Renewable Energy: BLM Has Limited Assurance That Wind and Solar Projects Are Adequately Bonded
Published: 2015-06-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Renewable energy projects can affect thousands of acres of federal land and involve significant infrastructure. BLM directs renewable energy developers to obtain bonds to cover the costs of returning the land to its pre-developed condition when the project terminates, a process called reclamation. Reclamation can cost millions and take years to complete.
GAO was asked to review the bonding policies for renewable energy projects on federal land. This report examines (1) BLM's policies for the bonding of wind and solar projects on federal land; (2) the amount and types of bonds held by BLM for the reclamation of these projects, and how BLM tracks the bonds; and (3) the extent to which BLM ensures that bonds for wind and solar rights-of-way are adequate to cover reclamation costs. GAO conducted a file review of all 45 wind and solar development project rights-of-way with a bond as of April 15, 2014; analyzed data from BLM data systems; reviewed relevant federal laws, regulations, and BLM policies and procedures; and interviewed agency officials.
section_title: What GAO Found
paragraphs: The Department of the Interior's Bureau of Land Management (BLM) has different policies for the bonding of wind and solar projects on federal land. For example, BLM's 2008 wind policy established minimum bond amounts, but BLM's 2010 solar policy set no minimum. However, the agency has issued a proposed rule that would establish consistent requirements for the bonding of the two types of projects in several areas, including minimum bond amounts.
BLM has about $100 million in bonds for the reclamation of wind and solar projects on federal land. These bonds are primarily letters of credit and surety bonds. BLM has two data systems for tracking bonds, but GAO found that neither system is reliable for this purpose. Specifically, GAO found instances in both systems where information was missing or inaccurate, or had not been updated. The agency does not have a timeliness standard for wind and solar data entry, contrary to having such a standard for its mining program. Without accurate or complete information, BLM has limited assurance that its data systems are reliable for tracking wind and solar bonds to ensure that bonding policies are being followed and that projects have the required bonds.
BLM has limited assurance that bonds for wind and solar rights-of-way will cover reclamation costs, leaving the federal government potentially at financial risk if developers do not complete reclamation. GAO found about one-third of the wind and solar rights-of-way were underbonded by as much as $15 million in total. Also, BLM did not clearly document how it made its bond decisions, contrary to government standards that call for documentation of significant events. Specifically, GAO found that for about two-thirds of the wind rights-of-way, there was little or no documentation to support the bond amount. In addition, BLM does not adequately ensure that wind and solar bond instruments are properly secured, handled, and stored and does not have policies related to this. In one BLM field office, a staff member told GAO that someone mistakenly shredded several bonds. BLM also does not consistently adhere to its policies calling for periodic review of wind and solar bond amounts to verify their adequacy. GAO found about half of the bonds were at least 4 months overdue for review. BLM officials acknowledged that automatic notifications could be established in their data system as to when reviews are due. 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.
section_title: What GAO Recommends
paragraphs: GAO recommends, among other things, that BLM develop policies on documenting bonding decisions, the proper handling and storage of bonds, and timely data entry. GAO also recommends that BLM take steps to ensure projects are periodically reviewed to ensure bond adequacy. Interior generally concurred with GAO's recommendations.

section_title: Letter
paragraphs: The Department of the Interior’s (Interior) Bureau of Land Management  (BLM) manages more federal land than any other agency—more than  245 million surface acres—and these lands are increasingly being tapped  to meet the nation’s growing demand for energy. BLM plays a key role in  managing energy produced on these lands, including energy from  renewable resources. Through the Energy Policy Act of 2005, Congress  encouraged the Secretary of the Interior to approve non-hydropower  renewable energy projects, including wind and solar projects, with a total  combined capacity to generate at least 10,000 megawatts of electricity on  federal lands by 2015. In 2012, BLM met this goal by approving projects  with a total combined capacity to generate more than 12,000 megawatts  of renewable energy. In June 2013, the President proposed an  expansion in renewable energy construction projects and set a new goal  for Interior to approve a renewable energy capacity of at least 20,000  megawatts of electricity from projects on federal land. That would be  enough capacity to power more than 6 million homes by 2020.
