[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Proposed Rules]
[Pages 81906-81908]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33429]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 2800

[WO-300-1430-PQ]
RIN 1004-AE24


Advance Notice of Proposed Rulemaking Regarding a Competitive 
Process for Leasing Public Lands for Solar and Wind Energy Development

AGENCY: Bureau of Land Management.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Bureau of Land Management (BLM) is issuing this Advance 
Notice of Proposed Rulemaking (ANPR) to solicit public comments and 
suggestions that will be used in preparing a proposed rule to establish 
a competitive process for leasing public lands for solar and wind 
energy development.

DATES: The BLM will accept comments and suggestions on the ANPR until 
February 27, 2012.

ADDRESSES: You may submit comments by any of the following methods:
    Mail: Director (630) Bureau of Land Management, U.S. Department of 
the Interior, Room 2134LM, 1849 C St. NW., Washington, DC 20240, 
Attention: 1004-AE24.
    Personal or messenger delivery: U.S. Department of the Interior, 
Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: 
Regulatory Affairs, Washington, DC 20003.
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions at this Web site.

FOR FURTHER INFORMATION CONTACT: Ray Brady at (202) 912-7312 or Linda 
Resseguie at (202) 912-7337 regarding the substance of this ANPR. For 
information on procedural matters or the rulemaking process generally, 
you may contact Joseph Berry at (202) 912-7442. Persons who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-(800) 877-8339, 24 hours a day, 
seven days a week to contact the above individuals.

SUPPLEMENTARY INFORMATION: In order to foster the growth and 
development of the renewable energy sector of the economy and to 
administer the public lands in a more orderly manner, the BLM believes 
that a rulemaking is needed to enhance the Agency's ability to 
establish an efficient competitive process for issuing Right-of-Way 
(ROW) leases for solar and wind energy development that is based upon 
the Agency's authority under the Federal Land Policy and Management Act 
(FLPMA) (43 U.S.C. 1701 et seq.).
    The BLM believes that a competitive process would enhance its 
ability to capture fair market value for the use of public lands, as 
required under Section 504(g) of FLPMA (43 U.S.C. 1764(g)), and ensure 
fair access to leasing opportunities for renewable energy development. 
This rulemaking would establish competitive bidding procedures for 
lands within designated solar and wind energy development leasing 
areas, define qualifications for potential bidders, and structure the 
financial arrangements necessary for the process.
    The purpose of this ANPR is to solicit public comments that will be 
helpful to the BLM in preparing a subsequent proposed rule, as well as 
to gather the input that is needed to develop an efficient competitive 
process for ROW leasing. The scope of the proposed rule will include 
existing BLM wind and solar policies and guidelines, and terms and 
conditions of lease authorizations as well as the competitive process.
    To help the BLM prepare the proposed rule, the Agency is seeking 
public comments and suggestions on the scope of the competitive 
process. See section III of this ANPR for a list of specific questions 
relating to this topic.

I. Public Comment Procedures

Commenting on the ANPR

    Written comments and suggestions should:

--Be specific;
--Explain the reasoning behind your comments and suggestions; and
--Address the issues outlined in the ANPR.

    For comments and suggestions to be the most useful, and most likely 
to inform decisions on the content of the proposed rule, they should:

--Be substantive; and
--Facilitate the development and implementation of an environmentally 
and fiscally responsible process for leasing public lands for solar and 
wind energy development.

    The BLM is particularly interested in receiving comments and 
suggestions in response to the questions listed in

[[Page 81907]]

section III of this ANPR. These specific questions will focus the 
feedback on matters most in need of public input for the development of 
the regulations. This public input will assist the BLM in creating a 
fair and workable competitive process. All communications on these 
topics should refer to RIN 1004-AE24 and may be submitted by the 
methods listed under the ADDRESSES section of this ANPR.
    Comments received after the close of the comment period (see DATES 
section of this ANPR) may not necessarily be considered or included in 
the Administrative Record for the proposed rule. Likewise, comments 
delivered to an address other than those listed under the ADDRESSES 
section of this ANPR may not necessarily be considered or included in 
the Administrative Record for the proposed rule.

Reviewing Comments Submitted by Others

    Comments, including names and street addresses of respondents, will 
be available for public review at the personal or messenger delivery 
address listed under ADDRESSES, during regular business hours (7:45 
a.m. to 4:15 p.m.), Monday through Friday, except holidays. Individual 
respondents may request confidentiality, which will be honored to the 
extent allowable by law. Those wishing to withhold their name or 
address (except for the city or town) must state this request 
prominently at the beginning of their comment, and state a reason for 
the request. Submissions from organizations or businesses, and from 
individuals identifying themselves as representatives or officials of 
organizations or businesses, will be made available for public 
inspection in their entirety.

