abolish regulations, discontinue governmental programs, or 
modify regulations in a manner that lessens interference with the use 
of private property. The rule would not interfere with private 
property. A takings implication assessment is not required.
    Some comments noted that access across federal, state, or county 
managed lands should not entail encumbrances or restrictions on private 
property. This final rule does not restrict access across any lands. 
Through separate environmental review, such as through land use 
planning, the BLM may consider actions that affect access. Tribal, 
Federal, State, and local government offices, as well as communities 
and private citizens will have opportunity to engage in those 
environmental processes.

Federalism (E.O. 13132)

    Under the criteria in Section 1 of E.O. 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement. It does not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. A federalism 
summary impact statement is not required.

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    a. Meets the criteria of Section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    b. Meets the criteria of Section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

Consultation and Coordination With Indian Tribes (E.O. 13175 and 
Departmental Policy)

    DOI strives to maintain and strengthen its government-to-government 
relationship with Indian Tribes through a commitment to consultation 
with Indian Tribes and recognition of their right to self-governance 
and Tribal sovereignty. We have evaluated this rule under the DOI's 
consultation policy and under the criteria in E.O. 13175 and have 
determined that it has no substantial direct effects on federally 
recognized Indian Tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian Tribes, and 
that consultation under the DOI's Tribal consultation policy is not 
required. However, consistent with the DOI's consultation policy (52 
Departmental Manual 4) and the criteria in E.O. 13175, the BLM will 
consult with federally recognized Indian Tribes on any renewable energy 
project proposals that may have a substantial direct effect on the 
Tribes.

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) generally 
provides that an agency may not conduct or sponsor and, not 
withstanding any other provision of law, a person is not required to 
respond to a collection of information, unless it displays a currently 
valid OMB control number. Collections of information include any 
request or requirement that persons obtain, maintain, retain, or report 
information to an agency, or disclose information to a third party or 
to the public (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)).
    This rule contains information-collection requirements that are 
subject to review by OMB under the PRA. OMB has generally approved the 
existing information-collection requirements contained in 43 CFR part 
2800 associated with wind and solar rights-of-way grants or leases 
under OMB control number 1004-0206 (expiration date: June 30, 2026). 
Additionally, the BLM's regulations at 43 CFR part 2800 require the use 
of Standard Form 299 (SF-299), ``Application for Transportation and 
Utility Systems and Facilities on Federal Lands,'' for right-of-way 
applications and the regulations at 43 CFR part 2800. OMB has approved 
the requirements associated with SF-299 and has assigned control number 
0596-0249.
    This rule does not include any changes to the information-
collection requirements currently contained in 43 CFR parts 2800 and 
2880 and approved by OMB as noted above. There is a new information-
collection requirement contained in 43 CFR 2806.52(b)(5) regarding an 
annual certified statement. The rule would require that by October of 
each year wind and solar grant or leaseholders must submit to the BLM a 
certified statement identifying the first year's estimated energy 
generation on public lands and the prior year's actual energy 
generation on public lands. The BLM will determine the capacity fee 
based on the certified statement provided. To prepare the annual 
certified statement, grant or leaseholders will need to compile 
information based on capacity fee as instructed in 43 CFR 2806.
    The information-collection requirements contained in 43 CFR 2800 
and 2880 and approved under OMB Control Number 1004-0206 and the 
aforementioned new information-collection pertaining to 43 CFR 
2806.52(b)(5) are described below.
Activities That Require SF-299
    The following discussion describes the information-collection 
activities in this control number that require use of SF-299.
Application for a Solar or Wind Energy Development Project Outside Any 
Designated Leasing Area (43 CFR 2804.12, 2804.25(c), 2804.26(a)(5), and 
2804.30(g)); and Application for an Electric Transmission Line With a 
Capacity of 100 kV or More (43 CFR 2804.12, 2804.25(c), and 
2804.26(a)(5))
    Section 2804.12(b) applies to solar and wind energy development 
grants outside any DLA and electric transmission lines with a capacity 
of 100 kV or more.
    Section 2804.12(b) includes the following requirements for 
applications for a solar or wind energy development project outside a 
DLA and for applications for a transmission line project with a 
capacity of 100 kV or more:
     A discussion of all known potential resource conflicts 
with sensitive resources and values, including special designations or 
protections; and
     Applicant-proposed measures to avoid, minimize, and 
compensate for such resource conflicts, if any.
    Section 2804.12(b) also requires applicants to initiate early 
discussions with any grazing permittees that may be affected by the 
proposed project. This

[[Page 35673]]

requirement stems from FLPMA Section 402(g) (43 U.S.C. 1752(g)) and a 
BLM grazing regulation (section 4110.4-2(b)) that require 2 years' 
prior notice to grazing permittees and lessees before cancellation of 
their grazing privileges.
    In addition to the information listed at Sec.  2804.12(b), an 
application for a solar or wind project, or for a transmission line of 
at least 100 kV, must include the information listed at Sec. Sec.  
2804.12(a)(1) through (a)(7).
    Section 2804.25 provides that the BLM will notify an applicant upon 
receipt of an application and may require the applicant to submit 
additional information necessary to process the application (such as a 
Plan of Development or cultural resource surveys). As amended, Sec.  
2084.25(c) provides that, for solar or wind energy development projects 
and transmission lines with a capacity of 100 kV or more, the applicant 
must commence any required resource surveys or inventories within 1 
year of the request date, unless otherwise specified by the BLM. The 
amended regulation also authorizes an applicant to submit a request for 
an alternative requirement by showing good cause under Sec.  2804.40.
    Applications for solar or wind energy development outside any DLA, 
but not applications for large-scale transmission lines, are subject to 
a requirement (at Sec.  2804.12(c)(2)) to submit an ``application 
filing fee'' of $15 per acre. As defined in an amendment to Sec.  
2801.5, an application filing fee is specific to solar and wind energy 
right-of-way applications. Section 2804.30(e)(4) provides that the BLM 
will refund the fee, except for the reasonable costs incurred on behalf 
of the applicant, if the applicant is not a successful bidder in the 
competitive process outlined in subpart 2804.
    Section 2804.26(a)(5) provides the authority that allows the BLM to 
deny an application for a right-of-way grant if the applicant does not 
have or cannot demonstrate the technical or financial capability to 
construct the project or operate facilities within the right-of-way. 
Amendments to that provision list the following ways an applicant may 
demonstrate their financial and technical capability to construct, 
operate, maintain, and terminate a project:
     Documenting any previous successful experience in 
construction, operation, and maintenance of similar facilities on 
either public or non-public lands;
     Providing information on the availability of sufficient 
capitalization to carry out development, including the preliminary 
study stage of the project and the environmental review and clearance 
process; or
     Providing written copies of conditional commitments of 
Federal and other loan guarantees; confirmed power purchase agreements; 
engineering, procurement, and construction contracts; and supply 
contracts with credible third-party vendors for the manufacture or 
supply of key components for the project facilities.
General Description of a Proposed Project and Schedule for Submittal of 
a Plan of Development (43 CFR 2804.12(b)(1) and (b)(2))
    Sections 2804.12(b)(1) and (b)(2) require applicants for a solar or 
wind development project outside a DLA to submit the following 
information, using Form SF-299:
     A general description of the proposed project and a 
schedule for the submission of a Plan of Development (POD) conforming 
to the POD template at https://www.blm.gov;
     A discussion of all known potential resource conflicts 
with sensitive resources and values, including special designations or 
protections; and
     Proposals to avoid, minimize, and compensate for such 
resource conflicts, if any.
Application for an Energy Site-Specific Testing Grant (43 CFR 
2804.12(a), and 2804.30(g)); Application for an Energy Project-Area 
Testing Grant (43 CFR 2804.12(a), and 2804.30(g)); and Application for 
a Short-Term Grant (43 CFR 2804.12(a))
    Section 2804.12(a) addresses the general requirements of an 
application for a FLPMA right-of-way grant. Section 2804.30(g) 
authorizes only one applicant (i.e., a ``preferred applicant'') to 
apply for an energy project-area testing grant or an energy site-
specific testing grant for land outside any DLA.
    Each of these grants is for 3 years or less, in accordance with 
Sec.  2805.11(c)(2). All of these applications must be submitted on SF-
299. Applications for project-area grants (but not site-specific 
grants) are subject to a $2 per-acre application filing fee in 
accordance with Sec.  2804.12(c)(2). Applicants for short-term grants 
for other purposes (such as geotechnical testing and temporary land-
disturbing activities) are subject to a processing fee in accordance 
with Sec.  2804.1.
Request To Assign a Solar or Wind Energy Development Right-of-Way (43 
CFR 2807.21)
    Section 2807.21, as amended, provides for assignment, in whole or 
in part, of any right or interest in a grant or lease for a solar or 
wind development right-of-way. Actions that may require an assignment 
include the transfer by the holder (assignor) of any right or interest 
in the grant or lease to a third party (assignee) or any change in 
control transaction involving the grant holder or leaseholder, 
including corporate mergers or acquisitions. The proposed assignee must 
file an assignment application, using SF-299, and pay application and 
processing fees.
    The assignment application must include:
     Documentation that the assignor agrees to the assignment; 
and
     A signed statement that the proposed assignee agrees to 
comply with and be bound by the terms and conditions of the grant that 
is being assigned and all applicable laws and regulations.
Environmental, Technical, and Financial Records, Reports, and Other 
Information (43 CFR 2805.12(a)(15))
    Section 2805.12(a)(15) authorizes the BLM to require a holder of 
any type of right-of-way to provide, or give the BLM access to, any 
pertinent environmental, technical, and financial records, reports, and 
other information. The use of SF-299 is required. The BLM will use the 
information for monitoring and inspection activities.
Application for Renewal of a Solar or Wind Energy Development Grant or 
Lease (43 CFR 2805.14(g) and 2807.22)
    Section 2805.14(g) provides that a holder of a right-of-way grant, 
which includes solar or wind energy generating facilities, may apply 
for renewal in accordance with Sec.  2807.22. Section 2807.22(c) 
provides that an application to renew a grant must include the same 
information, on SF-299, that is necessary for a new application. It 
also provides that processing fees, in accordance with Sec.  2804.14, 
as amended, apply to these renewal applications. Sections 2807.22(a) 
and (b) provide that an application for renewal of any right-of-way 
grant or lease, including a solar or wind energy development grant or 
lease, must be submitted at least 120 calendar days before the grant or 
lease expires. The application must show that the grantee or lessee is 
complying with the renewal terms and conditions (if any), with the 
other terms, conditions, and stipulations of the grant or lease, and 
with other applicable laws and regulations. The application also must 
explain why a renewal of the grant or lease is necessary.