Projects to produce energy from renewable resources can affect  thousands of acres of federal land and involve significant infrastructure.  For example, one solar project on federal land in California covers  approximately 3,500 acres and requires buildings, access roads,  wastewater treatment facilities, perimeter fencing, and power lines. The  projects may require developers to alter the land’s topography or remove  vegetation, physically or through the use of herbicides, and these actions  may affect the site itself or have potential downstream or off-site effects.  As a condition of BLM’s authorization for renewable energy projects, the  developer must agree to remove infrastructure elements and return the  land to its pre-developed condition when the project terminates, a process  called reclamation. Reclamation can cost millions and take years to  complete. For example, the current estimate for the reclamation of federal  land involved in the California solar project mentioned earlier is  approximately $30 million. According to BLM officials, as of April 2014,  BLM has not had to reclaim any wind or solar energy development  projects.
To ensure compliance with applicable requirements, including  requirements to reclaim project sites, BLM requires operators of wind and  solar energy projects on federal lands to obtain bonds. For the purposes  of this report, all financial instruments used to cover reclamation costs will  be referred to as bonds. If an operator fails to return the land to its pre- developed state, the bond can be used to cover any reclamation costs the  federal government may incur. If the bonds are inadequate to cover  reclamation costs and the federal government is unable to recover  additional costs from the developer, the federal government may have to  pay the reclamation costs. Concerns have been raised about whether  bonds held by the federal government are sufficient to cover estimated  reclamation costs. In particular, a 2012 report by Interior’s Office of  Inspector General found that wind projects were not always bonded as  required, and some projects either had no bonds in place or an  insufficient bond for the authorized operation.
You asked us to examine BLM’s bonding of wind and solar projects on  federal land. This report examines (1) BLM’s policies for the bonding of  wind and solar projects on federal land; (2) the amount and types of  bonds held by BLM for the reclamation of wind and solar projects, and  how BLM tracks these bonds; and (3) the extent to which BLM ensures  that bonds for wind and solar rights-of-way are adequate to cover  reclamation costs.
To determine BLM’s policies for bonding wind and solar projects, we  reviewed the agency’s policies regarding bonding, the reclamation  activities that the bonds are to cover, and the frequency with which bonds  are to be reviewed. We compared bonding provisions, such as minimum  bond amounts, acceptable bond instruments, and the basis for  determining bonds, in the wind and solar policies. We also reviewed  BLM’s Notice of Proposed Rulemaking—issued in September 2014—that  would revise and codify the agency’s current bonding policies for wind  and solar projects. We interviewed BLM officials on the agency’s efforts to  revise and codify its bonding policies for wind and solar energy projects  and the rationale behind the change.
To determine the amount and types of bonds held by BLM, we obtained  wind and solar project data as of April 15, 2014, from BLM’s Legacy  Rehost 2000 System (LR2000) and its Bond and Surety System, which  are data systems used to capture information on wind and solar projects  in addition to information on other types of BLM land and mineral use  authorizations. We worked with BLM officials to resolve data  discrepancies between the two systems and then analyzed the data to  identify the bond amounts and types for each right-of-way. To determine  how BLM tracks these bonds, we interviewed officials in BLM  headquarters, and all 9 state and 11 field offices with wind or solar energy  development projects to understand how LR2000 and the Bond and  Surety System are used, the frequency of updates, and the reliability of  the data in each system.
To determine the extent to which BLM ensures that bonds for wind and  solar rights-of-way are adequate to cover reclamation costs, we  conducted an in-depth file review of all wind and solar energy  development projects—45 in total—for which BLM held a bond on April  15, 2014, and interviewed BLM officials and other stakeholders. We  compared the bond held with what is specified in BLM’s wind and solar  policies, as well as reclamation cost estimates in the project files, and  determined the extent to which documentation of the bond decision is  consistent with government standards for internal controls. Specifically,  we reviewed key project documents, such as plans of operation or  decommissioning and site reclamation plans.officials to determine compliance with existing BLM policies, the depth  and detail of reclamation cost estimates, the extent of documentation  supporting bond amounts, and the types of staff involved in determining  bond amounts. In addition, we analyzed whether BLM was conducting  reviews to ensure that bonds are in place, as is called for in BLM policies.  We also obtained and analyzed data from LR2000 and the Bond and  Surety System to identify bond amounts for comparison with bond  amounts listed in the project files and the number of wind projects bonded  at the minimum amount set by BLM policy, among other factors.  Appendix I contains more detailed information on the objectives, scope,  and methodology of our review.