II. Background

    Congress has directed the Department of the Interior (Department) 
to facilitate the development of renewable energy resources. In Section 
211 of the Energy Policy Act of 2005 (EPAct), Congress declared that 
before 2015, the Secretary of the Interior (Secretary) should seek to 
have approved non-hydropower renewable energy projects (solar, wind, 
and geothermal) on public lands with a total combined generation 
capacity of at least 10,000 megawatts of electricity.
    Since passage of the EPAct, the Secretary has issued several orders 
that emphasize the importance of renewable energy development on public 
lands and the Department's efforts to achieve the goal Congress 
established in Section 211 of the EPAct. The most recent Secretarial 
Order 3285A1, ``Renewable Energy Development by the Department of the 
Interior,'' was issued in February 2010 by Secretary Ken Salazar. The 
Order established the development of renewable energy on public lands 
as one of the Department's highest priorities.
    The FLPMA provides comprehensive authority and guidelines 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'' (43 U.S.C. 1701(a)(7)). One of the principal 
or major uses defined by FLPMA includes the issuance of ROWs on public 
lands. The FLPMA also mandates that ``the United States receive fair 
market value of the use of the public lands and their resources unless 
otherwise provided for by statute'' (43 U.S.C. 1701(a)(9)).

Competitive Right-of-Way Procedures

    Title V of FLPMA authorizes the BLM to issue ROWs for electric 
generation systems on the public lands (including solar and wind energy 
generation systems). Title V includes the authority to issue a ROW 
easement, lease, permit, or license as defined by Section 103(f) of 
FLPMA.
    In June 2005, the BLM completed the Final Programmatic 
Environmental Impact Statement (PEIS) on Wind Energy Development 
relating to the authorization of wind energy projects on public lands. 
This Final PEIS provided an analysis of the environmental impact of the 
development of wind energy projects on public lands in the West and 
identified approximately 20.6 million acres of BLM public lands with 
wind energy development potential. However, the Final PEIS did not 
identify wind energy development leasing areas.
    On December 17, 2010, the Department of the Interior and the 
Department of Energy as co-lead agencies published the Draft PEIS for 
Solar Energy Development in Six Southwestern States. The Draft Solar 
PEIS assessed the environmental, social, and economic impacts 
associated with solar energy development on public lands in Arizona, 
California, Colorado, Nevada, New Mexico, and Utah (http://solareis.anl.gov). Under the Preferred Alternative identified in the 
Draft Solar PEIS, the BLM would establish Solar Energy Zones (SEZs), 
which are areas that have been identified as the most appropriate for 
development because they contain the highest solar energy potential and 
fewest environmental and resource conflicts. The BLM included in the 
Draft Solar PEIS an option to offer lands within SEZs on a competitive 
basis. This option is further discussed in the Supplement to the Draft 
Solar PEIS published on October 28, 2011 (http://solareis.anl.gov). The 
designation of any SEZs for solar development would be made final upon 
the approval of a Record of Decision, following completion of a final 
EIS. Additional solar energy development leasing areas could also be 
identified and designated in the future through other BLM land use 
planning efforts.
    The FLPMA does not limit the term of a solar or wind energy ROW 
lease. In accordance with Title V of FLPMA and the BLM's existing ROW 
regulations, a solar or wind energy ROW authorization is limited to a 
``reasonable term'' (43 U.S.C. 1764(b) and 43 CFR 2805.11(b)). The 
regulations further articulate a number of factors that the BLM 
considers in determining a reasonable term, including the overall costs 
and useful life of the project. Most major ROW authorizations also 
include provisions for renewal of the authorization consistent with the 
provisions of the existing regulations (43 CFR 2805.15(d) and 2807.22). 
The BLM has established policies related to terms for current solar and 
wind energy authorizations, but it believes a rule would help further 
clarify the term of solar and wind energy leasing.
    Due to the substantial investments required for typical solar or 
wind energy projects and the projected life of these facilities 
(generally in excess of 20 years), it is in the public interest to 
provide for a term for solar or wind energy ROW leases that would allow 
a reasonable period of time for construction, development, and 
continued operations of sufficient duration to make projects 
economically feasible. In addition, many Power Purchase Agreements 
(PPAs) for the purchase of electricity generated from solar or wind 
energy facilities are for terms of 20 years or longer. The BLM 
currently issues all solar energy ROW authorizations for a term not to 
exceed 30 years. A wind energy development authorization is generally 
for a term of 25-30 years.
    The existing ROW regulations (43 CFR 2804.23) provide authority for 
conducting a competitive process but only to resolve competing 
applications for the same facility or system. For public lands outside 
of designated solar or wind energy development leasing areas, the BLM 
expects to continue to use this existing regulatory authority.
    The BLM believes a rulemaking would help to establish a more 
comprehensive and efficient competitive process for public lands with 
designated solar and wind energy development leasing areas. This

