Document ID: FERC-2011-1788-0001
Agency: ferc
Document Type: Proposed Rule
Title: Annual Charges for Use of Government Lands
Posted Date: 2011-11-22T05:00Z

[Federal Register Volume 76, Number 225 (Tuesday, November 22, 2011)]
[Proposed Rules]
[Pages 72134-72142]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30110]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 11

[Docket No. RM11-6-000]

Annual Charges for Use of Government Lands

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Power Act requires hydropower licensees to 
recompense the United States for the use, occupancy, and enjoyment of 
its lands. The Commission assesses annual charges for the use of 
Federal lands through Part 11 of its regulations. The Commission is 
proposing to revise the methodology used to compute these annual 
charges. Under the proposed rule, the Commission would create a fee 
schedule based on the U.S. Bureau of Land Management's (BLM) 
methodology for calculating rental rates for linear rights of way. This 
methodology includes a land value per acre, an encumbrance factor, a 
rate of return, and an annual adjustment factor. The fee schedule would 
include all adjustments described in the BLM rule adopting this 
methodology, except the allocation of county land values into zones. In 
addition, the Commission proposes to eliminate its current practice of 
doubling the per-acre rental rate for non-transmission line lands.

DATES: Comments are due January 6, 2012.

ADDRESSES: Comments, identified by docket number, may be filed by the 
following methods:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT: 
Doug Foster, Office of the Executive Director, Federal Energy 
Regulatory Commission, 888 First Street NE., Washington, DC 20426, 
(202) 502-6118, doug.foster@ferc.gov.
Kimberly Ognisty, Office of General Counsel, Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, (202) 502-8565, 
kimberly.ognisty@ferc.gov.

SUPPLEMENTARY INFORMATION: 

Notice of Proposed Rulemaking

    November 17, 2011.

Table of Contents

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                                                               Paragraph
                                                                 Nos.
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I. Background...............................................           2
II. Comments on Notice of Inquiry...........................          21
III. Proposed Rule..........................................          44
    A. Per-Acre Land Value..................................          47
    B. Encumbrance Factor...................................          56
    C. Rate of Return.......................................          60
    D. Annual Adjustment Factor.............................          62
IV. Regulatory Requirements.................................          64
    A. Information Collection Statement.....................          64
    B. Environmental Analysis...............................          65

[[Page 72135]]

 
    C. Regulatory Flexibility Act...........................          66
    D. Comment Procedures...................................          71
    E. Document Availability................................          75
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    1. The Federal Power Act (FPA) requires licensees using Federal 
lands to recompense the United States for the use, occupancy, and 
enjoyment of its lands.\1\ The Commission has assessed this portion of 
annual charges at rental rates established by the U.S. Bureau of Land 
Management (BLM) (and adopted by the U.S. Forest Service), which are 
published annually in a fee schedule that identifies per-acre rental 
rates by state and county for linear rights of way. Under the proposed 
rule, the Commission would create a fee schedule based on the BLM 
methodology promulgated in 2008 for calculating rental rates for linear 
rights of way. This methodology includes a land value per acre, an 
encumbrance factor, a rate of return, and an annual adjustment factor. 
The Commission-created fee schedule would base county land values on 
average per-acre values from the National Agricultural Statistics 
Service (NASS) Census, and would not use the zone system adopted by the 
2008 BLM rule. All other adjustments to the formula components 
described in the BLM rule would apply to the Commission's creation of a 
fee schedule.\2\ In addition, the Commission proposes to eliminate its 
current practice of doubling the rental rate for non-transmission line 
lands.
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    \1\ 16 U.S.C. 803(e)(1) (2006).
    \2\ Update of Linear Right-of-Way Rent Schedule, 73 FR 65040 
(October 31, 2008) (codified at 43 CFR 2806.20-2806.23).
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I. Background

    2. Section 10(e)(1) of the Federal Power Act (FPA) requires 
Commission hydropower licensees using Federal lands to:

    pay to the United States reasonable annual charges in an amount 
to be fixed by the Commission * * * for recompensing [the United 
States] for the use, occupancy, and enjoyment of its lands or other 
property * * * and in fixing such charges the Commission shall seek 
to avoid increasing the price to the consumers of power by such 
charges, and any such charges may be adjusted from time to time by 
the Commission as conditions may require * * * .\3\
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    \3\ 16 U.S.C. 803(e)(1) (2006) (emphasis added). Section 
10(e)(1) also requires licensees to reimburse the United States for 
the costs of the administration of Part I of the FPA. Those charges 
are calculated and billed separately from the land use charges, and 
are not the subject of this proposed rule.