[[Page 35674]]

Request for Amendment, Assignment, or Other Change (FLPMA) (43 CFR 
2807.11(b) and (d) and 2807.21)
    Section 2807.11(b) requires a holder of any type of right-of-way 
grant to contact the BLM to seek an amendment to the grant under Sec.  
2807.20 and obtain the BLM's approval before beginning any activity 
that is a ``substantial deviation'' from what is authorized.
    Section 2807.11(d) requires contacting the BLM to request an 
amendment to the pertinent right-of-way grant or lease and prior 
approval whenever site-specific circumstances or conditions result in 
the need for changes to an approved right-of-way grant or lease, Plan 
of Development, site plan, mitigation measures, or construction, 
operation, or termination procedures that are not ``substantial 
deviations.''
    Section 2807.21 authorizes assignment of a grant or lease with the 
BLM's approval. It also authorizes the BLM to require a grant or 
leaseholder to file new or revised information in circumstances that 
include, but are not limited to:
     Transactions within the same corporate family;
     Changes in the holder's name only; and
     Changes in the holder's articles of incorporation.
    A request for an amendment of a right-of-way, using SF-299, is 
required in cases of a substantial deviation (for example, a change in 
the boundaries of the right-of-way, major improvements not previously 
approved by the BLM, or a change in the use of the right-of-way). Other 
changes, such as changes in project materials, or changes in mitigation 
measures within the existing, approved right-of-way area, must be 
submitted to the BLM for review and approval. In order to assign a 
grant, the proposed assignee must file an assignment application and 
follow the same procedures and standards as for a new grant or lease, 
as well as pay application and processing fees. In order to request a 
name change, the holder will be required to file an application and 
follow the same procedures and standards as for a new grant or lease 
and pay processing fees, but no application fee is required. The 
following documents are also required in the case of a name change:
     A copy of the court order or legal document effectuating 
the name change of an individual; or
     If the name change is for a corporation, a copy of the 
corporate resolution proposing and approving the name change, a copy of 
a document showing acceptance of the name change by the State in which 
incorporated, and a copy of the appropriate resolution, order, or other 
document showing the name change.
    In all these cases, the BLM will use the information to monitor and 
inspect rights-of-way, and to maintain current data.
Activities That Do Not Require Any Form
Preliminary Application Review Meetings for a Large-Scale Right-of-Way 
(43 CFR 2804.12(b)(4))
    ``Preliminary application review meetings'' are required after 
submission of an application for a large-scale right-of-way. A large-
scale right-of-way is for solar or wind energy development outside a 
DLA, or for a transmission line with a capacity of 100 kV or more.
    Within 6 months from the date that the BLM receives the cost 
recovery fee for an application for a large-scale project, the 
applicant must schedule and hold at least two preliminary application 
review meetings.
    In the first meeting, the BLM will collect information from the 
applicant to supplement the application on subjects such as the general 
project proposal. The BLM will also discuss with the applicant subjects 
such as the status of the BLM's land use planning for the lands 
involved, potential siting issues or concerns, potential environmental 
issues or concerns, potential alternative site locations, and the 
right-of-way application process.
    In the second meeting, the applicant and the BLM will meet with 
appropriate Federal and State agencies and Tribal and local governments 
to facilitate coordination of potential environmental and siting issues 
and concerns.
    The applicant and the BLM may agree to hold additional preliminary 
application review meetings.
Application for Renewal of an Energy Project-Area Testing Grant or 
Other Short-Term Grant (43 CFR 2805.11(c)(2)(ii), 2805.14(h), and 
2807.22)
    Section 2805.11(c)(2)(ii) provides that holders of energy project-
area testing grants may seek renewal of those grants. The initial term 
for such a grant is 3 years or less, with the option to renew for one 
additional 3-year period.
    For other short-term grants, such as for geotechnical testing and 
temporary land-disturbing activities, the initial term is 3 years or 
less. Short-term grants include an option for renewal.
    Section 2805.14(h) provides that applications to renew an energy 
project-area testing grant must include an energy development 
application submitted in accordance with Sec.  2801.9(d)(2). Cost 
recovery fees in accordance with Sec.  2804.14, as amended, apply to 
these renewal applications.
    Section 2807.22 provides that an application for renewal of any 
right-of-way grant or lease, including an energy project-area testing 
grant or a short-term grant, must be submitted at least 120 calendar 
days before the grant or lease expires. The application must show that 
the grantee or lessee is complying with the renewal terms and 
conditions (if any), with the other terms, conditions, and stipulations 
of the grant or lease, and with other applicable laws and regulations. 
The application also must explain why a renewal of the grant or lease 
is necessary.
Showing of Good Cause (43 CFR 2804.40 and 2805.12)
    Under Sec.  2804.40, an applicant for a FLPMA right-of-way grant 
who is unable to meet any of the requirements in subpart 2804 may 
request approval for an alternative requirement from the BLM. Any such 
request is not approved until the applicant receives BLM approval in 
writing. This type of request to the BLM must:
    (a) Show good cause for the applicant's inability to meet a 
requirement;
    (b) Suggest an alternative requirement and explain why that 
requirement is appropriate; and
    (c) Be received in writing by the BLM in a timely manner, before 
the deadline to meet a particular requirement has passed.
    The BLM will use the information to determine whether to apply an 
alternative requirement.
    Other showings of good cause are authorized or may be required by 
Sec.  2805.12, which requires due diligence in development and 
operations of any right-of-way grant or lease. In accordance with Sec.  
2805.12(c)(6) and (c)(8), the BLM will notify the holder before 
suspending or terminating a right-of-way for lack of due diligence. 
This notice will provide the holder with a reasonable opportunity to 
correct any noncompliance or to start or resume use of the right-of-
way. A showing of good cause will be required in response. That showing 
must include:
     Reasonable justification for any delays in construction or 
reductions in energy generation (for example, delays in equipment 
delivery, legal challenges, and acts of God);
     The anticipated date for the completion of construction or 
resumption of energy generation; and

[[Page 35675]]

