[Federal Register Volume 76, Number 225 (Tuesday, November 22, 2011)]
[Proposed Rules]
[Pages 72134-72142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30110]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 11
[Docket No. RM11-6-000]
Annual Charges for Use of Government Lands
AGENCY: Federal Energy Regulatory Commission, DOE.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: The Federal Power Act requires hydropower licensees to
recompense the United States for the use, occupancy, and enjoyment of
its lands. The Commission assesses annual charges for the use of
Federal lands through Part 11 of its regulations. The Commission is
proposing to revise the methodology used to compute these annual
charges. Under the proposed rule, the Commission would create a fee
schedule based on the U.S. Bureau of Land Management's (BLM)
methodology for calculating rental rates for linear rights of way. This
methodology includes a land value per acre, an encumbrance factor, a
rate of return, and an annual adjustment factor. The fee schedule would
include all adjustments described in the BLM rule adopting this
methodology, except the allocation of county land values into zones. In
addition, the Commission proposes to eliminate its current practice of
doubling the per-acre rental rate for non-transmission line lands.
DATES: Comments are due January 6, 2012.
ADDRESSES: Comments, identified by docket number, may be filed by the
following methods:
Electronic Filing through http://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.
FOR FURTHER INFORMATION CONTACT:
Doug Foster, Office of the Executive Director, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
(202) 502-6118, [email protected].
Kimberly Ognisty, Office of General Counsel, Federal Energy Regulatory
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8565,
[email protected].
SUPPLEMENTARY INFORMATION:
Notice of Proposed Rulemaking
November 17, 2011.
Table of Contents
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Paragraph
Nos.
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I. Background............................................... 2
II. Comments on Notice of Inquiry........................... 21
III. Proposed Rule.......................................... 44
A. Per-Acre Land Value.................................. 47
B. Encumbrance Factor................................... 56
C. Rate of Return....................................... 60
D. Annual Adjustment Factor............................. 62
IV. Regulatory Requirements................................. 64
A. Information Collection Statement..................... 64
B. Environmental Analysis............................... 65
[[Page 72135]]
C. Regulatory Flexibility Act........................... 66
D. Comment Procedures................................... 71
E. Document Availability................................ 75
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1. The Federal Power Act (FPA) requires licensees using Federal
lands to recompense the United States for the use, occupancy, and
enjoyment of its lands.\1\ The Commission has assessed this portion of
annual charges at rental rates established by the U.S. Bureau of Land
Management (BLM) (and adopted by the U.S. Forest Service), which are
published annually in a fee schedule that identifies per-acre rental
rates by state and county for linear rights of way. Under the proposed
rule, the Commission would create a fee schedule based on the BLM
methodology promulgated in 2008 for calculating rental rates for linear
rights of way. This methodology includes a land value per acre, an
encumbrance factor, a rate of return, and an annual adjustment factor.
The Commission-created fee schedule would base county land values on
average per-acre values from the National Agricultural Statistics
Service (NASS) Census, and would not use the zone system adopted by the
2008 BLM rule. All other adjustments to the formula components
described in the BLM rule would apply to the Commission's creation of a
fee schedule.\2\ In addition, the Commission proposes to eliminate its
current practice of doubling the rental rate for non-transmission line
lands.
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\1\ 16 U.S.C. 803(e)(1) (2006).
\2\ Update of Linear Right-of-Way Rent Schedule, 73 FR 65040
(October 31, 2008) (codified at 43 CFR 2806.20-2806.23).
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I. Background
2. Section 10(e)(1) of the Federal Power Act (FPA) requires
Commission hydropower licensees using Federal lands to:
pay to the United States reasonable annual charges in an amount
to be fixed by the Commission * * * for recompensing [the United
States] for the use, occupancy, and enjoyment of its lands or other
property * * * and in fixing such charges the Commission shall seek
to avoid increasing the price to the consumers of power by such
charges, and any such charges may be adjusted from time to time by
the Commission as conditions may require * * * .\3\
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\3\ 16 U.S.C. 803(e)(1) (2006) (emphasis added). Section
10(e)(1) also requires licensees to reimburse the United States for
the costs of the administration of Part I of the FPA. Those charges
are calculated and billed separately from the land use charges, and
are not the subject of this proposed rule.
In other words, where hydropower licensees use and occupy Federal lands
for project purposes, they must compensate the United States through
payment of an annual fee, to be established by the Commission.\4\
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\4\ Pursuant to FPA section 17(a), 16 U.S.C. 810(a) (2006), the
fees collected for use of government lands are allocated as follows:
12.5 percent is paid into the Treasury of the United States, 50
percent is paid into the federal reclamation fund, and 37.5 percent
is paid into the treasuries of the states in which particular
projects are located. No part of the fees discussed in this proposed
rule is used to fund the Commission's operations.
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3. Over time, the Commission has adopted a number of methodologies
to effectuate this statutory directive. This has included conducting
project-by-project appraisals,\5\ charging a single national average
land value per acre,\6\ and using a fee schedule for linear rights of
way developed jointly by the BLM and Forest Service.\7\
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\5\ See Revision of the Billing Procedures for Annual Charges
for Administering Part I of the Federal Power Act and to the
Methodology for Assessing Federal Land Use Charges, Order No. 469,
FERC Stats. & Regs., Regulations Preambles ] 30,741, at 30,584
(1987).
\6\ Id. See also Order Prescribing Amendment to Section 11.21 of
the Regulations Under the Federal Power Act, Order No. 560, 56 FPC
3860 (1976).
\7\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,584.
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4. From 1937 to 1942, the Commission based annual charges for the
use of Federal lands by hydropower licensees on individual land
appraisals for each project.\8\ In 1942, the Commission rejected this
approach in favor of a single national average per-acre land value
because it determined that project-by-project appraisals were more
costly to administer than the value collected in rent, the values for
inundated lands would become distorted, the values could only be
maintained with re-appraisals, and disputes over values may lead to
costly litigation.\9\ Eventually, the Commission also rejected the use
of a single national average per-acre land value because the Inspector
General of the Department of Energy concluded that this methodology
resulted in an under-collection of over $15 million per year due to the
use of outdated land values.\10\
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\8\ See 56 FPC 3860 at 3863.