In other words, where hydropower licensees use and occupy Federal lands 
for project purposes, they must compensate the United States through 
payment of an annual fee, to be established by the Commission.\4\
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    \4\ Pursuant to FPA section 17(a), 16 U.S.C. 810(a) (2006), the 
fees collected for use of government lands are allocated as follows: 
12.5 percent is paid into the Treasury of the United States, 50 
percent is paid into the federal reclamation fund, and 37.5 percent 
is paid into the treasuries of the states in which particular 
projects are located. No part of the fees discussed in this proposed 
rule is used to fund the Commission's operations.
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    3. Over time, the Commission has adopted a number of methodologies 
to effectuate this statutory directive. This has included conducting 
project-by-project appraisals,\5\ charging a single national average 
land value per acre,\6\ and using a fee schedule for linear rights of 
way developed jointly by the BLM and Forest Service.\7\
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    \5\ See Revision of the Billing Procedures for Annual Charges 
for Administering Part I of the Federal Power Act and to the 
Methodology for Assessing Federal Land Use Charges, Order No. 469, 
FERC Stats. & Regs., Regulations Preambles ] 30,741, at 30,584 
(1987).
    \6\ Id. See also Order Prescribing Amendment to Section 11.21 of 
the Regulations Under the Federal Power Act, Order No. 560, 56 FPC 
3860 (1976).
    \7\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,584.
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    4. From 1937 to 1942, the Commission based annual charges for the 
use of Federal lands by hydropower licensees on individual land 
appraisals for each project.\8\ In 1942, the Commission rejected this 
approach in favor of a single national average per-acre land value 
because it determined that project-by-project appraisals were more 
costly to administer than the value collected in rent, the values for 
inundated lands would become distorted, the values could only be 
maintained with re-appraisals, and disputes over values may lead to 
costly litigation.\9\ Eventually, the Commission also rejected the use 
of a single national average per-acre land value because the Inspector 
General of the Department of Energy concluded that this methodology 
resulted in an under-collection of over $15 million per year due to the 
use of outdated land values.\10\
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    \8\ See 56 FPC 3860 at 3863.
    \9\ See 56 FPC 3860 at 3863-64.
    \10\ See Assessment of Charges under the Hydroelectric Program, 
DOE/IG Report No. 0219 (September 3, 1986); see also More Efforts 
Needed to Recover Costs and Increase Hydropower Charges, U.S. 
General Accounting Office Report No. RCED-87-12 (November 1986). The 
single national average land value per acre in 1942 was $50 per 
acre, and, by 1976, the value was $150 per acre. 56 FPC 3860.
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    5. In 1987, the Commission adopted use of a fee schedule developed 
by the BLM and Forest Service that identified per-acre rental rates by 
county for linear rights of way on Federal lands.\11\ BLM and Forest 
Service produced the fee schedule by taking a survey of market values 
by county for the various types of land that the agencies had allowed 
to be occupied by linear rights of way.\12\ The range of per-acre land 
values was divided into eight zones, and each zone value was pegged to 
the highest raw value within that zone.\13\ The rental rate in the fee 
schedule was calculated by multiplying the zone value by an encumbrance 
factor of 70 percent,\14\ a rate of return of 6.41 percent, and an 
annual inflation adjustment factor. The resulting fee schedule assigned 
one of eight rental rates to all counties.\15\
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    \11\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,584.
    \12\ 51 FR 44014 (Dec. 5, 1986). BLM explained that the value of 
timber had not been included, and that the values were not for urban 
or suburban residential areas, industrial parks, farms or orchards, 
recreation properties or other such types of land. The agencies 
tried to avoid using attractive public use areas such as lakeshores, 
streamsides, and scenic highways frontage.
    \13\ The per-acre zone values were $50, $100, $200, $300, $400, 
$500, $600, and $1000.
    \14\ The encumbrance factor adjusts the zone value to reflect 
the degree that a particular type of facility encumbers the right-
of-way area or excludes other types of land uses. If the encumbrance 
factor is 100 percent, the right-of-way facility (and its operation) 
is encumbering the right-of-way area to the exclusion of all other 
uses.
    \15\ The per-acre zone fee under the 1987 BLM fee schedule 
ranged from $2.24 to $44.87. By 2008, the per-acre zone fee under 
the 1987 BLM fee schedule, having been adjusted each year for 
inflation, ranged from $3.76 to $75.23.
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    6. BLM would use individual land appraisals to substitute for the 
fee schedule rental rate only if the resulting rent would be 
significantly higher than that produced by the schedule.\16\
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    \16\ 51 FR 44014 (Dec. 5, 1986). BLM would use individual 
appraisals only if it could be determined that sufficient area 
within a right of way would, at a minimum, exceed the zone value by 
a factor of ten and the expected return was sufficient to initiate a 
separate appraisal.
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    7. In adopting the 1987 BLM fee schedule, the Commission found that 
the methodology promulgated by BLM and Forest Service for linear rights 
of way was the ``best approximation

[[Page 72136]]

available of the value of lands used for transmission line rights-of-
way.'' \17\ Therefore, the Commission assessed the schedule rate for 
transmission line rights of way on Federal lands, and doubled this rate 
for other project works on Federal lands (e.g., dams, powerhouses, 
reservoirs) because, historically, appraisers had determined that the 
market value of transmission line rights of way is roughly half of the 
market value of other land.\18\
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    \17\ Order No. 469, FERC Stats. & Regs. ] 30,741 at 30,588 
(emphasis added).
    \18\ Id. at 30,589.
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    8. In the 1987 proceeding, the Commission found no merit to claims 
that charging fair market value for Federal lands is prohibited by the 
FPA:

    All increases in charges will result in some impact on 
consumers. The statutory provision bars the Commission from 
assessing unreasonable charges that would be passed along to 
consumers. Reasonable annual charges are those that are 
proportionate to the value of the benefit conferred. Therefore, a 
fair market approach is consistent with the dictates of the Act. 
Furthermore, as land values have not been adjusted in over ten 
years, an adjustment upwards is warranted and overdue.\19\
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    \19\ Id. (footnotes omitted).