evidence of progress toward the start or resumption of construction; 
and
     A request for extension of the timelines in the approved 
POD or extension of the period in which the holder must satisfy the 
minimum energy threshold.
    Section 2805.12(e), as amended, applies as soon as a right-of-way 
holder anticipates noncompliance with stipulation, term, or condition 
of the approved right-of-way grant or lease, or in the event of 
noncompliance with any such stipulation, term, or condition. In these 
circumstances, the holder must notify the BLM in writing and show good 
cause for the noncompliance, including an explanation of the reasons 
for the noncompliance.
    In addition, the holder may request that the BLM consider 
alternative stipulations, terms, or conditions. Any request for an 
alternative stipulation, term, or condition must comply with applicable 
law in order to be considered. Any proposed alternative to applicable 
bonding requirements must provide the United States with adequate 
financial assurance for potential liabilities associated with the 
right-of-way grant or lease. Any such request is not approved until the 
holder receives the BLM's approval in writing.
Bonding Requirements (43 CFR 2805.20)
    Section 2805.20 provides that the bond amount for projects other 
than a solar or wind energy lease under subpart 2809 (i.e., inside a 
DLA) will be determined based on the preparation of a reclamation cost 
estimate that includes the cost to the BLM to administer a reclamation 
contract and review it periodically for adequacy.
    Section 2805.20(a)(5) provides that the reclamation cost estimate 
must include at a minimum:
     Remediation of environmental liabilities such as use of 
hazardous materials waste and hazardous substances, herbicide use, the 
use of petroleum-based fluids, and dust control or soil stabilization 
materials;
     The decommissioning, removal, and proper disposal, as 
appropriate, of any improvements and facilities; and
     Interim and final reclamation, re-vegetation, 
recontouring, and soil stabilization.
    Sections 2805.20(b) and 2805.20(c) identify specific bond 
requirements for solar and wind energy development respectively outside 
of DLAs. A holder of a solar or wind energy grant outside of a DLA will 
be required to submit a reclamation cost estimate to help the BLM 
determine the bond amount. For solar energy development grants outside 
of DLAs, the bond amount will be no less than $10,000 per acre. For 
wind energy development grants outside of DLAs, the bond amount will be 
no less than $10,000 per authorized turbine with a nameplate generating 
capacity of less than one Megawatt (MW), and no less than $20,000 per 
authorized turbine with a nameplate generating capacity of one MW or 
greater.
    Section 2805.20(d) separates site- and project-area testing 
authorization bond requirements from Sec.  2805.20(c). Meteorological 
and other instrumentation facilities are required to be bonded at no 
less than $2,000 per location. These bond amounts are the same as 
standard bond amounts for leases required under Sec.  2809.18(e)(3).
Annual Certified Statement (43 CFR 2806.52(b)(5))--New Information 
Collection
    The rule requires that by October of each year, wind and solar 
grant or leaseholders must submit to the BLM a certified statement 
identifying the first year's estimated energy generation on public 
lands and the prior year's actual energy generation on public lands. 
The BLM will determine the capacity fee based on the certified 
statement provided. To prepare the annual certified statement, grant or 
leaseholders will need to compile information based on the capacity fee 
as instructed in subpart 2806. This is the only new information-
collection requirement contained in this rule.
Nomination of a Parcel of Land Inside a Designated Leasing Area (43 CFR 
2809.11)
    Sections 2809.10 and 2809.11 authorize the BLM, on its own 
initiative, to offer land through a competitive process for solar or 
wind energy development. These regulations also authorize the BLM to 
solicit nominations for such development by publishing a notice in the 
Federal Register. To nominate a parcel under this process, the 
nominator must be qualified to hold a right-of-way under 43 CFR 
2803.10. After publication of a notice by the BLM, anyone meeting the 
qualifications may submit a nomination for a specific parcel of land to 
be developed for solar or wind energy. There is a fee of $5 per acre 
for each nomination. The following information is required:
     The nominator's name and personal or business address;
     The legal land description; and
     A map of the nominated lands.
    The BLM will use the information to communicate with the nominator 
and to determine whether to proceed with a competitive process.
Plan of Development for a Solar or Wind Energy Development Lease Inside 
a Designated Leasing Area (43 CFR 2809.18)
    Section 2809.l8(c) requires the holder of a lease for solar or wind 
energy development to submit a Plan of Development (POD) within 2 years 
of the lease issuance date. The POD must be consistent with the 
development schedule and other requirements in the POD template posted 
at https://www.blm.gov; and must address all pre-development and 
development activities.
    Section 2809.18(d) requires the holder of a solar or wind energy 
development lease for land inside a DLA to pay reasonable costs for the 
BLM or other Federal agencies to review and approve the POD and monitor 
the lease. To expedite review and monitoring, the holder may notify the 
BLM in writing of an intention to pay the full actual costs incurred by 
the BLM.
Request for Amendment, Assignment, or Other Change (MLA) (43 CFR 
2886.12(b) and (d) and 43 CFR 2887.11)
    Sections 2886.12 and 2887.11 pertain to holders of rights-of-way 
and temporary use permits authorized under the MLA. A temporary use 
permit authorizes a holder of a MLA right-of-way to use land 
temporarily in order to construct, operate, maintain, or terminate a 
pipeline, or for purposes of environmental protection or public safety. 
See Sec.  2881.12. The regulations require these holders to contact the 
BLM:
     Before engaging in any activity that is a ``substantial 
deviation'' from what is authorized;
     Whenever site-specific circumstances or conditions arise 
that result in the need for changes that are not substantial 
deviations;
     When the holder submits a certification of construction;
     Before assigning, in whole or in part, any right or 
interest in a grant or lease;
     Before any change in control transaction involving the 
grant- or lease-holder; and
     Before changing the name of a holder (i.e., when the name 
change is not the result of an underlying change in control of the 
right-of-way).
    A request for an amendment of a right-of-way or temporary use 
permit is required in cases of a substantial deviation (e.g., a change 
in the boundaries of the right-of-way, major improvements not 
previously approved by the BLM, or a change in the use of the right-of-
way). Other changes, such

[[Page 35676]]

as changes in project materials, or changes in mitigation measures 
within the existing, approved right-of-way area are required to be 
submitted to the BLM for review and approval. In order to assign a 
grant, the proposed assignee must file an assignment application and 
follow the same procedures and standards as for a new grant or lease, 
as well as pay processing fees. In order to request a name change, the 
holder will be required to file an application and follow the same 
procedures and standards as for a new grant or lease and pay processing 
fees, but no application fee is required. The following documents are 
also required in the case of a name change:
     A copy of the court order or legal document effectuating 
the name change of an individual; or
     If the name change is for a corporation, a copy of the 
corporate resolution proposing and approving the name change, a copy of 
a document showing acceptance of the name change by the State in which 
incorporated, and a copy of the appropriate resolution, order, or other 
document showing the name change.
    In all these cases, the BLM will use the information gathered for 
monitoring and inspection purposes, and to maintain current data on 
rights-of-way.

Certification of Construction (43 CFR 2886.12(f))

    A certification of construction is a document a holder of an MLA 
right-of-way must submit to the BLM after finishing construction of a 
facility, but before operations begin. The BLM will use the information 
to verify that the holder has constructed and tested the facility to 
ensure that it complies with the terms of the right-of-way and is in 
accordance with applicable Federal and State laws and regulations.
    The information-collection request for this rule has been submitted 
to OMB for review under 44 U.S.C. 3507(d). You may view the 
information-collection request(s) at https://www.reginfo.gov/public/do/PRAMain.
    As part of our continuing effort to reduce paperwork and respondent 
burdens, we invite the public and other Federal agencies to comment on 
any aspect of this information-collection, including:
     Whether the collection of information is necessary for the 
proper functioning of the BLM, including whether the information will 
have practical utility;
     The accuracy of the BLM's estimate of the burden of 
collecting the information, including the validity of the methodology 
and assumptions used;
     The quality, utility, and clarity of the information to be 
collected; and
     How to minimize the information-collection burden on those 
who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other forms of information technology.
    Currently, the information-collection requirements contained in 43 
CFR parts 2800 and 2880 and approved under OMB control number 1004-0206 
are estimated as follows: 3,042 annual responses; 47,112, annual burden 
hours; and $2,182,302 annual cost burden. We are projecting a burden 
increase of 75 new annual responses and 150 new annual burden hours as 
result of this rule. This burden hour increase would result from a new 
information collection requirement contained in Sec.  2806.52(b)(5) 
pertaining to the annual certified statement. This new information 
collection is needed to help the BLM more accurately determine the 
capacity fee based on the certified statement provided.
    The final rule also removes an existing information collection 
previously contained in 43 CFR 2809.11(c) titled, Expression of 
Interest in a Parcel of Land Inside a Designated Leasing Area. The 
removal of this information collection results in the reduction of 1 
annual response and 4 annual burden hours.
    Therefore, we estimate that the final rule will result in a net 
increase of 74 annual responses and 226 annual burden hours.
    We are also adjusting the burden for two existing and unchanged 
information collections to reflect more accurately the burden those 
activities would involve the industry. These adjustments include the 
following:
     Preliminary Application Review Meetings for 2 public 
meetings for a Large-Scale Right-of-Way (43 CFR 2804.12(b)(4)). The 
average response time is adjusted from 2 hours to 4 hours. This 
adjustment resulted in a 40-hour burden increase (from 40 hours to 80 
hours).
     Environmental, Technical, and Financial Records, Reports, 
and Other Information (43 CFR 2805.12(a)(15)). We have added a 50 
percent increase in the hours required to prepare reports (from 4 per 
response to 6 per response). This resulted in an increasing the 
estimated annual burden hours for these activities from 80 hours to 120 
hours.
    There are no projected changes to the non-hour cost burdens as a 
result of this rule. The resulting new estimated total burdens for OMB 
Control Number 1004-0206 are provided below.
    Title of Collection: Competitive Processes, Terms, and Conditions 
for Leasing Public Lands for Solar and Wind Energy Development (43 CFR 
parts 2800 and 2880).
    OMB Control Number: 1004-0206.
    Form Number: SF-299 (Burden approved by OMB in Request for Common 
Form under OMB Control Number 0596-0249).
    Type of Review: Revision of a currently approved collection of 
information.
    Respondents/Affected Public: Private sector (applicants for and 
holders of wind and solar rights-of-way grants or leases on Federal 
public lands.
    Respondent's Obligation: Required to obtain or retain a benefit.
    Frequency of Collection: On occasion and annually for the Annual 
Certified Statement in 43 CFR 2806.52(i).
    Number of Respondents: 75.
    Annual Responses: 3,116.
    Annual Burden Hours: 47,338.
    Annual Burden Cost: $2,182,302.
    If you want to comment on the information-collection requirements 
this in this rule, please send your comments and suggestions on this 
information-collection request within 30 days of publication of this 
final rule in the Federal Register to OMB at www.reginfo.gov. Click on 
the link, ``Currently under Review--Open for Public Comments.''

National Environmental Policy Act

    These proposed regulatory amendments are of an administrative or 
procedural nature and thus are eligible to be categorically excluded 
from the requirement to prepare an EA or an EIS. See 43 CFR 46.205 and 
46.210(i). They do not present any of the extraordinary circumstances 
listed at 43 CFR 46.215.

