[Federal Register Volume 88, Number 116 (Friday, June 16, 2023)]
[Proposed Rules]
[Pages 39726-39762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-12178]



[[Page 39725]]

Vol. 88

Friday,

No. 116

June 16, 2023

Part V





Department of the Interior





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Bureau of Land Management





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43 CFR Part 2800





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

  Federal Register / Vol. 88, No. 116 / Friday, June 16, 2023 / 
Proposed Rules  

[[Page 39726]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 2800

[BLM_HQ_FRN_MO#4500171739]
RIN 1004-AE78


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

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) is proposing to amend its 
existing right-of-way (ROW) regulations, issued under authority of the 
Federal Land Policy and Management Act (FLPMA). The principal purpose 
of these amendments would be to facilitate responsible solar and wind 
energy development on public lands managed by the BLM. The rule would 
adjust acreage rents and capacity fees for solar and wind energy, 
provide the BLM with more flexibility in how it processes applications 
for solar and wind energy development inside designated leasing areas, 
and update agency criteria on prioritizing solar and wind applications. 
The rule would also make technical changes, corrections, and 
clarifications to the existing ROW regulations. This rule would 
implement the authority granted to the Secretary of the Interior 
(Secretary) in the Energy Act of 2020 to ``reduce acreage rental rates 
and capacity fees'' to ``promote the greatest use of wind and solar 
energy resources'' and achieve other enumerated policy goals.

DATES: Please submit comments on this proposed rule on or before August 
15, 2023. The BLM is not obligated to consider any comments received 
after this date in making its decision on the final rule.
    This rule includes a proposed new information collection 
requirement that must be approved by the Office of Management and 
Budget (OMB). If you wish to comment on the new information collection 
requirement in this rule, please note that such comments should be sent 
directly to the OMB, and that the OMB is required to make a decision 
concerning the collection of information contained in this rule between 
30 and 60 days after publication of this document in the Federal 
Register. Therefore, comments to the OMB on the proposed new 
information collection are best assured of being given full 
consideration if the OMB receives them by July 17, 2023.

ADDRESSES: Mail, personal, or messenger delivery: U.S. Department of 
the Interior, Director (630), Bureau of Land Management, 1849 C St. NW, 
Room 5646, Washington, DC 20240, Attention: 1004-AE78.
    Federal eRulemaking Portal: https://www.regulations.gov. In the 
Searchbox, enter ``RIN 1004-AE78'' and click the ``Search'' button. 
Follow the instructions at this website.
    For Comments on Information-Collection Activities: Written comments 
and suggestions on the information-collection requirements should be 
submitted by the date specified above in DATES to www.reginfo.gov/public/do/PRAMain. Find this specific information-collection by 
selecting ``Currently under Review--Open for Public Comments'' or by 
using the search function.
    If you submit comments on the information-collection burdens, you 
should provide the BLM with a copy at the addresses shown earlier in 
this section, so that we can summarize all written comments and address 
them in the final rulemaking. Please indicate ``Attention: OMB Control 
Number 1004-0206 (RIN 1004-AE78)'' regardless of the method used to 
submit comments on the information-collection burdens. Comments not 
pertaining to the proposed rule's information-collection burdens should 
not be submitted to OMB. The BLM is not obligated to consider or 
include in the Administrative Record for the final rule any comments 
that are improperly directed to OMB.

FOR FURTHER INFORMATION CONTACT: Jayme Lopez, Interagency Coordination 
Liaison, by phone at (520) 235-4581 and by email at [email protected], or 
Jeremy Bluma, Renewable Energy Advisor, by phone at (208) 789-6014 and 
by email at [email protected] for information relating to the BLM 
Renewable Energy program and information relating to the substance of 
the rule with a subject line of ``RIN 1004-AE78''.
    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. Public Comment Procedures
II. Background
    A. Introduction
    B. Need for the Rule
    C. Statutory Authority
III. Discussion of the Rule
IV. Procedural Matters

I. Public Comment Procedures

    If you wish to comment on this rule, you may submit your comments 
to the BLM by mail, personal or messenger delivery during regular hours 
(7:45 a.m. to 4:15 p.m.), Monday through Friday, except holidays, or 
through https://www.regulations.gov (see the ADDRESSES section).
    Please make your comments on the rule as specific as possible, 
confine them to issues pertinent to the rule, and explain the reason 
for any changes you recommend. Where possible, your comments should 
reference the specific section or paragraph of the proposal that you 
are addressing. The BLM is not obligated to consider or include in the 
Administrative Record for the rule comments that we receive after the 
close of the comment period (see DATES section) or comments delivered 
to an address other than those listed above (see ADDRESSES section). 
Comments, including names and street addresses of respondents, will be 
available for public review at the address listed under ADDRESSES 
section. Before including your address, telephone number, email 
address, or other personal identifying information in your comment, be 
advised that your entire comment, including your personal identifying 
information, may be made publicly available at any time. While you can 
ask us in your comment to withhold from public review your personal 
identifying information, we cannot guarantee that we will be able to do 
so. As explained later, this proposed rule would include revisions to 
information collection requirements that must be approved by the Office 
of Management and Budget (OMB). If you wish to comment on the revised 
information collection requirements in this proposed rule, please note 
that such comments must be sent directly to the OMB in the manner 
described in the DATES and ADDRESSES sections above. Please note that 
due to COVID-19, electronic submission of comments is recommended.

II. Background

A. Introduction

    This proposed rule sets forth changes to the BLM's Renewable Energy 
and ROW programs related to two main topics. The first topic is solar 
and wind energy rents and fees, implementing new authority from the 
Energy Act of 2020 (43 U.S.C. 3003) to ``reduce acreage rental rates 
and capacity fees, or both, for existing and new wind and solar 
authorizations'' if the Secretary makes certain findings. The second

[[Page 39727]]

topic is making public lands available to solar and wind energy 
application inside of a designated leasing area without first holding a 
competitive offer.
Solar and Wind Energy Rents and Fees
    FLPMA generally requires ROW 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, allowing the BLM, 
on behalf of 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, 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.''
    Through this proposed rule, the BLM proposes changes to acreage 
rents and capacity fees for solar and wind energy ROW authorizations in 
order to ``promote the greatest use of wind and solar energy 
resources,'' maximize ``commercial interest'' in lease sales and ROW 
grants, and avoid ``economic hardship'' to ROW holders. By implementing 
these proposed changes, the BLM would promote solar and wind energy use 
on public lands and underpin an increase to the share of clean energy 
that is part of the United States' domestic power infrastructure.
    For example, the BLM expects that the proposed reductions in solar 
and wind energy acreage rent and capacity fees will facilitate solar 
and wind energy development by increasing commercial interest and 
encouraging additional investment in the use of public lands. These 
proposed reductions should particularly benefit smaller scale projects 
or projects that are on the margins of being economically profitable, 
increasing interest among renewable energy developers.
    Through the rent and fee adjustments contemplated in this rule, the 
BLM also expects that lower acreage rental rates and capacity fees for 
solar and wind energy generating facilities would translate into lower 
costs for energy deployment, increasing renewable energy market 
penetration in domestic energy production. By reducing costs to 
producers, these reduced rates may also reduce electricity costs to 
rate payers. Additionally, the BLM proposes reductions to capacity fees 
tied to a holder's use of American made parts and materials consistent 
with direction in the Energy Act of 2020. The BLM anticipates that the 
proposed Buy American capacity fee reductions would increase economic 
certainty for renewable energy projects on BLM-managed public lands. By 
incentivizing the use of American made parts and materials in exchange 
for a reduced capacity fee, the BLM expects to reduce costs for 
developers, which in turn will stimulate increased demand for domestic 
production of 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.\1\) Uncertainty 
in global supply chain dynamics, as seen in recent years, 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. Similar 
to the proposed rental fee and capacity fee reductions described in the 
previous paragraphs, the BLM believes that incentivizing the use of 
parts and materials that qualify for the Buy American 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.
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    \1\ https://www.energy.gov/sites/default/files/2022-02/Solar%20Energy%20Supply%20Chain%20Report%20-%20Final.pdf.
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    Consistent with the BLM's authority under FLPMA, the BLM would 
require ROW holders to pay in advance either an acreage rent or a 
capacity fee for solar and wind energy generation installations. The 
proposed rule's methodology for calculating a capacity fee is based on 
actual energy production, which is a change from the BLM's 2016 rule, 
Competitive Processes, Terms, and Conditions for Leasing Public Lands 
for Solar and Wind Energy Development and Technical Changes and 
Corrections (81 FR 92122). The 2016 rule discusses the capacity fee in 
detail at 81 FR 92122, page 92134. The 2016 rule bases the MW capacity 
fee on a technology's (i.e., photovoltaic or concentrating solar-
thermal) nameplate capacity as an estimate of the energy that could be 
generated at each facility. This rule proposes, instead, to base the 
capacity fee for solar and wind energy generation facilities on actual 
energy generation at each facility. The BLM believes this change would 
more accurately reflect 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 particular 
sites. This change to the capacity fee indexes the required payment to 
the developments' energy generation, being greater when the capacity 
generates more energy and less when generating less. In the context of 
this rule, the term ``capacity fee'' is defined as ``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.''
    The BLM would also calculate an acreage rent for wind and solar 
ROWs based on per acre values for pastureland from the National 
Agricultural Statistics Service (NASS) Cash Rents Survey. The acreage 
rent would be the minimum rent paid to the BLM for solar and wind 
energy generating facilities once a grant or lease is issued, whether 
or not energy is generated on the ROW in a given year. The capacity fee 
would be collected in place of the acreage rent if the capacity fee 
exceeds the acreage rent. The capacity fee would reflect the value of 
solar or wind energy resources used to generate electricity on the 
public lands. One component of the capacity fee, the MWh rate, which is 
based on wholesale prices for the major trading hubs serving 11 western 
States or on prices received by the ROW holder under a power purchase 
agreement, would be reduced by 80 percent until 2036 under this rule 
based on authority provided by the Energy Act of 2020 (codified at 43 
U.S.C 3003) and would only be adjusted by a fixed annual adjustment 
factor once set at the beginning of the grant or lease period. If the 
BLM collects the capacity fee, no acreage rent would be required that 
year. This fee calculation relies on BLM's direction under sections 
504(g) and 102(a)(9) of FLPMA to collect ``the fair market value'' for 
the use of the public lands and its resources, which Congress further 
clarified in the Energy Act of 2020 to confirm that the BLM could 
``consider acreage rental rates, capacity fees, and other recurring 
annual fees in total.'' Starting in 2036, under Sec.  
2806.52(b)(1)(ii), the MWh rate reduction would decrease from 80

[[Page 39728]]

percent to 20 percent of the wholesale price per Megawatt hour (MWh). 
This change in the MWh rate reduction in 2036 would not affect existing 
ROWs and would only apply to new or renewed ROWs for which the MWh rate 
is set at the beginning of their authorization using the current rate 
of the MWh rate schedule applicable in 2036.
    This rule aims to improve payment predictability for grant and 
lease holders by fixing 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 ROW is issued. In 
doing so, these rates would be set for the term of the ROW and only 
adjusted by the annual adjustment factor and, in the case of the 
capacity fee, by the holder's actual annual production.
    See preamble Sec.  2806.50 for a more detailed discussion of the 
BLM's proposed methodology for determining the acreage rent and 
capacity fee.
Lands Available for Solar and Wind Energy Applications
    Under this rule, the BLM would have the option to make public lands 
inside designated leasing areas available for non-competitive leasing 
by application, while retaining discretion to conduct competitive 
offers, either within or outside of designated leasing areas. This is a 
change from the BLM's 2016 rule, Competitive Processes, Terms, and 
Conditions for Leasing Public Lands for Solar and Wind Energy 
Development and Technical Changes and Corrections, which required 
authorizations within designated leasing areas to be offered 
competitively before the agency could proceed with a non-competitive 
application process.
    The BLM designated solar energy zones through the 2012 Western 
Solar Plan (https://blmsolar.anl.gov/documents/solar-peis/), which 
identified approximately 285,000 acres of agency preferred development 
locations for solar 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 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 
energy in Arizona through the 2017 Restoration Design Energy Project. 
After the 2016 rule went into effect, the BLM initially observed that 
solar and wind energy developers generally did not submit nominations 
or expressions of interest on their own accord for lands within agency 
preferred locations and instead continued to actively submit non-
competitive applications outside of such locations. In the past two 
years, however, the BLM has offered designated leasing areas 
competitively and identified greater levels of competitive interest 
inside and outside of designated leasing areas. Nonetheless, the BLM 
believes that by revising the regulations to allow the agency greater 
flexibility to use competitive processes in circumstances where 
competitive interest exists and to issue leases without a competitive 
process where no competitive interest exists across all BLM-managed 
public lands, the BLM can maximize interest in renewable energy leasing 
and accelerate the deployment of solar and wind energy on the public 
lands. Therefore, the BLM proposes to revise its rules to allow 
applications to be filed within designated areas without first holding 
a competitive offer, while preserving for the BLM the discretion to 
hold a competitive offer in response to competing applications, 
nominations, or expressions of interest, or on its own initiative. See 
Sec.  2804.23 for cost recovery considerations related to competing 
applications and subpart 2809 for the competitive process for solar and 
wind energy applications or leases.
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.'' To date, the BLM has authorized 
projects on public land that are estimated to support more than 13 
gigawatts of electricity from renewable energy sources. Current 
information regarding the BLM's approved energy developments and number 
of gigawatts is available on its website.\2\ The Energy Act of 2020 
also provided 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 
proposes to implement the direction in the Energy Act of 2020 through 
this rulemaking process.
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    \2\ https://www.blm.gov/programs/energy-and-minerals/renewable-energy/active-renewable-projects.
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    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 the Department of the Interior ``to 
increase renewable energy production on (public) lands.''
    The changes in this rulemaking would 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 ROWs on public lands; to issue regulations governing such ROWs 
and charge rent for such ROWs; and to impose terms and conditions on 
ROW 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 ROW applicants or holders to reimburse the agency 
for its costs incurred while working on a proposed or authorized ROW. 
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

[[Page 39729]]

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 the Rule

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

    Part 2800 of the CFR describes requirements for ROWs issued under 
FLPMA. This rule would revise the rent and fee schedules for solar and 
wind energy development ROWs. This rule would also modify the 
application process for public lands inside of solar and wind 
designated leasing areas available to allow for either competitive or 
non-competitive leasing processes. Other changes, including updated 
solar and wind prioritization provisions and establishing criteria for 
a ``complete application,'' would correct or clarify existing 
regulations.
Section 2801.5 What acronyms and terms are used in the regulations in 
this part?
    This section contains the acronyms and defines the terms used in 
this rule.
    Paragraph (a) provides for the acronyms used in this part. The 
acronym ``FLPMA,'' meaning the Federal Land Policy and Management Act 
of 1976, as amended (43 U.S.C. 1701 et seq.), would replace the term 
``Act'' from these rules. This change provides clarity to which act the 
BLM is referencing.
    Paragraph (b) provides for the terms used in this part. The 
proposed rule would:
    Remove the term ``Act'' which means the Federal Land Policy and 
Management Act of 1976 (43 U.S.C 1701 et. seq.). This revision is 
consistent with the addition of the acronym ``FLPMA'' under paragraph 
(a) of this section;
    Remove definitions of ``Megawatt (MW) capacity fee,'' ``Net 
capacity factor,'' ``Megawatt hour (MWh) price,'' ``Rate of return,'' 
and ``Hours per year'' from this rule. Because under this proposed rule 
the BLM would no longer charge a megawatt capacity fee based on solar 
and wind energy generation facility nameplate capacity, definitions 
related to the nameplate capacity fee are no longer necessary and would 
be removed from this rule;
    Revise the definition of the term ``Megawatt hour (MWh) rate'' to 
mean the 5 calendar-year average of the annual weighted average 
wholesale prices per MWh for major trading hubs serving 11 western 
States of the continental United States. This revision is consistent 
with the BLM's proposed change to implement a capacity fee;
    Add the term ``Buy American'' to mean an item or product that 
qualifies for the Buy American preference under Section 52.225-1(b) of 
the Federal Acquisition Regulations (FAR) (48 CFR 52.225-1(b)) or a 
successor regulation. Section 52.225-1(b) of the FAR identifies certain 
categories of items or products that qualify for the Buy American 
preference in federal acquisition. Generally, under section 52.225-
1(b), the preference applies to ``domestic end products'' and 
``commercially available off-the-shelf'' (or ``COTS'') items, with an 
additional provision specifying qualification rules for an ``end 
product that consists wholly or predominantly of iron or steel or a 
combination of both.'' Each of the terms quoted above, in turn, is 
defined in section 52.225-1(a). The BLM proposes to use the term ``Buy 
American'' as a catch-all term to refer to items for which the Buy 
American preference is available under section 52.225-1(b) of the FAR;
    Revise the term ``Grant'' to reflect that solar or wind energy 
leases are not covered under the definition. The change is consistent 
throughout the proposed rule and provides reader clarity where the BLM 
will issue a solar or wind energy grant and where a solar or wind 
energy lease will be issued;
    Add 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 proposed change is consistent with the BLM's 
proposed change to implement a capacity fee that is based on 
production;
    Revise the term ``Reasonable costs'' to be consistent with the rule 
change replacing the words ``the Act'' with the acronym ``FLPMA.'' This 
change is intended to improve readability and consistency with the 
rules in this part. See changes to acronyms under paragraph (a) of this 
section for further discussion on the use of acronyms;
    Add the term ``Renewable Energy Coordination Office (RECO)'' 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;
    Add the term ``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 designated leasing area. Any right-of-way not issued 
within an area identified as a designated leasing area would be a 
grant. This term is introduced for readability; and
    Add the 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 is intended to clarify that 
the term ``energy development'' refers specifically to uses of public 
lands that directly involve the generation of electricity on public 
lands, and not to other uses of public lands that might indirectly 
support energy production. The addition of this definition clarifies 
which ROW grants and leases are subject to the conditions in Section 
50265(b)(1) of the Inflation Reduction Act, which apply to ``a right-
of-way for wind or solar energy development on Federal land.''
Section 2801.6 Scope
    The scope in 43 CFR part 2800 would clarify that the regulations in 
this part apply to leases as well as grants. Paragraph (a)(1) includes 
the additional language ``or leases'' when describing the authorization 
types, clarifying that the scope includes both instrument types.
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. Section 2801.9(d) would 
be revised to extend the thirty-year maximum term to 50 years for ROWs 
for solar or wind energy development and for other uses that support 
solar or wind energy development, and to make other technical changes. 
Paragraphs (d)(3) and (4) are consolidated into new paragraph (d)(3), 
removing differences between grants and leases inside and outside 
designated leasing areas.
    New paragraph (d)(4) would add storage facilities that are separate 
from energy generation facilities to the list of systems, facilities, 
and related activities for energy generation, storage, or transmission 
projects for which a grant or lease is required. Similarly, paragraph 
(d)(6) would add electric transmission lines with a capacity of 100kV 
or more. The BLM proposes to add these paragraphs to specifically 
describe the additional types of authorizations required for various 
components of solar and wind energy developments, or their related 
infrastructure that may be operated, and thus processed, separately.

