Bureau of Land Management Solar Energy Program Western Solar Plan
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Due Diligence—Applicant/Lease Holder Qualifications

As part of a solar energy right-of-way (ROW) application or ROW lease, applicants or lease holders must include information on their company's financial and technical capability to construct, operate, maintain, and decommission the project.

The ROW regulations (43 CFR 2804.12(a)(5)) require all solar energy applicants or lease holders to include information on the financial and technical capability of the company to construct, operate, maintain, and decommission the proposed solar energy facility. The regulations (43 CFR 2804.26(a)(5)) provide authority to the BLM to deny any application or suspend or terminate a lease for which the applicant cannot demonstrate the technical or financial capability to construct the project or operate the facilities within the ROW.

The ROW regulations set forth the qualifications that an individual, business, or government entity must possess in order to hold a ROW authorization (grant or lease), including the requirement that the potential grantee be technically and financially able to construct, operate, maintain, and decommission the use of the public lands covered by the authorization (43 CFR 2803.10(b) and 2804.12(a)(5)). In carrying out its obligation to limit ROW authorizations to qualified individuals or entities and to prevent such individuals or entities from holding ROW authorizations merely for the purposes of speculating, controlling, or hindering development on the public lands, the BLM will focus on ensuring that the applicant or lease holder meets the qualification requirements in the regulations.

For ROW grants, the BLM will determine the technical and financial capabilities of the applicant upon receipt of a completed ROW application. For ROW leases, the BLM will determine the technical and financial capabilities of the bidder from a competitive offer upon receipt of a complete competitive bid certification form. The BLM will also review and evaluate technical and financial capabilities as part of the review of any subsequent Plan of Development (POD) for a ROW grant or lease. Further information on the review and evaluation of technical and financial capabilities of ROW applicants and bidders is found in IM 2017-099 issued on September 14, 2017.

In ensuring that an applicant or lease holder meets the regulatory requirement to demonstrate its technical and financial capability to construct, operate, maintain, and decommission the proposed solar energy facility (43 CFR 2803.10(b) and 43 CFR 2804.12(a)(5)), the BLM will consider a variety of factors, including the following:

  1. Applicant or bidder qualifications can be demonstrated by international or domestic experience with utility-scale renewable energy projects on either Federal or nonfederal lands;
  2. The applicant or bidder should provide information on the availability of sufficient capitalization to carry out development, including the preliminary study phase of the project and the environmental review and clearance process; and
  3. Applicants or bidders in bankruptcy or with other financial difficulties would generally present financial risk and would be required to provide additional information regarding financial capability.

Failure to provide such additional information can be the basis for the BLM authorized officer to deny the application or suspend or terminate the lease. Further evidence of financial and technical capability can include conditional or confirmed loan guarantees or Power Purchase Agreements; interconnect agreements; third-party engineering, procurement, and construction contracts; and supply contracts with credible third-party vendors for the manufacture and/or supply of key components for the solar energy project facilities.

During the assessment of technical and financial capability, the BLM authorized officer should also inform applicants or lease holders that such requirements are continuous during the application process and during the term of any grant or lease, and the BLM may periodically seek confirmation of these requirements. The BLM authorized officer should also inform applicants and lease holders that such technical and financial capability is a condition of any ROW authorization, and failure to sustain technical and financial capability for the development of an approved project could be grounds for termination of the authorization. In addition, the BLM will evaluate the technical and financial capabilities for an assignee when a grant or lease is assigned or if there is a change in corporate control of a grant or lease.

Updated: 12/11/2017