    The Commission also rejected the argument that it should 
intentionally set low land charges based on the public benefits 
provided by hydropower projects. The Commission explained that the 
public benefits provided by licensed projects are considered in the 
licensing decision and these benefits are the quid pro quo for the 
ability to operate the project in a manner consistent with the needs of 
society. In contrast, the purpose of the rental fee is to establish a 
fair market rate for the use of government land.\20\
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    \20\ Id. at 30,587.
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    9. In adopting the 1987 BLM fee schedule, the Commission rejected 
several other proposed methods of assessing annual charges for the use, 
occupancy, and enjoyment of government lands by hydropower licensees. 
The Commission rejected a proposal to use an agricultural land value 
index created by the U.S. Department of Agriculture (USDA), which used 
a state-by-state average value per acre of farm lands and buildings, 
concluding that this index would require such major adjustments that it 
would be an inefficient measure of land value for hydropower 
projects.\21\ The Commission also rejected a proposal to assess a fee 
based on the percentage of gross revenues from power sales or a rate 
per kilowatt hour, concluding that such methods would be unreasonable 
because they would result in a royalty as though the occupied Federal 
lands themselves were producing power. The Commission explained that 
this would overlook the fact that power output is the result of many 
factors (e.g., water rights, head, project structures), and not just 
the acreage of the Federal lands involved.\22\ Finally, the Commission 
again rejected a proposal to use individual project appraisals because 
such appraisals would be too costly and result in time-consuming 
litigation.\23\
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    \21\ Id. at 30,589. The potential adjustments included 
accounting for farm buildings, for the cleared, arable, level land 
that it represented, and for the fact that the index represented 
private and not federal lands.
    \22\ Id. at 30,589-90.
    \23\ Id. at 30,590.
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    10. From 1987 to 2008, the Commission assessed annual charges for 
the use, occupancy, and enjoyment of government lands according to the 
BLM fee schedule. Each year, BLM adjusted the fee schedule for 
inflation, and each year the Commission published notice of the updated 
schedule.\24\
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    \24\ See, e.g., Update of the Federal Energy Regulatory 
Commission's Fee Schedule for Annual Charges for the Use of 
Government Lands, 73 FR 3626 (Jan. 22, 2008), FERC Stats. & Regs. ] 
31,262 (2008).
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    11. In 2005, Congress passed the Energy Policy Act (EPAct) of 2005, 
which required BLM ``to update [the schedule] to revise the per acre 
rental fee zone value schedule * * * to reflect current values of land 
in each zone.'' \25\ Congress further ordered that ``the Secretary of 
Agriculture shall make the same revision for linear rights-of-way * * * 
on National Forest System land.''
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    \25\ 42 U.S.C. 15925 (2006).
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    12. On October 31, 2008, BLM issued a final rule promulgating its 
updated rental schedule for linear rights of way to satisfy the 
congressional mandate in EPAct 2005,\26\ and the Forest Service 
subsequently adopted the 2008 BLM fee schedule.\27\ As had been the 
case with the methodology underlying the 1987 BLM fee schedule, the 
updated fee schedule is based on the same formula, which has four 
components: (1) An average per-acre land value by county (grouped into 
zones); (2) an encumbrance factor reduction; (3) a rate of return; and 
(4) an annual adjustment factor for inflation.
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    \26\ Update of Linear Right-of-Way Rent Schedule, 73 FR 65040.
    \27\ See Fee Schedule for Linear Rights-of-Way Authorized on 
National Forest System Lands, 73 FR 66591 (November 10, 2008). The 
Forest Service noted it had given notice, in the preambles to BLM's 
proposed and final rules, that it would adopt BLM's revised fee 
schedule.
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    13. Under the updated 2008 BLM fee schedule, the per acre land 
value by county is based on the NASS Census data. To determine a county 
per-acre land value, BLM uses the average per acre land value from the 
``land and buildings'' category of the NASS Census. The ``land and 
buildings'' category is a combination of NASS Census land categories, 
and includes irrigated and non-irrigated cropland, pastureland, 
rangeland, woodland, and the ``other'' category, which includes roads, 
ponds, wasteland, and land encumbered by non-commercial or non-
residential buildings. BLM consulted with officials from NASS to arrive 
at an appropriate method for removing the value of irrigated cropland 
and land encumbered by buildings because these types of land are 
generally of higher value than the types of lands over which rights of 
way would be granted. This resulted in a reduction in the average per-
acre land value by 20 percent (a 13 percent reduction to remove all 
irrigated acres and a 7 percent reduction to remove all lands in the 
``other'' category, which includes all improved land or land encumbered 
by buildings) ``to eliminate the value of all land that could possibly 
be encumbered by buildings or which could possibly have been developed, 
improved, or irrigated.'' \28\
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    \28\ 73 FR 65040 at 65043.
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    14. In response to comments that the non-irrigated cropland 
category also represented higher value lands and therefore should be 
removed from the ``land and buildings'' category, BLM explained that in 
comparing the categories from the NASS Census data, it found little 
difference in the mid-western and western states between the average 
per acre values of non-irrigated cropland and pastureland/
rangeland.\29\ Furthermore, if the non-irrigated lands category were 
removed from the per-acre average, the per-acre average would 
undervalue Federal land holdings in the eastern U.S., including Forest 
Service lands, that have largely been acquired from the private sector 
(primarily farm real estate) and would likely fall into the same land 
categories covered by the NASS Census.\30\
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    \29\ Id. at 64044.
    \30\ Id.
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    15. In response to comments objecting to the zone system, BLM 
explained that it chose to retain the zone system because the 2005 
congressional mandate directed it to revise the schedule to reflect 
current land values in each zone. BLM also explained that it considered 
using the midpoint of the zone value to base its calculations instead 
of the upper limit. It chose not to do this because it would have been 
significantly different from the methodology used in

[[Page 72137]]

the previous schedule (which used the upper zone amount) and its use 
would have generated significantly lower per acre rent amounts, even 
though land values have generally increased. Because of the larger 
range in values, the 2008 fee schedule included twelve zones rather 
than eight.
    16. BLM will update the per-acre land values by county every five 
years on a defined schedule that is linked to the NASS Census updates, 
which are also updated every five years. Therefore, the 2011-2015 fee 
schedules would be based on the 2007 NASS Census data,\31\ adjusting in 
intermediary years with an annual inflation adjustment factor, the 
2016-2020 fee schedules would be based on the 2012 NASS Census, the 
2021-2025 fee schedules would be based on the 2017 NASS Census, and so 
on.
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    \31\ There is an 18-month delay in NASS's publication of the 
census data. In BLM's administration of its formula, it provides 
another 18-month delay to allow notice of any changes in applicable 
county values.
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    17. In promulgating the 2008 fee schedule, BLM made additional 
changes to the methodology underlying the fee schedule. BLM reduced the 
encumbrance factor from 70 percent to 50 percent after a review of 
public comments, industry practices in the private sector, and the 
Department of Interior's appraisal methodology for right-of-way 
facilities on Federal lands.\32\ BLM revised the fixed rate of return 
downward from 6.41 percent to 5.27, which is the 10-year average (1998-
2008) of the 30-year and 20-year Treasury bond yield rate.\33\ To stay 
current with inflationary or deflationary trends, BLM will apply an 
annual adjustment factor, which is currently 1.9 percent, to the per-
acre rental rate in the fee schedule.\34\ The annual adjustment factor 
is based on the average annual change in the Implicit Price Deflator-
Gross Domestic Product (IPD-GDP) for the 10-year period immediately 
preceding the year that the NASS Census data become available.\35\ The 
BLM rule makes clear that the fee schedule is the only basis for 
determining an annual rental fee for rights of way on Federal 
lands.\36\
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    \32\ Id. at 65047.
    \33\ Id. at 65049.
    \34\ Id. at 65050.
    \35\ The annual adjustment factor will be updated every ten 
years.
    \36\ If lands are to be transferred out of federal ownership, 
BLM allows a right-of-way occupier to submit an appraisal report to 
determine a one-time rental payment for perpetual linear grants or 
easements.
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    18. On February 17, 2009, the Commission issued notice (February 17 
Notice) of the 2008 BLM fee schedule, which was based on its revised 
methodology, as it had done for every annual update to the 1987 fee 
schedule.\37\ Because of the land value revisions and methodology 
adjustments in response to EPAct 2005, the 2008 fee schedule resulted, 
in some cases, in significantly higher annual charge assessments of 
Commission licensees.\38\
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    \37\ Update of the Federal Energy Regulatory Commission's Fees 
Schedule for Annual Charges for the Use of Government Lands, 74 FR 
8184 (Feb. 24, 2009) FERC Stats. & Regs. ] 31,288 (2009).
    \38\ However, a handful of licensees, in geographical locations 
throughout the country, had their rates reduced.
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    19. On March 6, 2009, a group of licensees requested rehearing of 
the February 17 Notice, which the Commission denied.\39\ The licensees 
petitioned for review of the Commission's orders in the United States 
Court of Appeals for the District of Columbia Circuit. On January 4, 
2011, the Court granted the petition for review and vacated the 
Commission's February 17 Notice.\40\ The DC Circuit found that the 
Commission is required by the Administrative Procedure Act to seek 
notice and comment on the methodology used to calculate annual charges 
because the Commission's fee schedule is based on the BLM fee schedule, 
and BLM has made changes to the methodology underlying its fee 
schedule.
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    \39\ Update of the Federal Energy Regulatory Commission's Fee 
Schedule for Annual Changes for the Use of Government Lands, 129 
FERC ] 61,095 (2009).
    \40\ City of Idaho Falls, Idaho v. FERC, 629 F.3d 222 (D.C. Cir. 
2011).
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    20. On February 17, 2011, the Commission issued a Notice of Inquiry 
soliciting comments on proposed methodologies for assessing annual 
charges for the use, occupancy, and enjoyment of Federal lands by 
hydropower licensees. The Notice of Inquiry identified five 
requirements that any proposed methodology should satisfy, which are 
derived from the Commission's statutory obligations under the FPA and 
the Commission's past practice in implementing various methodologies. 
Any proposed methodology must: (1) apply uniformly to all licensees; 
(2) avoid exorbitant administrative costs; (3) not be subject to review 
on an individual basis; (4) reflect reasonably accurate land 
valuations; and (5) avoid an unreasonable increase in costs to 
consumers.