[[Page 39730]]

    FLPMA requires the BLM to limit each ROW granted under FLPMA ``to a 
reasonable term in light of all circumstances concerning the project,'' 
including among other factors, ``the cost of the facility, its useful 
life, and any public purpose it serves'' (43 U.S.C. 1764(b)). The BLM 
considered different alternatives for the maximum term of a grant or 
lease for solar or wind energy development and for other uses that 
support solar or wind energy development, such as freestanding energy 
storage and electric transmission. Among other alternatives, the BLM 
considered providing for 5- or 10-year extensions to the initial term 
length with continued operations. However, the BLM believes, based on 
its experience administering such ROWs, that the reasonable term of a 
grant or lease is best limited to a 50-year term for large 
infrastructure ROWs, considering the cost of the facility, its useful 
life, and the public purpose it serves.
    Considering the cost of the facility may include the financing 
terms and the payback period a prospective grant or lease holder may 
enter into under a loan or grant program. When evaluating the useful 
life of a project, the BLM may consider the time it takes before a 
facility is no longer economically feasible to operate or the projected 
time until repowering (i.e., updating components of a facility to 
increase useful life or energy production). The economic life of 
technology has been increasing and is expected to continue doing so 
with the advent of new materials in solar or wind energy facilities. 
The method for financing or repowering may also change over time with 
further advances with the maturation and advancement of the renewable 
energy market. Additionally, a facility may also be part of a Federal, 
Tribal, state or local government energy plan or infrastructure project 
which may also indicate the need for a longer ROW term. In providing 
for ROW terms that may be up to 50 years, the BLM would be able to take 
into consideration the cost of the facility, its useful life and public 
purposes it serves up to a 50-year term as these considerations may 
change over time or with specific projects.
    The BLM is interested to hear from commenters whether other 
alternatives for maximum terms of grants and leases would be more 
appropriate, including, potentially, the existing 30-year maximum term; 
a maximum term longer than 50 years; no regulatory limitation to a ROW 
term; extending the initial term by 10-year intervals with updated 
power purchase agreements; or reducing the initial term based on the 
factors listed in 43 U.S.C. 1764(b).

Subpart 2802--Lands Available for FLPMA Grants or Leases

    Subpart 2802 would be revised to add ``or leases'' to the title to 
clarify for readers that public lands are available for both grants and 
leases, consistent with other revisions in this rule regarding leases.
Section 2802.11 How does the BLM designate right-of-way corridors and 
designated leasing areas?
    Section 2802.11 explains how the BLM designates ROW corridors and 
designated leasing areas. Section 2802.11 would be revised to explain 
how the BLM designates areas through its land use planning process, 
including the non-exhaustive list of factors it considers. The rule 
would add a new factor for access to electric transmission. Sec.  
2802.11(b) would be revised to improve readability and consistency 
between the BLM's regulatory authority under part 2800 and its 
statutory authority under the FLPMA.
    Paragraph (b)(1) is revised to be consistent with section 202(c)(9) 
of FLPMA (43 U.S.C. 1712(c)(9)), to include Tribal land use plans.
    Paragraphs (b)(10) and (b)(11) would be added to provide more 
detail for what the BLM considers when designating new leasing areas 
for solar and wind energy. In the BLM's experience with its energy 
programs, it has considered multiple criteria that are either specific 
to a particular region or State, as well as many common considerations 
all such types of development must consider. The proposed rule would 
identify two such factors that the BLM typically considers.
    The BLM proposes to add ``access to electric transmission'' in 
(b)(10) as a factor to be considered. This factor is intended to ensure 
that planning efforts for prioritizing solar and wind energy 
development take into consideration access to electric transmission. In 
the BLM's experience, accessibility to transmission is a key component 
for successful developments on public lands. The BLM also proposes to 
add a factor in (b)(11) derived from its 2012 Western Solar Plan.\3\ 
Section A.2.6 of Appendix A of the Plan explained that areas designated 
for solar development (termed solar energy zones in the Plan) would be 
relatively large areas where energy development is feasible and there 
is a low potential for conflict due to environmental, cultural, and 
other relevant criteria. The Western Solar Plan sets forth a four-step 
process for identifying new or expanded solar energy zones. The four 
steps are as follows:
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    \3\ https://eplanning.blm.gov/eplanning-ui/project/2017069/510.
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    (1) Assess the demand for new or expanded areas;
    (2) Establish technical and economic suitability criteria;
    (3) Apply environmental, cultural, and other screening criteria; 
and
    (4) Analyze proposed areas through the land use planning process 
described in part 1600 of this chapter.
    In the rule, the BLM proposes to carry forward three of these four 
steps, excluding the establishment of technical and economic 
suitability criteria because technical and economic criteria have and 
will change rapidly for utility-scale solar energy development and in 
the BLM's experience it has not been feasible or appropriate to utilize 
those criteria for the establishment of designated leasing areas. The 
BLM proposes to include steps (1), (3), and (4) above to the factors 
listed in Sec.  2802.11(b)(11).
Section 2803.10 Who may hold a grant or lease?
    Section 2803.10 provides the criteria for who may hold a grant or 
lease. Some BLM ROWs may cross more than one State. Therefore, the BLM 
proposes to revise existing provisions to clarify 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 ROW grant they seek 
is located.
Section 2803.12 What happens to my application or grant if I die?
    Section 2803.12 explains how the BLM administers a ROW or an 
application for a ROW in the event of the holder's or applicant's 
death. Paragraph (a) would be added to this section to address a 
situation in which an applicant dies before the ROW is granted and 
clarifies that an application does not hold any transferable rights. If 
an applicant dies before the grant or lease is issued as described in 
43 CFR 2805.10, the application cannot be transferred to another person 
and is deemed denied. Existing paragraphs (a) and (b) would be 
renumbered as (b) and (c) and revised.
    Paragraph (b) would be revised to include leases, clarifying that 
any inheritable interest in the grant or lease would be distributed 
under state law. Paragraph (c) would be revised to include the 
additional provision that if the BLM distributes a grant to an 
unqualified holder, the receiver must comply with all the terms, 
conditions,

[[Page 39731]]

and stipulations of the grant. The BLM also replaces the word 
``distributee'' to ``receiver'' to improve clarity to readers that when 
the BLM distributes a grant or lease, the instrument would be received 
by the holder.
Section 2804.12 What must I do when submitting my application?
    Section 2804.12 explains what an applicant must do when submitting 
a ROW application. Section 2804.12 would be revised to remove a 
provision that limits solar and wind energy development applications to 
public lands outside of designated leasing areas, revise the 
application fee requirements for solar and wind rights-of-way, and 
specify when an application becomes ``complete.''
    The BLM proposes to remove existing paragraph (c)(1), which limits 
solar and wind energy development applications to public lands outside 
of designated leasing areas, to allow applications to be submitted on 
public lands inside or outside of designated leasing areas without the 
BLM first holding a competitive offer under subpart 2809. As discussed 
previously in the summary and background sections of this notice, this 
change will make designated leasing areas available to noncompetitive 
applications.
    Paragraph (c) would be revised to update the requirements for 
payment of an application filing fee for solar or wind energy 
development ROWs and for short-term ROWs, which include project-area 
testing applications. The paragraph would also address the relationship 
between application filing fees and reasonable costs. Application 
filing fees are an existing per-acre fee collected by the BLM as a cost 
recovery payment and are intended to discourage applicants from 
applying for more land than is necessary for a proposed project and 
also to provide an early cost recovery payment. This rule would clarify 
that application filing fees are applied towards payment of reasonable 
costs to the government for processing applications as required under 
FLPMA. New provisions would be added to clarify that a cost recovery 
agreement may be required under Sec. Sec.  2804.14 through 2804.22 of 
this part for processing an application if the application filing fees 
are insufficient to cover the government's costs in processing such an 
application. Any cost recovery overpayment under an agreement, 
including application filing fees, may either be refunded to the 
applicant or applied to the monitoring costs of the ROW grant or lease 
consistent with this part if the project is approved.
    This rule would remove periodic (at least once every 10-year) 
updates to the application filing fee amounts using the IPD-GDP. The 
BLM is proposing to remove these periodic updates because they are not 
necessary in light of the BLM's ability to establish a cost recovery 
agreement with an applicant. Alternatively, the BLM considered but did 
not propose in this rule that it may continue updating the rate every 5 
years through policy. Cost recovery agreements may include 
consideration for changes from inflation or government indirect costs 
that are not captured by the application filing fee.
    The BLM is interested in comments regarding its proposed removal of 
the periodic update to the application filing fee.
    Section 2804.12(f) would be revised to clarify that the BLM will 
use a deficiency notice pursuant to existing Sec.  2804.25(c) to inform 
applicants of additional information that the BLM requires in order to 
process their application. This could include, for example, an updated 
plan of development (POD). Paragraph (f) would also be revised to 
remove a reference to part 2880, which applies to oil and gas pipeline 
ROWs under the Mineral Leasing Act (MLA) rather than to FLPMA ROWs, to 
avoid confusion to readers.
    The BLM proposes to add paragraph (j), describing what constitutes 
a complete application. Under this rule, a complete application would 
be one that meets or addresses the requirements of Sec.  2804.12, as 
appropriate for the application submitted. Identifying when an 
application is complete will support consistency in agency actions that 
require completed applications, such as when the BLM would prioritize 
solar and wind energy development applications under Sec.  2804.35. The 
proposed revision would clarify that the BLM will notify an applicant 
in writing when their application is complete. Additional information 
may be necessary for the BLM to continue processing a complete 
application if necessary, resource data is not submitted earlier. If 
the BLM determines that additional information is necessary after an 
application becomes complete, it may issue a deficiency notice under 
Sec.  2804.25(c). Additional sections in this rule that refer to 
complete applications are Sec.  2804.25, How will the BLM process my 
application?, and Sec.  2804.35, Application prioritization principles 
for solar and wind energy facilities. In addition, complete 
applications are discussed in this preamble in the context of Sec.  
2084.30, which this rulemaking proposes to remove and reserve.
Section 2804.14 What is the processing fee for a grant application?
    This section provides for collection of a fee to reimburse the 
Federal Government for its costs in processing an application for use 
of public lands.
    Paragraph (c) would be revised to update the BLM's address to read 
as U.S. Department of the Interior, Bureau of Land Management, 1849 C 
Street NW, Room 5645, Attention: Lands, Realty, and Cadastral Survey, 
Washington, DC 20240. This revision would be made so that the public is 
aware of where to obtain a copy of the current cost recovery schedule. 
The BLM also posts the cost recovery schedule online at http://www.blm.gov.
Section 2804.22 How will the availability of funds affect the timing of 
the BLM's processing?
    Section 2804.22 provides that if the BLM has insufficient funds to 
process your application, the bureau will not process your application 
until funds become available or you elect to pay full actual costs 
under Sec.  2804.14(f). Current text of Sec.  2804.22 would become 
paragraph (a). The BLM proposes to add ``continue to'' to this 
provision to clarify that if the BLM is processing an application, the 
BLM will not continue to process the application until funds become 
available or the applicant elects to pay full actual costs under Sec.  
2804.14(f).
    Section 2804.22 would be revised to improve readability and add new 
provisions under paragraphs (b) and (c). New paragraph (b) would allow 
the BLM to deny an application after 90 days if requested reasonable 
costs for processing an application have not been received. Cost 
recovery agreements can provide for a portion of the funds to be used 
for the BLM to hire additional staff or contractors.
    New paragraph (c) would provide that the BLM may enter into a cost 
recovery agreement with an applicant in which a portion of the funds 
may be used to hire additional staff or contractors to aid in 
application processing. If such cost recovery payments are provided to 
the BLM, the funds paid must be non-severable (non-refundable) once 
committed to the hiring of an employee. Payment of such funds would 
allow the BLM to increase its application-processing capacity.

[[Page 39732]]

Section 2804.23 What costs am I responsible for when the BLM decides to 
use a competitive process for my application?
    Existing Sec.  2804.23 describes when the BLM will use a 
competitive process and how such a process is initiated. Portions of 
the existing section that address when the BLM would use a competitive 
process have been relocated to subpart 2809, along with portions of the 
existing Sec.  2804.30, or have been removed for reasons explained 
below. Therefore, revised Sec.  2804.23 is limited to addressing issues 
related to cost recovery in competitive processes.
    The section title would be revised, changing ``if'' to ``when.'' In 
this paragraph, the applicant would be required to pay the application 
costs when the BLM decides to use a competitive process.
    Existing paragraph (a) would become introductory text, and existing 
paragraphs (a)(1) and (2) would be renumbered as paragraphs (a) and 
(b). The introductory text has been revised to remove the term 
``competing applications for the same facility or system,'' which is a 
term that is not used elsewhere in the regulations and is not clearly 
defined, and instead refer to situations in which ``the BLM decides to 
use a competitive process,'' which matches the title of this section as 
well as the language used in subpart 2809. Apart from this change, the 
substance of the retained text has not changed.
    Provisions found under existing paragraph (b) would be removed, but 
the substance of these provisions--that the discretion to decide 
whether to conduct a competitive process resides with the BLM--is 
addressed in proposed Sec. Sec.  2809.10(a) and 2809.12. The provisions 
of existing paragraph (c) can be found in existing Sec.  2809.13(b) 
(which addresses the notice requirements for notices of competitive 
offerings), and in proposed Sec. Sec.  2809.10(a) and (e) (which 
address the BLM's discretion and the circumstances under which the BLM 
will not conduct a competitive offer). Changes to the substance of 
these provisions are addressed below in the context of those sections. 
Existing paragraphs (d) and (e) would be removed from the regulations 
to be consistent with this rule which would allow for applications to 
be submitted inside designated leasing areas without first holding a 
competitive offer.
Section 2804.25 How will the BLM process my application?
    Section 2804.25 explains how the BLM would process your 
application. Revisions in this section would eliminate the provision 
for a mandatory pre-processing public meeting under existing paragraph 
(e)(2)(i); clarify that Tribal governments are accorded equal treatment 
with state and local governments during application reviews; and make 
technical changes.
    Existing provisions in paragraph (e) describe how the BLM processes 
solar and wind ROW applications. This paragraph is not intended to 
enumerate all the steps that the BLM may be required to take under 
other authorities, including its obligations under NEPA (which are 
incorporated in paragraph (e)(4)) or its obligations to engage in 
Tribal consultation (which are similarly referenced in paragraph 
(e)(7)), and any changes to this paragraph would not affect those 
obligations or the steps that the BLM takes to comply with them. 
Rather, the purpose of this paragraph is to describe how the BLM 
carries out certain steps that are distinctive to the ROW application 
review process, such as prioritizing applications (existing paragraph 
(e)(2)(ii)) and reviewing a proposed POD (paragraph (e)(3)).
    The proposed rule would remove a provision in this paragraph 
requiring a pre-processing public meeting in the affected area of a 
potential ROW (existing paragraph (e)(2)(i)), while leaving in place a 
provision that allows for such a meeting to occur at the BLM's 
discretion (paragraph (e)(1)). Such pre-processing public meetings are 
in addition to the opportunities for public participation that exist 
during the environmental review process, and from coordination and 
consultation sessions that the BLM holds with state, Tribal, and local 
governments, and are a unique feature of the solar and wind ROW 
application process. The BLM's experience, since its last rulemaking 
for solar and wind energy in 2016, demonstrates that this unique 
procedural step is redundant and not necessary to ensure adequate 
public participation and coordination with Tribal, and local 
governments. Participation and interest in these pre-processing 
meetings are not as strong as it was when solar and wind energy 
development was a relatively unfamiliar use of public lands, and these 
meetings are often confused with public meetings that are held later 
during the environmental review process. Removing this provision would 
reduce costs, shorten processing times, and remove redundant or 
unnecessary process requirements for these proposals. However, should 
the BLM decide that a public meeting is advisable (for example, in 
response to a request for such a meeting), it will give notice, under 
existing provisions in paragraph (e)(1) of this section, in the Federal 
Register, or may use other notification methods such as a local 
newspaper or the internet to announce a public meeting.
    Other changes within this section would clarify that Tribal 
governments are accorded equal treatment with state and local 
governments under paragraph (e)(2)(ii) (formerly paragraph 
(e)(2)(iii)); remove references to the prohibition on filing non-
competitive applications within designated leasing areas, which would 
no longer exist under the proposed regulations; and simplify language 
related to application prioritization under Sec.  2804.35 in paragraph 
(e)(2)(i) (formerly paragraph (e)(2)(ii)).
    Additionally, the BLM would revise paragraph (e)(5), which 
currently reads, ``The BLM will determine whether your proposed use 
complies with Federal and State laws,'' by removing ``and State.'' This 
revision provides clarity on the BLM's role regarding State laws. The 
BLM is not responsible for enforcing State law or ensuring that an 
applicant complies with State law, and removing this provision from the 
regulations would remove potential reader confusion as to the Federal 
Government's responsibility under State law. To the extent that State 
law is applicable to development on Federal lands, consistency with 
State law may be relevant to an application's prioritization under 
Sec.  2804.35(a)(4).
    Paragraph (f) addresses the segregation of lands within a ROW 
application. Segregation removes the lands covered by a ROW application 
from appropriation under the public land and mining laws. The BLM would 
revise this paragraph to clarify that a segregation would not be 
extended unless the application is complete (as defined in Sec.  
2804.12(j)) and a cost recovery payment has been received that includes 
the application filing fee. For further information on these 
segregations, please see the BLM's Segregation of Lands-Renewable 
Energy final rule published on April 30, 2013 (78 FR 25204).
Section 2804.26 Under what circumstances may the BLM deny my 
application?
    Section 2804.26 explains the circumstances under which the BLM may 
deny an application.
    Paragraph (a)(4) would be revised to be consistent with the 
proposed revisions for acronyms and terms found in Sec.  2801.5, where 
the BLM replaces the term ``the Act'' with ``FLPMA.'' For further 
discussion on this proposed