We also spoke with BLM  We conducted this performance audit from January 2014 through May  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Renewable energy technologies generate electricity, fuels, or heat  through the use of resources that are continually replenished, such as  wind and sunlight. Electricity generation using wind or solar technology  can range from small-scale production—for example, rooftop solar panels  on a home—to utility-scale production of hundreds of megawatts of   Development of  electricity, enough to power tens of thousands of homes.utility-scale renewable energy projects on federal land occurs primarily on  lands managed by BLM. Several utility-scale wind projects have been  operating on BLM-managed lands since the early 1980s, primarily in  California. In May 2012, the first utility-scale solar power plant began  operating on BLM-managed land. Currently, about 1 percent of the  nation’s electricity generated from wind and solar energy comes from  resources on federal lands. Figure 1 shows the federal lands managed by  BLM.
subsections: section_title: Types of Wind and Solar Technologies Used for Wind and Solar Energy Development
paragraphs: The most common technologies for utility-scale wind and solar  development include the following:
Wind energy. Wind farms consist of a number of turbines built close  together to produce utility-scale wind power. Horizontal-axis turbines,  the most common, constitute nearly all utility-scale wind turbines in  the United States. (See fig. 2.) To generate electricity, horizontal-axis  turbines capture the wind’s energy with two or three propeller-like  blades mounted on a rotor sitting atop a tower. A smaller utility-scale  wind farm may have 6 turbines on 100 acres and generate about 3  megawatts, and a larger wind farm may have more than 100 turbines  on about 10,000 acres, and generate approximately 300 megawatts.
Solar energy. Multiple technologies exist for utility-scale solar power,  such as photovoltaic and concentrating solar power technologies.  Solar photovoltaic technologies convert energy from sunlight directly  into electricity, using arrays of solar panels. (See fig. 3.)
Concentrating solar technologies use two types of mirrors with  tracking systems, either curved (parabolic) or flat, to focus the sun’s  energy onto a small area. The concentrated light is then used to heat  water or other fluids that create the steam to power a conventional  turbine generator and produce electricity. Examples of concentrating  solar power technologies include parabolic trough and power tower.  Parabolic trough technology collects energy from the sun using  parabolic mirrors that concentrate heat onto solar thermal equipment,  often a tube filled with fluid that runs the length of the trough at its  focal point; the heated transfer fluid then powers solar steam turbine  generators. (See fig. 4.)
A power tower system consists of an array of dual-axis tracking  mirrors that concentrate sunlight on a central receiver atop a tower.  The working fluid in the receiver is heated to 500-800 ºC and then  used as a heat source for a power generation or energy storage  system. (See fig. 5.)
An average solar plant, whether photovoltaic or concentrating,  requires about 3 to 8 acres for every megawatt of generating capacity.  For example, a small utility-scale solar plant occupying about 600  acres may generate 50 megawatts, and a large facility occupying  about 4,000 acres may generate 550 megawatts.
However it is generated, electricity from utility-scale wind and solar  energy development is sold to utilities and conveyed to consumers  through transmission lines, the same as electricity generated by more  conventional sources such as coal- or gas-fired power plants.