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

    Federal agencies are to prepare and submit to OMB a Statement of 
Energy Effects for any proposed significant energy action. A 
``significant energy action'' is defined as any action by an agency 
that: (1) Is a significant regulatory action under Executive Order 
12866, or any successor order, and (2) Is likely to have a significant 
adverse effect on the supply, distribution, or use of energy; or (3) Is 
designated by the Administrator of OIRA as a significant energy action.
    The BLM reviewed the rule and determined that it is not likely a 
significant energy action as defined by E.O. 13211. While the rights-
of-way affected by this rule are for solar and

[[Page 35677]]

wind energy generation, the rule is limited in scope and would not 
likely have a significant, adverse effect on the supply, distribution, 
or use of energy from these sources. The rule would not result in a 
shortfall in supply, price increases, or increase the use of foreign 
supplies.

Authors

    The principal authors of this rule are: Jayme M. Lopez, BLM 
National Renewable Energy Coordination Office; Jeremy Bluma, BLM 
National Renewable Energy Coordination Office; Radford Schantz, 
Division of Lands, Realty and Cadastral Survey; Patrick Lee, DOI, 
Office of Policy Analysis; Jeff Holdren, BLM Division of Lands, 
Realty and Cadastral Survey; Darrin King, BLM Division of Regulatory 
Affairs; Jennifer Noe, BLM Division of Regulatory Affairs, assisted 
by the DOI Office of the Solicitor. This action by the Principal 
Deputy Assistant Secretary is taken pursuant to an existing 
delegation of authority.

Steven H. Feldgus, Ph.D.,
Principal Deputy Assistant Secretary, Land and Minerals Management.

List of Subjects in 43 CFR Part 2800

    Electric power, Highways and roads, Penalties, Public lands and 
rights-of-way, Reporting and recordkeeping requirements.
    Accordingly, for the reasons stated in the preamble, the BLM amends 
43 CFR part 2800 as set forth below:

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

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

    Authority:  43 U.S.C. 1733, 1740, 1763, 1764, and 3003.

Subpart 2801--General information

0
2. Amend Sec.  2801.5:
0
a. In paragraph (a) by adding the acronym for ``FLPMA'' in alphabetical 
order;
0
b. In paragraph (b) by:
0
i. Removing the term ``Act'';
0
ii. Adding in alphabetical order the terms ``Domestic Content'' and 
``Capacity fee'';
0
iii. Revising the term for ``Grant'';
0
iv. Removing the term ``Megawatt (mw) capacity fee'';
0
v. Revising the terms ``Megawatt hour (MWh) rate'' and ``Reasonable 
costs''; and
0
vi. Adding in alphabetical order the terms ``Renewable energy 
coordination office (RECO)'', ``Solar or wind energy development'', and 
``Solar or wind energy lease''.
    The additions and revisions to read as follows:


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

    (a) * * *
    FLPMA means the Federal Land Policy and Management Act of 1976, as 
amended (43 U.S.C. 1701 et seq.).
* * * * *
    (b) * * *
    Domestic Content reduction means an item or product that qualifies 
for the domestic content preference under the Build America, Buy 
America Act, Public Law 117-58, 135 Stat. 429, Sec. Sec.  70901 through 
70927 (Nov. 15, 2021), and the implementing guidance at 2 CFR part 184.
    Capacity fee is the fee charged to right-of-way holders once energy 
production commences that is based on the production of energy on 
public lands from solar and wind energy generating facilities.
* * * * *
    Grant means an authorization or instrument (e.g., easement, 
license, or permit) the BLM issues under Title V of the Federal Land 
Policy and Management Act, 43 U.S.C. 1761 et seq., and any 
authorization or instrument the BLM and its predecessors issued for 
like purposes before October 21, 1976, under then existing statutory 
authority, except for solar or wind energy leases. It does not include 
authorizations issued under the Mineral Leasing Act (30 U.S.C. 185).
* * * * *
    Megawatt hour (MWh) rate means the 5 calendar-year average of the 
annual average wholesale electricity prices per MWh for the major 
trading hubs serving the 11 western States of the continental United 
States.
* * * * *
    Reasonable costs has the meaning found in Section 304(b) of FLPMA.
* * * * *
    Renewable energy coordination office (RECO) means one of the 
National, State, district, or field offices established by the 
Secretary under 43 U.S.C. 3002(a) that is responsible for implementing 
a program for improving Federal permit coordination with respect to 
solar, wind, and geothermal projects on BLM-administered land, and such 
other activities as the Secretary determines necessary.
* * * * *
    Solar or wind energy development means the use of public lands to 
generate electricity from solar or wind energy resources. It includes 
the construction, operation, maintenance, and decommissioning of any 
such facilities, as well as the subsequent reclamation of the site.
    Solar or wind energy lease means any right-of-way issued for solar 
or wind energy development in an area classified or allocated for solar 
or wind energy (i.e., a designated leasing area) in a resource 
management plan.
* * * * *

0
3. Amend Sec.  2801.6 by revising paragraph (a)(1) to read as follows:


Sec.  2801.6  Scope.

    (a) * * *
    (1) Grants or leases for necessary transportation or other systems 
and facilities that are in the public interest and require the use of 
public lands for the purposes identified in 43 U.S.C. 1761, and 
administering, amending, assigning, monitoring, renewing, and 
terminating them;
* * * * *

0
4. Amend Sec.  2801.9 by revising paragraphs (d) introductory text, 
(d)(3) and (4), and adding paragraph (d)(6) to read as follows:


Sec.  2801.9  When do I need a grant?

* * * * *
    (d) All systems, facilities, and related activities for energy 
generation, storage, or transmission projects are specifically 
authorized as follows:
* * * * *
    (3) Energy generation facilities, including solar and wind energy 
development facilities, are authorized with a right-of-way grant or 
lease that may be issued for up to 50 years (plus initial partial year 
of issuance);
    (4) Energy storage facilities, which are separate from energy 
generation facilities, are authorized with a right-of-way grant that 
may be issued for up to 50 years;
* * * * *
    (6) Electric transmission lines with a capacity of 100 kV or more 
are authorized with a right-of-way grant that may be issued for up to 
50 years.

0
5. Revise the heading for subpart 2802 to read as follows:

Subpart 2802--Lands Available for FLPMA Grants or Leases

0
6. Amend Sec.  2802.11 by revising paragraphs (b) introductory text and 
(b)(1) and adding paragraphs (b)(10) and (11) to read as follows:


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

* * * * *
    (b) When determining which public lands may be suitable for right-
of-way corridors or designated leasing areas, the BLM may consider 
various factors, including:

[[Page 35678]]

    (1) Federal, State, Tribal, and local land use plans, and 
applicable Federal, State, Tribal, and local laws;
* * * * *
    (10) Access to electric transmission; and
    (11) Whether there are areas for solar and wind energy development 
with low potential for conflict with resources or uses due to 
environmental, cultural, and other relevant criteria, which the BLM 
will identify by:
    (i) Assessing the demand for new or expanded areas;
    (ii) Applying environmental, cultural, and other screening 
criteria; and
    (iii) Analyzing proposed areas through the land use planning 
process described in part 1600 of this chapter.
* * * * *

0
7. Amend Sec.  2803.10 by revising paragraph (c) to read as follows:


Sec.  2803.10  Who may hold a grant or lease?

* * * * *
    (c) Of legal age and authorized to do business in the State or 
States where the right-of-way you seek is located.

0
8. Revise Sec.  2803.12 to read as follows:


Sec.  2803.12  What happens to my grant or lease if I die?

    (a) If a grant holder dies, any inheritable interest in a grant or 
lease will be distributed under State law.
    (b) If the receiver of a grant or lease is not qualified to hold a 
grant or lease under Sec.  2803.10 of this subpart, the BLM will 
recognize the receiver as grant or leaseholder for up to two years, 
subject to full compliance with all terms, conditions, and 
stipulations. During that period, the receiver must either become 
qualified or divest itself of the interest.

Subpart 2804--Applying for FLPMA Grants

0
9. Amend Sec.  2804.12 by revising paragraphs (c) and (f) and adding 
paragraph (j) to read as follows:


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

* * * * *
    (c) You must meet additional requirements when applying for a solar 
or wind energy development or short-term right-of-way, as follows:
    (1) Pay an application filing fee of $2 per acre for short-term 
right-of-way applications or $15 per acre for solar or wind energy 
development applications. The BLM will apply the application filing fee 
toward the processing fees described in Sec. Sec.  2804.14 through 
2804.22. The BLM will refund the balance of any application filing fee 
at the end of the BLM's application review process if the application 
filing fee exceeds the amount of the processing fee.
    (2) Pay additional reasonable costs in addition to payment of the 
application filing fee when processing your application, pursuant to 
Sec.  2804.14. A processing or monitoring Category 6 cost recovery fee 
may be reduced by the application filing fee paid when submitting an 
application.
* * * * *
    (f) The BLM may require you to submit additional information at any 
time while processing your application. The BLM will identify 
additional information in a written deficiency notice asking you to 
provide the information within a specified time pursuant to Sec.  
2804.25(c).
* * * * *
    (j) Your application will not be complete until you have met or 
addressed the requirements of this section to the satisfaction of the 
BLM. The BLM will notify you in writing when your application is 
complete.