[[Page 39733]]

revision, see this preamble for a discussion of revisions under Sec.  
2801.5.
    New paragraphs (a)(9) and (10) would incorporate into this section 
requirements that are discussed elsewhere in the rule. Paragraph (a)(9) 
provides for denying an application if the applicant fails to comply 
with a deficiency notice within the time specified by the BLM under 
Sec.  2804.25(c). Paragraph (a)(10) provides that an application may be 
denied for failing to pay costs, as noted in proposed Sec.  2804.22(b).
    Paragraph (c) would be removed, since the placement of this 
provision (which references requests for alternative requirements under 
Sec.  2804.40) in section 2804.26 may be read incorrectly to suggest 
that an applicant may request alternative means of complying after the 
BLM denies the application. Section 2804.40 provides that applicants 
must request alternative requirements in a timely manner (see Sec.  
2804.40(c)). A request that is received after an application has been 
denied is not timely. Removing this provision in this section improves 
clarity regarding when such requests may be made.
Section 2804.30 What is the competitive process for solar or wind 
energy development for lands outside of designated leasing areas?
    Section 2804.30 would be removed and reserved. Some portions of the 
existing section are duplicative of provisions in existing Sec. Sec.  
2809.13, 2809.14, and 2809.17, which address competitive leasing inside 
of designated leasing areas; because the BLM proposes to use the same 
process for competitive leasing inside and outside of designated 
leasing areas, there is no need to describe this process twice. Other 
portions of the existing section are proposed for inclusion in revised 
sections of subpart 2809, while others would be removed for the reasons 
explained below.
    Existing paragraph (a) would be removed, because the BLM would no 
longer distinguish between lands inside or outside of designated 
leasing areas for purposes of competitive leasing. Criteria and 
procedures for selecting parcels for competitive leasing are discussed 
in revised Sec.  2809.12.
    Existing paragraph (b) is duplicative of existing Sec.  2809.13(a), 
which the BLM does not propose to revise.
    Existing paragraph (c) is substantially similar to proposed Sec.  
2809.10(a).
    Existing paragraph (d) is duplicative of existing Sec.  2809.13(b), 
which the BLM does not propose to revise, except that the sentence in 
existing section (d) that reads, ``The notice would explain that the 
successful bidder would become the preferred applicant (see paragraph 
(g) of this section) and may then apply for a grant,'' corresponds to 
proposed new section 2809.13(b)(7), as discussed below.
    Existing paragraph (e) is duplicative of existing Sec.  2809.14, 
which the BLM does not propose to revise.
    Existing paragraphs s (f) and (g) correspond to Sec.  2809.15, 
which the BLM proposes to revise as discussed below.
    Existing paragraphs (h)(1) through (3) correspond to Sec.  
2809.17(a) through (c), which the BLM proposes to revise as discussed 
below.
    Existing paragraph (h)(4) is duplicative of existing Sec.  
2809.17(d) and would be removed for the reasons discussed below in 
connection with that section.
Section 2804.31 Reserved
    Section 2804.31, title, ``How will the BLM call for site testing 
for solar and wind energy?'' would be removed and reserved. The BLM has 
not had competitive interest in a site testing right-of-way since the 
regulations were finalized in 2016, and thus has not held a competitive 
process to authorize a site testing ROW during that period. The BLM has 
received input that the use of a competitive process for a site testing 
ROW prohibitively increases the time and cost for processing an 
application. This change does not eliminate rights-of-way for site 
testing, which may still be issued upon BLM approval of an application 
for site testing under Sec.  2801.9(d)(1) and (d)(2); nor does it 
eliminate the use of competitive processes for solar and wind energy 
development rights-of-way, which can be found in Sec. Sec.  2809.11 and 
2809.13.
    The BLM is interested in comments on the BLM proposing to remove 
the rules for a call for a competitive process for site testing ROWs 
for solar and wind energy and whether there is any value in keeping 
this rule for the future.
Section 2804.35 Application Prioritization Principles for Solar and 
Wind Energy Development Rights-of-Way
    Section 2804.35 would be retitled from ``How will the BLM 
prioritize my solar or wind energy application?'' to ``Application 
prioritization principles for solar and wind energy development rights-
of-way'' to more clearly identify the content of this section. 
Revisions to this section are based on the BLM's experience with the 
existing prioritization criteria and their potential for causing 
confusion and misunderstanding of the criteria's use. The existing 
Sec.  2804.35 prescribes screening criteria under which an application 
is evaluated and then assigned high, medium, or low priority. However, 
in practice, a single application may meet criteria that are associated 
with more than one priority level. Furthermore, 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. These practical concerns create 
confusion within the existing regulations. Additionally, evaluation 
using the existing criteria removes some discretion from the BLM to 
best determine an application's priority because use of the criteria to 
prescribe the priority level fails to recognize and give weight to 
local resource issues and circumstances.
    Revisions in this section therefore would not assign specific 
criteria to specific priority levels. Instead, the revised section 
would clarify that relevant factors including those set forth in the 
regulation are to be used holistically to prioritize applications in a 
manner that would facilitate environmentally responsible developments 
and ensure that agency workloads are directed appropriately. The 
revised section would also explicitly recognize that the BLM may 
identify additional criteria in step-down 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.
    Paragraph (b) identifies factors that the BLM may consider when 
prioritizing applications. The proposed factors are similar to the 
existing criteria inasmuch as they focus on the extent to which an 
application avoids known resource, use, or policy conflicts and 
complies with relevant plans and policies, but they are less 
prescriptive than the existing criteria. This rule proposes factors 
that are inclusive of the existing rule's criteria found in this 
section. The rule would provide discretion to the BLM as to how best to 
apply the factors to prioritizing processing of solar or wind energy 
generation applications, taking into account the multiple 
considerations that are relevant to each area and office managing 
public lands.
    The first factor would consider whether the proposed project is 
located within an area preferred for such development, such as a 
designated leasing area. These areas have

[[Page 39734]]

previously been identified as posing less severe resource conflicts 
through the land use planning process, and the BLM may reasonably 
presume that developments proposed within these areas are more likely 
to proceed to approval.
    The second factor would consider 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.
    The applicant must also include specific measures to mitigate 
impacts or conflicts with resources and uses. While subsequent 
consultation, public comment, and environmental review processes may 
reveal unknown resource or use conflicts, the BLM may reasonably 
presume that projects with fewer known conflicts are more likely to 
proceed to approval and successful implementation.
    The third factor would consider whether the proposed project is in 
conformance with the governing BLM land use plans. Applications should 
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 factor would consider 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 but rather to ensure 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 agreements with 
State, local, or Tribal governments or rely on existing agreements.
    The fifth factor would consider whether the proposed project 
incorporates the best management practices set forth in the applicable 
BLM land use plans and other BLM plans and policies. Like the first 
four principles, this principle ensures that the BLM takes into account 
the knowledge and expertise that has gone into formulating these 
existing policies and also recognizes that an application that would 
require an amendment to existing plans or policies is likely to require 
more time and effort to process.
    Under the sixth factor, the BLM would consider any other 
circumstances or prioritization criteria identified by the BLM in 
subsequent policy guidance or land use planning. Such guidance or 
planning could describe new criteria in addition to the proposed 
principles or may describe regional or local criteria that may be used 
when prioritizing solar and wind energy applications. Under paragraph 
(c), once applications are complete (as defined in Sec.  2804.12(j) of 
this part), the BLM would go through a process to prioritize those 
complete applications (as defined in Sec.  2804.12(j) of this part), 
based on all available information. Available information may include 
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 consultations, including consultations 
with other Federal agencies and with State, local, or Tribal 
governments.
    Paragraph (d) would allow the BLM to re-prioritize an application 
based on new information that the BLM has received or on changes the 
applicant has made to the application. Changes to an application may 
include changes that clarify an applicant's proposal or the related 
plans, studies, and inventories. Once the BLM begins processing an 
application, the BLM will generally continue processing that 
application to completion and decision, to the extent possible. 
Nonetheless, the BLM reserves the right to re-prioritize an 
application, and adjust its workload accordingly, if circumstances 
warrant such re-prioritization.
    The BLM is interested in comments regarding its proposed 
prioritization principles for solar or wind energy developments. Are 
the factors appropriate? Should the BLM consider additional factors, 
such as co-location with energy storage, or other proposed or existing 
energy facilities, or proximity to transmission infrastructure 
facilities as a consideration?
Section 2804.40 Alternative Requirements
    Section 2804.40 provides for situations when a requestor is not 
able to meet the requirements of this subpart and wants to request 
alternative requirements from the BLM. The introductory paragraph would 
be revised to clarify that requests for alternative requirements apply 
only to the application requirements set forth in this subpart, and not 
to other requirements related to ROWs, such as the requirement to pay 
rent as set forth in subpart 2806. This revision would improve clarity 
and avoid potential misunderstandings.
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 provides for how the BLM communicates to an 
applicant that their application or bid is successful. This section 
would be revised to improve consistency and clarity within the BLM's 
regulations and to avoid confusion over the timing of appeals. Existing 
paragraphs (a) and (d), which the BLM does not propose to revise, 
specify that the agency decision occurs when the BLM transmits an 
unsigned grant or lease to the successful applicant or when the BLM 
notifies an unsuccessful bidder or applicant that their bid or 
application has not been successful (see also the discussion below of 
Sec.  2809.15, which clarifies the process through which a successful 
bidder may proceed to become a presumptive lease holder, and eventually 
a lease holder). Existing paragraph (b), which the BLM similarly does 
not propose to revise, clarifies that the unsigned grant or lease 
document will specify the terms and conditions of the grant or lease. 
These paragraphs identify the point at which the BLM has made its 
decision to approve, approve with modifications, or deny the 
application, which typically marks the endpoint of the BLM's decision-
making process. This decision marks the appropriate time for appeal of 
the BLM's decision.
    Existing paragraph (c) injects potential confusion into this scheme 
by stating that after the applicant signs and returns the grant, ``BLM 
will sign the grant and return it to you with a final decision issuing 
the grant,'' and that the applicant ``may appeal this decision under 
Sec.  2801.10 of this part.'' This language suggests that an appealable 
decision occurs any time the BLM

[[Page 39735]]

issues a grant or lease by returning a signed ROW instrument to the 
applicant, even though the step of issuing the ROW often does not 
require the BLM to exercise discretion.
    Under the proposed rulemaking, paragraph (c) would be revised to 
replace the text ``BLM will sign the grant and return it to you with a 
final decision'' with the text ``The BLM will issue the right-of-way by 
signing the grant or lease and transmitting it to you,'' and by 
removing the sentence ``You may appeal this decision under Sec.  
2801.10 of this part.'' The purpose of this revision is to remove the 
confusing reference to a ``decision'' in paragraph (c), to recognize 
that the act of issuing the grant is not an appealable decision. The 
BLM also proposes the technical change of replacing ``grant'' with 
``grant or lease.''
    While the proposed revision would clarify that the act of issuing a 
grant or lease by returning a signed ROW instrument to the applicant is 
not typically an appealable decision, the revised text retains the 
critical language clarifying that it is the BLM's act of returning the 
signed instrument to the holder that constitutes the ``issuance'' of 
the ROW. Identifying the point in time at which the ROW is ``issued'' 
is important for calculating when the term of a ROW 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 ROW is ``issued'' is 
also important for clarifying which actions are subject to the 
conditions in Section 50265(b)(1) of the Inflation Reduction Act, which 
imposes conditions on when the Secretary may ``issue a right-of-way for 
wind or solar energy development on Federal land.'' Under both the 
current and the proposed text of Sec.  2805.10(c), the ROW is issued 
when the BLM transmits the signed instrument to the holder.
Section 2805.11 What does a grant or lease contain?
    Section 2805.11(b) addresses the duration of ROWs. Section 
2805.11(b)(2) provides specific terms for solar and wind energy grants 
and leases. Paragraphs (b)(2)(iv), (b)(2)(v), and (b)(4) would be 
revised to update 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 (b)(2)(iv) would be revised to include updating the 
maximum term for both grants and leases, consistent with changes under 
this rule that allow for applications to be filed within designated 
leasing areas without first holding a competitive offer.
    Paragraph (b)(2)(v) would be revised to set the maximum term for 
ROWs for energy storage facilities that are separate from energy 
generation facilities. Although these ROWs are generally treated as 
linear ROWs, rather than solar or wind energy development ROWs, for 
purposes such as rent calculation, the BLM believes that allowing a 
longer maximum term, commensurate with the maximum term for solar or 
wind energy development ROWs, will facilitate the transition to cleaner 
sources of energy in the United States.
    Paragraph (b)(4) would be added to update the term for electric 
transmission lines with a capacity of 100 kV or more.
Section 2805.12 What terms and conditions must I comply with?
    Section 2805.12 provides terms and conditions that apply to ROWs. 
The BLM proposes to revise paragraph (e)(2) to clarify 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 
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) (which the 
BLM does not propose to revise), which sets forth a procedure for 
asking the BLM State Director to waive or reduce a holder's rent 
payment, or proposed Sec.  2806.52(b)(1)(i), which describes certain 
circumstances under which the BLM may calculate rent based on an 
alternative MWh rate. The applicability of those provisions would not 
be affected by this proposed revision to Sec.  2805.12.
Section 2805.13 When is a grant or lease effective?
    Section 2805.13 title and section is revised to add ``or lease'' to 
clarify that this section applies to both grants and leases.
Section 2805.14 What rights does a right-of-way grant or lease convey?
    The title would be revised from ``What rights does a grant 
convey?'' to ``What rights does a right-of-way grant or lease convey?'' 
The title would be revised to clarify that this section applies to both 
grants and leases.
    Paragraph (g) would be revised to remove the text ``solar or wind 
energy development'' and add ``right-of-way'' to read as ``right-of-way 
grant or lease'' to capture every instrument or type of ROW 
authorization that the BLM may issue. This revision would clarify for 
readers that an applicant may apply to renew any ROW grant or lease, 
including those for solar or wind. This revision would clarify that 
holders of all ROW grants and leases may apply for a renewal under 
Sec.  2807.22. ROW grants or leases would include those issued for 
solar or wind energy developments, communication sites, or other types 
of uses authorized by a ROW grant or lease.
Section 2805.16 If I hold a grant or lease, what monitoring fees must I 
pay?
    This section provides for a monitoring fee to reimburse the Federal 
Government for its costs in inspecting and monitoring the public lands 
subject to a ROW and for its ongoing costs administering the ROW.
    Proposed paragraph (b) would update the BLM's headquarters address 
to read as U.S. Department of the Interior, Bureau of Land Management, 
1849 C Street NW, Room 5645, Attention: Lands, Realty, and Cadastral 
Survey, Washington, DC 20240. This revision is made so that the public 
is aware of where to obtain a copy of the current cost recovery 
schedule. The BLM also posts the cost recovery schedule online at 
http://www.blm.gov.