II. Comments on Notice of Inquiry

    21. In response to the Notice of Inquiry, comments were filed by 
eight entities representing licensees, industry trade groups, and 
Federal agencies. No commenters suggested, and the Commission is 
unaware of, any existing index other than the NASS Census to determine 
per acre rental rates by county.
    22. 2008 BLM Fee Schedule. The Forest Service is the only commenter 
that recommends straight-forward adoption of the 2008 BLM fee schedule 
for assessing annual charges for the use of Federal lands by hydropower 
licensees. The Forest Service identified several advantages to adopting 
the BLM fee schedule, including: (1) Consistent application of linear 
rights-of-way rental values among Federal agencies; (2) parity in 
rental rates for projects licensed or exempted from licensing under the 
FPA; and (3) reduced administrative burden because BLM maintains and 
updates the schedule with periodic revisions to reflect changes in land 
values, treasury rates, and inflation.
    23. Per-Acre Land Value. The Federal Lands Group \41\ believes that 
the NASS Census land values should be reduced by 50 percent, instead of 
the 20 percent reduction incorporated into the BLM fee schedule, to 
reflect the fact that lands used for hydropower projects rarely have 
any value for agricultural purposes. The Federal Lands Group also 
recommends that the Commission use actual county land values from the 
NASS Census instead of the zone values created by BLM, which would 
result in a more accurate valuation of the project lands, with only 
minimal additional burden on the Commission because it is responsible 
for assessing Federal lands charges for fewer than 250 projects.
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    \41\ The Federal Lands Group is a group of 16 private and 
municipal licensees that operate 37 licensed projects in the western 
U.S.
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    24. Similarly, Southern California Edison (SCE) generally supports 
use of the 2008 BLM fee schedule but believes that the 20 percent 
reduction in per-acre county land value does not properly account for 
the reduced value of vacant land. SCE recommends the Commission use the 
pastureland average value per acre category from the NASS Census to 
capture the value of vacant, unimproved lands. In addition, SCE 
recommends the Commission adjust downward the land values from the NASS 
Census because of the dramatic decrease in value that has occurred 
since the 2002 NASS Census.
    25. Idaho Power Company (Idaho Power) believes that in order to 
accurately reflect the fair market value of Federal lands, the NASS 
Census land and buildings category should be reduced by an additional 
26 percent for a total reduction of 46 percent.

[[Page 72138]]