0
10. Revise Sec.  2804.22 to read as follows:


Sec.  2804.22  How will the availability of funds affect the timing of 
the BLM's processing your application?

    (a) If the BLM has insufficient funds to process your application, 
we will not continue to process it until funds become available or you 
elect to pay full actual costs under Sec.  2804.14(f) of this part.
    (b) The BLM may deny your application if we have not received 
requested reasonable costs for processing your application within 90 
days.
    (c) If your cost recovery agreement provides that a portion of the 
funds you pay will be used in the hiring of additional staff or 
contractors, such funds may not be refundable.

0
11. Revise Sec.  2804.23 to read as follows:


Sec.  2804.23  What costs am I responsible for when the BLM decides to 
use a competitive process for lands included in my application?

    If the BLM decides to use a competitive process for lands included 
in your application and your application is in:
    (a) Processing Categories 1 through 4. You must reimburse the 
Federal Government for processing costs as if the other application or 
applications had not been filed.
    (b) Processing Category 6. You are responsible for processing costs 
identified in your application. If the BLM cannot readily separate 
costs, such as costs associated with preparing environmental analyses, 
you and any competing applicants must pay an equal share, or a 
proportion agreed to in writing among all applicants and the BLM. If 
you agree to share the costs that are common to your application and 
that of a competing applicant, and the competitor does not pay the 
agreed upon amount, you are liable for the entire amount due. You must 
pay the entire processing fee in advance. The BLM will not process your 
application until we receive the advance payments.

0
12. Amend Sec.  2804.25 by revising paragraphs (c), (e)(2), (e)(4), 
(e)(5), and (f)(3) to read as follows:


Sec.  2804.25  How will the BLM process my application?

* * * * *
    (c) The BLM may require you to submit additional information 
necessary to process the application. This information may include a 
detailed construction, operation, rehabilitation, and environmental 
protection plan (i.e., a POD), and any needed cultural resource surveys 
or inventories for threatened or endangered species. If the BLM needs 
more information, the BLM will identify this information in a written 
deficiency notice asking you to provide the additional information 
within a specified period of time. The failure to provide additional 
information requested by the BLM under this section may result in the 
BLM denying your application pursuant to Sec.  2804.26.
    (e) * * *
    (2) If your application is for solar or wind energy development;
    (i) Hold a local public meeting if there is no other public meeting 
or opportunity for early engagement on the project, such as those 
completed when complying with the National Environmental Policy Act 
(NEPA).
    (ii) Prioritize the application in accordance with Sec.  2804.35; 
and
    (iii) Evaluate the application based on the information provided by 
the applicant and input from other parties, such as Federal, State, 
Tribal, and local government agencies, as well as comments received in 
preliminary application review meetings held under Sec.  2804.12(b)(4) 
and any public meeting held under paragraph (e)(1) of this section. 
Based on these evaluations, the BLM will either deny your application 
or continue processing it.
* * * * *
    (4) Complete appropriate NEPA compliance for the application, as 
required by 43 CFR part 46 and 40 CFR chapter V, subchapter A;

[[Page 35679]]

    (5) Determine whether your proposed use complies with applicable 
Federal laws;
* * * * *
    (f) * * *
    (3) The segregation period may not exceed 2 years from the date of 
publication in the Federal Register of the notice initiating the 
segregation, unless the state director determines and documents in 
writing, prior to the expiration of the segregation period, that an 
extension is necessary for the orderly administration of the public 
lands. If the state director determines an extension is necessary, the 
BLM will extend the segregation for up to 2 years by publishing a 
notice in the Federal Register, prior to the expiration of the initial 
segregation period. A segregation will not be extended unless the 
application is complete and cost recovery has been received. 
Segregations under this part may only be extended once and the total 
segregation period may not exceed 4 years.

0
13. Amend Sec.  2804.26 by revising the section heading, paragraphs 
(a)(4) and (9) and adding paragraph (a)(10), and removing paragraph 
(c).
    The revisions and additions read as follows:


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

    (a) * * *
    (4) Issuing the grant would be inconsistent with FLPMA, other laws, 
or these or other regulations;
* * * * *
    (10) You fail to pay costs for processing your application within 
90 days of receiving the BLM's request for funds under Sec.  
2804.22(b).
* * * * *


Sec.  2804.30  [Removed and Reserved]

0
14. Remove and reserve Sec.  2804.30.


Sec.  2804.31  [Removed and Reserved]

0
15. Remove and reserve Sec.  2804.31.

0
16. Revise Sec.  2804.35 to read as follows:


Sec.  2804.35  Application prioritization for solar and wind energy 
development rights-of-way.

    (a) The BLM will prioritize the processing of applications to 
ensure that agency resources are allocated to applications with the 
greatest potential for approval and implementation. The BLM's 
prioritization of an application is not a decision and is not subject 
to appeal under 43 CFR part 4.
    (b) The BLM will consider relevant criteria when prioritizing 
applications, including the following:
    (1) Whether the proposed project is located within an area 
preferred for solar or wind energy development, such as designated 
leasing areas, which include solar energy zones, development focus 
areas, and renewable energy development areas;
    (2) Whether the proposed project is likely to avoid adverse impacts 
to or conflicts with known resources or uses on or adjacent to public 
lands, and includes specific measures designed to further mitigate 
impacts or conflicts;
    (3) Whether the proposed project is in conformance with the 
governing BLM land use plans;
    (4) Whether the proposed project is consistent with relevant State, 
Tribal, and local government laws, plans, or priorities;
    (5) Whether the proposed project incorporates the best management 
practices set forth in the applicable BLM land use plans and other BLM 
plans and policies; and
    (6) Any other circumstances or prioritization criteria identified 
by the BLM in subsequent policy guidance or management direction 
through land use planning.
    (c) The BLM will prioritize your complete application based on all 
available information, including information you provide to the BLM in 
the application or in response to deficiency notices, and information 
provided to the BLM in public meetings or consultations.
    (d) The BLM may re-prioritize your application at any time.

0
17. Amend Sec.  2804.40 by revising the introductory text to read as 
follows:


Sec.  2804.40  Alternative requirements.

    If you are unable to meet any of the application requirements in 
this subpart, you may request approval for an alternative requirement 
from the BLM. Any such request is not approved until you receive BLM 
approval in writing. Your request to the BLM must:
* * * * *

Subpart 2805--Terms and Conditions of Grants

0
18. Amend Sec.  2805.10 by revising paragraph (c) to read as follows:


Sec.  2805.10  How will I know whether the BLM has approved or denied 
my application or if my bid for a solar or wind energy development 
grant or lease is successful or unsuccessful?

* * * * *
    (c) If you agree with the terms and conditions of the unsigned 
grant or lease, you should sign and return it to the BLM with any 
payment required under Sec.  2805.16. The BLM will issue the right-of-
way by signing the grant or lease and transmitting it to you, if the 
regulations in this part, including Sec.  2804.26, remain satisfied.
* * * * *

0
19. Amend Sec.  2805.11 by revising the section heading and paragraphs 
(c)(2) introductory text and (c)(2)(iv) and (v) and adding paragraph 
(b)(4) to read as follows:


Sec.  2805.11  What does a grant or lease contain?

* * * * *
    (c) * * *
    (2) Specific terms for energy grants and leases, such as solar or 
wind energy development projects, are as follows:
* * * * *
    (iv) Energy generation facilities, including solar or wind energy 
development facilities, are authorized with a grant or lease for up to 
50 years (plus initial partial year of issuance), subject to the terms 
and conditions including but not limited to Sec.  2805.12(c); and
    (v) Energy storage facilities which are separate from energy 
generation facilities are authorized with a right-of-way grant for up 
to 50 years, subject to the terms and conditions including but not 
limited to Sec.  2805.12(c);
* * * * *
    (4) Electric transmission lines with a capacity of 100 kV or more 
are authorized with a right-of-way grant for up to 50 years.
* * * * *

0
20. Amend Sec.  2805.12 by adding paragraph (c)(8) and by revising 
paragraph (e)(2) to read as follows:


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

* * * * *
    (c) * * *
    (8) Comply with the operational standards in this section for solar 
or wind energy development projects on public lands. The holder of a 
grant or lease for solar or wind energy development is authorized to 
operate for the purpose of generating energy. Diligent operation 
requires the holder to annually maintain at least 75 percent of energy 
generation capacity for the authorized development. Failure to meet 
this required generation in continuous two calendar year period during 
the term of the grant or lease may support suspension or termination of 
the grant or lease under Sec. Sec.  2807.17 through 2807.19. Before 
suspending or terminating the authorization, the BLM will send you a 
notice that gives you a reasonable opportunity to correct any

[[Page 35680]]

noncompliance or to start or resume use of the right-of-way (see Sec.  
2807.18). In response to this notice, you must:
    (i) Provide reasonable justification for any reductions in energy 
generation (for example, delays in equipment delivery, legal 
challenges, and Acts of God);
    (ii) Provide the anticipated date in which production of energy 
generation will resume; and
    (iii) Submit a written request under paragraph (e) of this section 
for extension of the period in which the holder must satisfy the 
minimum energy threshold. If you do not comply with the requirements of 
paragraph (c)(8) of this section, the BLM may deny your request for an 
extension of the period for complying with the minimum energy 
generation threshold.
* * * * *
    (e) * * *
    (2) You may also request that the BLM consider alternative 
stipulations, terms, or conditions, other than rents or fees, and 
except as provided in Sec.  2806.52(b)(1)(i). Any proposed alternative 
stipulation, term, or condition must comply with applicable law in 
order to be considered. Any proposed alternative to applicable bonding 
requirements must provide the United States with adequate financial 
assurance for potential liabilities associated with your right-of-way 
grant or lease. Any such request is not approved until you receive BLM 
approval in writing.