Subpart 2806--Annual Rents and Payments

    In subpart 2806, the BLM sets forth the rent calculation 
methodologies for solar and wind energy development ROWs. Section 
504(g) of FLPMA, 43 U.S.C. 1764(g), requires ROW 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

[[Page 39736]]

that reflect the fair market value of the public lands and their 
resources. For example, the preamble to the 2016 rule 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, page 
92134). As the BLM explained in 2016, 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 the fair market 
value for the use of public land. The multicomponent fee proposed in 
this proposed rule would continue to achieve important BLM objectives, 
including allowing the BLM to capture fair market value for use of the 
land (subject to reductions pursuant to Energy Act of 2020 authority).
    For solar and wind energy development ROWs, the fair market value 
requirement of Section 504(g) of FLPMA has been supplemented since the 
2016 rulemaking by the Energy Act of 2020, 43 U.S.C. 3003, which 
reaffirms that the ``Secretary may consider acreage rental rates, 
capacity fees, and other recurring annual fees in total when evaluating 
existing rates paid for the use of Federal land by eligible projects,'' 
and confers on the Secretary new authority to reduce acreage rental 
rates and capacity fees if the Secretary makes certain findings.
    Consistent with FLPMA and the Energy Act of 2020, the BLM proposes 
to continue to determine rent for solar and wind energy ROWs based on 
acreage rent rates and capacity fees, although under a revised 
methodology that provides the BLM with more flexibility to ensure 
rental fees and rates are adjusted to appropriately respond to changes 
in the renewable energy market. The revised methodology would also 
reflect the direction in the Energy Act of 2020, including to propose 
rules for certain rate reductions and to meet the Congressional goal of 
permitting 25 GW by 2025. The BLM also proposes to introduce through 
this rulemaking certain rate reductions, implementing the authority of 
the Energy Act of 2020.
    Acreage rent rates for solar and wind energy ROWs would be 
determined under the proposed rule using the NASS Cash Rents Survey, 
which reflects the value of the land at the time the ROW is issued. 
This per-acre land rental value would 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 ROW 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.
    Once a solar or wind energy generation facility is producing 
electricity, the BLM would charge the higher of the acreage rent, 
described in the previous paragraph, or the capacity fee for the ROW. 
The capacity fee is determined using the annual production multiplied 
by either wholesale power pricing information or pricing figures 
specific to a project's power purchase agreement, to determine the 
market value of the energy generated from the project. The wholesale 
power pricing information or other pricing figures, like the 
pastureland rental value used for calculating acreage rents, would be 
fixed at the time the ROW is issued and would be updated using a fixed 
annual adjustment factor. This market value of the energy generated 
would then be multiplied by a rate of return based on a percentage of 
wholesale pricing, and by certain policy-based fee reduction factors 
tied to the Energy Act of 2020, to arrive at a capacity fee.
Section 2806.10 What rent must I pay for my grant or lease?
    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 ROW 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 that none of these schedules 
applies pursuant to Sec.  2806.70.
Section 2806.12 When and where do I pay rent?
    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 ROW grants or leases.
Section 2806.20 What is the rent for a linear right-of-way grant?
    Section 2806.20(c) addresses how to obtain a current rent schedule 
for linear ROWs. This paragraph would be revised to update the BLM's 
mailing address of record by reference to Sec.  2804.14(c) that would 
also be updated.
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 Sec. Sec.  2806.60-
68) energy rights-of-way. This proposed rule would revise those 
sections and undesignated headings to provide a single set of 
provisions for all solar and wind energy development ROWs. Existing 
regulations have solar and wind rights-of-way separated into different 
sections, even though rents, fees, and the required payments for solar 
and wind rights-of-way are similar. The rent, fee, and payment 
requirements under the proposed rule are discussed in the following 
sections and would be the same for both 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 2806.60 through 
2806.68, which address wind energy rents and fees, would be removed and 
consolidated with solar energy rents and fees under 2806.50 through 
2806.58.
    The BLM has considered several alternative methods for valuing 
solar and wind energy facilities on public lands. In May 2022, the BLM 
issued its interim solar and wind energy rent policy in an update to 
the BLM Right-of-Way Manual (Manual), Section 2806.60--Rent: Solar and 
Wind Rights-of-Way Rents, Fees, and Reductions, which incorporated the 
Secretary's authority under the Energy Act of 2020 to implement changes 
to the solar and wind energy rents and fees, including reductions. The 
Manual provides for updates to the rent adjustment methodology under 
regulation or law. The BLM issued this interim policy after first 
releasing a draft update to Section 2800.60 of the Manual for public 
review and comment, see https://www.blm.gov/press-release/blm-seeks-public-input-proposed-guidance-renewable-energy-blm-public-lands 
(December 3, 2021). In the BLM's release of the draft update to the 
manual, it solicited comments on alternatives for reduced rent payments 
and offered two rent adjustment options that would rely on the 
Secretary's

[[Page 39737]]

authority under the Energy Act of 2020, 43 U.S.C. 3003, 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.'' The two primary options would have generally sought to 
either adjust the baseline acreage and capacity fees or provide for a 
nominal acreage rent and a capacity fee. After reviewing the comments 
received on the draft update, the BLM amended Section 2806.60 \4\ of 
the Manual with its update to renewable energy rent that provides for 
adjustments to baseline acreage rents and capacity fees that result in 
a reduction in total payments for solar and wind energy facilities. 
Manual 2806.60 does not provide for a nominal acreage rent and a 
capacity fee.
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    \4\ https://www.blm.gov/sites/default/files/docs/2022-05/MS-2806%20rel%202-307%20Chapter%206.pdf.
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    The BLM determined that the most expeditious way to implement rent 
changes was by an interim adjustment to the 2016 methodology as 
reflected in the Manual and subsequently to use this rulemaking to 
further address its proposed rate setting methodology based on an 
acreage rent and a capacity fee. In this rulemaking, the BLM considered 
as an alternative the rates released in Manual Section 2806.60--Rent: 
Solar and Wind Rights-of-Way Rents, Fees, and Reductions, which 
implements a state-wide per acre value based on non-irrigated land 
values and a reduced capacity fee that is the same for both solar and 
wind energy. Please see the BLM's release of its updated Right-of-Way 
Manual Section 2806.60 for further information. Under this proposed 
rule, the rates would generally be lower for solar and wind energy ROWs 
and allow existing holders to choose to keep the updated rate 
methodology set by the Manual.
    The BLM understands, based on comments received for the draft 
Manual and other engagement with industry representatives and grant and 
lease holders, that predictability of project costs is critical to the 
success of an energy generation facility. This includes the costs of 
energy development through its life, including those for construction, 
operations, and maintenance.
    Although land use expenses, such as annual payments for rents and 
fees, are a small portion of an energy generating facility's operating 
expenses (generally 1-3 percent of costs), these amounts are important 
to a developer as they contribute to determining if a certain facility 
may be successful or not. Under existing regulations the BLM adjusts 
the rates based on changes in land values and power pricing, among 
other considerations. More recently, the rates for solar and wind 
energy development acreage rents have increased by more than 300 
percent in some locations while capacity fees have decreased by about 
50 percent. These unanticipated rate changes affect existing holder 
payments, raising concerns over project viability in future years for 
projects that are typically associated with 30-year ROWs.
    Under the current regulatory method, established in 2016, the rates 
for acreage rent and wholesale power pricing would likely increase 
again when the next adjustments are made starting in 2026. These 
increases to the BLM's rates would be based primarily on recent NASS 
per-acre land survey data and western power trading pricing in 
wholesale markets which are both trending upwards in recent years. 
Changes or variability in rates present an uncertainty to potential ROW 
holders. The BLM aims through this rulemaking to improve the 
predictability of public land rental rates for solar and wind energy 
development, while continuing to adhere to FLPMA's fair market value 
requirement, except where rates would be reduced to promote the 
greatest use of the public lands consistent with the Energy Act of 
2020.
    The 2016 rule did not require the BLM to use a particular source 
for electricity market wholesale trading data when determining the 
value for wholesale market pricing, in order to provide the agency with 
flexibility to use the best available data. Such flexibility is 
maintained in this proposed rule. Currently, the BLM uses the SNL 
Energy dataset from S&P Global. Under the proposed rule, however, the 
BLM would elect to use the wholesale market pricing data from the 
Energy Information Administration at this time because it is free and 
open to the public, which would provide additional transparency into 
the BLM's rate schedule. The BLM would still retain flexibility to 
utilize different data sources in the future. Wholesale market pricing 
data from the Energy Information Administration may be found on the 
Administration's website: https://www.eia.gov/electricity/wholesale/.
    The BLM is interested in receiving comments and information 
discussing the BLM's proposed changes to the solar and wind energy 
acreage rent and capacity fees and whether the rule reasonably 
implements changes to BLM regulations under Title V of FLPMA and the 
Energy Act of 2020. Is the BLM proposing a reasonable methodology for 
valuing solar and wind energy development ROWs, including any 
preference for alternatives to the BLM's proposal in this rule. Is the 
BLM's proposal to use free and publicly available wholesale market 
pricing information appropriate when setting its rates? Are there other 
options that are more appropriate for use in the BLM's rate setting 
methodology?
    Under this rule, the BLM proposes changes to the acreage rent and 
capacity fees that would greatly improve payment certainty. Payment 
certainty would be improved through the BLM establishing an acreage 
rate and capacity fee rate at the beginning of a grant or lease term 
and then adjusting it annually by a fixed percentage of the rate 
established in the first year of the grant or lease term, and by the 
annual energy production. This is different than current methodology 
which updates rates periodically based on changes in land values 
derived from the NASS Census of Agriculture, conducted every five 
years, and estimated energy generation capacity of solar and wind 
facilities.
    The BLM's proposed acreage rent would use an average of the state-
wide pastureland rent from the NASS Cash Rent Survey instead of 
adjusted non-irrigated land values to determine the acreage rent. The 
acreage rent would be the minimum payment made to the BLM each year, 
regardless of energy generation on public lands, and would compensate 
the United States for the privilege obtained by the developer in 
securing the right to use and build improvements on the public lands. 
See Sec.  2806.52(a) for further information on the acreage rent.
    The BLM also proposes a capacity fee based on wholesale power 
prices to compensate the United States for the value of the solar and 
wind energy resources used by the developer on public lands. The 
capacity fee would be collected annually, but only when the fee exceeds 
the acreage rent for the year. See Sec.  2806.52(b) for further 
information on the capacity fee.
    This rule also proposes certain reductions to the capacity fee 
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. Reductions to the capacity fee 
are discussed in greater detail under Sec.  2806.52(b)(1)(ii) and (iii) 
for the MWh

[[Page 39738]]

rate reduction and Buy American reduction. The BLM considered but did 
not pursue several reductions for siting developments in designated 
areas, use of energy storage, efficiency of technology used, payment of 
compensatory mitigation fees, and project sizing. These reductions 
would be applied to solar or wind energy developments depending on the 
specifics of the project and whether it would qualify for one or 
multiple reductions. The BLM did not propose multiple reductions 
because it made for a more complex rate structure that may help 
individual projects that qualify for the reduction(s) but did not seem 
to promote the deployment of solar or wind energy on public lands 
collectively.
    This rule proposes a single reduction, to apply to all 
developments, to the annual weighted average wholesale power price, 
referred to as the MWh rate reduction, as well as a Buy American 
reduction that is project-specific. For the reasons explained below and 
in the introduction to this notice, the BLM believes that these 
proposed rate reductions would reduce economic hardships on developers, 
maximize commercial interest in lease sales, and promote the greatest 
use of wind and solar energy resources.
    The BLM is interested to hear comments from readers on its proposed 
capacity fee rate reductions and use of the Energy Act to promote the 
greatest use of solar and wind energy resources on public lands. How 
might the BLM utilize its authority under the Energy Act of 2020 
differently to provide a reduction to the capacity fee? How might the 
BLM utilize this authority differently to promote the greatest use? 
Additionally, the BLM would like to receive comments on whether the BLM 
should use multiple project specific reductions or whether other 
reductions may be more appropriate toward meeting the goals of the 
Energy Act of 2020.
Section 2806.50 Rents and Fees for Solar and Wind Energy Development
    Existing Sec.  2806.50 requires a holder of a solar ROW to pay both 
an annual rent and a phased-in capacity fee in advance each year. Under 
the proposed rule, this section would be modified to require the holder 
of a solar or wind energy development ROW to pay the greater of either 
an annual rent or a capacity fee in advance each year, consistent with 
Section 504(g) of FLPMA (43 U.S.C. 1764(g)). Because this proposed rule 
uses a fee based on production, it would remove the phased-in MW 
capacity fee. The phased-in MW capacity fee in the current regulations 
is based on the nameplate capacity, an estimation of energy generation 
potential of a technology, and apart from the phase-in factor, is paid 
regardless of the amount of energy that is actually produced.
    The acreage rent or capacity fee, as applicable, calculated 
consistently with the requirements found in Sec. Sec.  2806.11 and 
2806.12. The acreage rent would be calculated according to the formula 
set forth in Sec.  2806.52(a), while the capacity fee would be 
calculated according to the formula set forth in Sec.  2806.52(b).
    Section 2806.50 would be retitled adding ``and wind'' consistent 
with changes under this rule to consolidate both solar and wind energy 
rent, fee, and payment provisions. Revisions also include the addition 
of ``wind'' and ``grant or lease,'' clarifying that this section 
applies both to grants and leases issued under this part.
    The BLM is also interested in public comments regarding its 
proposal to move from a fee based on the nameplate capacity of a 
project to a fee based on the energy produced at a solar or wind energy 
generation facility sited on public lands. Additionally, the BLM would 
like input on whether it should implement minimum efficiency criteria 
for developments to support the greatest use of solar and wind energy 
resources on public land. If so, what criteria should the BLM follow 
and what penalties, if any should the BLM include for facilities that 
would not meet these criteria?
    As proposed, and as noted in the draft economic and threshold 
analysis, the BLM believes that this rule would not have a significant 
economic impact on a substantial number of small entities, and further, 
that any potential impacts on small entities are unlikely, and would 
only occur in a limited set of circumstances. The BLM is not aware of 
developers and operators of solar or wind energy facilities on public 
lands \5\ that would typically qualify as a small business under the 
Small Business Administration regulations at 13 CFR part 121, which 
define what constitutes a small business for the relevant industries. 
Additionally, entities that develop solar or wind projects on public 
land are often an affiliate of a larger company or a financial 
investment company that does not qualify as a small business, and 
therefore the affiliate company would also not qualify as a small 
business. The BLM provides further information on small business and 
the number of potentially affected establishments in its draft economic 
and threshold analysis (Table 8).
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    \5\ Wind: https://www.blm.gov/sites/default/files/docs/2021-11/PROJECT%20LIST%20WIND_October%202021.pdf. Solar: https://www.blm.gov/sites/default/files/docs/2023-03/PROJECT_LIST_SOLAR_FY2022.pdf.
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    The BLM is interested on comments whether small business may be 
impacted and whether that impact would be negative or positive. How is 
this rule negatively or positively affecting small business, and how 
might the BLM more fairly include small business if it is negatively 
impacted?
Section 2806.51 New and Existing Grant and Lease Rate Adjustments
    Section 2806.51 would be retitled from ``Schedule Rate Adjustment'' 
to ``New and Existing Grant and Lease Rate Adjustments,'' clarifying to 
readers that this section applies to both new and existing grants and 
leases.
    Paragraph (a) directs readers to the appropriate section setting 
forth the different rental schedules for different types of ROWs.
    Paragraph (b) explains the process for selecting a rate adjustment 
method for a new grant or lease.
    Paragraph (c) informs holders of existing solar or wind energy 
development ROWs that they may request that the new rate methodology 
set forth in this proposed rule be applied to their existing grant or 
lease. Existing holders would have 2 years from the date this rule 
becomes effective to request a change to the new rate adjustment 
method. The BLM would continue to apply the grant or lease holder's 
current rate methodology if a timely request is not received. A request 
to change the rate adjustment method would require the holder's 
agreement to the BLM re-issuing the grant or lease with updated Terms 
and Conditions found under this part, pursuant to Sec.  2806.70.
Section 2806.52 Annual Rents and Fees for Solar and Wind Energy 
Development
    Section 2806.52 currently provides the methodology that the BLM 
uses to determine the acreage rent and the MW capacity fee for solar 
and wind energy development ROWs. The current regulation provides for 
payment of both the acreage rent and the MW capacity fee (based on the 
MW capacity of the solar or wind energy generation facility).
    The BLM proposes to require payment of the greater of either an 
acreage rent, which is calculated in advance of authorization, or a 
capacity fee, which is calculated once energy generation begins (Sec.  
2806.50). Section 2806.52 would be revised to provide the methodology 
for the BLM to determine the acreage rent (Sec.  2806.52(a)) and 
capacity fee (Sec.  2806.52(b)).

