BLM Announces Solar Energy Rental Rates

June 10, 2010 - From BLM Press Release.

^Harper Lake SEGS solar thermal power plant, northwest of Barstow, California.

Long after the Solar Gold Rush has claimed tens of thousands of acres of public land managed by the Bureau of Land Management, the agency has finally determined the lease rate that solar companies will pay to rent the land they plan to build on. The rates are not high compared to buying private land, and provides an explanation for why so many companies resist private land alternatives to scraping pristine desert ecosystems. But the question remains, is the public getting a raw deal for scars that will last on the land long after these projects are decommissioned?

The BLM is required by the Federal Land Policy and Management Act (FLPMA) to collect an annual rental payment for right-of-way authorizations on the public lands. FLPMA also requires that rents for these authorizations reflect the fair market value for the use of the public lands.


The solar rental schedule developed from this review and analysis includes two fees:

1. "Base Rent" for the acreage of public land included within the right-of-way authorization.

The “Base Rent” will be paid upon the date of issuance of the right-of-way authorization and will be paid on a continuing annual basis during the term of the authorization. The “Base Rent” is a per-acre rental fee that varies from county to county, based on the different average rural land values for each county published by the National Agricultural Statistics Service (www.nass.usda.gov/index.asp).

California Calendar Year 2010 Base Rent Fees:

Nevada:

Arizona:

Colorado:

As an example, the Base Fee rent for a Clark County, Nevada 4,000-acre solar project would be $753,360 (4,000 acres X $188.34 per acre).

2. "Megawatt (MW) Capacity Fee" based on the MW-size of the project.

The “MW Capacity Fee” will be paid on an annual basis upon the start of generation of electricity from a facility, based on the MW-size of that facility. No “MW Capacity Fee” will be due until a facility is in operation. If a Phase 1 of a project becomes operational before other phases, then the MW Capacity Fee will be approved for that Phase 1 only. A 5-year implementation schedule will allow "testing" of the facility: 20% of the MW Capacity Fee will be charged the first year, 40% the second year, 60% the third year, 80% the fourth year, and 100% the fifth year and following years.

This fee would not apply to ROWs for associated transmission lines, pipelines, roads, and wells. Fees are calculated as follows:

Photovoltaic - $5,256 per MW per year. Calculated as (MW) X (8,760 hours per year) X (20% capacity factor) X (5% Federal bond yield) X ($0.06 average electricity price per kilowatt-hour) X (1,000 kilowatts per MW).

Concentrated solar thermal - $6.570 per year. The same formula is used except for a capacity factor of 25%.

Concentrated solar thermal with storage - $7.884 per year. The same formula is used except for a capacity factor of 30%.

As an example, a 400-MW photovoltaic power plant fee would be $2,102,400 = (400 MW X $5,256 per MW). Source: BLM Instruction Memorandum (838 kb pdf).

Full Speed Ahead

Over 200 solar Right-of-Way applications have been submitted to BLM.

“Publishing this rental schedule moves our nation closer to creating a new energy frontier – one that relies more on renewable, clean energy sources,” BLM Director Bob Abbey said. “Today, we are providing the solar energy industry the level of certainty it needs about the costs associated with projects on the public lands and ensuring a fair return to American taxpayers for the use of their public lands.”

^Copper Mountain thin-film photovoltaic plant, Boulder City Green Zone, Nevada.

 

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