0
21. Revise Sec.  2805.13 to read as follows:


Sec.  2805.13  When is a grant or lease effective?

    A grant is effective after both you and the BLM sign it. You must 
accept its terms and conditions in writing and pay any necessary rent 
and monitoring fees as set forth in subpart 2806 of this part and Sec.  
2805.16 of this subpart. Your written acceptance constitutes an 
agreement between you and the BLM that your right to use the public 
lands, as specified in the grant or lease, is subject to the terms and 
conditions of the grant or lease and applicable laws and regulations.

0
22. Amend Sec.  2805.14 by revising the section heading and paragraph 
(g) to read as follows:


Sec.  2805.14  What rights does a right-of-way grant or lease convey?

* * * * *
    (g) Apply to renew your right-of-way grant or lease under Sec.  
2807.22;
* * * * *

Subpart 2806--Annual Rents and Payments

0
23. Amend Sec.  2806.10 by revising the section heading and adding 
paragraph (c) to read as follows:


Sec.  2806.10  What rent must I pay for my grant or lease?

* * * * *
    (c) You must pay rent for your grant or lease using the per-acre 
rent schedule for linear right-of-way grants (see Sec.  2806.20) unless 
a separate rent schedule is established for your use, such as for 
communication sites per Sec.  2806.30 or solar and wind energy 
development per Sec.  2806.50. The BLM may also determine that these 
schedules do not apply to your right-of-way pursuant to Sec.  2806.70.

0
24. Amend Sec.  2806.12 by revising paragraphs (a)(1) introductory 
text, (a)(2), and (b) to read as follows:


Sec.  2806.12  When and where do I pay rent?

    (a) * * *
    (1) If your grant or lease is effective on:
* * * * *
    (2) If your grant or lease allows for multiyear payments, such as a 
short-term grant issued for energy site-specific testing, you may 
request that your initial rent bill be for the full term instead of the 
initial rent bill periods provided under paragraph (a)(1)(i) or (ii) of 
this section.
    (b) You must make all rent payments for rights-of-way according to 
the payment plan described in Sec.  2806.24.
* * * * *

0
25. Amend Sec.  2806.20 by revising paragraph (c) to read as follows:


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

* * * * *
    (c) You may obtain a copy of the current Per Acre Rent Schedule 
from any BLM state, district, or field office or by writing the address 
found under Sec.  2804.14(c) of this part. We also post the current 
rent schedule at https://www.blm.gov.

0
26. Revise the undesignated center heading that precedes Sec.  2806.50 
and Sec.  2806.50 to read as follows:

Solar and Wind Energy Development Rights-of-Way


Sec.  2806.50  Rents and fees for solar and wind energy development.

    If you hold a right-of-way for solar or wind energy development, 
you must pay an annual rent and fee in accordance with this section and 
subpart. The annual rent and fee is the greater of the acreage rent or 
the capacity fee that would be due in a given year, and must be paid in 
advance each year. The acreage rent will be calculated consistent with 
Sec.  2806.11 and prorated consistent with Sec.  2806.12(a). The 
capacity fee will vary depending on the project's annual energy 
generation on public lands and will be calculated consistent with Sec.  
2806.52(b). Any underpayment will be billed pursuant to Sec.  2806.13 
and any overpayment will be credited pursuant to Sec.  2806.16.

0
27. Amend Sec.  2806.51 by revising the section heading and paragraph 
(c) to read as follows:


Sec.  2806.51  Grant and lease rate adjustments.

* * * * *
    (c) If you hold a right-of-way for solar or wind energy development 
that is in effect prior to July 1, 2024, you may either request that 
the BLM apply the annual rent and fee set forth in Sec.  2806.52 or use 
the rate methodology applicable to your authorization immediately prior 
to this rule. If you wish to use the annual rent and fee set forth in 
Sec.  2806.52, your request must be received by the BLM before July 1, 
2026. The BLM will continue to apply the rate in effect immediately 
prior to this rule unless it receives your request to use the rate 
adjustments in this part. A request to change your rate methodology 
will include your agreement to a re-issuance of the grant or lease with 
updated Terms and Conditions found under this part, pursuant to Sec.  
2807.20(f).

0
28. Amend Sec.  2806.52 by revising the section heading, the 
introductory text and paragraphs (a), (b), and (c) to read as follows:


Sec.  2806.52  Annual rents and fees for solar and wind energy 
development.

    You must pay the greater of either an annual acreage rent or a 
capacity fee. The acreage rent and capacity fee are determined as 
follows:
    (a) Acreage rent. The BLM will calculate the acreage rent for your 
grant or lease by multiplying the number of acres of the authorized 
area (rounded up to the nearest tenth of an acre) by the annual per-
acre rate for the year in which the payment is due.
    (1) Per-acre rate. The annual per-acre rate for your grant or lease 
is calculated using the State per-acre value from the solar or wind 
energy acreage rent schedule, the encumbrance factor, the year of the 
grant or lease term, and the annual adjustment factor. The calculation 
for determining the annual per-acre rate is A x B x [(1 + C) [supcaret] 
D] where:

[[Page 35681]]

    (i) A is the state per-acre value from the solar or wind energy 
acreage rent schedule published by the BLM for the year on which your 
right-of-way grant or lease is issued and is based on the National 
Agricultural Statistics Service (NASS) Survey of Pastureland Rents. The 
BLM will prepare the rent schedule by averaging the NASS reported 
pastureland rents for the most recent 5-year period, using only those 
years for which rent is reported by NASS. The BLM will update the rent 
schedule every 5 years consistent with the timing of rent adjustments 
under Sec.  2806.22.
    (ii) B is the encumbrance factor, which is 100 percent for solar 
energy and 5 percent for wind energy;
    (iii) C is the annual adjustment factor, which is 3 percent; and,
    (iv) D is the year of the grant or lease term, which is the number 
of years the grant or lease has been authorized. For example, the first 
year (whether partial or full year) would be 0 and the second year 
would be 1.
    (2) You may obtain a copy of the current solar or wind energy 
acreage rent schedule from any BLM state, district, or field office or 
by writing the address found under Sec.  2804.14(c) of this part, 
Attention: Renewable Energy Coordination Office. The BLM also posts the 
current solar energy acreage rent schedule at https://www.blm.gov.
    (b) Capacity fee. (1) The capacity fee is calculated using the MWh 
rate or the alternative MWh rate, the MWh rate reduction, the domestic 
content reduction, the Project Labor Agreement (PLA) reduction, the 
rate of return, the year of the grant or lease, the annual adjustment 
factor, and the annual power generated on the right-of-way. You must 
pay the capacity fee annually, beginning the year in which electricity 
generation begins or is scheduled to begin in the approved POD, 
whichever comes first, unless the acreage rent (see paragraph (a) of 
this section) exceeds the capacity fee in a given year. The calculation 
for determining the capacity fee is A x B x C x D x [(1 + E) 
[supcaret]F] x G x H where:
    (i) A is the MWh rate or the alternative MWh rate. The MWh rate is 
the annual weighted average wholesale price per MWh for the major 
trading hubs serving the 11 Western States of the continental United 
States for the full 5 calendar-year period preceding the year in which 
your grant or lease was issued, rounded to the nearest dollar increment 
(see paragraph (7)). An Alternative MWh rate may be approved by the BLM 
if you have entered into a power purchase agreement, such as with a 
utility, and that rate is lower than the MWh rate. You must provide 
proof of the lower rate to the BLM, and if the BLM determines the lower 
rate is appropriate, the alternative MWh rate will be used in place of 
the MWh rate.
    (ii) B is the MWh rate reduction, which is equal to 80 percent for 
fee payments due before 2036. Starting 2036, the MWh rate reduction for 
new authorizations transitions to 20 percent, as follows:

                     Table 1 to Paragraph (b)(1)(ii)
------------------------------------------------------------------------
                                                                 B--
                                                 MWh rate    calculation
                 Calendar year                   reduction   multiplier
                                                    (%)          (%)
------------------------------------------------------------------------
2035..........................................          80            20
2036..........................................          60            40
2037..........................................          40            60
2038 and beyond...............................          20            80
------------------------------------------------------------------------

