Yes, there is language in the final approved Reconciliation Bill that changes the acreage rent and megawatt capacity fee for solar and wind energy right-of-way authorizations on public lands. The acreage rent calculations are basically the same as current regulations, so no big deal, and we support the language.
The big change is in the MW capacity fee which now provides for a “royalty” of 3.9 % of gross sales of electricity. This 3.9 % was a change from the earlier version that had a 4.85 % royalty. We have always supported a royalty provision, but FLPMA did not provide authority for a royalty. So this is good and in our minds is a very reasonable rate of return and is in the range of the complex formula that BLM previously used. The big change is that in the recent 2024 regulations the BLM had applied an 80% reduction in the fees to solar and wind energy authorizations for the first ten years of an authorization to encourage renewable energy development on the public lands. We had never supported that level of reduction and have no problem with this reasonable royalty rate.
All revenues from right-of-way authorizations currently go to the Treasury. We have always supported a revenue distribution authority and support the 25% distribution to State and 25% distribution to County.
I believe the section that repealed the right of the Secretary to lower fees for economic reasons was removed from the final version of the Bill that went back to the House for approval. I think the Senate parliamentarian ruled that this provision was not appropriate for a Reconciliation Bill.
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But where does the Secretary’s right to lower fees come from?
It was in Section 3103 of the Energy Act of 2020, which allowed BLM to include reductions to solar and wind energy fees in the regulations that were published in 2024. Initially the Reconciliation Bill proposed to repeal that Section of the Energy Act, but it was removed before the Senate sent it back to the House for final passage.
From the Energy Act of 2020
SEC. 3103. INCREASING ECONOMIC CERTAINTY.
13 (a) CONSIDERATIONS.—The Secretary may consider
14 acreage rental rates, capacity fees, and other recurring an15 nual fees in total when evaluating existing rates paid for 16 the use of Federal land by eligible projects.
17 (b) REDUCTIONS IN BASE RENTAL RATES.—The 18 Secretary may reduce acreage rental rates and capacity 19 fees, or both, for existing and new wind and solar author20 izations if the Secretary determines—
21 (1) that the existing rates—
22 (A) exceed fair market value;
23 (B) impose economic hardships;
24 (C) limit commercial interest in a competitive lease sale or right-of-way grant; or
1 (D) are not competitively priced compared
2 to other available land; or
3 (2) that a reduced rental rate or capacity fee is
4 necessary to promote the greatest use of wind and
5 solar energy resources.
I asked Ray why geothermal was not on this list..and it turns out..
The Geothermal Steam Act already provides that authority and the regulations at 43 CFR 3212.16 allows for the reduction, suspension, or waiver of geothermal lease royalty or rent.
So apparently the authority can be given to, or taken away from, the Secretary by Congress, but not in a reconciliation bill.
Below is the PLF’s general statement in their comments on the 2023 proposed regulations , which brings up the long-standing question of whether these kinds of facilities are best sited on public or private land.
There is immense value in continuing to support the responsible development of renewable energy resources on the public lands and providing financial incentives where necessary, consistent with the provisions of the Energy Act of 2020. Increased renewable energy development has many benefits, however, it is not without its own impacts and challenges, and poorly sited projects can threaten other important natural resource values, wildlife habitat, and cultural resources on the public lands. It may be more appropriate to site some renewable energy projects on non-federal lands than to provide financial incentives for projects on public lands that have potential resource conflicts and impacts. The PLF recommends that the BLM consider opportunities to limit financial incentives to only those lands that the BLM has identified through land use planning efforts as designated leasing areas or preferred development areas.
Below are the PLF recommendations from their position statement from April 2025:
1. The responsible development of solar energy projects, including projects with additional battery storage capacity, and wind energy projects on the public lands, with the support of Renewable Energy Coordination Offices to facilitate the permitting process, should be a high priority of the BLM and the Department of the Interior. Public lands with low natural or cultural resource conflicts, or on previously disturbed or mined lands, are more suitable for solar or wind energy development than are lands with high natural or cultural resource values.