    26. The National Hydropower Association (NHA) argues that any 
methodology based on an agricultural index, without an adjustment to 
more accurately capture the character of lands present at hydroelectric 
project, is inherently flawed because the lands typically present at 
hydroelectric projects are steeply sloped, rocky, and remote.
    27. PG&E objects to the use of the NASS Census for per acre county 
land values because the land values reflect values from the beginning 
of the real estate bubble and may have improperly inflated the true 
value of the government lands. PG&E states that an agricultural index 
overvalues government lands used by hydroelectric projects, and points 
out that the Commission previously found, in Order No. 469, that farm 
land values were typically much higher than the value of Federal land 
used for hydroelectric projects.
    28. Individual Appraisals. The Federal Lands Group argues that the 
Commission should provide a limited opportunity for a licensee, at its 
own expense, to demonstrate through periodic, independent appraisals 
the actual fair market value of Federal lands at a project.
    29. Placer County also supports a mechanism for individual 
licensees to demonstrate, at their own expense, that the fair market 
value of the Federal lands at a hydropower project are substantially 
less than the annual charges billed by the Commission. Placer County 
suggests that a licensee could submit a land sales value appraisal 
performed by a state certified and licensed real estate appraiser. If 
that appraised value is substantially lower than the assumed land value 
used to derive the Commission's default annual charges, then the 
Commission should adjust the charges.
    30. Placer County proposes two alternative approaches to making 
this adjustment. First, the Commission could reassign the specific 
project to the BLM fee schedule zone that corresponds to the appraised 
land value. Second, the Commission could develop a project-specific 
multiplier based on the difference between the values yielded by the 
default methodology and the individual assessment. For each subsequent 
year, the charge yielded by the default methodology would be multiplied 
by the same percentage. Under either of these proposals, licensees 
could be required to provide an updated appraisal periodically in order 
to continue to be assessed a rate other than that produced by the 
default methodology.
    31. NHA also recommends that the Commission allow an alternative 
land valuation method on a case-by-case basis to resolve anomalies that 
may occur in the application of an index-based valuation system.
    32. PG&E objects to independent appraisals on a case-by-case basis 
because such a practice would be time consuming and would result in 
exorbitant administrative costs, ultimately resulting in increased 
annual charge assessments to licensees for the administration of Part I 
of the FPA. However, PG&E believes that it might be appropriate for the 
Commission to allow a licensee to challenge the application of a 
uniform formula, if it results in an inappropriate annual charge given 
the peculiar characteristics of particular projects.
    33. Encumbrance Factor. The Federal Lands Group argues that the 
encumbrance factor should be 30 percent because, unlike other energy 
infrastructure, hydroelectric projects encumber Federal lands 
minimally, and substantially enhance the management objectives of the 
Federal lands management agencies.
    34. Placer County also argues that the Federal lands rental fee 
should be reduced because hydropower licensees do not fully encumber 
the Federal lands within their projects, much of those lands remain 
available for other uses, the Federal government retains significant 
rights in its lands, and licensees use the Federal lands within their 
projects to provide benefits to the public. Placer County suggests that 
the Commission adopt an encumbrance factor between 30 and 50 percent 
for all project areas occupying Federal lands.
    35. SCE believes that a 50 percent encumbrance factor is the 
highest that is appropriate for a hydropower facility, and that the 
Commission should consider a public benefit credit system to offset the 
encumbrance factor when it is determined a hydropower facility provides 
recreational and other benefits to the general public (e.g., 
recreational activities, flood control, or water storage).
    36. Idaho Power also believes an encumbrance factor of 100 percent 
for non-transmission line lands is inappropriate because Federal 
landowners such as BLM and Forest Service issue commercial permits and 
collect fees for the use of project lands, and licensees are required 
to make significant investment for the protection of Federal lands from 
natural and manmade impacts or enhancements to Federal lands. Idaho 
Power believes an appropriate encumbrance factor is zero.
    37. NHA believes that the hydropower industry's contributions to 
multiple use of Federal lands should be reflected in the Commission's 
valuation method by significantly reducing the level of encumbrance of 
hydropower projects on Federal lands. NHA states that Commission-issued 
licenses reserve authority for Federal land management agencies to 
authorize non-project uses on Federal lands within the project 
boundary, such as flood control, navigation, and storage for water 
supply and irrigation. NHA further states that many projects 
significantly enhance the multiple use management of the lands they 
occupy by providing recreational attractions such as fishing, boating, 
camping, and other activities, and many licensees also provide funding 
to the land managing agency in addition to the recreation facilities 
they construct, operate, and maintain.
    38. Non-Transmission Line Lands. The Federal Lands Group, PG&E, 
Idaho Power, NHA, and SCE object to the Commission's practice of 
automatically doubling the linear rights-of-way fee for non-
transmission line project areas because this practice does not 
recognize that these other project areas are frequently used for non-
hydroelectric purposes, such as public recreation, private recreation 
(e.g., residential boat docks), and general environmental preservation, 
and are accessible by the general public for a variety of uses. PG&E 
also argues that, in the case of government lands administered by the 
Forest Service, the Forest Service reserves to itself the right to use, 
or to permit others to use, project lands for any purpose. PG&E 
suggests that the Commission charge some lesser factor than doubling 
for non-transmission line project areas.
    39. Rate of Return and Annual Adjustment Factor. SCE recommends use 
of the 30-year Treasury Bond rate rather than the 10-year average of 
the 30-year Treasury bond yield rate because the former is a more 
accurate valuation of a long-range asset. SCE proposes that the 
Commission use the IPD-GDP to track inflation of land values annually.
    40. 1987 Fee Schedule. PG&E recommends the Commission continue use 
of the 1987 BLM fee schedule, with annual adjustments for inflation. 
PG&E states that it recognizes that Congress appeared to believe the 
BLM fee schedule for linear rights of way did not reflect current land 
values, but asserts there is no indication in the statutory provision 
that Congress intended that the Commission use the revised fee 
schedules for hydroelectric projects, or

[[Page 72139]]

that the use of the 1987 BLM fee schedule was inappropriate.
    41. Income- or Generation-Based Methodologies. PG&E and NHA object 
to any methodology for assessing annual charges that would use an 
income- or generation-based methodology to establish annual land use 
charges.
    42. Phase-In of New Fee Schedule. PG&E requests that the increase 
in annual charges be phased in over a number of years thereby avoiding 
an increase to the price of consumers of power.
    43. Edison Electric Institute. The Edison Electric Institute (EEI) 
endorses the comments submitted by the Federal Lands Group, PG&E, SCE, 
Idaho Power, and NHA. EEI emphasizes the importance of such factors as 
the rural, unfarmed, undeveloped nature of hydropower project lands, 
the local nature of land values, the modest encumbrance of Federal 
lands used by hydropower facilities, changes in land values from year 
to year, use of reasonable long-term discount rates, and the need for 
project-by-project adjustments in fee assessments.

III. Proposed Rule

    44. The Commission proposes to adopt the 2008 BLM methodology for 
creating a fee schedule of rental rates by county to assess annual 
charges for the use, occupancy, and enjoyment of Federal lands by 
hydropower licensees. Four components comprise the proposed formula: 
(1) An average per-acre land value by county based on the ``land and 
buildings'' category from the NASS Census; (2) an encumbrance factor; 
(3) a rate of return; and (4) an annual adjustment factor. The 
Commission proposes to use this methodology to create its own schedule, 
based on the NASS Census, without using the zone system incorporated 
into the BLM fee schedule. Except for this difference, the Commission 
proposes to adopt all other aspects of the BLM methodology for 
producing a fee schedule to assess rental rates for the use of Federal 
lands. In addition, the Commission proposes to eliminate the current 
practice of doubling the fee schedule rate for non-transmission line 
lands. The proposed rule does not include a graduated phase-in rate for 
the new schedule. Thus, the Commission would assess annual charges for 
the use of Federal lands by multiplying the rate in its fee schedule by 
the number of Federal acres occupied by a licensee.
    45. The per-acre land value would be based on the NASS Census, 
adjusted downward to remove the value of irrigated lands and buildings, 
and would be updated with current land values every five years. The 
encumbrance factor, which adjusts for the degree to which an occupation 
of Federal lands precludes other uses, would be 50 percent. The rate of 
return, which converts the per-acre land value into an annual rental 
value, would be 5.27 percent. Finally, the annual adjustment factor, 
which adjusts the rental rate to reflect inflationary or deflationary 
trends, would be 1.9 percent, and would be adjusted every ten years.
    46. The Commission proposes to track BLM's timing for incorporating 
the periodic updates to the NASS Census data. Therefore, the 
Commission's 2011-2015 fee schedules would be based on the 2007 NASS 
Census data,\42\ adjusting in intermediary years with the annual 
adjustment factor, the 2016-2020 fee schedules would be based on the 
2012 NASS Census, the 2021-2025 fee schedules would be based on the 
2017 NASS Census, and so on. The annual adjustment factor would be 
revised every ten years, and the encumbrance factor and rate of return 
would remain unchanged unless by future rulemaking.
---------------------------------------------------------------------------