\9\ See 56 FPC 3860 at 3863-64.
\10\ See Assessment of Charges under the Hydroelectric Program,
DOE/IG Report No. 0219 (September 3, 1986); see also More Efforts
Needed to Recover Costs and Increase Hydropower Charges, U.S.
General Accounting Office Report No. RCED-87-12 (November 1986). The
single national average land value per acre in 1942 was $50 per
acre, and, by 1976, the value was $150 per acre. 56 FPC 3860.
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5. In 1987, the Commission adopted use of a fee schedule developed
by the BLM and Forest Service that identified per-acre rental rates by
county for linear rights of way on Federal lands.\11\ BLM and Forest
Service produced the fee schedule by taking a survey of market values
by county for the various types of land that the agencies had allowed
to be occupied by linear rights of way.\12\ The range of per-acre land
values was divided into eight zones, and each zone value was pegged to
the highest raw value within that zone.\13\ The rental rate in the fee
schedule was calculated by multiplying the zone value by an encumbrance
factor of 70 percent,\14\ a rate of return of 6.41 percent, and an
annual inflation adjustment factor. The resulting fee schedule assigned
one of eight rental rates to all counties.\15\
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\11\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,584.
\12\ 51 FR 44014 (Dec. 5, 1986). BLM explained that the value of
timber had not been included, and that the values were not for urban
or suburban residential areas, industrial parks, farms or orchards,
recreation properties or other such types of land. The agencies
tried to avoid using attractive public use areas such as lakeshores,
streamsides, and scenic highways frontage.
\13\ The per-acre zone values were $50, $100, $200, $300, $400,
$500, $600, and $1000.
\14\ The encumbrance factor adjusts the zone value to reflect
the degree that a particular type of facility encumbers the right-
of-way area or excludes other types of land uses. If the encumbrance
factor is 100 percent, the right-of-way facility (and its operation)
is encumbering the right-of-way area to the exclusion of all other
uses.
\15\ The per-acre zone fee under the 1987 BLM fee schedule
ranged from $2.24 to $44.87. By 2008, the per-acre zone fee under
the 1987 BLM fee schedule, having been adjusted each year for
inflation, ranged from $3.76 to $75.23.
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6. BLM would use individual land appraisals to substitute for the
fee schedule rental rate only if the resulting rent would be
significantly higher than that produced by the schedule.\16\
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\16\ 51 FR 44014 (Dec. 5, 1986). BLM would use individual
appraisals only if it could be determined that sufficient area
within a right of way would, at a minimum, exceed the zone value by
a factor of ten and the expected return was sufficient to initiate a
separate appraisal.
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7. In adopting the 1987 BLM fee schedule, the Commission found that
the methodology promulgated by BLM and Forest Service for linear rights
of way was the ``best approximation
[[Page 72136]]
available of the value of lands used for transmission line rights-of-
way.'' \17\ Therefore, the Commission assessed the schedule rate for
transmission line rights of way on Federal lands, and doubled this rate
for other project works on Federal lands (e.g., dams, powerhouses,
reservoirs) because, historically, appraisers had determined that the
market value of transmission line rights of way is roughly half of the
market value of other land.\18\
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\17\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,588
(emphasis added).
\18\ Id. at 30,589.
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8. In the 1987 proceeding, the Commission found no merit to claims
that charging fair market value for Federal lands is prohibited by the
FPA:
All increases in charges will result in some impact on
consumers. The statutory provision bars the Commission from
assessing unreasonable charges that would be passed along to
consumers. Reasonable annual charges are those that are
proportionate to the value of the benefit conferred. Therefore, a
fair market approach is consistent with the dictates of the Act.
Furthermore, as land values have not been adjusted in over ten
years, an adjustment upwards is warranted and overdue.\19\
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\19\ Id. (footnotes omitted).
The Commission also rejected the argument that it should
intentionally set low land charges based on the public benefits
provided by hydropower projects. The Commission explained that the
public benefits provided by licensed projects are considered in the
licensing decision and these benefits are the quid pro quo for the
ability to operate the project in a manner consistent with the needs of
society. In contrast, the purpose of the rental fee is to establish a
fair market rate for the use of government land.\20\
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\20\ Id. at 30,587.
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9. In adopting the 1987 BLM fee schedule, the Commission rejected
several other proposed methods of assessing annual charges for the use,
occupancy, and enjoyment of government lands by hydropower licensees.
The Commission rejected a proposal to use an agricultural land value
index created by the U.S. Department of Agriculture (USDA), which used
a state-by-state average value per acre of farm lands and buildings,
concluding that this index would require such major adjustments that it
would be an inefficient measure of land value for hydropower
projects.\21\ The Commission also rejected a proposal to assess a fee
based on the percentage of gross revenues from power sales or a rate
per kilowatt hour, concluding that such methods would be unreasonable
because they would result in a royalty as though the occupied Federal
lands themselves were producing power. The Commission explained that
this would overlook the fact that power output is the result of many
factors (e.g., water rights, head, project structures), and not just
the acreage of the Federal lands involved.\22\ Finally, the Commission
again rejected a proposal to use individual project appraisals because
such appraisals would be too costly and result in time-consuming
litigation.\23\
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\21\ Id. at 30,589. The potential adjustments included
accounting for farm buildings, for the cleared, arable, level land
that it represented, and for the fact that the index represented
private and not federal lands.
\22\ Id. at 30,589-90.
\23\ Id. at 30,590.
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10. From 1987 to 2008, the Commission assessed annual charges for
the use, occupancy, and enjoyment of government lands according to the
BLM fee schedule. Each year, BLM adjusted the fee schedule for
inflation, and each year the Commission published notice of the updated
schedule.\24\
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\24\ See, e.g., Update of the Federal Energy Regulatory
Commission's Fee Schedule for Annual Charges for the Use of
Government Lands, 73 FR 3626 (Jan. 22, 2008), FERC Stats. & Regs. ]
31,262 (2008).