Developing wind and solar energy projects on a scale large enough to  generate substantial electric power can affect the environment in both the  immediate vicinity and across hundreds, or even thousands, of acres of  land depending on the energy source. For example, the turning rotors of a  wind turbine may injure or kill birds and bats, and wind farms may  fragment wildlife habitat and plant communities. In addition, solar  installations can affect habitat needed by various species, including those  listed as threatened or endangered under the Endangered Species Act,  such as the desert tortoise. Also, the water used in some solar  technologies may diminish scarce groundwater in the arid Southwest.
section_title: Federal Laws, Regulations, and BLM Policy for Wind and Solar Energy Projects
paragraphs: Wind and solar projects on BLM land are subject to federal laws and  regulations as well as BLM policy. The Federal Land Policy and  Management Act of 1976 authorizes BLM to issue rights-of-way on  federal lands for a variety of purposes, including systems for generating,  transmitting, and distributing electric energy. For purposes of this report, a  right-of-way is an authorization to a qualified individual, business, or  government entity to use a specific area of federal land for a specific  amount of time for a certain purpose and with specific terms, conditions,  and stipulations that, among other things, are intended to protect the  environment, federal property and economic interests, and the public  interest. Right-of-way holders are required to restore, revegetate, and  stabilize the land disturbed by wind and solar projects within a reasonable  time, to a condition satisfactory to BLM, as approved by BLM in their Plan  of Development. For projects that may have a significant impact on the  environment, the act requires applicants to submit a plan of construction,  operation, and rehabilitation for the right-of-way that complies with  applicable laws and regulations and the agency’s stipulations. By  accepting the right-of-way, the holder agrees to comply with all terms,  conditions, and stipulations of the right-of-way. Federal regulations  authorize BLM to require a right-of-way holder to provide a bond to  secure the obligations imposed by the right-of-way. According to BLM  policy, a bond is required for each wind and solar facility on federal land.  BLM may require an increase or decrease in the value of an existing bond  at any time during the term of the right-of-way, according to federal  regulations.
section_title: BLM’s Management and Oversight of Wind and Solar Projects
paragraphs: BLM manages and oversees wind and solar projects as well as its other  programs primarily through its headquarters, 12 state offices, 44 district  offices, and 119 field offices. BLM’s National Renewable Energy  Coordination Office oversees wind and solar development on federal  land. The office also develops renewable energy policies and  legislation, among other things. Realty specialists—located at the state,  district, and field office level—administer the wind and solar rights-of-way,  among other things.
BLM’s process for authorizing a right-of-way begins with pre-application  meetings between BLM and the prospective right-of-way applicant.  Subsequently, the prospective applicant completes an application that  includes a statement of technical and financial capability and a project  description, and, for solar projects, a decommissioning and site  reclamation plan. including associated environmental reviews under the National  Environmental Policy Act. Once BLM approves the application, BLM  authorizes the right-of-way. However, before the holder of the right-of- way can begin construction and land disturbance activities, BLM  establishes the required bond amount—known as a bond determination— and notifies the right-of-way holder. Once the right-of-way holder obtains  a bond and BLM determines that the bond is acceptable, BLM issues a  notice to proceed.
A decommissioning and site reclamation plan defines the reclamation, revegetation,  restoration, and soil stabilization requirements for the project area.
Wind site-specific testing. A site-specific right-of-way for individual  meteorological towers and instrumentation facilities with a term that is  limited to 3 years.
Wind project area testing. A project area right-of-way for a larger  site testing and monitoring area, with a term of 3 years that may be  renewed.
Wind energy development. A right-of-way to develop wind energy  facilities generally for a term of 30 years that may be renewed.  Facilities include wind turbines, as well as on-site access roads,  electrical and distribution facilities, and other support.
Solar energy development. A right-of-way to develop solar energy  facilities for a term not to exceed 30 years that may be renewed.
BLM manages and oversees wind and solar projects in part by  maintaining data on each project electronically in two data systems— LR2000 and the Bond and Surety System. LR2000 is BLM’s electronic  case recordation system that is used to capture information on the  agency’s land and mineral projects. In the case of wind and solar  projects, BLM captures information such as the date the right-of-way was  issued, acres authorized, project location, case status (e.g., authorized,  expired, or closed), and the actions that have taken place. The system  also contains bond information for wind and solar projects, including bond  numbers, amounts, and bond actions, such as the date when a bond was  filed, accepted, or returned. For wind projects, LR2000 contains the  number of authorized turbines and towers. The Bond and Surety System  contains bond information, such as the type and amount of bond, as well  as actions taken, including the date when a bond was filed, accepted, or  returned.LR2000 as well as information about bonds into the Bond and Surety  System.