    \42\ There is an 18 month delay in NASS's publication of the 
census data. In BLM's administration of its formula it provides 
another 18 month delay to allow notice of any changes in applicable 
county values.
---------------------------------------------------------------------------

A. Per-Acre Land Value

    47. The Commission proposes to adopt BLM's practice of creating a 
per-acre land value by using the ``land and buildings'' category from 
the NASS Census. The ``land and buildings'' category is a combination 
of all the land categories in the NASS Census, and includes croplands 
(irrigated and non-irrigated), pastureland/rangeland, woodland, and 
``other'' (roads, ponds, wasteland, and land encumbered by non-
commercial/non-residential buildings). The Commission would apply a 20 
percent reduction to remove the value of irrigated farmland and 
buildings from the ``land and buildings'' category, but would avoid 
grouping the resulting land values into zones. Thus, under the BLM zone 
system, if the per-acre land value for County A, after the 20 percent 
reduction, is $3,500 and the zone range is $3,000 to $5,000, then 
County A's per-acre land value for purposes of the BLM formula would be 
$5,000. In contrast, under the proposed rule, the per-acre land value 
for County A would be $3,500, rather than $5,000.\43\
---------------------------------------------------------------------------

    \43\ After the other components of the BLM formula are applied 
(encumbrance factor reduction, rate of return, and adjustment for 
inflation), County A's per-acre rent in 2011 under the Commission's 
proposed rule would be approximately $94.
---------------------------------------------------------------------------

    48. Using the county-by-county data is the ``best approximation'' 
of county values of which the Commission is aware. This method would 
result in more accurate land valuations for all licensees because under 
the zone system, every county is priced at the highest zone value (and 
thus the value of every county is inflated). In addition, the use of 
NASS Census data, which is updated every five years, alleviates 
commenters' concern that values are based on short-term anomalies in 
real estate prices.
    49. Several commenters disagree with the use of an agricultural 
index as the basis for per-acre land values, arguing that the 
Commission has previously rejected use of an agricultural-based index 
in Order No. 469.\44\ In Order No. 469, the Commission determined that 
the BLM fee schedule, which was based on a survey of lands that had 
been occupied by BLM and Forest Service linear rights of way, was the 
best approximation of per-acre rental rates for linear rights of way. 
The Commission rejected use of the agricultural index produced by the 
USDA at that time because the index overvalued the types of lands that 
are used for hydropower purposes, provided values only for states and 
not by county, and required too many adjustments by the Commission to 
account for farm buildings, cleared and arable land, and the private 
ownership of the lands.\45\ The Commission concluded that the 
administrative efficiencies provided by the 1987 BLM fee schedule were 
superior to the many adjustments the Commission would have had to make 
to the USDA's agricultural index.
---------------------------------------------------------------------------

    \44\ FERC Stats. & Regs. ] 30,741 at 30,589.
    \45\ Id.
---------------------------------------------------------------------------

    50. This is no longer the case. BLM has adopted use of the NASS 
Census for determining per-acre land values by county and has 
incorporated reasonable adjustments to the raw NASS Census data to more 
accurately value the types of lands used as Federal rights of way. 
Unlike the previous agricultural index created by USDA, the NASS Census 
includes land values at the county level, allowing differentiation 
within each state.
    51. In addition, BLM's methodology for producing the fee schedule 
provides for significant adjustments to the NASS Census land values to 
account for the same concerns the Commission had when considering use 
of the USDA agricultural index. BLM uses the total average ``land and 
buildings'' category from the NASS Census, which includes, irrigated 
and non-irrigated croplands

[[Page 72140]]

(but not the value of crops), pasturelands, rangelands, woodlands, and 
interstitial lands, such as roads, ponds, wastelands, and lands 
encumbered by non-commercial or non-residential buildings. In 
consultation with NASS officials, BLM determined that a 20 percent 
reduction to the average per-acre ``land and buildings'' category would 
remove the value of irrigated croplands and lands encumbered by 
buildings, which are generally not the types of lands used for linear 
rights of way or hydropower projects. Because the Commission proposes 
to adopt the BLM fee schedule, the Commission would not be required to 
make these adjustments itself. Therefore, the NASS Census data and 
BLM's application of this data alleviates the concerns the Commission 
once had with USDA's previous agricultural index.
    52. Several commenters object to use of the BLM fee schedule 
because recent NASS Census data was gathered during a national real 
estate bubble. The Commission recognizes that property values have 
increased significantly in some parts of the country in the last 
decade. One of the significant advantages to the new BLM methodology is 
that the land values will be updated every five years. Because there is 
a delay in BLM's adoption of the NASS Census data, there will also be a 
delay in including these values into the fee schedule. However, over 
time, all increases and decreases in land values will be reflected in 
the NASS Census data and in the fee schedule.
    53. Several commenters believe that licensees should have the 
opportunity, at their own expense, to submit individual appraisals to 
demonstrate the NASS Census per-acre land values are inaccurate. The 
Commission continues to believe that individual land appraisals would 
be difficult to administer, would increase the costs of administering 
Part I of the FPA, and would increase the potential for disputes and 
litigation over annual charges.
    54. Commenters argue that the Commission should allow individual 
appraisals because BLM allows for such an opportunity. This is not 
accurate. The BLM rule makes clear that all entities with linear rights 
of way are to be assessed a rental rate according to the published fee 
schedule. The BLM rule allows appraisals to be submitted where an 
entity is making a one-time rental payment for a perpetual right of way 
or easement on land that will be transferred out of Federal ownership. 
If Federal lands within a licensee's project boundary were transferred 
out of Federal ownership, then the Commission would no longer collect 
annual charges for the use of those Federal lands from that 
licensee.\46\
---------------------------------------------------------------------------

    \46\ Annual charges for the use of Federal lands would still be 
assessed if the lands transferred out of federal ownership were 
subject to a power site classification under section 24 of the FPA. 
16 U.S.C. 818 (2006).
---------------------------------------------------------------------------

    55. The Commission recognizes that for some licensees regional land 
values have increased dramatically, resulting in a significant increase 
in the rental rate for the use of Federal lands by hydropower 
licensees. This is primarily the result of a shift from a methodology 
that used land values from 1987 to a methodology that uses current 
market land values. Because the 2008 BLM methodology incorporates five 
year updates to the per-acre county land values, it is not anticipated 
that such a large increase in annual charges for the use of Federal 
lands will occur again.