[[Page 81908]]

rulemaking would provide the authority to offer lands through a 
nomination and competitive process instead of simply through an 
application process. The new regulations could include the following 
provisions for leasing within designated solar or wind energy 
development leasing areas.
     Call for Nominations. A call for nominations would be 
published to solicit expressions of interest for parcels of land within 
designated solar or wind energy development leasing areas. Nomination 
of a specific parcel would require payment of a nomination fee to be 
determined by the regulations. (Section 304 of FLPMA provides authority 
to the BLM to establish reasonable filing fees.)
     Review of Nominations. The BLM would review the 
nominations to identify parcels of land within designated solar or wind 
energy development leasing areas that are suitable to be offered 
competitively and then complete the work necessary, including the 
National Environmental Policy Act (NEPA) and other required reviews, to 
prepare the selected parcels for the competitive offer. At this lease 
stage, the NEPA analysis for parcels would likely tier to the Final 
Solar PEIS, once it is published, and the BLM's 2005 Wind Energy 
Development PEIS. Because the 2005 Wind Energy Development PEIS and 
associated Record of Decision did not identify wind energy development 
leasing areas, the BLM would designate these areas before considering 
nominations for a competitive wind energy ROW leasing process.
     Notice of Competitive Offer. A notice would be published 
at least 30 days prior to the competitive offer. The notice would 
include a legal description of the lands involved, the process for 
conducting the competitive offer, a minimum bid requirement, the 
qualifications for potential bidders, and the due diligence 
requirements for the successful bidder to submit a Plan of Development 
(POD) for the lands involved in the competitive offer. The POD defines 
the specific development plans of the lease holder.
     Bonus Bid Competitive Process or Other Competitive 
Procedures. A variety of competitive bid procedures could be defined by 
the new regulations. These competitive procedures could include sealed 
bids, oral auctions or ascending bidding, two-stage (combination of 
sealed and oral auctions) bidding, or multiple-factor bidding methods. 
Multiple-factor bidding could include monetary or nonmonetary factors 
and could be structured similarly to the method that the Bureau of 
Ocean Energy Management provides for offshore wind leasing (30 CFR 
285.220). Multiple-factor variables for competitive wind and solar 
could include, but are not limited to, qualified bidder or other fees, 
variable cash bonuses, technical merit of the applicant, timeliness, 
financing and economics, environmental impact, and public benefits. 
Bonus bids would be deposited into the U.S. Treasury. The bonus bid 
from the successful bidder would be nonrefundable. All other bids would 
be returned. The new regulations could define a fee structure and 
determine whether particular fees might be deposited into the Treasury 
or be used to reimburse the BLM for administrative and other costs.
     Issuance of Competitive ROW Leases. A ROW lease would be 
issued to the successful bidder. The successful bidder would be 
required to submit a POD within the timeframes specified in the Notice 
of Competitive Offer and to pay cost recovery fees for review and 
approval of the POD. The review and approval process for the POD would 
require compliance with the NEPA and other Federal laws and 
regulations.
     Administration of Competitive ROW Leases. To reduce 
uncertainty about future changes in the terms and conditions of the 
lease, the competitive ROW lease could be a 30-year fixed-term lease, 
with specific terms and conditions, and be available for renewal.
    In order to facilitate the efficient development of solar and wind 
energy within designated energy development leasing areas, the BLM 
would include a requirement in each ROW lease that the holder submit a 
POD within a specified period of time and begin construction within the 
approved timeframes. Each ROW lease would also include terms and 
conditions requiring the holder to maintain all facilities in 
accordance with the design standards in the approved POD. There are no 
specific provisions in the existing regulations regarding such diligent 
development requirements and the BLM believes a rule would help further 
define the due diligence development requirements for competitive solar 
and wind energy leases.
    The BLM also would require that a minimum performance bond be 
provided for all competitive solar and wind energy ROW leases to ensure 
compliance with the provisions of the regulations and the terms and 
conditions of the lease. The BLM believes a rule would be appropriate 
for defining the performance bonding requirements for competitive solar 
and wind energy leases.

III. Description of the Information Requested

    The BLM is particularly interested in receiving comments on the 
following questions relating to regulations for a competitive process 
for solar and wind energy development on the public lands:
    1. How should a competitive process be structured for leasing lands 
within designated solar or wind energy development leasing areas?
    2. Should a competitive leasing process be implemented for public 
lands outside of designated solar or wind energy development leasing 
areas? If so, how should such a competitive leasing process be 
structured?
    3. What competitive bidding procedures should the BLM adopt?
    4. What is the appropriate term for a competitive solar energy ROW 
lease?
    5. What is the appropriate term for a competitive wind energy ROW 
lease?
    6. Should nomination fees be established for the competitive 
process? If so, how should the fees be determined?
    7. How should the bidding process for competitive solar and wind 
energy ROW leases be structured to ensure receipt of fair market value?
    8. Should a standard performance bond be required for competitive 
solar and wind energy ROW leases and how should the bond amount be 
determined?
    9. What diligent development requirements should be included in 
competitive solar and wind energy ROW leases?
    The BLM is also interested in receiving any other comments 
regarding the content and structure of the competitive process for 
solar and wind energy development. Because this discussion is 
specifically focused on the development of the competitive process, 
comments are not being requested regarding solar or wind energy 
environmental issues.

Marcilynn A. Burke,
Acting Assistant Secretary of the Interior, Land and Minerals 
Management.
[FR Doc. 2011-33429 Filed 12-28-11; 8:45 am]
BILLING CODE 4310-84-P