    (iii) C is the Domestic Content reduction, which is equal to 1.0 
for fee payments when a holder's project does not qualify for the 
domestic content reduction. C is equal to 0.8 when the holder can 
demonstrate that a facility qualifies for the domestic content 
reduction. A facility qualifies for the domestic content reduction if a 
holder documents that the facility would qualify as ``Produced in the 
United States'', consistent with 2 CFR part 184.
    (iv) D is the factor for the Project Labor Agreement reduction, 
which is equal to 1.0 for fee payments when the holder does not execute 
a PLA. D is equal to 0.8 if the holder executes a PLA for the 
construction of the project.
    (v) Request for conditional approval: Alternative MWh rate, 
Domestic Content reduction and PLA reduction. The alternative MWh rate, 
the Domestic Content reduction and PLA reduction (paragraphs (b)(1)(ii) 
and (iii) and (iv) of this section) may only be applied if a request 
for conditional approval is received by the BLM prior to the issuance 
of a grant or lease. A request for conditional approval must be 
submitted with sufficient documentation to demonstrate that the 
development qualifies or may later qualify for the rate reductions. A 
request for conditional approval is subject to the holder 
demonstrating, to the satisfaction of the BLM's Authorized Officer, 
that the development qualifies. If energy generation begins before the 
holder has demonstrated that the facility qualifies, the BLM will 
charge the holder the full capacity fee, without the alternative MWh 
rate, Domestic Content reduction, or PLA reduction. The capacity fee 
may be updated for subsequent calendar years after the holder 
demonstrates that the facility qualifies, but the BLM will not refund 
past payments made before the alternative MWh rate, domestic content 
reduction, or PLA reduction went into effect.
    (2) E is the annual adjustment factor, which is 3 percent.
    (3) F is the year of the grant or lease term, which is the number 
of years the grant or lease has been authorized. For example, the first 
year (whether partial or full year) would be 0 and the second year 
would be 1.
    (4) G is the rate of return, which is 7 percent.
    (5) H is the annual energy generated on the right-of-way and will 
be provided to the BLM by the grant or leaseholder in an annual 
certified statement. The BLM will bill to coincide with the start of 
the calendar year. The first-year payment in advance will be based on 
estimated energy generation and the BLM will determine final payment 
for the first year based on actual energy generation. Subsequent 
payments in advance will be based on the most recent calendar year's 
actual energy generation reported on the certified statement, unless 
exception is approved in paragraph (vi) of this section.
    (i) The holder must submit the annual certified statement to the 
BLM before the first year of energy generation begins or is scheduled 
to begin as approved in the Plan of Development, whichever comes first. 
Certified annual statements must be submitted to the BLM by October, 
each year.
    (ii) Prior to the start of energy generation, the holder must 
submit to the BLM in the certified statement the estimated energy 
generation of the development for the first year.
    (iii) Once energy generation has begun, the holder must submit to 
the BLM in the certified statement the most recent calendar year's 
actual energy generation of the development.
    (iv) The BLM will calculate the capacity fee from the certified 
statement. For projects that include generation on public and non-
public lands, the holder will prorate the total energy generation by 
the percentage of the right-of-way footprint on public lands relative 
to the total development area footprint.
    (v) If the year's actual energy generation exceeds or is less than 
the amount of energy generation used to bill for the payment in 
advance, the holder will be billed, credited, or refunded for the 
underpayment or overpayments pursuant to Sec. Sec.  2806.13(e) and 
2806.16. In no event will the total payment be less than the annual 
acreage rent.
    (vi) The BLM may approve a request made by a right-of-way holder to 
provide a new estimate of energy generation to the BLM in the annual

[[Page 35682]]

certified statement to use for billing the next year's payment in 
advance if: the right-of-way holder has planned maintenance activities, 
or other interruptions to energy generation, that would reduce the 
amount of energy generated by 25 percent or more; or, the right-of-way 
holder is aware that the energy generation in the subsequent year will 
exceed the actual energy generation for the previous year by 25 percent 
or more. See Sec.  2805.12(c)(8)(i) through (iii) for the steps to 
follow when failing to meet diligent operation requirements.
    (vii) If the right-of-way holder underestimates energy generation 
by 25 percent or more of the actual energy generation or does not 
provide the BLM with a new estimate when energy production will exceed 
the previous year's actual production by more than 25 percent, the BLM 
may assess the holder a late payment fee of 10 percent of the actual 
generation for each year of underestimation. This section applies 
unless the BLM has approved a request to provide a new estimate under 
Sec.  2806.52(b)(5)(vi), and the approved new estimate does not 
underestimate energy generation by 25 percent or more of actual energy 
generation or if the holder can provide the BLM with justification 
consistent with Sec.  2805.12(e).
    (6) MWh rate schedule. You may obtain a copy of the current MWh 
rate schedule from any BLM state, district, or field office or by 
writing the address found under Sec.  2804.14(c) of this part, 
Attention: Renewable Energy Coordination Office. The BLM also posts the 
current MWh rate schedule at https://www.blm.gov.
    (7) Periodic adjustments. (i) The MWh rate applicable to your 
right-of-way will be the MWh rate in effect the first year for your 
grant or lease and will not be updated with subsequent MWh rate 
schedule adjustments. The MWh rate applicable to your right-of-way will 
only be updated each year by the annual adjustment factor under 
paragraph (b)(2) of this section.
    (ii) The MWh rate schedule for new grants and leases will be 
adjusted once every 5 years consistent with the timing of rent 
adjustments under Sec.  2806.22 of this part and consistent with 
paragraph (b)(1) of this section.
    (8) The general payment provisions for rents described in this 
subpart, except for Sec.  2806.14(a)(4), also apply to the capacity 
fee.
    (c) Implementation of the acreage rent and capacity fee. The rates 
for acreage rent and capacity fees apply to all grants and leases 
issued after the effective date of this rule, and to existing grants 
and leases if the holder elects to continue paying under the rate 
setting methodology established at the time of your authorization per 
Sec.  2806.51(c).
* * * * *

0
29. Add an undesignated center heading between Sec. Sec.  2806.52 and 
2806.54 and revise Sec.  2806.54 to read as follows:

Renewable Energy Rights-of-Way


Sec.  2806.54  Rent for energy storage facilities that are not part of 
a solar or wind energy development facility.

    Rent for energy storage facilities that are not part of a solar or 
wind energy development facility will be determined pursuant to the 
linear rent formula set forth in Sec.  2806.23. The BLM may determine 
your rent pursuant to Sec.  2806.70 if we determine the linear rent 
schedule does not apply.


Sec.  Sec.  2806.60 through 2806.68  [Removed]

0
30. Remove the undesignated center heading ``Wind Energy Rights-of-
Way'' and Sec. Sec.  2806.60 through 2806.68.

Subpart 2807--Grant Administration and Operation

0
31. Amend Sec.  2807.17 by revising paragraph (c) to read as follows:


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

* * * * *
    (c) Your failure to use your right-of-way for its authorized 
purpose for any continuous 5-year period creates a presumption of 
abandonment, except for solar and wind energy rights-of-way. Consistent 
with Sec.  2805.12(c)(8), a presumption of abandonment or insufficient 
productivity of a grant or lease for a solar or wind energy generation 
occurs for any continuous two calendar-year period.

0
32. Amend Sec.  2807.20 by revising paragraph (b) and adding paragraph 
(f) to read as follows:


Sec.  2807.20  When must I amend my application, seek an amendment of 
my grant or lease, or obtain a new grant or lease?

* * * * *
    (b) The requirements to amend an application or grant are the same 
as those for a new application, including paying processing and 
monitoring fees and rent according to Sec. Sec.  2804.14, 2805.16, and 
2806.10, except for solar and wind energy development grants and leases 
per Sec.  2806.51(c) requesting a rent adjustment addressed under 
paragraph (f) of this section.
* * * * *
    (f) A request to the BLM per Sec.  2806.51(c) to adjust your solar 
or wind energy rates must be received before July 1, 2026. The BLM will 
re-issue your grant or lease, without further review, for the remainder 
of your existing term consistent with the requirements of this part, 
including processing and monitoring costs under Sec. Sec.  2804.14 and 
2805.16, the terms and conditions under Sec.  2805.12, and rent 
provision under Sec.  2806.50.

0
33. Amend Sec.  2807.21 by revising paragraph (e) to read as follows:


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

* * * * *
    (e) Your assignment is not recognized until the BLM approves it in 
writing. We will approve the assignment if doing so is in the public 
interest. We may modify the grant or lease or add bonding and other 
requirements, including additional terms and conditions, to the grant 
or lease when approving the assignment, except that we may only modify 
solar or wind energy leases where modification is warranted under Sec.  
2805.15(e). We may decrease rents if the new holder qualifies for an 
exemption (see Sec.  2806.14) or waiver or reduction (see Sec.  
2806.15) and the previous holder did not. Similarly, we may increase 
rents if the previous holder qualified for an exemption or waiver or 
reduction and the new holder does not. If we approve the assignment, 
the benefits and liabilities of the grant or lease apply to the new 
grant or leaseholder.
* * * * *

0
34. Revise the heading of subpart 2809 to read as follows:

Subpart 2809--Competitive Process for Solar and Wind Energy 
Development Applications or Leases

0
35. Revise Sec.  2809.10 to read as follows:


Sec.  2809.10  Competitive process for energy development grants and 
leases.

    (a) The BLM may conduct a competitive process for solar and wind 
energy development grants or leases on its own initiative; or
    (b) The BLM may solicit nominations for public lands to be included 
in a competitive process by publishing a call for nominations under 
Sec.  2809.11(a); or
    (c) You may request that the BLM conduct a competitive process by 
submitting a request in writing that complies with Sec.  2809.11(b); or
    (d) The BLM may conduct a competitive process if it receives two or 
more competing applications.