2. SolarMapper and WindMapper data and geospatial tools, developed by DOE in collaboration with the BLM, should be maintained and updated to assist in the early identification of potential natural and cultural resource conflicts with solar and wind energy resources on the public lands. These mapping tools can assist in the early screening of proposed solar and wind energy projects and assist in the siting of projects with low natural and cultural resource conflicts.
3. The permitting of transmission line rights-of-way on the public lands should be streamlined, through upfront corridor land-use planning, to facilitate solar and wind energy development on both BLM-managed public lands and adjacent non-federal lands. Corridor planning efforts should be collaborative efforts that involve State, Tribal and industry partners. The approval of connected-action transmission line right-of-way authorizations on federal lands, to support development of solar and wind energy projects on adjacent non-federal lands, may also be more appropriate in some cases than development on public lands and should be tracked by the BLM and reported as accomplishments in meeting national renewable energy goals.
4. The PLF supports legislation that would provide authority for the distribution of revenues to States and Counties, a conservation fund to restore and protect habitats/resources and improve access to Federal lands, and to the U. S. Treasury. Legislation should also include a provision to establish an appropriate royalty for solar and wind energy authorizations to ensure a fair market value return for the use of public lands. These royalty revenues should also be shared as noted above.
5. The 2005 Wind Energy Programmatic EIS should be updated to identify public lands potentially suitable for wind energy development pursuant to the new solar and wind energy regulations issued in 2024. In addition, updated avoidance areas should be identified that are considered unsuitable for wind energy development based on new resources data, current land use plan decisions, and current policies.
6. The BLM should proceed with an effort to offer lands for competitive leasing in high priority suitable areas pursuant to the solar and wind energy regulations at 43 CFR Part 2809.10. This effort should be initiated with a call for nominations or expressions of interest.
7. Reclamation bonding is required by the regulations for all solar and wind energy authorizations and the BLM needs to ensure these bonds are periodically reviewed and are adequate to protect the interests of the Federal Government.
8. The BLM should consider the utilization of compensatory mitigation tools, as appropriate and consistent with land-use planning, to facilitate the reduction of landscape-scale resource impacts from solar and wind energy projects on the public lands. The DRECP land use plan in southern California is an example of collaboration in mitigation planning to support responsible renewable energy development.
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The big change is in the MW capacity fee which now provides for a “royalty” of 3.9 % of gross sales of electricity. This 3.9 % was a change from the earlier version that had a 4.85 % royalty. “We have always supported a royalty provision, but FLPMA did not provide authority for a royalty. So this is good and in our minds is a very reasonable rate of return and is in the range of the complex formula that BLM previously used. The big change is that in the recent 2024 regulations the BLM had applied an 80% reduction in the fees to solar and wind energy authorizations for the first ten years of an authorization to encourage renewable energy development on the public lands. We had never supported that level of reduction and have no problem with this reasonable royalty rate.”
That royalty rate should be applied to ALL Federal dams that generate electricity.
The resulting PILT payments can be split 25% between the county where the dam is located and 25% to counties in the watersheds affected by the dams.
In-lieu of payments the counties should have the right to take the “electricity” instead and use it for economic development or resale. That would help with building a infrastructure in rural counties.
That’s an interesting idea.. who would manage that.. FERC?
In the PNW it would be Corp of Engineers and Bonneville Power Authority. It would be the agencies with the facilities.
“Everybody” talks about how awful the dams are for local communities it just seems right to make amends with PILT payments.
This local community wants its dam and others want to get rid of it.
https://www.americaunwon.com/p/explosive-newly-revealed-2023-seismic
@Vladimir I agree that this is a great idea. I would be curious to see it pursued in a community benefit agreement for new energy development. This begs another question: what is the status of community benefit agreement requirements? Do they still exist?