B. Encumbrance Factor

    56. The encumbrance factor is a measure of the degree that a 
particular type of facility encumbers the right-of-way area or excludes 
other types of land uses.\47\ If the encumbrance factor is 100 percent, 
the right-of-way facility (and its operation) is encumbering the right-
of-way area to the exclusion of all other uses. Impacts could include 
visual, open space, wildlife, vegetative, cultural, recreation, and 
other public land resources. The updated BLM methodology reduces the 
encumbrance factor from 70 percent to 50 percent.
---------------------------------------------------------------------------

    \47\ 73 FR 65040 at 65047.
---------------------------------------------------------------------------

    57. Several commenters believe that the encumbrance factor should 
be less than 50 percent, particularly because other uses are often 
authorized on the Federal lands. In promulgating the 2008 fee schedule, 
BLM revisited its survey of the degrees of encumbrance presumed by 
utility facilities and infrastructure, and determined that 50 percent 
was more reasonable than 70 percent because lands often can be used for 
other purposes. BLM made this change as a result of comments received 
on its proposed rule, a review of industry practices in the private 
sector, and a review of the Department of Interior's appraisal 
methodology for right-of-way facilities located on Federal lands.\48\ 
However, BLM explained that the degree to which Federal lands can be 
used for multiple purposes does not reduce the rental rate to be 
assessed, and clarified that grants issued for rights-of-way facilities 
are non-exclusive, such that BLM reserves the right to authorize other 
uses within a right-of-way area.\49\
---------------------------------------------------------------------------

    \48\ Id.
    \49\ Id.
---------------------------------------------------------------------------

    58. Several commenters suggested the public benefits provided by 
hydropower licensees should result in a reduced encumbrance factor.\50\ 
However, the public benefits required by a license cannot completely 
offset the rental fee for use of Federal lands. Rather, the public 
benefits, including aesthetics, recreation, environmental, fish and 
wildlife, and others, are required by the FPA in order to receive a 
license, not in exchange for occupying Federal lands. We acknowledge 
these public uses at many projects by discontinuing the practice of 
doubling the charges for non-transmission line lands. However, because 
hydropower projects located on Federal lands do indeed make use of 
public property for which the FPA requires us to set a reasonable fee, 
we agree with BLM's use of a 50 percent encumbrance factor.
---------------------------------------------------------------------------

    \50\ Idaho Power believes the encumbrance factor should be zero, 
which would zero out the rental rate as well.
---------------------------------------------------------------------------

    59. The Commission's practice has been to charge the fee schedule 
rental rate for transmission line lands and to double this rate for 
other project areas based on the theory that linear rights of way 
represent a lesser encumbrance than do rights of way over other project 
areas. Most commenters request that the Commission discontinue this 
practice. The 1987 fee schedule was developed for linear rights of way 
on Federal lands, which was based on a survey of market values for the 
various types of land that the Forest Service and BLM had allowed to be 
occupied by linear rights of way. When the Commission adopted BLM's 
1987 fee schedule, it recognized that the values identified in the BLM 
schedule were the ``best approximation'' available of the value of 
lands used for transmission linear rights of way. Thus, it was 
reasonable at that time for the Commission to assess transmission line 
lands at this rate, but to double the rate for non-linear project areas 
that involved a more comprehensive occupation of Federal lands than a 
linear right of way. However, because the NASS Census provides a per-
acre value for lands generally, and not specifically for linear 
sections of land, there is no compelling reason to double the 
underlying value represented in the NASS Census for non-linear lands. 
Therefore, we agree with commenters and propose to discontinue this 
practice.

[[Page 72141]]

C. Rate of Return

    60. The BLM fee schedule adopts a fixed rate of return of 5.27 
percent, which is the most current 10-year average (1998-2008) of the 
30-year and 20-year Treasury bond yield rate. This is a reduction from 
the rate of return of 6.41 percent under the 1987 fee schedule, which 
was the 1-year Treasury Securities ``Constant Maturity'' rate from June 
30, 1986. The rate of return component used in the fee schedule formula 
reflects the relationship of income to property value, as modified by 
any adjustments to property value. BLM reviewed a number of appraisal 
reports that indicated the rate of return for land can vary from seven 
to twelve percent and is typically around ten percent. These rates take 
into account certain risk considerations, and BLM chose to use a ``safe 
rate of return,'' such as the prevailing rate on insured savings 
accounts or guaranteed government securities. In its 2008 rule, BLM 
explained that a 10-year average is more appropriate than a rate 
selected from one point in time, and that a periodic adjustment of the 
rate of return would lead to uncertainty in rental fees, which would 
have a negative impact on utilities and customers and duplicate the 
changes reflected in the GDP index.
    61. SCE commented that the Commission should use the 30-year 
Treasury bond rate rather than the 10-year average of the 30-year 
Treasury bond yield rate because use of the actual 30-year rate is the 
most accurate valuation of a long-range asset. While using the actual 
30-year rate would be more accurate, we agree with BLM's rationale that 
an annual adjustment of the rate of return would result in unnecessary 
uncertainty with respect to rental rates. Therefore, the Commission 
finds that BLM's use of the 5.27 percent fixed rate of return is 
reasonable.

D. Annual Adjustment Factor

    62. The BLM fee schedule includes an annual adjustment factor, 
which is currently 1.9 percent. The annual adjustment factor allows the 
rental rate to stay current with inflationary or deflationary trends. 
In its 2008 rule, BLM explained that it will adjust the per-acre rent 
each calendar year based on the average annual change in the IPD-GDP 
for the 10-year period immediately preceding the year that the NASS 
Census data becomes available. Thus, the IPD-GDP will change every ten 
years. The annual adjustment factor is based on the average annual 
change in the IPD-GDP for the 10-year period immediately preceding the 
year (2004) that the 2002 NASS Census data became available. This 
figure is 1.9 percent and will be applied for each calendar year 
through 2015.
    63. BLM will recalculate the annual index adjustment in 2014 based 
on the average annual change in the IPD-GDP from 2004 to 2013 (the 10-
year period immediately preceding the year (2014) when the 2012 NASS 
Census data will become available) and will apply it annually to the 
fee schedule for years 2016 through 2025. The Commission proposes to 
adopt BLM's decadal updates to the annual index adjustment.