[[Page 35683]]

    (e) Except where an applicant has failed to timely provide 
information requested by the BLM under Sec.  2804.25(c), the BLM will 
not offer lands in a competitive process for which the BLM has accepted 
a complete application, received a Plan of Development, and entered 
into a cost recovery agreement.

0
36. Revise Sec.  2809.11 to read as follows:


Sec.  2809.11  How will the BLM call for nominations?

    (a) Call for nominations. The BLM may publish a call for 
nominations for lands to be included in a competitive process. The BLM 
will publish this notice in the Federal Register and may also use other 
notification methods, such as a newspaper of general circulation in the 
area affected, or the internet. The Federal Register notice and any 
other notices will include:
    (1) The date, time, and location by which nominations must be 
submitted;
    (2) The date by which nominators will be notified of the BLM's 
decision on timely submissions;
    (3) The area or areas within which nominations are being requested; 
and
    (4) The qualification for a nominator, which must include, at a 
minimum, the requirements for an applicant, see Sec.  2803.10.
    (b) Nomination submission. Nominations for lands to be included in 
a competitive process must be in writing, and include the following:
    (1) A refundable nomination fee of $5 per acre;
    (2) The nominator's name and personal or business address. The name 
of only one citizen, association, partnership, corporation, or 
municipality may appear as the nominator. All communications relating 
to submissions will be sent to that name and address, which constitutes 
the nominator's name and address of record; and
    (3) The legal land description and a map of the nominated lands. 
The lands nominated may be the entire area or part of the area made 
available under the call for nominations.
    (c) The BLM will not accept your submission if it does not comply 
with the requirements of this section, or if you are not qualified to 
hold a grant or lease under Sec.  2803.10.
    (d) Withdrawing a nomination. A nomination cannot be withdrawn, 
except by the BLM for cause, in which case the nomination fee will be 
refunded.
    (e) The BLM may decide whether to conduct an offer for nominated 
lands.

0
37. Revise Sec.  2809.12 to read as follows:


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

    (a) The BLM will identify parcels for a competitive process based 
on information received in public nominations, land use designations, 
and on any other information it deems relevant.
    (b) The BLM and other Federal agencies, as applicable, may conduct 
necessary studies and site evaluation work, including applicable 
environmental reviews and public meetings, before offering lands in a 
competitive process.
    (c) The BLM's choice to conduct a competitive process is not a 
decision to grant or deny a right-of-way application and is not subject 
to appeal under 43 CFR part 4.

0
38. Amend Sec.  2809.13 by revising paragraphs (b)(7) and (c) to read 
as follows:


Sec.  2809.13  How will the BLM conduct competitive processes?

* * * * *
    (b) * * *
    (7) The terms and conditions of the process, including whether a 
successful bidder will become a preferred applicant or a presumptive 
leaseholder; the requirements for the successful bidder to submit an 
application, see Sec.  2804.12, or a Plan of Development, see Sec.  
2809.18; and any mitigation requirements, including compensatory 
mitigation.
    (c) We will notify you in writing of our decision to conduct a 
competitive process at least 30 days prior to the competitive process 
if you nominated lands that are included in the process, paid the 
nomination fees, and demonstrated your qualifications to hold a grant 
or lease as required by Sec.  2809.11.

0
39. Amend Sec.  2809.15 by:
0
a. Revising paragraph (a);
0
b. Removing paragraph (d);
0
c. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
d. Adding a new paragraph (b); and
0
e. Revising newly redesignated paragraphs (d)(1) through (4);
0
f. Adding paragraph (d)(5); and
0
f. Revising paragraph (e).
    The revisions and addition read as follows:


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

    (a) The bidder with the highest total bid, prior to any variable 
offset, is the successful bidder, and may become the preferred 
applicant or the presumptive leaseholder in accordance with Sec.  
2809.15(b).
    (b) The successful bidder will become the presumptive leaseholder 
or preferred applicant only after making the payments required in 
paragraph (d) and satisfying the requirements of this section and Sec.  
2803.10. If the successful bidder does not satisfy these requirements, 
the BLM may make the next highest bidder the successful bidder under 
Sec.  2809.17(b) or re-offer the lands under Sec.  2809.17(d).
    (1) Presumptive leaseholder. (i) The successful bidder will become 
a presumptive leaseholder if:
    (A) The lands for which the bidder has successfully bid are located 
within a designated leasing area; and,
    (B) The notice of the competitive process indicated that a 
successful bidder will become a presumptive leaseholder.
    (ii) A presumptive leaseholder will be awarded a lease only if the 
presumptive leaseholder submits a proposed Plan of Development in 
accordance with Sec.  2804.25(c) and the proposed Plan of Development 
is approved by the BLM.
    (2) Preferred applicant. A successful bidder who does not become a 
presumptive leaseholder in accordance with Sec.  2809.15(b)(1) may 
become a preferred applicant. The preferred applicant's application for 
a grant or lease will be processed for the parcel identified in the 
submission under Sec.  2809.12(b). Approval of the application is not 
guaranteed and is solely at the BLM's discretion. The BLM will not 
process other applications for solar and wind energy development on 
lands where a preferred applicant has been identified, unless allowed 
by the preferred applicant.
* * * * *
    (d) * * *
    (1) Make payments by personal check, cashier's check, certified 
check, bank draft, or money order, or by other means deemed acceptable 
by the BLM, payable to the Department of the Interior--Bureau of Land 
Management;
    (2) By the close of official business hours on the day on which the 
BLM conducts the competitive process or such other time as the BLM may 
have specified in the offer notices, submit for each parcel:
    (3) Within 15 calendar days after the day on which the BLM conducts 
the competitive process, submit the balance of the bonus bid (after the 
variable offsets are applied under paragraph (c) of this section) to 
the BLM office conducting the process; and
    (4) Within 15 calendar days after the day on which the BLM conducts 
the

[[Page 35684]]

competitive process, submit the application filing fee under Sec.  
2804.12(c) less the application fee submitted under Sec.  2809.11(c)(1) 
(if you are the preferred applicant), or submit the acreage rent for 
the first full year of the lease as provided in part 2806 (if you are 
the presumptive leaseholder).
    (5) You may be required to pay reasonable costs in addition to 
payment of the application filing fee when processing your application, 
pursuant to Sec.  2804.14. A processing or monitoring Category 6 cost 
recovery fee may be reduced by the application filing fee paid when 
submitting an application.
    (e) The successful bidder will not become the preferred applicant 
or be offered a lease and the BLM will keep all money that has been 
submitted with the competitive process if the successful bidder does 
not satisfy the requirements of paragraph (d) of this section. In this 
case, the BLM may make the next highest bidder the successful bidder 
under Sec.  2809.17(b) or re-offer the lands.

0
40. Amend Sec.  2809.16 by redesignating paragraph (c)(11) as paragraph 
(c)(13), revising paragraphs (c) introductory text and (c)(10), adding 
paragraphs (c)(11) and (12), revising newly redesignated paragraph 
(c)(13), and adding paragraph (e) to read as follows:


Sec.  2809.16  When do variable offsets apply?

* * * * *
    (c) The variable offset may be based on the following factors, 
including progressive steps towards:
* * * * *
    (10) Public benefits;
    (11) Use of items qualifying for the Domestic Content preference;
    (12) Use of a project labor agreement; and
    (13) Other factors.
* * * * *
    (e) If the successful bidder's eligibility for a variable offset 
cannot be verified until a later time, the BLM may require the 
successful bidder to submit the full bid amount, without taking into 
account the variable offset, and hold the amount of the variable offset 
in suspense. The amount of the bonus bid corresponding to the variable 
offset will be refunded or credited to the successful bidder once the 
successful bidder has demonstrated that it has qualified for the 
variable offset. The BLM may set a deadline in the notice of 
competitive process by which the successful bidder must demonstrate its 
qualifications.

0
41. Amend Sec.  2809.17 by revising paragraph (b) and removing 
paragraph (d) to read as follows:


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

* * * * *
    (b) We may make the next highest bidder the successful bidder if 
the first successful bidder does not satisfy the requirements of Sec.  
2809.15, does not execute the lease, or is for any reason disqualified 
from holding the lease.
* * * * *

0
42. Amend Sec.  2809.18 by revising the introductory text and 
paragraphs (a), (b), and (f) to read as follows:


Sec.  2809.18  What terms and conditions apply to a solar and wind 
energy development lease?

    The lease will be issued subject to the following terms and 
conditions:
    (a) Site control. A lease provides site control to the leaseholder. 
The term of your lease will be consistent with Sec.  2805.11(b) and 
will terminate on December 31 of the final year of the lease term. You 
may submit an application for renewal under Sec.  2805.14(g). A 
leaseholder may not construct any facilities on the right-of-way until 
the BLM issues a notice to proceed or other written form of approval to 
begin surface disturbing activities.
    (b) Rent. You must pay any rent as specified in Sec.  2806.52.
* * * * *
    (f) Assignments. You may apply to assign your lease under Sec.  
2807.21, and if an assignment is approved, the BLM will not make any 
changes to the lease terms or conditions, as provided for by Sec.  
2807.21(e), except for modifications required under Sec.  2805.15(e).
* * * * *


Sec.  2809.19  [Removed]

0
43. Remove Sec.  2809.19.

[FR Doc. 2024-08099 Filed 4-30-24; 8:45 am]
BILLING CODE 4331-29-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.