On Tuesday, Secretary of the Interior Ken Salazaar announced the most significant changes (http://tinyurl.com/bve4hyf) in federal management of Indian lands in 50 years. These new rules seek to improve what has been seen as an extremely cumbersome Bureau of Indian Affairs process for getting leases of these lands approved. Significantly, one of the affected categories of land leases are those for renewable energy project.
Under the new rules, the BIA will have 60 days to approve a project, before it is automatically approved. This is important, as tribal leaders look forward to economic growth that could come from investment in renewable energy projects. Tribal lands make up 5% of the land area of the United States, but 10% of it’s total renewable energy resource.
An example of the kind of deal these new rules streamline, is the recently announced power purchase agreement between the Los Angeles Department of Public Works (DPW) and the K Road Moapa solar project (http://tinyurl.com/buvzesp). A solar power purchase agreement usually involves a project sponsor who finances the construction of the project, a landholder who leases the land to the project, and an offtaker, who make the investment worthwhile by contracting to purchase the power over the projects lifetime. DPW will purchase solar electricity over 25 years, helping to fulfill part of their renewable requirement under California’s aggressive Renewable Portfolio Standard (RPS). At peak capacity, the 250 MW system could provide up to 4% of Los Angeles’ power. An added benefit for the Moapa is that the solar plant will hasten the possible shutdown of a nearby coal fired plant, which has been the implicated in pollution related health complaints.