section_title: BLM Has Different Policies for Bonding Wind and Solar Projects, but a Proposed Rule Would Establish Consistent Requirements
paragraphs: BLM has different policies for the development of wind and solar energy  on federal land, and each policy contains provisions related to bonding.  The wind and solar bonding provisions differ in a number of ways, such  as minimum bond amounts and acceptable bond instruments. However,  the agency has issued a proposed rule that would, among other things,  establish consistent requirements for the bonding of the two types of  projects.
subsections: section_title: BLM Has Different Bonding Policies for Wind and Solar Projects, but Similar Annual Certification Policies
paragraphs: In 2008, BLM issued a wind energy development policy that includes  provisions for bonding wind energy projects on federal land.the policy established a minimum bond amount of $2,000 per  meteorological tower for site-specific and project area testing rights-of- way and $10,000 per wind turbine for wind energy development rights-of- way. BLM is to determine the bond amount for all wind energy  development projects during the right-of-way authorization process “on  the basis of site-specific and project-specific factors,” but the policy  provides no further details on these factors or how to calculate the costs.  BLM can consider the salvage value of the turbines and towers—the  estimated resale value of the structures, equipment, or material at the  time of removal—when setting bonds for development projects. The  policy identifies the types of bond instruments that BLM will accept from  the applicant, including cash, cashier’s check or certified check, certificate  of book entry deposits, negotiable U.S. Treasury bonds, or surety bonds.
Specifically,  However, BLM will not accept a letter of credit. BLM is to review all bonds  for wind development rights-of-way at least once every 5 years to ensure  that the bond amount is adequate. Finally, the policy states that, for a  wind energy site testing case, BLM staff are required to enter into the  remarks section of LR2000 the number of meteorological towers  authorized and located on federal land; for a wind energy development  case, staff are required to enter the number of turbines and total  megawatt capacity authorized and located on federal land.
In 2010, BLM issued a solar energy development policy that includes  provisions for bonding solar energy projects on federal land that differ  from the bonding provisions of the wind policy. Specifically, in contrast  to the wind policy, the solar policy sets no minimum bond amount for  solar energy development rights-of-way. Rather, the policy states that  BLM is to base the bond amount on a reclamation cost estimate provided  by the right-of-way applicant that consists of three components: (1)  environmental liabilities; (2) decommissioning, removal, and disposal of  improvements and facilities; and (3) reclamation, revegetation,  restoration, and soil stabilization. A reclamation cost estimate is an  estimate of what it would cost a third party to reclaim the site. According  to agency officials, the required bond can be higher, but never lower than  the reclamation cost estimate. The policy states that the applicant is to  submit the estimate as part of the decommissioning and site reclamation  plan—which defines the reclamation, revegetation, restoration, and soil  stabilization requirements for the project area—and the overall Plan of  Development.
Unlike the wind policy, the solar policy states that BLM can use the  agency’s guidance for mining operations on federal land—guidance that  includes detailed information about the process for determining  appropriate bond amounts—to assist in calculating the bond amount for  solar projects. In addition to the acceptable bond instruments named in  the wind policy, the solar policy allows BLM to accept irrevocable letters  of credit payable to the agency and insurance policies for which the  agency is named a beneficiary. The appropriate Regional Solicitor for  the Department of the Interior is to review each bond instrument prior to  its acceptance by BLM. In addition, in contrast to the wind policy, BLM  staff are to review annually all bonds for solar development rights-of-way  to ensure that the bond amount is adequate to ensure compliance with  the right-of-way authorization, including requirements to reclaim the  disturbed land. BLM staff are also to review the bond at the time of any  right-of-way assignment, amendment, or renewal. BLM may increase or  decrease the bond amount at any time during the term of the right-of-way,  consistent with the regulations.
Table 1 summarizes the differences among the provisions contained in  BLM’s wind and solar bonding policies.