IV. Regulatory Requirements

A. Information Collection Statement

    64. The Office of Management and Budget (OMB) regulations require 
OMB to approve certain information collection requirements imposed by 
agency rule.\51\ The proposed regulations discussed above do not impose 
or alter existing reporting or recordkeeping requirements on applicable 
entities as defined by the Paperwork Reduction Act.\52\ As a result, 
the Commission is not submitting this proposed rule to OMB for review 
and approval.
---------------------------------------------------------------------------

    \51\ 5 CFR 1320.11 (2011).
    \52\ 44 U.S.C. 3502(2)-(3) (2006).
---------------------------------------------------------------------------

B. Environmental Analysis

    65. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\53\ 
Commission actions concerning annual charges are categorically exempted 
from the preparation of an Environmental Assessment or an Environmental 
Impact Statement.\54\
---------------------------------------------------------------------------

    \53\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
    \54\ 18 CFR 380.4(a)(11) (2011).
---------------------------------------------------------------------------

C. Regulatory Flexibility Act

    66. The Regulatory Flexibility Act of 1980 (RFA) \55\ generally 
requires a description and analysis of final rules that will have a 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's (SBA) Office of Size 
Standards develops the numerical definition of a small business.\56\ 
The SBA has established a size standard for hydroelectric generators, 
stating that a firm is small if, including its affiliates, it is 
primarily engaged in the transmission, generation, and/or distribution 
of electric energy for sale and its total electric output for the 
preceding 12 months did not exceed four million megawatt hours.\57\
---------------------------------------------------------------------------

    \55\ 5 U.S.C. 601-612 (2006).
    \56\ 13 CFR 121.101 (2011).
    \57\ 13 CFR 121.201, Sector 22, Utilities & n.1 (2011).
---------------------------------------------------------------------------

    67. Section 10(e)(1) of the FPA requires that the Commission fix a 
reasonable annual charge for the use, occupancy, and enjoyment of 
Federal lands by hydropower licensees.\58\ The Commission has issued 
253 licenses that occupy Federal lands to 135 discrete licensees, who 
will be impacted by the proposed rule. The proposed rule adopts a 
methodology promulgated by BLM, based on the NASS Census data, to 
determine the annual charge for the use of Federal lands. The 
methodology for assessing this annual charge under the existing rule is 
based on land values from 1987, whereas the proposed rule incorporates 
current land values, and would update those values every five years. As 
a result, some of the 135 licensees may experience a one-time increase 
in their annual charge for the use of Federal lands.
---------------------------------------------------------------------------

    \58\ 16 U.S.C. 803(e)(1) (2006).
---------------------------------------------------------------------------

    68. Nevertheless, based on a review of the 135 licensees with 
Federal lands that will be impacted by the proposed rule, we estimate 
that less than ten percent are small entities under the SBA definition. 
The 135 licensees represent utilities, cities, and private and public 
companies in 30 states or territories. Many of the utilities which may 
seem to be under the four million megawatt hours per year threshold are 
also engaged in electricity production through other forms of 
generation, such as coal or natural gas, or also provide other utility 
services such as natural gas or water delivery. Similarly, many 
licensees that are small hydropower generators are affiliated with a 
larger entity or entities in other industries. Therefore, we estimate 
that less than ten percent of the impacted licensees are actually 
small, unaffiliated entities who are primarily engaged in hydropower 
generation and whose total electrical output through transmission, 
generation, or distribution is less than four million megawatt hours 
per year.
    69. Any impact on these small entities would not be significant. 
Under the proposed rule there may be a one-time increase for some 
licensees in the annual charge for the use of Federal lands, but 
because the new methodology for calculating the annual charge will be 
updated every five years, any future

[[Page 72142]]

increases or decreases will be incremental. In addition, small, 
unaffiliated entities generally occupy less Federal lands than larger 
projects that generate more power. Therefore, as a class of licensees, 
small entities would be less impacted by an annual charge for the use 
of Federal lands. Furthermore, this proposed rule does not incur any 
additional compliance or recordkeeping costs on any licensees occupying 
Federal lands. Consequently, the proposed rule should not impose a 
significant economic impact on small entities.
    70. Based on this understanding, the Commission certifies that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities. Accordingly, no regulatory 
flexibility analysis is required.

D. Comment Procedures

    71. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due January 6, 2012. Comments must refer to 
Docket No. RM11-6-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    72. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    73. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    74. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

E. Document Availability

    75. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    76. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    77. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-(866) 208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 11

    Dams, Electric power, Indians-lands, Public lands, Reporting and 
recordkeeping requirements.

    By direction of the Commission. Commissioner Spitzer is not 
participating.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 11, Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 11--ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT

    1. The authority citation for part 11 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r; 42 U.S.C. 7101-7352.

Sec.  11.2  [Amended]

    2. Amend Sec.  11.2 by deleting paragraph (a).
    3. Amend Sec.  11.2 by revising paragraph (b) to read as follows:
    (b) Pending further order of the Commission, annual charges for the 
use of government lands will be payable in advance, and will be set on 
the basis of an annual schedule of rental fees for linear rights-of-way 
as set out in Appendix A of this part. Annual charges for transmission 
line rights of way and other project lands will be equal to the per-
acre charges established by the above schedule. The Commission, by its 
designee the Executive Director, will update its fee schedule to 
reflect changes in land values established by the U.S. National 
Agricultural Statistics Service Census, and to reflect changes in the 
annual adjustment factor, as calculated by the U.S. Bureau of Land 
Management. The Executive Director will publish the updated fee 
schedule in the Federal Register.
    4. Amend Sec.  11.2 by deleting existing paragraphs (c)(1) and 
(c)(2).
    5. Amend Sec.  11.2 by redesignating paragraph (b) as new paragraph 
(a), and by redesignating paragraphs (d) and (e) as new paragraphs (b) 
and (c), respectively.

[FR Doc. 2011-30110 Filed 11-21-11; 8:45 am]
BILLING CODE 6717-01-P