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

<RULE> DEPARTMENT OF THE INTERIOR <SUBAGY>Bureau of Land Management</SUBAGY> <CFR>43 CFR Part 2800</CFR> <DEPDOC>[BLM_HQ_FRN_MO# 4500177145]</DEPDOC> <RIN>RIN 1004-AE78</RIN> <SUBJECT>Rights-of-Way, Leasing, and Operations for Renewable Energy</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Land Management, Interior. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective July 1, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Jayme Lopez, Interagency Coordination Liaison, by phone at (520) 235-4581, or by email at <E T="03">energy@blm.gov</E> 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. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <EXTRACT> <FP SOURCE="FP-2">I. Executive Summary</FP> <FP SOURCE="FP-2">II. Background</FP> <FP SOURCE="FP-2">III. Discussion of Public Comments on the Proposed Rule</FP> <FP SOURCE="FP-2">IV. Section-by-Section Discussion</FP> <FP SOURCE="FP-2">V. Procedural Matters</FP> </EXTRACT> <HD SOURCE="HD1">I. Executive Summary</HD> 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  <SU>1</SU> <FTREF/> ) in the <E T="04">Federal Register</E> , 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. <FTNT> <SU>1</SU>   <E T="03">https://www.federalregister.gov/documents/2023/06/16/2023-12178/rights-of-way-leasing-and-operations-for-renewable-energy.</E> </FTNT> <HD SOURCE="HD1">II. Background</HD> 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 <E T="04">Federal Register</E> 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 ( <E T="03">i.e.,</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. <HD SOURCE="HD2">Solar and Wind Energy Rents and Fees</HD> 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 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), <E T="03">i.e.,</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 incenti ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 378k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━