To help ensure compliance with provisions of the wind and solar bonding  policies, BLM has two additional policies that direct BLM state directors to  certify annually that all wind and solar energy rights-of-way within their  respective states have the required bonds and that the bond data are  entered into the Bond and Surety System.assess whether the amount of the bond would be sufficient to cover  expected reclamation costs. Rather, the annual certification is intended to  ensure that a bond has been provided or requested for each wind and   This certification does not  solar right-of-way. The certification is to be submitted to BLM  headquarters within 30 days after the end of the fiscal year. If a right-of- way is missing a bond, BLM is to issue a letter of noncompliance to the  holder, which includes the time frame in which to provide the bond. In  addition, field office staff are to enter all bonds received for renewable  energy projects into LR2000 and the Bonds and Surety System.
section_title: BLM Has Proposed a Rule That Would Establish Consistent Requirements for Wind and Solar Bonding
paragraphs: In September 2014, BLM issued a Notice of Proposed Rulemaking  related to wind and solar development on federal lands and requested  public comment. The proposed rule would revise and codify existing  policies and establish consistent requirements for the bonding of solar  and wind energy projects. Specifically, the proposed rule would require  bonds, set standard or minimum bond amounts, and establish procedures  for determining those bond amounts. Requirements would differ based on  whether projects were located in certain preferred areas—called  designated leasing areas.
Specifically, for projects outside designated leasing areas, the proposed  rule would establish a minimum bond amount per turbine of $20,000 for  wind energy development projects—a doubling of the minimum amount  currently set in BLM policy—and establish a minimum bond amount of  $10,000 per acre for solar energy development projects. The minimum  bond amount for wind energy site-specific or project area testing projects  would remain at the amount currently set in BLM policy, that is, $2,000  per meteorological tower. The proposed rule would require both wind and  solar right-of-way applicants to submit a reclamation cost estimate to help  BLM to determine the bond amount, and would outline specific bond  components that must be addressed when determining the estimated  costs. These components are those outlined in BLM’s 2010 solar energy  development policy, including (1) environmental liabilities; (2)  decommissioning, removal, and disposal of improvements and facilities;  and (3) interim and final reclamation, revegetation, recontouring, and soil  stabilization. The reclamation cost estimate is to also include the cost for  BLM to administer a reclamation contract. The proposed rule would  require BLM to review a bond for adequacy when a replacement bond is  filed. However, it would not require BLM to conduct periodic reviews to  assess whether the bonds remain adequate to cover potential  reclamation costs, as is specified in the current wind and solar policies.  According to a BLM official, BLM plans to issue policies that would  address adequacy reviews once the proposed rule is finalized. Under the  proposed rule, acceptable bond instruments for both wind and solar  projects would include cash, cashiers or certified check, certificate or  book entry deposits, negotiable U.S. Treasury securities, surety bonds  from an approved list of sureties, and irrevocable letters of credit, which  would be a new option for wind projects. Insurance policies may also  qualify as acceptable bond instruments.
For wind and solar development projects inside designated leasing areas,  the proposed rule would establish a standard bond amount for wind  energy development of $20,000 per turbine and $2,000 per  meteorological tower, and a standard bond amount for solar energy  development of $10,000 per acre. BLM proposed a standard bond  amount for solar or wind energy development inside designated leasing  areas because these areas would be identified by BLM as areas with  lesser and fewer environmental and cultural resource conflicts. According  to BLM officials, when a project terminates inside a designated leasing  area, the agency would potentially reoffer the site for new wind or solar  energy development. As a result, these sites would require less  reclamation than if they needed to be fully reclaimed to their pre- developed condition. For this reason, the bond amount required would be  lower than it would outside designated leasing areas, according to BLM  officials. Under the proposed rule, right-of-way holders would not be  required to submit a reclamation cost estimate, and the bond amounts  would not be adjusted unless there is a change in use. For example, the  removal of a wind turbine and subsequent reclamation could result in a  decreased bond amount. The standard bond amounts would be subject to  an adjustment every 10 years based on inflation. However, the proposed  rule would not require BLM to conduct periodic reviews to assess whether  the standard bond amounts remain adequate or whether they need to be  adjusted based on factors other than inflation.