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11. In 2005, Congress passed the Energy Policy Act (EPAct) of 2005,
which required BLM ``to update [the schedule] to revise the per acre
rental fee zone value schedule * * * to reflect current values of land
in each zone.'' \25\ Congress further ordered that ``the Secretary of
Agriculture shall make the same revision for linear rights-of-way * * *
on National Forest System land.''
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\25\ 42 U.S.C. 15925 (2006).
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12. On October 31, 2008, BLM issued a final rule promulgating its
updated rental schedule for linear rights of way to satisfy the
congressional mandate in EPAct 2005,\26\ and the Forest Service
subsequently adopted the 2008 BLM fee schedule.\27\ As had been the
case with the methodology underlying the 1987 BLM fee schedule, the
updated fee schedule is based on the same formula, which has four
components: (1) An average per-acre land value by county (grouped into
zones); (2) an encumbrance factor reduction; (3) a rate of return; and
(4) an annual adjustment factor for inflation.
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\26\ Update of Linear Right-of-Way Rent Schedule, 73 FR 65040.
\27\ See Fee Schedule for Linear Rights-of-Way Authorized on
National Forest System Lands, 73 FR 66591 (November 10, 2008). The
Forest Service noted it had given notice, in the preambles to BLM's
proposed and final rules, that it would adopt BLM's revised fee
schedule.
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13. Under the updated 2008 BLM fee schedule, the per acre land
value by county is based on the NASS Census data. To determine a county
per-acre land value, BLM uses the average per acre land value from the
``land and buildings'' category of the NASS Census. The ``land and
buildings'' category is a combination of NASS Census land categories,
and includes irrigated and non-irrigated cropland, pastureland,
rangeland, woodland, and the ``other'' category, which includes roads,
ponds, wasteland, and land encumbered by non-commercial or non-
residential buildings. BLM consulted with officials from NASS to arrive
at an appropriate method for removing the value of irrigated cropland
and land encumbered by buildings because these types of land are
generally of higher value than the types of lands over which rights of
way would be granted. This resulted in a reduction in the average per-
acre land value by 20 percent (a 13 percent reduction to remove all
irrigated acres and a 7 percent reduction to remove all lands in the
``other'' category, which includes all improved land or land encumbered
by buildings) ``to eliminate the value of all land that could possibly
be encumbered by buildings or which could possibly have been developed,
improved, or irrigated.'' \28\
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\28\ 73 FR 65040 at 65043.
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14. In response to comments that the non-irrigated cropland
category also represented higher value lands and therefore should be
removed from the ``land and buildings'' category, BLM explained that in
comparing the categories from the NASS Census data, it found little
difference in the mid-western and western states between the average
per acre values of non-irrigated cropland and pastureland/
rangeland.\29\ Furthermore, if the non-irrigated lands category were
removed from the per-acre average, the per-acre average would
undervalue Federal land holdings in the eastern U.S., including Forest
Service lands, that have largely been acquired from the private sector
(primarily farm real estate) and would likely fall into the same land
categories covered by the NASS Census.\30\
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\29\ Id. at 64044.
\30\ Id.
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15. In response to comments objecting to the zone system, BLM
explained that it chose to retain the zone system because the 2005
congressional mandate directed it to revise the schedule to reflect
current land values in each zone. BLM also explained that it considered
using the midpoint of the zone value to base its calculations instead
of the upper limit. It chose not to do this because it would have been
significantly different from the methodology used in
[[Page 72137]]
the previous schedule (which used the upper zone amount) and its use
would have generated significantly lower per acre rent amounts, even
though land values have generally increased. Because of the larger
range in values, the 2008 fee schedule included twelve zones rather
than eight.
16. BLM will update the per-acre land values by county every five
years on a defined schedule that is linked to the NASS Census updates,
which are also updated every five years. Therefore, the 2011-2015 fee
schedules would be based on the 2007 NASS Census data,\31\ adjusting in
intermediary years with an annual inflation adjustment factor, the
2016-2020 fee schedules would be based on the 2012 NASS Census, the
2021-2025 fee schedules would be based on the 2017 NASS Census, and so
on.
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\31\ There is an 18-month delay in NASS's publication of the
census data. In BLM's administration of its formula, it provides
another 18-month delay to allow notice of any changes in applicable
county values.
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17. In promulgating the 2008 fee schedule, BLM made additional
changes to the methodology underlying the fee schedule. BLM reduced the
encumbrance factor from 70 percent to 50 percent after a review of
public comments, industry practices in the private sector, and the
Department of Interior's appraisal methodology for right-of-way
facilities on Federal lands.\32\ BLM revised the fixed rate of return
downward from 6.41 percent to 5.27, which is the 10-year average (1998-
2008) of the 30-year and 20-year Treasury bond yield rate.\33\ To stay
current with inflationary or deflationary trends, BLM will apply an
annual adjustment factor, which is currently 1.9 percent, to the per-
acre rental rate in the fee schedule.\34\ The annual adjustment factor
is based on the average annual change in the Implicit Price Deflator-
Gross Domestic Product (IPD-GDP) for the 10-year period immediately
preceding the year that the NASS Census data become available.\35\ The
BLM rule makes clear that the fee schedule is the only basis for
determining an annual rental fee for rights of way on Federal
lands.\36\
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\32\ Id. at 65047.
\33\ Id. at 65049.
\34\ Id. at 65050.
\35\ The annual adjustment factor will be updated every ten
years.
\36\ If lands are to be transferred out of federal ownership,
BLM allows a right-of-way occupier to submit an appraisal report to
determine a one-time rental payment for perpetual linear grants or
easements.
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18. On February 17, 2009, the Commission issued notice (February 17
Notice) of the 2008 BLM fee schedule, which was based on its revised
methodology, as it had done for every annual update to the 1987 fee
schedule.\37\ Because of the land value revisions and methodology
adjustments in response to EPAct 2005, the 2008 fee schedule resulted,
in some cases, in significantly higher annual charge assessments of
Commission licensees.\38\
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\37\ Update of the Federal Energy Regulatory Commission's Fees
Schedule for Annual Charges for the Use of Government Lands, 74 FR
8184 (Feb. 24, 2009) FERC Stats. & Regs. ] 31,288 (2009).
\38\ However, a handful of licensees, in geographical locations
throughout the country, had their rates reduced.
