§3007 Renewable Energy Fees on Federal Land

Summary

Federal agencies must collect yearly rent and fees from companies that hold rights to build wind or solar projects on public land. Key terms: Annual Adjustment Factor = 3 percent. Encumbrance Factor = 100% for solar, and at least 10% for wind as set by the Secretary. Per-Acre Rate = the State’s average pasture rent over the five calendar years before the right-of-way is issued or renewed. Project = the system defined in the regulations. Public land = public lands plus National Forest System land. Right-of-way = the land-use permit. Secretary = the Interior Secretary for Interior lands, and the Agriculture Secretary for National Forest lands. Each year, by January 1, the holder must pay an acreage rent calculated by multiplying the Per-Acre Rate (A) by the Encumbrance Factor (B) and by (1 + Annual Adjustment Factor (C)) raised to the power of the year number in the permit (D): Acreage rent = A × B × (1 + C)^D. Rent is owed until the project begins producing energy. There is also an annual capacity fee equal to the larger of the acreage rent or 3.9% of gross electricity sales. Wind projects may apply for a 10% reduction if at least 25% of the area is used for other activities year-round; any approval applied late takes effect the next year and past payments are not refunded. A late payment charge may be added after 15 days, and the right-of-way can be ended if payment is not made within 90 days.