[[Page 39739]]

    Paragraph (a) would provide that acreage rent would be determined 
by multiplying the authorized number of acres (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) would clarify that ``A'' would be the per-acre 
rate, using the state-specific per-acre value from the solar or wind 
energy acreage rent schedule for the states where a project is located 
for the year when the grant or lease is issued. The per-acre rate for a 
grant or lease would not change once issued, even with updates to the 
acreage rent schedule; instead, the acreage rent would be adjusted by 
the annual adjustment factor, ``C'' in the formula above, under 
2806.52(a)(1)(iii). To calculate the current acreage rent schedule for 
a state, the BLM would use the most recent 5-year period average of 
NASS pastureland rent values. The average per acre value would be 
determined by using only the years with reported NASS pastureland rents 
within the 5-year period. Updates to the per acre rate would occur 
every 5 years in the acreage rent schedule consistent with the timing 
of rent adjustments under Sec.  2806.22 for the linear rents schedule. 
The current 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, based upon the pastureland rent value in the NASS 
Cash Rents Survey through 2021.
    Using Nevada as an example for how the BLM would average NASS 
pastureland rents, assume that values of $10.00, $13.00, and $10.00 per 
acre were reported 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. Therefore, the BLM would average the 
reported values using three years for that 5-year period. Thus, the 5-
year average would be $11.00 per acre.
    Paragraph (a)(1)(ii) would clarify that ``B'' in the formula above, 
would be the encumbrance factor. For solar energy development 
facilities, a 100 percent encumbrance factor would be set in this rule, 
and for wind energy a 5 percent encumbrance factor would be set. A 100 
percent encumbrance factor reflects a virtual exclusion of all other 
uses on the ROW. A lesser encumbrance factor recognizes that an 
authorized use or development only partially encumbers the land, 
allowing other uses to co-exist. This proposed rule would maintain the 
existing 100 percent encumbrance factor for solar energy developments. 
This rule proposes to reduce the encumbrance factor for wind energy 
from 10 percent to 5 percent to account for changes in technology over 
the years and the comparative reduction in land occupied by wind energy 
generation facilities which use fewer wind turbines and generally meet 
or exceed older wind energy facility nameplate capacities. For wind, 
this rule proposes a 5 percent encumbrance factor, reflecting that 
relatively little exclusion of other uses would occur. This is also 
consistent with changes in lands where the National Renewable Energy 
Laboratory (NREL) has noted that wind projects now typically occupy one 
to four percent of the land within the project area. You may read 
further in NREL's news release and analysis, NREL Explores the Dynamic 
Nature of Wind Deployment and Land Use.\6\
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    \6\ https://www.nrel.gov/news/program/2022/nrel-explores-the-
dynamic-nature-of-wind-deployment-and-land-
use.html#:~:text=Through%20comprehensive%20spatial%20analysis%20of%20
U.S.%20wind%20power,and%20plant%20design%20are%20changing%20land%20us
e%20requirements.
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    Paragraph (a)(1)(iii) clarifies that ``C,'' in the formula above, 
would be the annual adjustment factor, which is 3 percent, and 
Paragraph (a)(1)(iv) clarifies that ``D'' would be the year of the 
grant or lease term, where the first year (whether partial or a full 
year) would be 1 and the final year for a grant or lease authorized for 
a 50-year term would be 51 (assuming a partial first year). Currently, 
the BLM sets and adjusts the annual adjustment factor based on the 
average annual change to the Implicit Price Deflator--Gross Domestic 
Product (IPD-GDP) for the ten-year period immediately preceding the 
year that the NASS Census data become available, to reflect the loss in 
value due to inflation. Under the proposed rule, the annual adjustment 
factor would be fixed at 3 percent. In reviewing the IPD-GDP, average 
annual change for the last five-year period (2017-2022) was 3.27 
percent, while for the ten-year period before that the average annual 
change was 2.39 percent. This difference highlights the fact that 
inflation in 2017-22 has been significantly greater than for years in 
the preceding 10-year period. Under the proposed rule, the annual 
adjustment factor would be fixed at 3 percent, derived by rounding the 
average annual change from the past 15 years to the nearest full 
percent. Setting this factor would improve future rate predictability.
    Paragraph (a)(2) would describe where you may obtain a copy of the 
current per acre rates for solar and wind energy rent schedule.
    Paragraph (b) would provide 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 Buy American reduction, 
the 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 paid 
annually beginning in the first year that generation begins for the 
energy generation facility. There would be no capacity fee levied for 
the first year or any other year if the acreage rent exceeds the 
capacity fee. The proposed formula for calculating the annual capacity 
fee is A x F x G x B x C x (1 + D) [supcaret]E.
    Paragraph (b)(1)(i) would clarify 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 ROW was issued, rounded to the nearest dollar 
increment. 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 lease 
holder enters into a power purchase agreement 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 would determine if 
the rate in the power purchase agreement is appropriate to use instead 
of the MWh rate. For example, an alternative MWh rate may not be 
appropriate if the utility issues itself a power purchase agreement for 
its solar or wind energy development. If the rate in the agreement is 
appropriate, then the BLM would set an alternative MWh rate for the 
grant or lease at the rate shown in the agreement.

[[Page 39740]]

    In paragraph (b)(1)(ii), ``B'' is the MWh rate reduction. The BLM 
proposes to set the capacity fee based on 20 percent of the wholesale 
price per MWh or alternative MWh rate until 2036. 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 minimum goal under the Energy Act of 2020 for 
``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 and further supporting existing facilities that may have 
capacity fee rates that exceed market value, impose economic hardship, 
or limit future commercial interests.
    Starting in 2036, the MWh rate reduction factor would increase to 
80 percent of the wholesale price per MWh--that is, the capacity fee 
would now be based on 80 percent of the wholesale price per MWh or 
alternative MWh rate. This continuing 20 percent reduction would be 
consistent with the Energy Act of 2020 authority to reduce acreage 
rental rates and megawatt capacity fees when the Secretary determines 
that reducing the rate would ensure that the BLM's rates are 
``competitively priced compared to other available land.''
    The BLM is interested to hear from commenters whether the reduction 
to the wholesale price per MWh should be limited to a specific period 
of time or conditioned on national or regional (i.e., renewable 
portfolio standard) priorities. The BLM has also considered whether a 
shorter period of time to set its rates would be appropriate instead of 
using a 5-year average of wholesale market pricing. Should a different 
period of time be provided in the final rule, or should the BLM allow 
for the reduction to continue until further rulemaking or a change in 
the statutory framework? Additionally, the BLM considered conditioning 
this reduction on renewable portfolio standards, in which a State may 
set a specific objective for additional energy from renewable energy 
resources. If such a provision were added to the final rule, the BLM 
would lower its MWh rate for projects that help a State to meet its 
renewable portfolio standard.
    Finally, the BLM has considered, but not proposed in this rule, 
tiering the wholesale power pricing to the potential energy of the 
solar or wind energy resource in a given location based on solar energy 
insolation values or wind energy by meter per second, in which case, 
the BLM would lower the power pricing for locations that are of lower 
energy resource potential to promote renewable energy development that 
may have a lower overall production capacity. In addition to the 
proposed expiration of an 80 percent reduction to the price per MWh 
rate used in determining a capacity fee, the BLM is interested to hear 
from commenters whether a different reduction may be more appropriate, 
if at all.
    In paragraph (b)(1)(iii), ``C'' is the Buy American reduction. As 
explained above, the BLM proposes to promote the development of wind 
and solar energy resources on public lands by helping to offset some of 
the costs of using American-made items in solar and wind energy 
development facilities. The Federal Acquisition Regulations (FAR), 48 
CFR 52.225-1(b), describe certain categories of items or products that 
are eligible for the Buy American preference in Federal acquisition. As 
noted above, in the discussion of proposed Section 2801.5, the BLM 
proposes to adopt the term ``Buy American'' to refer to any item that 
is eligible for the Buy American preference in Federal acquisition 
under section 52.225-1(b) of the FAR. Paragraph (b)(1)(iii) of Section 
2806.52 of the BLM's proposed regulation would reduce the capacity fee 
for solar or wind energy generation facilities according to the 
percentage of the total cost of the facilities on the ROW attributable 
to Treasury items. The reduction to the capacity fee would be as 
follows:

(A) 25 percent or more of the total facility cost attributable to items 
qualifying for Buy American preference = 5 percent reduction
(B) 35 percent or more qualifying for Buy American preference = 10 
percent reduction
(C) 45 percent or more qualifying for Buy American preference = 15 
percent reduction
(D) 55 percent or more qualifying for Buy American preference = 20 
percent reduction

    To qualify for this capacity fee reduction, the percent of the 
energy generation facility's total cost that consists of items 
qualifying for the Buy American preference would have to meet or exceed 
the percentages set forth in this section. The holder would have to 
identify the items qualifying for the Buy American preference in the 
energy generation facility and provide sufficient documentation (e.g., 
purchase orders for end products, materials and supplies of the 
facility; as-built or construction plans) to demonstrate that these 
items, in the aggregate, represent the specified percentage of the 
facility's total cost.
    Once an energy generation facility qualifies for a Buy American 
reduction, the facility would have that same reduction for the term of 
the grant or lease. The BLM would 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 would apply the version of the FAR in effect at 
the time the ROW is issued If the FAR is amended in the future in such 
a way that section 52-225-1(b) of the FAR no longer provides a clear 
meaning for the term ``Buy American,'' as defined in these proposed 
regulations, the BLM would continue to apply the most recent version of 
the FAR that provides such a workable definition until such time as the 
BLM is able to amend these regulations.
    Also, the proposed Buy American reduction increases incrementally 
based on the percentage of the total facility cost attributable to 
items qualifying for Buy American preference. The BLM recognizes that, 
in other contexts, such as direct federal procurement, qualification 
for a domestic content preference is based on reaching a set percentage 
and is not altered by reaching a higher percentage. The BLM seeks 
comment on whether it should establish a fixed reduction based upon a 
set percentage rather than the escalating approach proposed in this 
rule.
    The Buy American reduction to the capacity fee is proposed in this 
rule under the authority of the Energy Act of 2020, 43 U.S.C. 3003, to 
``promote the greatest use of wind and solar energy resources,'' avoid 
``economic hardships'' to ROW holders, and maximize ``commercial 
interest'' in lease sales and ROW grants. Providing this reduction 
would defray some costs in sourcing from domestic supply chains, which 
would support continued deployment of solar and wind projects on public 
lands if foreign supply chains are disrupted.
    Deployment of renewable energy technology on public lands has been 
impeded, particularly in recent years, by unreliable foreign supply 
chains as a result of international developments, a worldwide pandemic, 
and

[[Page 39741]]

manufacturing limitations. There have been several instances of 
international developments, such as the Russia-Ukraine war, that 
resulted in disruptions to supplies and limited investment in solar and 
wind energy resources on public lands, created economic hardships for 
ROW holders, or limited commercial interest in lease sales and ROW 
grants. Such recent developments include the enactment of the Uyghur 
Forced Labor Prevention Act, Public Law 117-78 (``UFLPA''), which aims 
to prevent the importation of goods produced using forced labor in 
China. The UFLPA imposes a rebuttable presumption that ``any goods, 
wares, articles, and merchandise mined, produced, or manufactured 
wholly or in part in the Xinjiang Uyghur Autonomous Region of the 
People's Republic of China'' are made with forced labor, and are 
therefore prohibited from importation into the United States. A 
significant portion of the global supply chain for photovoltaic panels 
and their components involves the Xinjiang region, and although panels 
imported into the United States no longer incorporate components from 
Xinjiang, the United States' efforts to combat the use of forced labor 
has impacted the import of solar energy components and precursor 
materials.
    At the same time, the United States has reduced importation of 
Russian mineral resources and imposed sanctions against the Russian 
Federation as the Russia-Ukraine war has progressed, resulting in 
increased demand for domestic minerals (e.g., steel, aluminum, iron, 
copper, and silicon). As of November 2022, the United States had 
reduced US goods trade with Russia to about $500 million worth of goods 
from its peak of about $2.65 billion in March 2022 (the month after the 
Russian-Ukraine war started) per the U.S. Census Bureau.\7\ Trade in 
goods between the United States and the Russian Federation continues to 
decline with the implementation of US tariffs against Russian imports. 
These imports of necessary minerals have nearly stopped in the past 
year, having a significant effect on the available resources used in 
manufacture and development of solar and battery storage facilities.
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    \7\ https://www.census.gov/foreign-trade/balance/c4621.html.
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    In addition, the worldwide COVID-19 pandemic that started in 2020 
revealed vulnerabilities in the United States' supply chains for 
materials, supplies, and other goods used in its carbon-free clean 
energy markets, such as in solar and wind energy developments, among 
other things. Vulnerabilities in supply chains include international 
shipping, where shipping vessels and containers waited for months 
during labor shortages and quarantine periods before becoming available 
to the American public. Uncertainty in global supply chain dynamics 
have significant potential to cause delays and higher prices for solar 
and wind energy development projects on public lands. Potential tariffs 
to foreign-sourced items and components result in dramatic decline in 
project deployment. According to the Solar Energy Industries 
Association's U.S. Solar Market Insight Q2 2021 report, supply chain 
constraints for critical solar components, such as polysilicon, steel, 
aluminum, and semiconductor chips, lead to higher prices. In response 
to the U.S. Department of Commerce's anti-circumvention tariffs on 
solar products from Southeast Asia countries, the President made an 
emergency declaration on a temporary duty-free importation of solar 
cells and modules to curb disruption to solar projects.
    These developments highlight the importance of secure, reliable 
domestic supply chains to the development of solar and wind energy 
resources on public lands and demonstrate how the proposed Buy American 
reduction, by supporting those domestic supply chains, would promote 
the greatest use of those resources, while also reducing economic 
hardships for developers. By offsetting some of the costs of 
domestically sourced parts and materials, the Buy American reduction 
would reduce the economic dependence of developers on unreliable global 
supply chains and support the efforts of domestic suppliers. In this 
way, the proposed Buy American reduction supports the transition to 
more-reliable domestic supply chains which would, in turn, increase 
commercial interest in the use of public lands and promote the 
development of solar and wind energy resources on public lands.
    Recent Presidential determinations and legislation are similarly 
intended to strengthen domestic supply chains for renewable energy 
components, highlighting the importance of such domestic supply chains 
to the development of domestic energy generation. On March 31, 2022, 
and most recently on June 6, 2022, the President signed determinations 
permitting use of the Defense Production Act Title III authorities for 
domestic clean energy technologies (including solar photovoltaic 
components; transformers and electric grid components; heat pumps; 
insulation; and electrolyzers, fuel cells, and platinum group metals), 
reiterating the Administration's commitment to a carbon pollution-free 
electricity sector. In addition, the Creating Helpful Incentives to 
Produce Semiconductors for America Act, aka, the ``CHIPS Act,'' was 
signed on August 9, 2022, providing for improvements to manufacturing 
of important components for clean energy, among other things, 
furthering the objective to improve domestic supply chains. The 
Infrastructure Investment and Jobs Act, Public Law 117-58, signed on 
Nov. 15, 2021, also provides funding for electric vehicles and clean 
energy technologies, including manufacturing of energy storage and its 
components, increasing domestic supply chains. We anticipate that there 
will be significant increases in domestic manufacturing over the next 
five years that will benefit the solar and wind energy generation 
industries. The BLM would encourage a more rapid deployment of 
domestically made items by providing a reduction to solar and wind 
energy development facilities using qualifying items for the Buy 
American preference, thereby increasing further commercial interest in 
public lands and expediting deployment of solar and wind energy 
developments and maximizing the greatest use of solar and wind energy 
resources on public lands.
    The BLM is aware that other Federal agencies (e.g., Office of 
Management and Budget) may currently be developing policy relevant to 
domestic content requirements, including those authorized by the 
Inflation Reduction Act. The BLM may consider using a definition from 
one of those policies as an alternative to the domestic content 
definition under Buy American and would welcome comments to that 
effect.
    The BLM is interested in receiving comments regarding the addition 
of the domestic content reduction to the capacity fee and to other 
parts of this rule where domestic content provisions are proposed. Is 
there a more appropriate way than determining percentage of total cost 
of qualifying items for the domestic content preference? Are there 
other methods to promote the greatest use of solar and wind energy 
generation on the public lands while strengthening the resiliency of 
domestic energy supply chains that may be more appropriate or 
preferred? Do the proposed reductions up to 20 percent fairly encourage 
developers to qualify for using American-made products in their solar 
or wind energy generation facilities, and support increasing demand for 
clean energy technologies on public lands? What forms of documentation 
would be

[[Page 39742]]

appropriate to provide to the BLM in order to qualify for this 
reduction when applying for a grant or lease, and when demonstrating at 
time of renewal or reauthorization?
    The BLM also is interested in receiving comments on the possibility 
of adding a reduction to the capacity fee of up to 20 percent based on 
the use of union labor in project construction. Like the Buy American 
preference, such a provision would offset some developer costs, thus 
promoting the use of solar and wind energy resources on public lands, 
while reducing economic hardships for developers who may also qualify 
for certain tax incentives. Should the BLM incorporate a capacity fee 
reduction in this rule for the use of union labor? Should the reduction 
be contingent on a developer's commitment to enter into a project labor 
agreement? What documentation should be required to qualify for this 
reduction? What percentage reduction would be appropriate?
    Paragraph (b)(1)(iv) explains how the BLM would apply the 
alternative MWh rate and the Buy American reduction from paragraphs 
(b)(1)(ii) and (iii) of this section. By default, the BLM would 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 and the Buy American reduction would 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 would not be able to determine 
definitively in advance whether the proponent qualifies for these 
reductions. The BLM could then conditionally approve the requested 
reductions, but the reductions would not go into effect until the 
proponent qualifies for the reduction. If energy generation begins 
before the holder has demonstrated that the facility qualifies, the BLM 
would charge the holder the full capacity fee. The capacity fee could 
be updated for subsequent calendar years after the holder demonstrates 
that the facility qualifies, but the BLM would not refund past payments 
made before the rate reductions went into effect.
    For example, an applicant or presumptive lease holder (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 lease holder has entered into or intends to enter 
into a power purchase agreement (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 power 
purchase agreements or confirmation in writing from the purchasing 
party that negotiations have been entered into. 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 to calculate the 
rental obligations until the power purchase agreement is finalized and 
the BLM determines, in writing, that the facility actually qualifies 
for the alternative rate. The holder's MWh rate would then be updated 
for the next year's billing, but payments for past years would not be 
reduced retroactively.
    In another example of a request for conditional approval, an 
applicant or presumptive lease holder might request conditional 
approval of a Buy American reduction. In that example, a request for 
conditional approval may be granted if the proponent demonstrates that 
it has firm plans to use items 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 meet sufficient levels to qualify for this reduction. 
While the BLM may then conditionally approve the request for a Buy 
American reduction, the reduction would not go into effect and be used 
to calculate the proponent's rental obligations until the proponent 
submits documentation of actual value incorporated into the facility, 
such as fulfilled purchase orders and as-built design documents 
demonstrating installation of the qualifying Buy American 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, but payments for past years would 
not be reduced retroactively.
    Paragraph (b)(2) would clarify that ``D'' is the annual adjustment 
factor, which is the same adjustment factor used for the annual acreage 
rent under Sec.  2806.52(a)(1)(iii). See Sec. Sec.  2806.52(a) and 
2806.22(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 power, they are in an agreement 
with a utility or other party to sell their 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. Annual escalation rates generally range 
between one and three percent each year of the agreement. There may be 
some higher annual escalation rates; however, higher rates are not 
common. The BLM believes, based on its experience with power purchase 
agreements, that three percent annual adjustment factor is a fair and 
reasonable escalation for the MWh rate.
    Paragraph (b)(3) would clarify that ``E'' 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) would clarify that ``F'' is the rate of return, 
which is proposed at 7 percent, an increase from the 2 percent 
currently used in the BLM's recent Manual 2806.60 update for solar and 
wind energy rents. In this 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 which 
is provided to the BLM through an annual payment. The BLM has 
previously used a 10-year average of the yields on 20- and 30-year U.S. 
Treasury bonds to ``build up'' a return for use in calculating the rate 
of return, as described in its October 31, 2008, rulemaking, Update of 
Linear Right-of-Way Rent Schedule. The rate of return minimum under the 
existing regulations is 4 percent, but the BLM used the Energy Act 
authority to lower the rate of return to 2 percent in its Manual 
update. It is the BLM's experience that periodically ``building up,'' 
or calculating, the rate of return creates uncertainty for grant 
holders as the Treasury bond rates are affected by changes to interest 
rates, inflation, and economic growth. The BLM's proposal to set its 
rate of return in this rule introduces a level of rate predictability, 
including for future rate changes.
    The BLM considered several options for determining a rate of 
return. These options included retaining the current ten-year average 
of the 20- and 30-year Treasury bond yields and the prime rates used by 
banks for lending. Market capitalization rates and Gross Domestic 
Product (GDP) by industry were also considered for determining a 
reasonable rate of return for ROWs but were ultimately not proposed in 
this rule. Treasury bond yields reflect the Federal Government's cost 
of borrowing or equivalently the returns earned by investors in Federal 
debt. A similar logic applies to prime rates, which