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19. On March 6, 2009, a group of licensees requested rehearing of
the February 17 Notice, which the Commission denied.\39\ The licensees
petitioned for review of the Commission's orders in the United States
Court of Appeals for the District of Columbia Circuit. On January 4,
2011, the Court granted the petition for review and vacated the
Commission's February 17 Notice.\40\ The DC Circuit found that the
Commission is required by the Administrative Procedure Act to seek
notice and comment on the methodology used to calculate annual charges
because the Commission's fee schedule is based on the BLM fee schedule,
and BLM has made changes to the methodology underlying its fee
schedule.
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\39\ Update of the Federal Energy Regulatory Commission's Fee
Schedule for Annual Changes for the Use of Government Lands, 129
FERC ] 61,095 (2009).
\40\ City of Idaho Falls, Idaho v. FERC, 629 F.3d 222 (D.C. Cir.
2011).
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20. On February 17, 2011, the Commission issued a Notice of Inquiry
soliciting comments on proposed methodologies for assessing annual
charges for the use, occupancy, and enjoyment of Federal lands by
hydropower licensees. The Notice of Inquiry identified five
requirements that any proposed methodology should satisfy, which are
derived from the Commission's statutory obligations under the FPA and
the Commission's past practice in implementing various methodologies.
Any proposed methodology must: (1) apply uniformly to all licensees;
(2) avoid exorbitant administrative costs; (3) not be subject to review
on an individual basis; (4) reflect reasonably accurate land
valuations; and (5) avoid an unreasonable increase in costs to
consumers.
II. Comments on Notice of Inquiry
21. In response to the Notice of Inquiry, comments were filed by
eight entities representing licensees, industry trade groups, and
Federal agencies. No commenters suggested, and the Commission is
unaware of, any existing index other than the NASS Census to determine
per acre rental rates by county.
22. 2008 BLM Fee Schedule. The Forest Service is the only commenter
that recommends straight-forward adoption of the 2008 BLM fee schedule
for assessing annual charges for the use of Federal lands by hydropower
licensees. The Forest Service identified several advantages to adopting
the BLM fee schedule, including: (1) Consistent application of linear
rights-of-way rental values among Federal agencies; (2) parity in
rental rates for projects licensed or exempted from licensing under the
FPA; and (3) reduced administrative burden because BLM maintains and
updates the schedule with periodic revisions to reflect changes in land
values, treasury rates, and inflation.
23. Per-Acre Land Value. The Federal Lands Group \41\ believes that
the NASS Census land values should be reduced by 50 percent, instead of
the 20 percent reduction incorporated into the BLM fee schedule, to
reflect the fact that lands used for hydropower projects rarely have
any value for agricultural purposes. The Federal Lands Group also
recommends that the Commission use actual county land values from the
NASS Census instead of the zone values created by BLM, which would
result in a more accurate valuation of the project lands, with only
minimal additional burden on the Commission because it is responsible
for assessing Federal lands charges for fewer than 250 projects.
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\41\ The Federal Lands Group is a group of 16 private and
municipal licensees that operate 37 licensed projects in the western
U.S.
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24. Similarly, Southern California Edison (SCE) generally supports
use of the 2008 BLM fee schedule but believes that the 20 percent
reduction in per-acre county land value does not properly account for
the reduced value of vacant land. SCE recommends the Commission use the
pastureland average value per acre category from the NASS Census to
capture the value of vacant, unimproved lands. In addition, SCE
recommends the Commission adjust downward the land values from the NASS
Census because of the dramatic decrease in value that has occurred
since the 2002 NASS Census.
25. Idaho Power Company (Idaho Power) believes that in order to
accurately reflect the fair market value of Federal lands, the NASS
Census land and buildings category should be reduced by an additional
26 percent for a total reduction of 46 percent.
[[Page 72138]]
26. The National Hydropower Association (NHA) argues that any
methodology based on an agricultural index, without an adjustment to
more accurately capture the character of lands present at hydroelectric
project, is inherently flawed because the lands typically present at
hydroelectric projects are steeply sloped, rocky, and remote.
27. PG&E objects to the use of the NASS Census for per acre county
land values because the land values reflect values from the beginning
of the real estate bubble and may have improperly inflated the true
value of the government lands. PG&E states that an agricultural index
overvalues government lands used by hydroelectric projects, and points
out that the Commission previously found, in Order No. 469, that farm
land values were typically much higher than the value of Federal land
used for hydroelectric projects.
28. Individual Appraisals. The Federal Lands Group argues that the
Commission should provide a limited opportunity for a licensee, at its
own expense, to demonstrate through periodic, independent appraisals
the actual fair market value of Federal lands at a project.
29. Placer County also supports a mechanism for individual
licensees to demonstrate, at their own expense, that the fair market
value of the Federal lands at a hydropower project are substantially
less than the annual charges billed by the Commission. Placer County
suggests that a licensee could submit a land sales value appraisal
performed by a state certified and licensed real estate appraiser. If
that appraised value is substantially lower than the assumed land value
used to derive the Commission's default annual charges, then the
Commission should adjust the charges.
30. Placer County proposes two alternative approaches to making
this adjustment. First, the Commission could reassign the specific
project to the BLM fee schedule zone that corresponds to the appraised
land value. Second, the Commission could develop a project-specific
multiplier based on the difference between the values yielded by the
default methodology and the individual assessment. For each subsequent
year, the charge yielded by the default methodology would be multiplied
by the same percentage. Under either of these proposals, licensees
could be required to provide an updated appraisal periodically in order
to continue to be assessed a rate other than that produced by the
default methodology.
31. NHA also recommends that the Commission allow an alternative
land valuation method on a case-by-case basis to resolve anomalies that
may occur in the application of an index-based valuation system.
32. PG&E objects to independent appraisals on a case-by-case basis
because such a practice would be time consuming and would result in
exorbitant administrative costs, ultimately resulting in increased
annual charge assessments to licensees for the administration of Part I
of the FPA. However, PG&E believes that it might be appropriate for the
Commission to allow a licensee to challenge the application of a
uniform formula, if it results in an inappropriate annual charge given
the peculiar characteristics of particular projects.
