Trump admin slaps solar, wind operators with retroactive
rent bills
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[May 18, 2020] By
Nichola Groom
(Reuters) - The Trump administration has
ended a two-year rent holiday for solar and wind projects operating on
federal lands, handing them whopping retroactive bills at a time the
industry is struggling with the fallout of the coronavirus outbreak,
according to company officials.
The move represents a multi-million-dollar hit to an industry that has
already seen installation projects canceled or delayed by the global
health crisis, which has cut investment and dimmed the demand outlook
for power.
It also clashes with broader government efforts in the United States to
shield companies from the worst of the economic turmoil through federal
loans, waived fees, tax breaks and trimmed regulatory enforcement.
U.S. power plant owner Avangrid Inc <AGR.N>, majority owned by Spain's
Iberdrola <IBE.MC>, received a bill for more than $3 million for two
years of rent on its 131-megawatt Tule wind project on federal land near
San Diego, according to spokesman Paul Copleman.
Officials at two other renewable projects also confirmed they had
received retroactive rent bills from the federal government but asked
not to be named discussing the issue as the industry continues to lobby
the government for support to weather the downturn.
Some 96 utility-scale solar, wind and geothermal projects operate on
lands run by the Interior Department’s Bureau of Land Management,
according to The Wilderness Society and Yale Center for Business and the
Environment.
The bills came as a surprise, said Shannon Eddy, executive director of
the Large-scale Solar Association, a trade group for owners of big solar
farms. But she said some companies had likely set funds aside in case
the bills ever came.
The Interior Department had stopped charging the rents at the end of
2018 to review company complaints that former President Barack Obama’s
administration had increased them too much, making them uncompetitive
with rents on private property.
The Interior Department declined repeated requests to comment on the
outcome of that review, or the issuance of the retroactive rent bills.
A budget document on the Interior Department’s web site shows it expects
to collect $50 million in rent fees for wind and solar projects in 2020,
up from $1.1 million in 2019 and $21.6 million in 2018.
The rent bills landed around the same time the Bureau of Land Management
notified oil and gas drillers on federal lands of the procedures they
would need to follow to get relief from paying royalties amid an oil
market slump.
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A wind farm is shown in Movave, California, U.S., November 8, 2019.
REUTERS/Mike Blake/File Photo
The administration has also expanded the drilling industry’s access to
economy-wide government lending facilities and is contemplating ways to pump
additional billions of dollars into the sector through tax breaks.
The Nuclear Regulatory Commission, meanwhile, recently agreed to a 90-day fee
deferral for nuclear power plant owners due to economic disruptions caused by
the pandemic.
Renewable companies are also facing significant headwinds from the coronavirus.
Project delays have threatened their ability to tap lucrative federal subsidies
needed to compete with fossil fuels and cut the growth outlook for U.S. wind and
solar installations by 5% and 10%, respectively, this year, according to the
Energy Information Administration.
The industry likes to site its projects on federal lands, particularly near
large Western population centers such as Southern California, because they offer
ample undeveloped space.
Other owners of wind and solar projects on BLM lands include NextEra Energy Inc
<NEE.N>, NRG Energy Inc <NRG.N>, Clearway Energy Inc <CWENa.N> and Southern Co <SO.N>.
Officials from NRG, Clearway and Southern declined to comment and NextEra did
not reply to requests for comment.
BLM increased the annual amounts renewable energy companies pay in rent during
the final weeks of the Obama administration. The rents are calculated based on
acreage, as well as the amount of power and the type of technology being used to
generate it.
Many Western lawmakers, including Wyoming Senator John Barrasso and Alaska
Senator Lisa Murkowski, both Republicans, have sided with the wind and solar
industries in opposing the higher rents.
(Editing by Richard Valdmanis and Marguerita Choy)
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