[[Page 39743]]

reflect the interest earned by private banks on their loans or assets 
and which were also considered but not proposed in this rule.
    The BLM notes that the 50-year simple (i.e., arithmetic) average of 
the real annual return on 10-year Treasury Bonds is approximately 7 
percent. This 50 years includes times when the United States went 
through periods of stagflation, high inflation, economic boom, and 
relatively calm market conditions. The average of the 10-year Treasury 
Bond rates is a reasonable reflection of the return to government. As 
proposed in this rule, solar and wind energy development terms would be 
up to 50 years and use a 7 percent rate of return supported by the 50-
year average of the 10-year Treasury Bond rates. The proposed 7 percent 
rate of return is also supported by the Council of Economic Advisors, 
which estimates a real return to U.S. capital of around 7 percent from 
1960 to 2014 using data from the National Income Product Accounts and 
other sources.\8\ By setting the rate of return in this rule, it would 
not be adjusted in the future, except by further rulemaking.
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    \8\ Council of Economic Advisers Issue Brief, ``Discounting for 
Public Policy: Theory and Recent Evidence on the Merits of Updating 
the Discount Rate'' (January 2017).
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    The BLM is interested in comments on the proposed codification of 
the encumbrance factor and rate of return, and the acreage rent 
calculations more generally. What alternative factors might the BLM 
consider in setting rate of return? Does the BLM's proposed rate of 
return improve predictability for holders? Does the proposed rate of 
return accurately capture the fair market value of solar and wind 
energy developments on public lands? Should the BLM consider allowing 
for adjustment in the future or setting the rate based on inflation 
parameters at the time of grant issuance, and if so, explain what 
reasoning you believe supports future changes and what that might look 
like? Please provide your comments and supporting references or 
materials for that recommendation.
    Paragraph (b)(5) would clarify that ``G'' is the estimated annual 
power generated on public lands for the grant or lease in question. The 
estimated annual power generated on public lands would be provided to 
the BLM ahead of the first year of energy generation in a certified 
statement from the grant or lease holder, and every year thereafter. 
The BLM would bill annually to coincide with the calendar year, 
consistent with the timing for acreage rent payments. Beginning in the 
year following the first full year of production, the certified annual 
statement provided to the BLM would also include the most recent year's 
actual energy generation. The actual energy generation would be used to 
calculate a corrected capacity fee, and any under- or over-payments for 
the difference between estimated and actual energy generation would be 
administered under Sec. Sec.  2806.13 and 2806.16, respectively. A 
holder that underestimates energy generation by more than 10 percent of 
the actual energy generation would be subject to a late payment fee and 
other administrative fees, consistent with Sec.  2806.13.
    For example, the BLM would require an annual certified statement 
from the grant or lease holder by October of the second year of energy 
generation that includes an estimate of energy generation for the third 
year of energy generation, as well as actual production information for 
the first year of energy generation. The following year, the BLM would 
require an annual certified statement that includes the estimate for 
the fourth year of energy generation and the actual energy generation 
from the second year.
    The BLM is interested in comments regarding the under estimation of 
energy generation. Is a different percent of underestimation 
appropriate or should the BLM implement such a provision after repeated 
occurrences of under estimating power?
    In instances where an energy generation facility crosses multiple 
land ownerships, the reported estimate and actual energy generation 
would be apportioned based on the energy generated on the public lands. 
The reported energy generated on public lands would be determined by 
prorating the project area's footprint on public lands with the total 
project area footprint. This would include infrastructure that is 
necessary for the energy generating facility, including any roadways, 
fence lines, safety setbacks, and other infrastructure. However, this 
would not include electric power lines or offsite substations unless 
they are within the footprint of the project area or necessary to 
generating energy. Under this provision, the BLM would not carve out 
land from the footprint of the facility when apportioning energy 
generation on public lands.
    Paragraph (b)(6) would describe where you may obtain a copy of the 
current MWh rate schedule for solar and wind energy generation.
    Paragraph (b)(7) would provide 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) would clarify that the rate from the MWh rate 
schedule for the first year of energy generation would not change once 
your grant or lease is authorized. The annual adjustment factor under 
Sec.  2806.52(b)(1)(i) would be applied to the MWh rate during the term 
of the grant or lease. Any subsequent MWh rate schedule updates would 
apply to new grants and leases.
    Paragraphs (b)(7)(ii) and (iii) would provide that the MWh rate 
schedule would be updated once every five years consistent with the 
timing of acreage rent adjustments. The MWh rate schedule would include 
the annual adjustment factor when setting the rate for the five-year 
period.
    Paragraph (b)(8) would provide that the general payment provisions 
for rents under Sec.  2806.14(a)(4) also apply to the capacity fee.
    Paragraph (c) would apply unless you are an existing grant or lease 
holder and elect to continue with your current MW capacity fee 
adjustment method. The fee would be 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).
Section 2806.54 Energy Storage Facilities That are not Part of a Solar 
or Wind Energy Development
    Provisions of existing Sec.  2806.54 would be incorporated into 
Sec.  2806.52 (see discussion relating to Sec.  2806.52). Existing 
Sec.  2806.54 would be retitled from ``Rents and fees for solar energy 
development leases'' to ``Rent for energy storage facilities that are 
not part of a solar or wind energy development facility.'' Under this 
rule, the BLM is removing differences in payment requirements for 
grants and leases; therefore, the existing Sec.  2806.54 title and its 
provisions are no longer necessary and would be misleading to a reader.
    Revised Sec.  2806.54 would clarify that the rent the BLM 
determines for an energy storage facility that is not part of a solar 
or wind energy development facility would be 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 
would apply the linear rent schedule unless the BLM determines that the 
linear rent schedule does not apply per Sec.  2806.70, such as when the 
BLM determines that a small site rent schedule applies to the energy 
storage facility.

[[Page 39744]]

    The BLM would not charge the rent or fee of a solar or wind energy 
development ROW for an energy storage facility that is separate from 
the energy generation facility, the purpose of which is simply to store 
generated energy, and then deploy the stored energy as needed. Charging 
a capacity fee would be inappropriate as there is no energy generation 
from the facility. Using the pastureland rents for energy storage would 
also be inappropriate, as use of those acreage rates are intended to be 
coupled with the capacity fee to determine solar and wind energy 
generation payments for use of public lands. Thus, the BLM proposes 
that for energy storage facilities separate from an energy generation 
facility, it would apply the linear rent schedule unless it determines 
that the linear rent schedule does not apply per Sec.  2806.
    Sections 2806.60 through 2806.68 would be removed for the reasons 
discussed above. Information formerly contained in these sections are 
now found under Sec. Sec.  2806.50 through 2806.58. Sections 2806.56 
and 2806.58 are inclusive of all testing authorization types and do not 
require revision to include wind energy testing. The BLM is interested 
in reader comments regarding its valuation of energy storage that is 
not part of a solar or wind energy generation facility. Is a different 
method for collecting a rent warranted or appropriate for such 
facilities on public lands? Should the BLM consider valuing battery 
storage differently, such as based on how many hours of storage 
capacity per MWh of energy may be deployed?

Subpart 2807--Grant Administration and Operation

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 you must seek to amend your 
application, grant, or lease.
    Paragraph (b) would be revised to clarify that 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. This paragraph would be revised to include ``except for 
qualifying energy development grants and leases per Sec.  2806.51(c).'' 
That section describes rights-of-way in effect before the effective 
date of this rule. See Sec.  2806.51(c) of this preamble for further 
discussion on qualifying projects.
    Paragraph (f) is a new paragraph that would describe how the BLM 
would administer an existing 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, without further environmental review, 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 section 2806.51(c) for further 
discussion regarding requests to use the rent adjustment methodology of 
this rule.
Section 2807.21 May I assign or make other changes to my grant or 
lease?
    Section 2807.21 provides the requirements for when a holder may 
seek to assign or make other changes to a grant or lease.
    Paragraph (e) would be revised to clarify that the BLM may issue 
solar or wind energy development leases non-competitively inside a 
designated leasing area, consistent with other changes proposed in this 
rule. Additionally, the BLM could modify a grant or lease, such as 
adding additional terms and conditions, except for solar and wind 
energy leases unless required pursuant to 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.

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

    Subpart 2809 would be retitled from ``Competitive Process for 
Leasing Lands for Solar and Wind Energy Development Inside Designated 
Leasing Areas.'' Existing subpart 2809 is dedicated to competitive 
solar and wind energy leasing specifically in designated leasing areas. 
Revisions to subpart 2809 generally apply the same competitive process 
both within and outside designated leasing areas. This change is 
consistent with other revisions in this rule that would provide the BLM 
with discretion to accept applications within designated leasing areas 
and authorizing leases using a competitive offer or non-competitive 
process based on whether competitive interest exists for the area. 
Revisions generally include incorporating provisions describing 
competitive processes outside of designated leasing areas, currently 
found under Sec. Sec.  2804.30 and 2804.31, into subpart 2809 as 
appropriate.

Section 2809.10 Competitive process for energy development grants and 
leases

    Section 2809.10 would be retitled from ``General'' and revised to 
provide the same standard for the use of competitive processes on 
public lands located both inside and outside of designated leasing 
areas. As revised, 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 to offer leases for 
lands outside of designated leasing areas, as noted in the existing 
text of Sec. Sec.  2804.23(b) and (c) and 2804.30(c). These provisions 
standardize the BLM's discretion to utilize a competitive process for 
lands within and outside designated leasing areas.
    Existing paragraph (d) is proposed to be removed consistent with 
changes made under Sec.  2804.35(b) and subpart 2809. Under existing 
paragraph (d) the BLM generally prioritizes the processing of 
competitive leases over non-competitive grants. Under subparts 2804 and 
2809, the BLM proposes to provide greater flexibility and discretion to 
process applications inside designated leasing areas by removing the 
requirement in the current rule that the BLM can only accept 
applications processed first through a competitive process. 
Additionally, Sec.  2804.35(b) of this preamble provides additional 
information on the BLM's proposed factors to prioritize applications.
    The BLM has found that the requirement of the current rule to only 
accept applications processed competitively extends the timeline and 
increases costs, creating a barrier for authorizing projects in certain 
DLAs where there was no competitive interest. The proposed changes 
incorporate the BLM's broad discretion under FLPMA to determine under 
what circumstances it may utilize a competitive process for lands both 
inside and outside of designated leasing areas and standardize the 
BLM's discretion to utilize a competitive process where competitive 
interest exists for lands. The BLM anticipates that these changes would 
lead to more deployment in these areas

[[Page 39745]]

because accepting applications within DLAs without the prerequisite of 
holding a competitive process will likely generate more applications in 
the most desirable locations. This in turn would provide BLM with the 
flexibility to utilize a competitive process where there are multiple 
competing applications. At the same time, applicants can also 
proactively submit applications in DLAs that may not have competitive 
interest, and the BLM can process the leases non-competitively. The 
purpose of these changes is to ensure that the BLM is able to 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.
    Paragraph (e) would largely incorporate language currently found in 
Sec.  2804.23(c), to establish the timing within which the BLM would 
not initiate a competitive process for those lands where the BLM has 
accepted an application, received a plan of development, and entered 
into a cost recovery agreement. These provisions are intended to 
improve certainty with applicants that the BLM would not hold a 
competitive offer after an application has progressed substantively. 
Consistent with the BLM's statutory authority, and to preserve its 
discretion to utilize a competitive process where appropriate, Sec.  
2809.10(e) proposes that the BLM would decline to use a competitive 
process after it receives a complete application and plan of 
development, enters into a cost recovery agreement, and publishes an 
Environmental Assessment or a Draft Environmental Impact Statement. The 
BLM considered other possible criteria for identifying the point in 
time at which it will decline to hold a competitive offer, including 
some criteria that would cut off potential competition earlier in time 
(such as 30-days after receiving a complete application, as defined in 
Sec.  2804.12(j)), and other criteria, such as the initiation of 
scoping, including through the publication of a notice of intent to 
prepare an Environmental Impact Statement The BLM also considered 
establishing a notice process, whereby the BLM solicits expressions of 
interest in an area after receiving a first application, to determine 
if there is any competitive interest. The BLM is interested in 
receiving comments about (a) the benefits of a process by which the 
agency would provide notice and how a public notice process can create 
an efficient use of leases on BLM land, (b) how notice could be 
communicated and what information could be included, (c) the cutoff 
point for expressions of interest incorporated into this proposed rule, 
(d) what information could be required for expressions of interest, (e) 
whether expressions of interest should also be noticed, and (f) other 
potential features of a notice process. The BLM is also interested in 
receiving comments about other potential cutoff points or associated 
public notice processes.
Section 2809.11 How will the BLM call for nominations?
    Section 2809.11 would be retitled from ``How will the BLM solicit 
nominations?'' to improve consistency with the revised section.
    Proposed paragraph (a) provides that the BLM would 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, 
and may use other notification methods, such as a newspaper of general 
circulation in the affected area, or the internet. The first sentence 
of this paragraph would be revised from ``The BLM will publish a notice 
. . .'' to ``The BLM may publish a notice . . .'' to reflect the 
proposed discretionary use of a competitive process discussed in Sec.  
2809.10.
    Paragraph (a) would also be revised to remove language specifying 
that a call for nominations may only be issued for public lands inside 
of designated leasing areas. 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 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) would provide the requirements for nominating a 
parcel of land for a competitive offer. Paragraph (b)(1) would require 
a 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 offer may be refunded to the 
nominator if not successful in the competitive offer. These fees would 
reimburse the BLM for the expense of preparing and holding a 
competitive offer. The proposed revision would remove language that 
adjusts the nomination fee for inflation. In the BLM's experience, this 
inflation adjustment adds unnecessary complexity.
    Paragraph (b)(2) would require 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 offer for the parcel. The proposed revision changes 
``leasing'' to ``submissions'', consistent with changes in this rule 
allowing for applications for development to be submitted without first 
requiring a competitive process to be held.
    Paragraph (b)(3) would require that a nomination be accompanied by 
a legal land description and a map of the parcel of land. This 
information would help the BLM in identifying parcels in the 
competitive offer. The BLM proposes adding language stating that 
nominated lands may be the entire area or part of the area made 
available in the call for nominations.
    Paragraph (c) would provide that the BLM would 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. The requirement that a nominator must be qualified to hold a 
grant is carried over and relocated from existing paragraph (d). 
Existing paragraph (c) allowed interested parties to submit ``informal 
expressions of interest.'' In the BLM's experience, the information 
required by proposed paragraph (b) is the minimum information that the 
BLM needs in order to efficiently process and consider a nomination; an 
``informal expression of interest'' that does not comply with these 
requirements imposes an undue burden on the agency and would not be 
considered under the proposed regulation. At the same time, under the 
proposed regulation, the BLM would consider nominations that do comply 
with the requirements of paragraph (b) even if they are not submitted 
in response to a published call for nominations, as set forth in 
proposed Sec.  2809.10(c).
    Paragraph (d) would state that a nomination cannot be withdrawn, 
except by the BLM for cause, in which case the nomination fee would be 
refunded. This provision is carried over and relocated from existing 
paragraph (e). Existing paragraph (d) is removed consistent with the 
addition of paragraph (a)(4) of this section which provides how to 
qualify as a nominator.