33. Encumbrance Factor. The Federal Lands Group argues that the
encumbrance factor should be 30 percent because, unlike other energy
infrastructure, hydroelectric projects encumber Federal lands
minimally, and substantially enhance the management objectives of the
Federal lands management agencies.
34. Placer County also argues that the Federal lands rental fee
should be reduced because hydropower licensees do not fully encumber
the Federal lands within their projects, much of those lands remain
available for other uses, the Federal government retains significant
rights in its lands, and licensees use the Federal lands within their
projects to provide benefits to the public. Placer County suggests that
the Commission adopt an encumbrance factor between 30 and 50 percent
for all project areas occupying Federal lands.
35. SCE believes that a 50 percent encumbrance factor is the
highest that is appropriate for a hydropower facility, and that the
Commission should consider a public benefit credit system to offset the
encumbrance factor when it is determined a hydropower facility provides
recreational and other benefits to the general public (e.g.,
recreational activities, flood control, or water storage).
36. Idaho Power also believes an encumbrance factor of 100 percent
for non-transmission line lands is inappropriate because Federal
landowners such as BLM and Forest Service issue commercial permits and
collect fees for the use of project lands, and licensees are required
to make significant investment for the protection of Federal lands from
natural and manmade impacts or enhancements to Federal lands. Idaho
Power believes an appropriate encumbrance factor is zero.
37. NHA believes that the hydropower industry's contributions to
multiple use of Federal lands should be reflected in the Commission's
valuation method by significantly reducing the level of encumbrance of
hydropower projects on Federal lands. NHA states that Commission-issued
licenses reserve authority for Federal land management agencies to
authorize non-project uses on Federal lands within the project
boundary, such as flood control, navigation, and storage for water
supply and irrigation. NHA further states that many projects
significantly enhance the multiple use management of the lands they
occupy by providing recreational attractions such as fishing, boating,
camping, and other activities, and many licensees also provide funding
to the land managing agency in addition to the recreation facilities
they construct, operate, and maintain.
38. Non-Transmission Line Lands. The Federal Lands Group, PG&E,
Idaho Power, NHA, and SCE object to the Commission's practice of
automatically doubling the linear rights-of-way fee for non-
transmission line project areas because this practice does not
recognize that these other project areas are frequently used for non-
hydroelectric purposes, such as public recreation, private recreation
(e.g., residential boat docks), and general environmental preservation,
and are accessible by the general public for a variety of uses. PG&E
also argues that, in the case of government lands administered by the
Forest Service, the Forest Service reserves to itself the right to use,
or to permit others to use, project lands for any purpose. PG&E
suggests that the Commission charge some lesser factor than doubling
for non-transmission line project areas.
39. Rate of Return and Annual Adjustment Factor. SCE recommends use
of the 30-year Treasury Bond rate rather than the 10-year average of
the 30-year Treasury bond yield rate because the former is a more
accurate valuation of a long-range asset. SCE proposes that the
Commission use the IPD-GDP to track inflation of land values annually.
40. 1987 Fee Schedule. PG&E recommends the Commission continue use
of the 1987 BLM fee schedule, with annual adjustments for inflation.
PG&E states that it recognizes that Congress appeared to believe the
BLM fee schedule for linear rights of way did not reflect current land
values, but asserts there is no indication in the statutory provision
that Congress intended that the Commission use the revised fee
schedules for hydroelectric projects, or
[[Page 72139]]
that the use of the 1987 BLM fee schedule was inappropriate.
41. Income- or Generation-Based Methodologies. PG&E and NHA object
to any methodology for assessing annual charges that would use an
income- or generation-based methodology to establish annual land use
charges.
42. Phase-In of New Fee Schedule. PG&E requests that the increase
in annual charges be phased in over a number of years thereby avoiding
an increase to the price of consumers of power.
43. Edison Electric Institute. The Edison Electric Institute (EEI)
endorses the comments submitted by the Federal Lands Group, PG&E, SCE,
Idaho Power, and NHA. EEI emphasizes the importance of such factors as
the rural, unfarmed, undeveloped nature of hydropower project lands,
the local nature of land values, the modest encumbrance of Federal
lands used by hydropower facilities, changes in land values from year
to year, use of reasonable long-term discount rates, and the need for
project-by-project adjustments in fee assessments.
III. Proposed Rule
44. The Commission proposes to adopt the 2008 BLM methodology for
creating a fee schedule of rental rates by county to assess annual
charges for the use, occupancy, and enjoyment of Federal lands by
hydropower licensees. Four components comprise the proposed formula:
(1) An average per-acre land value by county based on the ``land and
buildings'' category from the NASS Census; (2) an encumbrance factor;
(3) a rate of return; and (4) an annual adjustment factor. The
Commission proposes to use this methodology to create its own schedule,
based on the NASS Census, without using the zone system incorporated
into the BLM fee schedule. Except for this difference, the Commission
proposes to adopt all other aspects of the BLM methodology for
producing a fee schedule to assess rental rates for the use of Federal
lands. In addition, the Commission proposes to eliminate the current
practice of doubling the fee schedule rate for non-transmission line
lands. The proposed rule does not include a graduated phase-in rate for
the new schedule. Thus, the Commission would assess annual charges for
the use of Federal lands by multiplying the rate in its fee schedule by
the number of Federal acres occupied by a licensee.
45. The per-acre land value would be based on the NASS Census,
adjusted downward to remove the value of irrigated lands and buildings,
and would be updated with current land values every five years. The
encumbrance factor, which adjusts for the degree to which an occupation
of Federal lands precludes other uses, would be 50 percent. The rate of
return, which converts the per-acre land value into an annual rental
value, would be 5.27 percent. Finally, the annual adjustment factor,
which adjusts the rental rate to reflect inflationary or deflationary
trends, would be 1.9 percent, and would be adjusted every ten years.
46. The Commission proposes to track BLM's timing for incorporating
the periodic updates to the NASS Census data. Therefore, the
Commission's 2011-2015 fee schedules would be based on the 2007 NASS
Census data,\42\ adjusting in intermediary years with the annual
adjustment factor, the 2016-2020 fee schedules would be based on the
2012 NASS Census, the 2021-2025 fee schedules would be based on the
2017 NASS Census, and so on. The annual adjustment factor would be
revised every ten years, and the encumbrance factor and rate of return
would remain unchanged unless by future rulemaking.
