On June 16, 2023, the Bureau of Land Management (BLM) published a proposed rule that would revise the agency’s existing regulations for wind and solar rights-of-way and leases on public lands contained at 43 C.F.R. part 2800. Most significant, the proposed rule would adjust rental rates and capacity fees for wind and solar rights-of-way, modify BLM’s competitive process for offering lands for lease, and revise the BLM’s criteria for prioritizing right-of-way applications. Through this proposed rule, the BLM aims to promote the development of renewable energy on public lands and deliver greater certainty for the private sector.
Annual Rents and Payments (§ 2806)
The Federal Land Policy and Management Act (FLPMA) requires that the BLM rent public lands at fair market value. The BLM’s existing regulations attempted to capture fair market value for wind and solar rights-of-way by imposing a multicomponent fee that was comprised of an acreage rent, capacity fee, and any competitive bids. The Energy Act of 2020 amended FLPMA to allow the BLM to reduce rental rates and capacity fees for wind and solar projects. See 43 U.S.C. § 3003. In the proposed rule, the BLM seeks to exercise this authority by revising the rental and fee structure for both new and existing wind and solar rights-of-way. Most notably, the proposed rule would:
- Require the payment of either an acreage fee or a capacity fee, whichever is higher in a given year;
- Implement a capacity fee based on wholesale power prices and the actual energy produced by a facility rather than an estimate of the energy that could be generated at a facility;
- Implement an acreage fee based on per-acre values for pastureland from the National Agricultural Statistics Service Cash Rents Survey. The acreage fee would be established at the beginning of the grant or lease term and then adjusted annually at a proposed 3% percent; and
- Include a “Buy American” escalating capacity fee reduction, whereby a greater value of American-made products used in facility construction would result in a greater reduction of capacity fees.
Competitive Process for Solar and Wind Energy Development Applications or Lease (Subpart 2809)
The existing regulations require the BLM to use a competitive process to lease lands within designated right-of-way leasing areas. The proposed rule would give the BLM discretion to use a competitive process both within and outside of designated leasing areas. Under the proposed rule, the BLM may use a competitive process on its own initiative, when nominated or requested by the public, or when there are two or more competing applications.
Additionally, the proposed rule would adjust the BLM’s process by which interested parties can nominate lands for competitive lease (§ 2809.11). The proposed rule would also assign different statuses to successful bidders for lands within and outside designated leasing areas; these statuses reflect the BLM’s need for further evaluation of lands outside of designated leasing areas (§ 2809.15).
Prioritization Factors for Solar and Wind Energy Development Rights-of-Way (§ 2804.35)
The proposed rule would revise the BLM’s direction as to how it will prioritize applications for wind and solar rights-of-way. The BLM explained that the existing rule relied on screening criteria that were overly prescriptive. Instead, the BLM has proposed factors it will “holistically” consider to prioritize applications, which include:
- Whether a project is in an area preferred for wind and solar development;
- Whether a project avoids adverse impacts or conflicts;
- Whether a project conforms with land use plans;
- Whether a project is consistent with laws;
- Whether the project incorporates best management practices; and
- Any other factors identified in BLM guidance.
Duration of Grants and Leases (§ 2805.11)
The proposed rule would extend the maximum term of a lease or grant for solar or wind development projects from 30 years to 50 years.
Public comments on the proposed rule must be received by August 15, 2023, and may be submitted at www.regulations.gov (RIN 1004-AE78). The BLM will host three virtual public meetings regarding the proposed rule on June 29, July 11, and July 25, 2023. The BLM anticipates finalizing the rule by the summer of 2024.
For more information about the proposed rule, please see the BLM’s FAQs. If you have questions about the proposed rule or how to participate in the public comment process, please contact Katie Schroder or Natalie Boldt.