[[Page 39746]]

    Paragraph (e) would provide that the decision whether to hold a 
competitive offer in response to a nomination lies in the BLM's 
discretion.
Section 2809.12 How will the BLM select and prepare parcels?
    Section 2809.12 describes how the BLM identifies parcels suitable 
for competitive offer. Paragraph (a) would be revised to note that the 
BLM may rely on any information it deems relevant in identifying 
parcels for competitive offers, but also describe more accurately the 
most common sources of information, which include nominations and 
existing land use designations. In particular, the BLM may continue to 
consider existing designated leasing areas, which are an example of 
land use designations, although it will not be constrained to conduct 
competitive offers in such areas.
    Paragraph (b) would be revised to clarify that the BLM may conduct 
necessary studies and site evaluation work, including applicable 
environmental reviews and public meetings, either before or after 
offering lands competitively. The existing regulations state that the 
BLM ``will'' conduct such studies and site evaluation work before 
holding a competitive offer. In practice, however, the BLM has 
sometimes found that the necessary studies and site evaluation work 
cannot be completed until the competitive offer is held and the 
successful bidder has submitted an application or plan of development. 
Accordingly, the BLM proposes to revise this regulation to clarify that 
the timing of these studies and site evaluation work relative to the 
competitive offer may vary depending on the circumstances. As noted 
below, the proposed regulations also introduce the term ``presumptive 
lease holder'' to clarify that the necessary environmental reviews must 
be completed before the BLM irretrievably commits to allowing a 
facility to be developed (see Sec. Sec.  2809.13 and 2809.15).
    Paragraph (c) would be added to clarify that the BLM's decision to 
conduct a competitive offer, or not conduct a competitive offer, is not 
a decision to approve or deny a grant or lease and is not subject to 
appeal.
Section 2809.13 How will the BLM conduct competitive offers?
    Section 2809.13 describes how the BLM conducts competitive offers. 
Paragraph (b) provides that the BLM publishes a notice of competitive 
offer 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) would be revised consistent with other 
revisions in this rule that would allow the BLM to accept applications 
within designated leasing areas without prior competitive offer. This 
paragraph clarifies that the notice of competitive offer would state 
whether a successful bidder would become a preferred applicant or a 
presumptive lease holder. Preferred applicants would be required to 
meet application submission requirements under Sec.  2804.12, and 
presumptive lease holders would be required to submit a Plan of 
Development per Sec.  2809.18. The difference between preferred 
applicants and presumptive lease holders is discussed further in 
connection with Sec.  2809.15.
    Under paragraph (c), the BLM would notify nominators of its 
decision to conduct a competitive offer 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.
Section 2809.15 How will the BLM select the successful bidder?
    Section 2809.15 explains how the successful bidder is selected. 
This proposed rule introduces a new distinction between the term 
``preferred applicant'' (used in the existing regulations and carried 
forward into this rule) and the term ``presumptive lease holder'' (a 
new term in this rule). The distinction between preferred applicants 
and presumptive lease holders reflects the fact that the proposed 
regulations allow the BLM to conduct competitive offers in a wider 
range of circumstances than the existing regulations. The distinction 
is intended to ensure that the BLM can properly balance the need to 
expedite approval of proposed projects in areas where the environmental 
impacts of solar and wind energy development are already well 
understood with the need to ensure that the BLM does not commit public 
land resources before completing the necessary analyses.
    The term ``presumptive lease holder'' would describe those 
situations in which at least one round of environmental review for 
solar or wind energy development has been conducted before the 
competitive offer is held, so that the environmental impacts of 
potential development are relatively well understood before the 
competitive offer 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 lease holder if the 
lands for which the competitive offer is held are located within a 
designated leasing area and the BLM has indicated in advance that the 
successful bidder would become a presumptive lease holder (see also 
Sec.  2809.13(b)(7)). These requirements would limit the use of the 
term ``presumptive lease holder'' 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 offer) many of 
the terms, conditions, and mitigation measures that would need to be 
incorporated into an approved authorization. A presumptive lease holder 
would therefore avoid the initial application review stage, which is 
designed to ensure that the site is generally appropriate for solar or 
wind energy development. A presumptive lease holder would have site 
control for a solar or wind energy development, precluding other 
competing solar or wind energy developments from siting on that land.
    At the same time, the proposed regulations also recognize that even 
in these cases, 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 lease holder'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 designated leasing area. This proposed change would resolve 
an ambiguity in the current rule regarding the appropriate timing of an 
environmental analysis tiered to an area-wide environmental analysis 
for a site-specific proposal. Paragraph (b)(1)(ii) therefore notes that 
the presumptive lease holder's right to develop a project on the site 
would remain contingent upon the BLM's approval of the presumptive 
lease holder's proposed plan of development. Once the BLM approves the 
proposed plan of development, following site-specific environmental 
analysis, a lease could be awarded, conferring a right to develop a 
project on the site, and the presumptive lease holder would become a 
lease holder.
    In contrast, in other cases under the proposed rule, the BLM could 
conduct a competitive offer outside of a designated leasing area in 
response to

[[Page 39747]]

receiving two or more competing applications or under any of the other 
circumstances set forth in Sec.  2809.10, without having completed an 
initial environmental analysis for solar or wind energy development in 
the area. In such cases, as set forth in paragraph (b)(2), the 
successful bidder would be designated a ``preferred applicant,'' and 
would merely obtain the exclusive right to submit an application for 
solar or wind energy development on the site, without competition from 
other applicants for solar or wind energy development. Such an 
application would be processed under Part 2804 in the same manner as an 
application for a non-competitive authorization, and a full 
environmental analysis would be conducted before the preferred 
applicant can obtain the right to develop a project on the site. A 
preferred applicant that fails to meet the requirements of Part 2804 
may lose status as the preferred applicant and their application may be 
denied consistent with Sec.  2804.26.
    Accordingly, paragraph (a) would add ``preferred applicant or the 
presumptive lease holder'' consistent with other revisions in this part 
that clarify what the BLM may offer in a notice of competitive offer. 
Reference to paragraph (b) of this section is updated consistent with 
the addition of new paragraph 2809.15(b).
    New paragraph (b) would provide that a successful bidder becomes a 
presumptive lease holder or preferred applicant only after making 
payments required in paragraph (d) of this section and satisfying 
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) would describe the requirements to become a 
presumptive lease holder, which are that the public lands successfully 
bid upon are located within a designated lease area and that the notice 
of competitive offer indicated successful bidders would become 
presumptive lease holders. This paragraph also provides that a 
presumptive lease holder would only be awarded a lease if the BLM 
approves the plan of development that is submitted in accordance with 
Sec.  2804.25(c).
    Paragraph (b)(2) would describe 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. Applications for a grant or lease would be 
processed for the parcel identified in the submission under Sec.  
2809.12(b). As with presumptive lease holders, approval of a 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 that 
application is allowed by the preferred applicant. The BLM may consider 
issuing authorizations for other uses, such as roadways, testing 
facilities, recreation permits, or even ROWs 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 the subpart 2804 of this part. Recreation permits and ROWs under 
MLA authority would be processed under part 2920 and 2880, 
respectively. In some instances, such as when other applicants have 
submitted applications for incompatible uses, the BLM may determine 
that processing other applications must wait until it issues a decision 
on a first-in-line solar or wind energy development facility.
    Existing paragraphs (b) and (c) would be redesignated as (c) and 
(d) respectively. Redesignated paragraph (c) is not revised, while 
redesignated paragraph (d) is revised to make several technical 
changes. Paragraph (d)(1) (currently paragraph (c)(1)) is added back 
into this section without revision. Paragraphs (d)(2), (3), and (4) 
(currently paragraphs (c)(2), (3), and (4)) are revised to replace the 
words ``the day of the offer'' with the words ``the day on which the 
BLM conducts the competitive offer.'' This proposal is made to prevent 
confusion that sometimes arises under the existing regulations. The 
intent of paragraph (d) is to specify that the successful bidder must 
make certain payments on, or within fifteen days of, the day that the 
BLM conducts the competitive offer and the bidder is identified as the 
successful bidder. However, some readers have misunderstood ``the 
offer'' in this paragraph to refer to the day on which the BLM offers 
the lease to the successful bidder, as described in paragraphs (a), 
(d), and (e) of the existing regulation. This reading creates an 
internal contradiction: the successful bidder must make the specified 
payments within a specified time after the BLM offers the lease to the 
bidder, but the BLM cannot make the offer until it has received the 
payments (see existing paragraph (d)). The proposed revisions would 
avoid this internal contradiction by clarifying that the payments must 
be made on or after the day on which the competitive offer is held, but 
before the lease can be offered to the successful bidder.
    Paragraphs (d)(3) and (4) would also be revised to update reference 
to redesignated paragraph (c) for payment of the balance of bonus bids 
after variable offsets, and to reflect the different payment 
requirements for successful bidders who would become preferred 
applicants and those who would become presumptive lease holders.
    Paragraph (d)(5) would be added to clarify that successful bidders 
may be required to pay reasonable costs in addition to payment of 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 would be reduced by the amount of the application 
filing fee already paid. See Sec.  2804.19 of the existing regulations 
for further information on Category 6 cost recovery.
    Existing paragraph (d) would be removed from this rule as its 
provisions are duplicative and no longer necessary for grants or 
leases. The requirements of existing paragraphs (d)(1) and (d)(2) are 
addressed in proposed paragraph (b) and in revised paragraph (e), while 
existing paragraph (d)(3) merely cross-references Sec.  2808.12, which 
would remain in effect without changes under the proposed rule, and 
repeats a requirement of existing Sec.  2804.25(b)(1), which would 
similarly remain in effect.
    Paragraph (e) would be revised to explain that the successful 
bidder would not become a preferred applicant or a presumptive lease 
holder, and the BLM would keep all money that has been submitted with 
the competitive offer, 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 
competitively under Sec.  2809.17.
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.
    Paragraph (c) would be revised by adding ``including progressive 
steps towards.'' The BLM proposes this additional text to clarify 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. Consistent with existing paragraph (b) of 
this section, the BLM would identify further information on the 
variable

[[Page 39748]]

offset in its notice, including what progressive steps may include.
    Paragraph (c)(11) would be added to allow the BLM to provide an 
incentive for use of items that qualify for the Buy American preference 
in solar and wind energy generation facilities on public lands, to 
complement the fee reduction described in Sec.  2806.52(b)(1)(iii). In 
order to qualify for the Buy American variable offset, if offered, 
prospective bidders must demonstrate how they meet the thresholds 
identified within the Notice of Competitive Offer. A prospective bidder 
would be required to provide sufficient documentation to the BLM prior 
to the competitive offer to show that the bidder qualifies 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)(iii) of this preamble. As discussed below, the BLM may 
hold in suspense the amounts corresponding to the variable offset until 
the facility construction is substantially complete or the successful 
bidder can otherwise demonstrate to the BLM that the required Buy 
American items have been used in the facility.
    The BLM is interested in receiving comments regarding the addition 
of the Buy American variable offset. Responses to this section may also 
be applied to other parts of this rule where Buy American incentives 
are proposed. Are there other methods to implement a proposed variable 
offset that may better provide the greatest economic benefit to the 
American public or support increasing demand for clean energy 
technologies on public lands? Is there an alternative method to provide 
acceptable documentation to the BLM for qualifying items for the Buy 
American preference in an energy generation facility? What are 
reasonable levels to qualify for Buy American items within an energy 
generation facility that could be met by a developer today and in the 
future, such as when domestic production levels have increased further?
    This paragraph would be further revised by renumbering existing 
paragraph (c)(11) to (c)(12) and by revising it to read as ``other 
factors'' by removing the word ``similar.'' This revision is also made 
to emphasize that the BLM may use other factors, including progressive 
steps towards those factors, when determining a variable offset for a 
competitive offer.
    The BLM is also interested in receiving comments on the possibility 
of adding ``use of union labor'' to the list of variable offset factors 
in Sec.  2809.16(c). That addition would parallel the proposed Buy 
American variable offset and complement the proposed union-labor 
reduction in the capacity fee discussed above in reference to Sec.  
2806.52.
    New paragraph (e) would provide for bidders to qualify for a 
variable offset after a competitive offer is held. Some variable offset 
qualifications may not be able to be demonstrated to the satisfaction 
of the BLM until after the competitive offer is held, such as with new 
provision 2809.16(c)(11) for energy development facilities that would 
contain items qualifying for the Buy American preference. A bidder may 
conditionally qualify for a variable offset before the competitive 
offer and then later demonstrate their qualification to the BLM and 
perfect their qualification. The way a bidder may conditionally qualify 
for the variable offset would be described in the Notice of Competitive 
Offer and could include methods such as a written statement to the BLM 
that they intend to qualify for the variable offset and at what 
percentage. The bidder, if successful, must later demonstrate to the 
BLM that they have qualified for the variable offset at that 
percentage. The BLM could set a deadline in the notice for bidders to 
demonstrate that the proposed facility qualifies for the variable 
offset. If the variable offset is not qualified for in the time 
provided, or the bidder is not able to adequately demonstrate they 
qualify for the variable offset, the bid money would be retained by the 
U.S. Government as the balance of the bonus bid.
Section 2809.17 Will the BLM ever reject bids or re-conduct a 
competitive offer?
    Section 2809.17 identifies situations when the BLM may reject a 
bid, offer a lease to another bidder, or re-offer a parcel.
    Paragraph (b) would be revised to refer to the preferred applicant 
or presumptive lease holder, consistent with other revisions in this 
part for competitive processes, and to include the requirement that the 
successful bidder satisfy the requirements of Sec.  2809.15. This 
paragraph would provide 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.
    Paragraph (d) would be removed from this section as it is 
unnecessary with other revisions made under this rule to make public 
lands inside of designated leasing areas available to application 
without a competitive offer. Paragraph (d) currently states that if no 
bids are received for a notice of competitive offer inside a designated 
leasing area, the BLM may make the lands available to application. This 
provision would no longer be necessary, as this rule would make all 
designated leasing areas available to application without first 
requiring a competitive offer to be held. The existing provision also 
states that lands can be re-offered; this provision is duplicative of 
Sec.  2809.15(e).
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 only issued inside of areas classified or 
allocated for solar or wind energy (e.g., designated leasing areas). 
The title would be revised from ``What terms and conditions apply to 
leases?'' to clarify to readers that this section applies to all leases 
for solar and wind energy development.
    The introductory paragraph would be revised to clarify to a reader, 
consistent with other changes in this rule, that a lease may be awarded 
on a competitive offer or through an application. Any lease issued 
would be subject to the terms and conditions of this section.
    Paragraph (a) would be revised to clarify that a lease awarded from 
a competitive offer provides site control to a lessee, but the lease 
holder may not construct any facilities on the right-of-way until the 
BLM issues a subsequent notice to proceed. As noted above in the 
context of paragraph 2809.15(b)(1)(ii), the competitively awarded 
lease, which is issued after the BLM reviews the plan of development, 
confers on the lease holder the right to develop a facility. Before the 
lease holder can begin actual construction, however, the BLM must issue 
a notice to proceed or other form of approval to begin surface 
disturbing activities.
    Existing provisions in paragraph (a) referring to the term of a 
lease would be revised to be consistent with the new provisions added 
under Sec.  2805.11(b) which provide for a reasonable term for ROWs of 
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. This paragraph would be revised to require that rent must be 
paid as specified in Sec.  2806.52. This change is consistent with 
revisions under Sec. Sec.  2806.50 through 2806.58 that consolidate 
solar and wind energy rents into the same sections.
    Paragraph (f) provides for lease assignments under Sec.  2807.21. 
The BLM would not make any changes to the lease terms or conditions, as 
provided in

[[Page 39749]]

Sec.  2807.21(e). Changes to ROW terms or conditions would involve an 
amendment action by the BLM in addition to the assignment action. This 
paragraph would be revised to add ``apply to'' so that it is clear that 
the lease holder must apply to the BLM for an assignment. An assignment 
is not complete until the BLM has approved it.
Section 2809.19 Applications in Designated Leasing Areas or on Lands 
That Later Become Designated Leasing Areas
    Under Sec.  2809.19, the BLM explains how it would evaluate 
applications for public lands that later become a designated leasing 
area. This section is proposed to be removed in its entirety as it is 
not consistent with the changes in this rule that allow for 
applications in designated leasing areas without first holding a 
competitive offer. Because designation of a designated leasing area 
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, if the BLM believes 
that the proposed use would be incompatible with land use designations 
that are being considered by the BLM through an ongoing land use 
planning process.
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.'' 
The proposed revisions should be considered separately. If a court 
holds any provision of one part of this proposed rule invalid, it 
should not affect the other parts of the proposed rule. Any decision 
finding any provisions in this rule to be invalid would not affect the 
remaining provisions, which would remain in force.

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.
    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.
    OIRA has determined that this proposed rule is a significant 
regulatory action because it may cause material budgetary impacts.
    Furthermore, the BLM's threshold analysis concluded that the rule 
may have an effect on the economy of $200 million or more. The BLM 
estimated that the rule would have distributional impacts in the form 
of transfer payments from ROW 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.
    The BLM is interested in public comment on the potential impacts of 
this rule on the deployment of wind and solar energy generation on BLM-
managed public lands. Would this proposed rule cause increased 
deployment of renewable energy development on public lands such that 
the rule may have an annual effect on the economy of $200 million or 
more? (See E.O. 14094 Sec.  1(b).) What data, models, or tools should 
the BLM review when considering this question? What factors, aside from 
BLM rents and fees, influence the siting of renewable energy 
developments on public lands and would form the baseline for that 
analysis? This rule is one among a suite of actions the Federal 
government may take to encourage renewable energy development. How can 
the BLM determine the contribution this rule will make to new renewable 
energy development? Please provide information and reference citations 
for comments informing the impacts of this rule.
    For more detailed information, see the Economic and Threshold 
Analysis for Revisions to 43 CFR 2800 (Economic and Threshold Analysis) 
prepared for this rule. This Economic and Threshold Analysis has been 
posted in the docket for the rule on the Federal eRulemaking Portal: 
https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE78,'' 
click the ``Search'' button, open the Docket Folder, and look under 
Supporting Documents.

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 does modify provisions in the 
regulations 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,''

[[Page 39750]]

as that phrase is used in 5 U.S.C. 605. Therefore, the BLM has not 
prepared an initial regulatory flexibility analysis.

Congressional Review Act

    This rule is not a major rule under 5 U.S.C. 804(2). This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more. The BLM did not estimate the annual benefits that this rule would 
provide to the economy. Please see the Economic and Threshold Analysis 
for this rule for a more detailed discussion.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. The rule would benefit small 
businesses by streamlining the BLM's processes.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
rule would not have adverse effects on any of these criteria, it would 
encourage solar and wind energy development and promote the greatest 
use of solar and wind energy resources consistent with the Energy Act 
of 2020.

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.

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.