---------------------------------------------------------------------------
\42\ There is an 18 month delay in NASS's publication of the
census data. In BLM's administration of its formula it provides
another 18 month delay to allow notice of any changes in applicable
county values.
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A. Per-Acre Land Value
47. The Commission proposes to adopt BLM's practice of creating a
per-acre land value by using the ``land and buildings'' category from
the NASS Census. The ``land and buildings'' category is a combination
of all the land categories in the NASS Census, and includes croplands
(irrigated and non-irrigated), pastureland/rangeland, woodland, and
``other'' (roads, ponds, wasteland, and land encumbered by non-
commercial/non-residential buildings). The Commission would apply a 20
percent reduction to remove the value of irrigated farmland and
buildings from the ``land and buildings'' category, but would avoid
grouping the resulting land values into zones. Thus, under the BLM zone
system, if the per-acre land value for County A, after the 20 percent
reduction, is $3,500 and the zone range is $3,000 to $5,000, then
County A's per-acre land value for purposes of the BLM formula would be
$5,000. In contrast, under the proposed rule, the per-acre land value
for County A would be $3,500, rather than $5,000.\43\
---------------------------------------------------------------------------
\43\ After the other components of the BLM formula are applied
(encumbrance factor reduction, rate of return, and adjustment for
inflation), County A's per-acre rent in 2011 under the Commission's
proposed rule would be approximately $94.
---------------------------------------------------------------------------
48. Using the county-by-county data is the ``best approximation''
of county values of which the Commission is aware. This method would
result in more accurate land valuations for all licensees because under
the zone system, every county is priced at the highest zone value (and
thus the value of every county is inflated). In addition, the use of
NASS Census data, which is updated every five years, alleviates
commenters' concern that values are based on short-term anomalies in
real estate prices.
49. Several commenters disagree with the use of an agricultural
index as the basis for per-acre land values, arguing that the
Commission has previously rejected use of an agricultural-based index
in Order No. 469.\44\ In Order No. 469, the Commission determined that
the BLM fee schedule, which was based on a survey of lands that had
been occupied by BLM and Forest Service linear rights of way, was the
best approximation of per-acre rental rates for linear rights of way.
The Commission rejected use of the agricultural index produced by the
USDA at that time because the index overvalued the types of lands that
are used for hydropower purposes, provided values only for states and
not by county, and required too many adjustments by the Commission to
account for farm buildings, cleared and arable land, and the private
ownership of the lands.\45\ The Commission concluded that the
administrative efficiencies provided by the 1987 BLM fee schedule were
superior to the many adjustments the Commission would have had to make
to the USDA's agricultural index.
---------------------------------------------------------------------------
\44\ FERC Stats. & Regs. ] 30,741 at 30,589.
\45\ Id.
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50. This is no longer the case. BLM has adopted use of the NASS
Census for determining per-acre land values by county and has
incorporated reasonable adjustments to the raw NASS Census data to more
accurately value the types of lands used as Federal rights of way.
Unlike the previous agricultural index created by USDA, the NASS Census
includes land values at the county level, allowing differentiation
within each state.
51. In addition, BLM's methodology for producing the fee schedule
provides for significant adjustments to the NASS Census land values to
account for the same concerns the Commission had when considering use
of the USDA agricultural index. BLM uses the total average ``land and
buildings'' category from the NASS Census, which includes, irrigated
and non-irrigated croplands
[[Page 72140]]
(but not the value of crops), pasturelands, rangelands, woodlands, and
interstitial lands, such as roads, ponds, wastelands, and lands
encumbered by non-commercial or non-residential buildings. In
consultation with NASS officials, BLM determined that a 20 percent
reduction to the average per-acre ``land and buildings'' category would
remove the value of irrigated croplands and lands encumbered by
buildings, which are generally not the types of lands used for linear
rights of way or hydropower projects. Because the Commission proposes
to adopt the BLM fee schedule, the Commission would not be required to
make these adjustments itself. Therefore, the NASS Census data and
BLM's application of this data alleviates the concerns the Commission
once had with USDA's previous agricultural index.
52. Several commenters object to use of the BLM fee schedule
because recent NASS Census data was gathered during a national real
estate bubble. The Commission recognizes that property values have
increased significantly in some parts of the country in the last
decade. One of the significant advantages to the new BLM methodology is
that the land values will be updated every five years. Because there is
a delay in BLM's adoption of the NASS Census data, there will also be a
delay in including these values into the fee schedule. However, over
time, all increases and decreases in land values will be reflected in
the NASS Census data and in the fee schedule.
53. Several commenters believe that licensees should have the
opportunity, at their own expense, to submit individual appraisals to
demonstrate the NASS Census per-acre land values are inaccurate. The
Commission continues to believe that individual land appraisals would
be difficult to administer, would increase the costs of administering
Part I of the FPA, and would increase the potential for disputes and
litigation over annual charges.
54. Commenters argue that the Commission should allow individual
appraisals because BLM allows for such an opportunity. This is not
accurate. The BLM rule makes clear that all entities with linear rights
of way are to be assessed a rental rate according to the published fee
schedule. The BLM rule allows appraisals to be submitted where an
entity is making a one-time rental payment for a perpetual right of way
or easement on land that will be transferred out of Federal ownership.
If Federal lands within a licensee's project boundary were transferred
out of Federal ownership, then the Commission would no longer collect
annual charges for the use of those Federal lands from that
licensee.\46\
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\46\ Annual charges for the use of Federal lands would still be
assessed if the lands transferred out of federal ownership were
subject to a power site classification under section 24 of the FPA.
16 U.S.C. 818 (2006).
---------------------------------------------------------------------------
55. The Commission recognizes that for some licensees regional land
values have increased dramatically, resulting in a significant increase
in the rental rate for the use of Federal lands by hydropower
licensees. This is primarily the result of a shift from a methodology
that used land values from 1987 to a methodology that uses current
market land values. Because the 2008 BLM methodology incorporates five
year updates to the per-acre county land values, it is not anticipated
that such a large increase in annual charges for the use of Federal
lands will occur again.
