GAO report: Feds losing track of renewable energy bonds

The agency charged with overseeing renewable energy infrastructure on federal lands is inconsistent in collecting and overseeing the bonds it holds for those projects, the Government Accountability Office (GAO) concluded in a report released Tuesday. 

The Bureau of Land Management requires operators of solar and wind projects on federal land to obtain bonds covering the cost of dismantling the projects when they terminate, a process called “reclamation.” If the operator cannot reclaim the whole project on its own, the bonds would cover the cost of doing so, though that has never happened.

{mosads}In its report, the GAO said the BLM has “different policies for the bonding of wind and solar projects on federal land” and its oversight of the bonds is inconsistent, which could leave the government footing the bill for reclamation.

The GAO found that BLM has about $100 million in bonds for wind and solar projects on federal land, but that it has different standards for the two projects. There is no minimum bond amount for solar projects under a 2010 agency policy, for example, even though there is one for wind projects.

BLM proposed regulations in September to spur the development of renewable energy projects on federal land, and it included steps to standardize the bond requirements within that rule. 

The GAO said about one-third of the projects BLM has authorized were under-bonded by as much as $15 million total, “leaving the federal government potentially at financial risk if developers do not complete reclamation.”

The GAO also said the agency’s system for tracking its bonds is unreliable and that “information was missing or inaccurate, or had not been updated.” The GAO said BLM “does not adequately ensure that wind and solar bond instruments are properly secured, handled, and stored,” and that at one field office a staffer accidentally shredded several of its bond documents. 

“Without policies to document decisions and properly secure bonds, and steps to ensure bond adequacy reviews, BLM has limited assurance that bonds in place will be adequate to cover reclamation,” GAO wrote in its report.

The report comes ahead of a Wednesday House Natural Resources subcommittee hearing on the agency’s bonding process. Steven Ellis, BLM’s deputy director for operations, is scheduled to testify.

In a statement Tuesday, committee chairman Rob Bishop (R-Utah) said the report “is part of a broader problem and emblematic of a bigger issue of stunning mismanagement that is plaguing the bureau.”