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)

    The Department of the Interior (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 requests 
and requirements that an individual, partnership, or corporation obtain 
information, and report it to a Federal agency. See 44 U.S.C. 3502(3); 
5 CFR 1320.3(c) and (k). This rule contains information-collection 
requirements that are subject to review by OMB under the PRA). 
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)).
    OMB has generally approved the existing information-collection 
requirements contained in 43 CFR parts 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 ROW 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 proposed or materially substantive 
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 proposed new information-collection requirement contained in 43 
CFR 2806.52(i) regarding an annual certified statement. The rule would 
require that by October of each year wind and solar grant or lease 
holders must submit to the BLM a certified statement identifying the 
next 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 lease holders 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

[[Page 39751]]

Control Number 1004-0206 and the proposed aforementioned new 
information-collection pertaining to 43 CFR 2806.52(i) 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 designated leasing area; 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 
designated leasing area, 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 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 
POD 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 
designated leasing area, 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 ROW 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 ROW grant if the applicant does not have or 
cannot demonstrate the technical or financial capability to construct 
the project or operate facilities within the ROW. 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 designated leasing area to submit 
the following information, using Form SF-299:
     A general description of the proposed project and a 
schedule for the submission of a Plan of Development (POD) conforming 
to the POD template at http://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 ROW 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 designated leasing area.
    Each of these grants is for 3 years or less, in accordance with 
Sec.  2805.11(b)(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 ROW. Actions that may require an assignment include 
the transfer by the holder (assignor) of any right or interest in the 
grant or lease to a third party (assignee) or any change in control 
transaction involving the grant holder or lease holder, including 
corporate mergers or acquisitions. The proposed assignee must file an 
assignment application, using SF-299, and pay application and 
processing fees.
    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

[[Page 39752]]

ROW 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 ROW grant, which 
includes solar or wind energy generating facilities, may be applied 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 ROW 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.
    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 ROW 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 ROW grant or lease, and prior approval 
whenever site-specific circumstances or conditions result in the need 
for changes to an approved ROW 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 lease 
holder to file new or revised information in circumstances that 
include, but are not limited to:
     Transactions within the same corporate family;
     Changes in the holder's name only; and
     Changes in the holder's articles of incorporation.
    A request for an amendment of a ROW, using SF-299, is required in 
cases of a substantial deviation (for example, a change in the 
boundaries of the ROW, major improvements not previously approved by 
the BLM, or a change in the use of the ROW). Other changes, such as 
changes in project materials, or changes in mitigation measures within 
the existing, approved ROW 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 ROWs, 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 ROW. A large-scale ROW 
is for solar or wind energy development outside a designated leasing 
area, 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 ROW 
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(b)(2(ii), 2805.14(h), and 
2807.22).
    Section 2805.11(b)(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 ROW 
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 ROW 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;

[[Page 39753]]

    (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 or not 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 of any ROW 
grant or lease. In accordance with Sec.  2805.12(c)(6), the BLM will 
notify the holder before suspending or terminating a ROW 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 ROW. A showing of good cause will be required in response. That 
showing must include:
     Reasonable justification for any delays in construction 
(for example, delays in equipment delivery, legal challenges, and acts 
of God);
     The anticipated date for the completion of construction 
and evidence of progress toward the start or resumption of 
construction; and
     A request for extension of the timelines in the approved 
POD.
    Section 2805.12(e), as amended, applies as soon as a ROW holder 
anticipates noncompliance with stipulation, term, or condition of the 
approved ROW 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 ROW 
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 
designated leasing area) will be determined based on the preparation of 
a reclamation cost estimate that includes the cost to the BLM to 
administer a reclamation contract and review it periodically for 
adequacy.
    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 designated leasing areas. A holder of a solar or wind energy grant 
outside of a designated leasing area will be required to submit a 
reclamation cost estimate to help the BLM determine the bond amount. 
For solar energy development grants outside of designated leasing 
areas, the bond amount will be no less than $10,000 per acre. For wind 
energy development grants outside of designated leasing areas, 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).
    Proposed Annual Certified Statement. (43 CFR 2806.52(b)(5)(i)).
    The rule would require that by October of each year, wind and solar 
grant or lease holders must submit to the BLM a certified statement 
identifying the next 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 lease 
holders 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 competitively inside a designated leasing 
area 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 ROW 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 or not to proceed with a competitive offer.
    Expression of Interest in Parcel of Land Inside a Designated 
Leasing Area (43 CFR 2809.11(c)).
    Section 2809.11(c) authorizes the BLM to consider informal 
expressions of interest suggesting specific lands inside a designated 
leasing area to be included in a competitive offer. The expression of 
interest must include a description of the suggested lands and a 
rationale for their inclusion in a competitive offer. The information 
will assist the BLM in determining whether or not to proceed with a 
competitive offer.
    Plan of Development for a Solar or Wind Energy Development Lease 
Inside a Designated Leasing Area (43 CFR 2809.18).
    Section 2809.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 http://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 designated leasing area 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

[[Page 39754]]

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 ROWs and 
temporary use permits authorized under the Mineral Leasing Act (MLA). A 
temporary use permit authorizes a holder of a MLA ROW 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 
ROW).
    A request for an amendment of a ROW or temporary use permit is 
required in cases of a substantial deviation (e.g., a change in the 
boundaries of the ROW, major improvements not previously approved by 
the BLM, or a change in the use of the ROW). Other changes, such as 
changes in project materials, or changes in mitigation measures within 
the existing, approved ROW 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 
ROW 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 ROW 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 http://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 
proposed new information collection requirement contained in Sec.  
2806.52(i) pertaining to the annual certified statement. This change in 
burden is considered a program change due to agency discretion. This 
new information collection is needed to help the BLM more accurately 
determine the capacity fee based on the certified statement provided.
    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 No. 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 proposed in 43 CFR 2806.52(i).
    Number of Respondents: 75.
    Annual Responses: 3,117.
    Annual Burden Hours: 47,342.
    Annual Burden Cost: $2,182,302.
    If you want to comment on the information-collection requirements 
of this rule, please send your comments and suggestions on this 
information-collection by the date indicated in the DATES and ADDRESSES 
sections as previously described.

National Environmental Policy Act

    These proposed regulatory amendments are of an administrative or

[[Page 39755]]

procedural nature and thus are eligible to be categorically excluded 
from the requirement to prepare an environmental assessment (EA) or an 
Environmental Impact Statement (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; (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 proposed rule and determined that it is not 
likely a significant energy action as defined by E.O. 13211. While the 
ROWs affected by this rule are for solar and wind energy generation, 
the proposed 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.

Clarity of This Regulation (Executive Orders 12866, 12988, and 13563)

    We are required by Executive Orders 12866 (section 1(b)(12)), 12988 
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential 
Memorandum of June 1, 1988, to write all rules in plain language. This 
means that each rule must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use common, everyday words and clear language rather than 
jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help the BLM revise the proposed rule, your comments should be 
as specific as possible. For example, you should tell us the numbers of 
the sections or paragraphs that you find unclear, which sections or 
sentences are too long, the sections where you feel lists or tables 
would be useful, etc.

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 Shantz, 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.

Laura Daniel-Davis,
Principal Deputy Assistant Secretary, Land and Minerals Management. The 
action taken herein is pursuant to an existing delegation of authority.

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 
proposes to amend 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 continues to read as follows:

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

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 ``Buy American'' and 
``Capacity fee'';
0
iii. Revising the term for ``Grant'';
0
iv. Removing the term ``Megawatt (mw) capacity fee'';
0
v. Revising the term for ``Megawatt hour (MWh) rate'';
0
vi. Removing paragraphs (1) and (2) in the term ``Megawatt rate'' and 
redesignating paragraphs (3) and (4) as paragraphs (1) and (2);
0
vii. Revising the term ``Reasonable costs''; and
0
viii. 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) * * *
    Buy American means an item or product that qualifies for the Buy 
American preference under Section 52.225-1(b) of the Federal 
Acquisition Regulations, 48 CFR 52.225-1(b), or a successor regulation.
    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

[[Page 39756]]

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, factors the BLM may 
consider include, but are not limited to, the following:
    (1) Federal, State, Tribal, and local land use plans, and 
applicable Federal, State, Tribal, and local laws;
* * * * *
    (10) Access to electric transmission; and
    (11) 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 application or grant or lease if I 
die?

    (a) Applications do not hold any transferable interest.
    (b) If a grant or lease holder dies, any inheritable interest in 
the grant or lease will be distributed under State law.
    (c) 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 lease holder 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.
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 
towards 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) Complete applications: 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. Amend Sec.  2804.14 by revising paragraph (c) to read as follows:


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

* * * * *
    (c) You may obtain a copy of the current year's processing fee 
schedule from any BLM state, district, or field office or by writing: 
U.S. Department of the Interior, Bureau of Land Management, 1849 C 
Street NW, Room 5645, Washington, DC 20240. The BLM also posts the 
current processing fee schedule at https://www.blm.gov.
* * * * *
0
11. 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
12. Revise Sec.  2804.23 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

[[Page 39757]]

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
13. Amend Sec.  2804.25 by revising the section heading, removing 
paragraph (e)(2)(i), redesignating paragraphs(e)(2)(ii) and (iii) as 
(e)(2)(i) and (ii), respectively, and revising them, and revising 
paragraphs (e)(5) and (f)(3) to read as follows:


Sec.  2804.25  How will the BLM process my application?

* * * * *
    (e) * * *
    (2) * * *
    (i) Prioritize the application in accordance with Sec.  2804.35; 
and
    (ii) 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.
* * * * *
    (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
14. Amend Sec.  2804.26 by revising the section heading and paragraph 
(a)(4), adding paragraphs (a)(9) and (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;
* * * * *
    (9) You do not comply with a deficiency notice (see Sec.  
2804.25(c) of this subpart) within the time specified in the notice.
    (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
15. Remove and reserve Sec.  2804.30:


Sec.  2804.31  [Removed and Reserved]

0
16. Remove and reserve Sec.  2804.31:
0
17. Revise Sec.  2804.35 to read as follows:


Sec.  2804.35  Application prioritization factors 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.
    (b) The BLM will consider relevant factors 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
18. 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
19. 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
20. Amend Sec.  2805.11 by revising the section heading and paragraphs 
(b)(2) introductory text and (b)(2)(iv) and (v) and adding paragraph 
(b)(4) to read as follows:


Sec.  2805.11  What does a grant or lease contain?

* * * * *
    (b) * * *

[[Page 39758]]

    (2) Specific terms for energy grants and leases, such as solar or 
wind energy developments, 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); 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;
* * * * *
    (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
21. Amend Sec.  2805.12 by revising paragraph (e)(2) to read as 
follows:
* * * * *


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

* * * * *
    (e) * * *
    (2) You may also request that the BLM consider alternative 
stipulations, terms, or conditions, other than rents or fees, except 
for 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
22. 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 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 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
23. 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;
* * * * *
0
24. Amend Sec.  2805.16 by revising the section heading and paragraph 
(b) to read as follows:


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

* * * * *
    (b) The monitoring cost schedule is available from any BLM state, 
district, or field office or by writing the address found under Sec.  
2804.14(c) of this part. The BLM also posts the current schedule at 
http://www.blm.gov.

Subpart 2806--Annual Rents and Payments

0
25. 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
26. 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 multi-year payments, such as 
a short-term grant issued for energy site-specific testing, you may 
request that your initial rent bill be for the full term 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
27. 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 section 2804.14(c) of this part. We also post the current 
rent schedule at http://www.blm.gov.
    28. 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
29. Amend Sec.  2806.51 by revising the section heading and paragraph 
(c) to read as follows:


Sec.  2806.51  New and existing 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 [effective date of the final rule], 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 [Date 2 years after effective date of the 
final rule]. 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
30. 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:

[[Page 39759]]

    (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:
    (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 1 and the second year 
would be 2.
    (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 http://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 Buy 
American 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 F x G x B 
x C x (1 + D) [supcaret] E 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 0.2 for fee 
payments due before 2036, and 0.8 for fee payments due starting in 
2036.
    (iii) C is the Buy American reduction, which is calculated based on 
the percentage of the total cost of the facilities on the ROW 
attributable to Buy American items, as follows:

                    Table 1 to Paragraph (b)(1)(iii)
------------------------------------------------------------------------
 Total cost of the facilities on the ROW attributable to   Buy American
                   Buy American items                        reduction
------------------------------------------------------------------------
Less than 25 percent....................................             1.0
25-35 percent...........................................            0.95
35-45 percent...........................................             0.9
45-55 percent...........................................            0.85
55 percent or more......................................             0.8
------------------------------------------------------------------------

    (iv) Request for conditional approval: Alternative MWh rate and Buy 
American reduction. The alternative MWh rate and the Buy American 
reduction (paragraphs (b)(1)(ii) and (iii) 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 or Buy American 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 or Buy American reduction went into 
effect.
    (2) D is the annual adjustment factor, which is 3 percent.
    (3) E 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 1 and the second year 
would be 2.
    (4) F is the rate of return, which is 7 percent.
    (5) G is the annual energy generated on the right-of-way, and will 
be provided to the BLM by the grant or lease holder in an annual 
certified statement. The BLM will bill to coincide with the start of 
the calendar year. Payment in advance will be based on estimated energy 
generation and the BLM will determine final payment based on actual 
energy generation.
    (i) By October of each year, the holder must submit to the BLM a 
certified statement identifying the next year's estimated energy 
generation on the right-of-way and the prior year's actual energy 
generation on the right-of-way. 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.
    (ii) The BLM will calculate the capacity fee from the certified 
statement. For developments 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.
    (iii) If the actual energy generation exceeds the estimated energy 
generation in a given calendar year, the holder will be billed for the 
underpayment pursuant to Sec.  2806.13(e). If the underpayment amount 
is more than 10 percent of the actual capacity fee, the BLM may charge 
the holder late payment fees and other administrative fees consistent 
with Sec.  2806.13. If the actual energy generation is less than the 
estimated energy generation in a given calendar year, the holder will 
be credited or refunded consistent with Sec.  2806.16, but in no event 
will the total rent paid be less than the annual acreage rent.
    (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 http://www.blm.gov.

[[Page 39760]]

    (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
31. Add an undesignated center heading between Sec. Sec.  2806.52 and 
2806.54 and revise Sec.  2806.54 by 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
32. 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
33. 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 [date 2 years after the 
effective date of the final rule]. The BLM will re-issue your grant or 
lease for the remainder of your existing term 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, without further review.
0
34. 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. Except for solar or wind energy leases, we may modify the 
grant or lease or add bonding and other requirements, including 
additional terms and conditions, to the grant or lease when approving 
the assignment, unless a modification to a solar or wind energy lease 
is required under Sec.  2805.15(e). We may decrease rents if the new 
holder qualifies for an exemption (see Sec.  2806.14) or waiver or 
reduction (see Sec.  2806.15) and the previous holder did not. 
Similarly, we may increase rents if the previous holder qualified for 
an exemption or waiver or reduction and the new holder does not. If we 
approve the assignment, the benefits and liabilities of the grant or 
lease apply to the new grant or lease holder.
* * * * *
0
35. Revise the heading of subpart 2809 to read as follows:

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

0
36. 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 offer 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 offer by publishing a call for nominations under Sec.  
2809.11(a); or
    (c) You may request that the BLM conduct a competitive offer by 
submitting a request in writing that complies with Sec.  2809.11(b); or
    (d) The BLM may conduct a competitive offer if it receives two or 
more competing applications.
    (e) The BLM will not competitively offer lands for which the BLM 
has accepted a complete application, received a plan of development, 
entered into a cost recovery agreement, and published an Environmental 
Assessment or Draft Environmental Impact Statement.
0
37. 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 offer. 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 offer 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,

[[Page 39761]]

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
38. 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 competitive offer based on 
information received in public nominations, on existing 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 
competitively.
    (c) A decision to conduct a competitive offer, or not to conduct a 
competitive offer, 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
39. Amend Sec.  2809.13 by revising paragraphs (b)(7) and (c) to read 
as follows:


Sec.  2809.13  How will the BLM conduct competitive offers?

* * * * *
    (b) * * *
    (7) The terms and conditions of the offer, including whether a 
successful bidder will become a preferred applicant or a presumptive 
lease holder; the requirements for the successful bidder to submit an 
application, see Sec.  2804.12, or a POD, 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 offer at least 30 days prior to the competitive offer if 
you nominated lands that are included in the offer, paid the nomination 
fees, and demonstrated your qualifications to hold a grant or lease as 
required by Sec.  2809.11.
0
40. 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
g. 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 lease holder in accordance with Sec.  
2809.15(b).
    (b) The successful bidder will become the presumptive lease holder 
or preferred applicant only after making the payments required in 
subsection (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 lease holder. (i) The successful bidder will become 
a presumptive lease holder 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 offer indicated that a successful 
bidder will become a presumptive lease holder.
    (ii) A presumptive lease holder will be awarded a lease only if the 
presumptive lease holder 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 lease holder 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 offer 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 offer, 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 offer; and
    (4) Within 15 calendar days after the day on which the BLM conducts 
the competitive offer, 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 lease holder).
    (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 offer 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
41. Amend Sec.  2809.16 by revising paragraphs (c) introductory text 
and (c)(10) and (11) and adding paragraphs (c)(12) and (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 Buy American preference; and
    (12) 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 offer by which the successful bidder must demonstrate its 
qualifications.
0
42. Amend Sec.  2809.17 by revising paragraph (b) and removing 
paragraph (d).
    The revision reads as follows:

[[Page 39762]]

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

* * * * *
    (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
43. 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) A lease provides site control to the lease holder. 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 lease holder 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).
* * * * *
[FR Doc. 2023-12178 Filed 6-15-23; 8:45 am]
BILLING CODE 4331-29-P