B. Encumbrance Factor
56. The encumbrance factor is a measure of the degree that a
particular type of facility encumbers the right-of-way area or excludes
other types of land uses.\47\ If the encumbrance factor is 100 percent,
the right-of-way facility (and its operation) is encumbering the right-
of-way area to the exclusion of all other uses. Impacts could include
visual, open space, wildlife, vegetative, cultural, recreation, and
other public land resources. The updated BLM methodology reduces the
encumbrance factor from 70 percent to 50 percent.
---------------------------------------------------------------------------
\47\ 73 FR 65040 at 65047.
---------------------------------------------------------------------------
57. Several commenters believe that the encumbrance factor should
be less than 50 percent, particularly because other uses are often
authorized on the Federal lands. In promulgating the 2008 fee schedule,
BLM revisited its survey of the degrees of encumbrance presumed by
utility facilities and infrastructure, and determined that 50 percent
was more reasonable than 70 percent because lands often can be used for
other purposes. BLM made this change as a result of comments received
on its proposed rule, a review of industry practices in the private
sector, and a review of the Department of Interior's appraisal
methodology for right-of-way facilities located on Federal lands.\48\
However, BLM explained that the degree to which Federal lands can be
used for multiple purposes does not reduce the rental rate to be
assessed, and clarified that grants issued for rights-of-way facilities
are non-exclusive, such that BLM reserves the right to authorize other
uses within a right-of-way area.\49\
---------------------------------------------------------------------------
\48\ Id.
\49\ Id.
---------------------------------------------------------------------------
58. Several commenters suggested the public benefits provided by
hydropower licensees should result in a reduced encumbrance factor.\50\
However, the public benefits required by a license cannot completely
offset the rental fee for use of Federal lands. Rather, the public
benefits, including aesthetics, recreation, environmental, fish and
wildlife, and others, are required by the FPA in order to receive a
license, not in exchange for occupying Federal lands. We acknowledge
these public uses at many projects by discontinuing the practice of
doubling the charges for non-transmission line lands. However, because
hydropower projects located on Federal lands do indeed make use of
public property for which the FPA requires us to set a reasonable fee,
we agree with BLM's use of a 50 percent encumbrance factor.
---------------------------------------------------------------------------
\50\ Idaho Power believes the encumbrance factor should be zero,
which would zero out the rental rate as well.
---------------------------------------------------------------------------
59. The Commission's practice has been to charge the fee schedule
rental rate for transmission line lands and to double this rate for
other project areas based on the theory that linear rights of way
represent a lesser encumbrance than do rights of way over other project
areas. Most commenters request that the Commission discontinue this
practice. The 1987 fee schedule was developed for linear rights of way
on Federal lands, which was based on a survey of market values for the
various types of land that the Forest Service and BLM had allowed to be
occupied by linear rights of way. When the Commission adopted BLM's
1987 fee schedule, it recognized that the values identified in the BLM
schedule were the ``best approximation'' available of the value of
lands used for transmission linear rights of way. Thus, it was
reasonable at that time for the Commission to assess transmission line
lands at this rate, but to double the rate for non-linear project areas
that involved a more comprehensive occupation of Federal lands than a
linear right of way. However, because the NASS Census provides a per-
acre value for lands generally, and not specifically for linear
sections of land, there is no compelling reason to double the
underlying value represented in the NASS Census for non-linear lands.
Therefore, we agree with commenters and propose to discontinue this
practice.
[[Page 72141]]
C. Rate of Return
60. The BLM fee schedule adopts a fixed rate of return of 5.27
percent, which is the most current 10-year average (1998-2008) of the
30-year and 20-year Treasury bond yield rate. This is a reduction from
the rate of return of 6.41 percent under the 1987 fee schedule, which
was the 1-year Treasury Securities ``Constant Maturity'' rate from June
30, 1986. The rate of return component used in the fee schedule formula
reflects the relationship of income to property value, as modified by
any adjustments to property value. BLM reviewed a number of appraisal
reports that indicated the rate of return for land can vary from seven
to twelve percent and is typically around ten percent. These rates take
into account certain risk considerations, and BLM chose to use a ``safe
rate of return,'' such as the prevailing rate on insured savings
accounts or guaranteed government securities. In its 2008 rule, BLM
explained that a 10-year average is more appropriate than a rate
selected from one point in time, and that a periodic adjustment of the
rate of return would lead to uncertainty in rental fees, which would
have a negative impact on utilities and customers and duplicate the
changes reflected in the GDP index.
61. SCE commented that the Commission should use the 30-year
Treasury bond rate rather than the 10-year average of the 30-year
Treasury bond yield rate because use of the actual 30-year rate is the
most accurate valuation of a long-range asset. While using the actual
30-year rate would be more accurate, we agree with BLM's rationale that
an annual adjustment of the rate of return would result in unnecessary
uncertainty with respect to rental rates. Therefore, the Commission
finds that BLM's use of the 5.27 percent fixed rate of return is
reasonable.
D. Annual Adjustment Factor
62. The BLM fee schedule includes an annual adjustment factor,
which is currently 1.9 percent. The annual adjustment factor allows the
rental rate to stay current with inflationary or deflationary trends.
In its 2008 rule, BLM explained that it will adjust the per-acre rent
each calendar year based on the average annual change in the IPD-GDP
for the 10-year period immediately preceding the year that the NASS
Census data becomes available. Thus, the IPD-GDP will change every ten
years. The annual adjustment factor is based on the average annual
change in the IPD-GDP for the 10-year period immediately preceding the
year (2004) that the 2002 NASS Census data became available. This
figure is 1.9 percent and will be applied for each calendar year
through 2015.
63. BLM will recalculate the annual index adjustment in 2014 based
on the average annual change in the IPD-GDP from 2004 to 2013 (the 10-
year period immediately preceding the year (2014) when the 2012 NASS
Census data will become available) and will apply it annually to the
fee schedule for years 2016 through 2025. The Commission proposes to
adopt BLM's decadal updates to the annual index adjustment.
