Legislation would grant states revenue from clean-energy projects

Nevada could finally make some money off the dozens of giant solar arrays and wind farms planned for its deserts and mountain peaks if legislation introduced this week by Rep. Dean Heller and Senate Majority Leader Harry Reid passes.
The Clean Energy, Community Investment and Wildlife Conservation Act would change the system for acquiring federal land for solar and wind developments from revolving around rights of way, a process originally intended for multiple-use applications such as grazing, off-road racing and transmission corridors, to a competitive lease auction.
The legislation calls for revenue sharing with home states and counties and for money to be set aside to preserve and enhance wild land near the developments.  A similar system has been in place for the geothermal industry since 2007.  The proposal is extends the preservation zone to solar and wind and is being hailed by sportsmen’s groups, but is being panned by Nevada officials for not going far enough.
Under the Reid-Heller plan, solar and wind developers would have to bid for leases on parcels made available by the Bureau of Land Management (BLM) at an annual auction. The home state and county would each get 25 percent of the lease and royalty income over the project’s life. Another 15 percent would go toward funding BLM’s renewable energy offices, which process applications for developments, and the remaining 35 percent would go into a fund to aid habitat preservation and support recreational uses of nearby land.
The legislation would also protect the status of any renewable energy project that has a right-of-way application under BLM review or has completed paperwork to begin the review and public comment process required by the National Environmental Protection Act.
Those backing the legislation include Trout Unlimited, a conservation group dedicated to saving habitat and watersheds for sport fish.  Reid and Heller worked closely with Trout Unlimited and Nevada hunting clubs when amending previous proposals to include habitat conservation funds. Under the legislation, developers would still be required to set money aside to remediate the damage their projects do to the land if their developments are dismantled. The group says those provisions are essential for balancing renewable development and hunting and fishing opportunities on federal land.
State Energy Director Jim Groth says the congressmen’s intentions are excellent, but he doesn’t think the bill goes far enough. He wants to see Nevada become the world leader in renewable energy, particularly solar, because the industry would create much-needed jobs and give the state the economic diversification it has long needed.
But the state won’t benefit from renewable development unless it has a greater stake in it, Groth says. More than 80 percent of Nevada land is controlled by the federal government. This unfairly puts the state at the mercy of the federal government, Groth says.
He has asked Congress to give the state 3 million acres of the prime solar zones under federal jurisdiction so it can create renewable energy development and manufacturing corridors.  Groth says turning over the land to the state would allow it to match offers on manufacturing land being made by competitors such as Arizona.
But the feds show no sign of giving over the land, even if they are willing to share most of the revenue.  It’s an issue the Nevada congressional delegation has been trying to push through for years and at least the third time Nevada congressmen have proposed legislation that would extend royalties and lease income from all solar and wind projects to home states and counties.
Reid introduced in February 2009 the Clean Renewable Energy and Economic Recovery Act to extend the geothermal revenue-sharing scheme to solar and wind. When that legislation stalled, he and Sen. John Ensign introduced the Renewable Energy Permitting Act with the same provisions in May 2009. That bill, too, never made it to the Senate floor.
The latest bill is based on the terms of the American Solar Energy Pilot Leasing Act of 2010, which Reid and Heller introduced in June. That legislation sets aside an area of land in a BLM’s Solar Energy Study Areas in Lincoln County for a pilot of the lease auction and revenue-sharing plan.
The legislation calls for the Interior Department to select specific areas where the BLM will assess and review environmental conditions and determine which land ought to be leased.  The solar plots selected by the Interior secretary will likely all be within the 24 Solar Energy Study Areas, seven of which are in Nevada.
The concept of sending at least a portion of the revenue from energy projects to home states and counties comes from the money states receive from geothermal energy development. Because of the drilling, geothermal energy has historically been classified as a mineral resource. As such, the income from geothermal leases on federal land are shared among the federal, state and local governments. Half the income goes to the home state, 25 percent to the home county and 25 percent to the BLM.
Nevada has received about $26 million just from lease sales on geothermal parcels. Home counties have collectively received about $13 million. Those figures don’t include annual rent and royalties payments, which vary depending on a project’s stage of development and lease terms.
Under current law, Nevada and home counties would get nothing from wind and solar land leases or royalties. Because of differences in land value in rural counties across the country, the rental rates on BLM rights of way vary greatly, from $7.85 per acre in 2010 for Elko County to $3,138.86 per acre in Richmond County, N.Y., this year.
Most Nevada land, under existing rights-of-way leases, would be rented for less than $50 per acre in 2010, but spike in mining country. Rent in Storey County, for example, is $941.66 an acre this year while land in sun-rich Clark and Lincoln counties would be $94.17 and $15.69 an acre, respectively.
Under the proposed plan, the BLM would put the leases on the auction block, potentially raising the per-acre rent on the most valuable solar development sites significantly.
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