IV. Regulatory Requirements
A. Information Collection Statement
64. The Office of Management and Budget (OMB) regulations require
OMB to approve certain information collection requirements imposed by
agency rule.\51\ The proposed regulations discussed above do not impose
or alter existing reporting or recordkeeping requirements on applicable
entities as defined by the Paperwork Reduction Act.\52\ As a result,
the Commission is not submitting this proposed rule to OMB for review
and approval.
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\51\ 5 CFR 1320.11 (2011).
\52\ 44 U.S.C. 3502(2)-(3) (2006).
---------------------------------------------------------------------------
B. Environmental Analysis
65. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\53\
Commission actions concerning annual charges are categorically exempted
from the preparation of an Environmental Assessment or an Environmental
Impact Statement.\54\
---------------------------------------------------------------------------
\53\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
\54\ 18 CFR 380.4(a)(11) (2011).
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C. Regulatory Flexibility Act
66. The Regulatory Flexibility Act of 1980 (RFA) \55\ generally
requires a description and analysis of final rules that will have a
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a proposed rule and that minimize
any significant economic impact on a substantial number of small
entities. The Small Business Administration's (SBA) Office of Size
Standards develops the numerical definition of a small business.\56\
The SBA has established a size standard for hydroelectric generators,
stating that a firm is small if, including its affiliates, it is
primarily engaged in the transmission, generation, and/or distribution
of electric energy for sale and its total electric output for the
preceding 12 months did not exceed four million megawatt hours.\57\
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\55\ 5 U.S.C. 601-612 (2006).
\56\ 13 CFR 121.101 (2011).
\57\ 13 CFR 121.201, Sector 22, Utilities & n.1 (2011).
---------------------------------------------------------------------------
67. Section 10(e)(1) of the FPA requires that the Commission fix a
reasonable annual charge for the use, occupancy, and enjoyment of
Federal lands by hydropower licensees.\58\ The Commission has issued
253 licenses that occupy Federal lands to 135 discrete licensees, who
will be impacted by the proposed rule. The proposed rule adopts a
methodology promulgated by BLM, based on the NASS Census data, to
determine the annual charge for the use of Federal lands. The
methodology for assessing this annual charge under the existing rule is
based on land values from 1987, whereas the proposed rule incorporates
current land values, and would update those values every five years. As
a result, some of the 135 licensees may experience a one-time increase
in their annual charge for the use of Federal lands.
---------------------------------------------------------------------------
\58\ 16 U.S.C. 803(e)(1) (2006).
---------------------------------------------------------------------------
68. Nevertheless, based on a review of the 135 licensees with
Federal lands that will be impacted by the proposed rule, we estimate
that less than ten percent are small entities under the SBA definition.
The 135 licensees represent utilities, cities, and private and public
companies in 30 states or territories. Many of the utilities which may
seem to be under the four million megawatt hours per year threshold are
also engaged in electricity production through other forms of
generation, such as coal or natural gas, or also provide other utility
services such as natural gas or water delivery. Similarly, many
licensees that are small hydropower generators are affiliated with a
larger entity or entities in other industries. Therefore, we estimate
that less than ten percent of the impacted licensees are actually
small, unaffiliated entities who are primarily engaged in hydropower
generation and whose total electrical output through transmission,
generation, or distribution is less than four million megawatt hours
per year.
69. Any impact on these small entities would not be significant.
Under the proposed rule there may be a one-time increase for some
licensees in the annual charge for the use of Federal lands, but
because the new methodology for calculating the annual charge will be
updated every five years, any future
[[Page 72142]]
increases or decreases will be incremental. In addition, small,
unaffiliated entities generally occupy less Federal lands than larger
projects that generate more power. Therefore, as a class of licensees,
small entities would be less impacted by an annual charge for the use
of Federal lands. Furthermore, this proposed rule does not incur any
additional compliance or recordkeeping costs on any licensees occupying
Federal lands. Consequently, the proposed rule should not impose a
significant economic impact on small entities.
70. Based on this understanding, the Commission certifies that the
proposed rule will not have a significant economic impact on a
substantial number of small entities. Accordingly, no regulatory
flexibility analysis is required.
D. Comment Procedures
71. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due January 6, 2012. Comments must refer to
Docket No. RM11-6-000, and must include the commenter's name, the
organization they represent, if applicable, and their address in their
comments.
72. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
73. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
74. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.
E. Document Availability
75. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
76. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
77. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-(866) 208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
List of Subjects in 18 CFR Part 11
Dams, Electric power, Indians-lands, Public lands, Reporting and
recordkeeping requirements.
By direction of the Commission. Commissioner Spitzer is not
participating.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
In consideration of the foregoing, the Commission proposes to amend
Part 11, Chapter I, Title 18, Code of Federal Regulations, as follows:
PART 11--ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT
1. The authority citation for part 11 continues to read as follows:
Authority: 16 U.S.C. 791a-825r; 42 U.S.C. 7101-7352.
Sec. 11.2 [Amended]
2. Amend Sec. 11.2 by deleting paragraph (a).
3. Amend Sec. 11.2 by revising paragraph (b) to read as follows:
(b) Pending further order of the Commission, annual charges for the
use of government lands will be payable in advance, and will be set on
the basis of an annual schedule of rental fees for linear rights-of-way
as set out in Appendix A of this part. Annual charges for transmission
line rights of way and other project lands will be equal to the per-
acre charges established by the above schedule. The Commission, by its
designee the Executive Director, will update its fee schedule to
reflect changes in land values established by the U.S. National
Agricultural Statistics Service Census, and to reflect changes in the
annual adjustment factor, as calculated by the U.S. Bureau of Land
Management. The Executive Director will publish the updated fee
schedule in the Federal Register.
4. Amend Sec. 11.2 by deleting existing paragraphs (c)(1) and
(c)(2).
5. Amend Sec. 11.2 by redesignating paragraph (b) as new paragraph
(a), and by redesignating paragraphs (d) and (e) as new paragraphs (b)
and (c), respectively.
[FR Doc. 2011-30110 Filed 11-21-11; 8:45 am]
BILLING CODE 6717-01-P