A BLM official told us that the agency expects the proposed rule to be  finalized by the end of 2015. Once finalized, the official said BLM plans to  rescind the current wind and solar policies and replace them with policies  that would address, among other things, the bonding process and  adequacy reviews not covered in the proposed rule.
section_title: BLM Has About $100 Million in Bonds for Wind and Solar Projects, but the Systems for Tracking These Bonds Are Not Reliable
paragraphs: BLM has about $100 million in bonds—primarily in the form of letters of  credit and surety bonds—for the reclamation of wind and solar rights-of- way on federal land. BLM tracks bonds through LR2000 and the Bond  and Surety System, but we found that neither system was reliable for  managing bonds.
subsections: section_title: About $100 Million in Letters of Credit and Surety Bonds Secure Most Wind and Solar Energy Rights-of-Way
paragraphs: As of April 15, 2014, BLM held bonds valued at approximately $100  million to cover reclamation costs associated with 12 solar rights-of-way  and 108 wind rights-of-way on federal land in 9 western states, according  to our analysis of BLM data. As shown in table 2, solar development  bonds accounted for about 82 percent of the total value, with wind  development bonds accounting for about 17 percent. Wind project area  and site-specific testing projects accounted for less than 1 percent.
Of the approximately $100 million in bonds held by BLM for wind and  solar rights-of-way, 48.9 percent were backed by letters of credit—and  39.2 percent by surety bonds. Personal bonds, including cash; Treasury  securities; guaranteed remittances; and time deposits accounted for the  remaining bonds. See table 3.
section_title: Information in LR2000 and the Bond and Surety System Is Not Reliable for Tracking Bonds
paragraphs: BLM tracks bonds through LR2000 and the Bond and Surety System, but  we found that neither system was reliable for this purpose. Specifically,  we found multiple instances in each system where information was  missing, inaccurate, or had not been updated.
Missing information. BLM’s oversight and implementation plan for  solar and wind energy policies directs field offices to enter all bonds  received for renewable energy projects into LR2000 and the Bond and  Surety System, but we found instances where bonds had been  entered into LR2000, but not into the Bond and Surety System. We  also found instances where staff did not always enter in the remarks  section of LR2000 the number of wind turbines or meteorological  towers authorized and located on federal land, as directed by BLM’s  wind policy.
Inaccurate information. We found instances in LR2000 and the  Bond and Surety System where the type of right-of-way entered for  the project was incorrect. For example, one wind development  project’s right-of-way had been incorrectly entered in both systems as  a road right-of-way.the annual state bond certification. When BLM reviewed the bond, the  agency determined that the bond amount was approximately $90,000  less than the minimum set by BLM’s wind policy.
As a result, the bond had not been included in  Information had not been updated. We found instances where a  bond’s status or amount had not been updated in one or both  systems. In some cases, the data were several years out of date.  Examples include:  In one case, LR2000 showed that a bond had been accepted for  $40,000 in 1994 and an additional bond for the same right-of-way  had been accepted for $160,000 in 2011, for a total bond amount  of $200,000. However, BLM had not updated the Bond and Surety  System to show that the $160,000 bond had been accepted, and  the system contained no information on the $40,000 bond.
In another case, the Bond and Surety System showed a bond in  the amount of approximately $150,000. However, LR2000 showed  four additional payments totaling more than $500,000, bringing the  total bond amount posted for this project to more than $650,000.
In a third case, both the Bond and Surety System and LR2000  showed that a bond in the amount of $110,000 had been filed with  BLM in 2011, but BLM had not updated the bond status in either  system to reflect that BLM had accepted the bond. However, the  bond acceptance letter showed that the bond was accepted in  2012.
The LR2000 data standards for BLM’s mining program state that all data  must be routinely entered within 5 business days of each action taking  place. However, there is no such standard for entering wind and solar  project data into LR2000. Government standards for internal control call  for control activities, such as ensuring accurate and timely recording of  transactions and events, to be in place to help ensure that actions are  taken to address risks. Furthermore, BLM has not issued data  standards for the Bond and Surety System. Because information in these  two data systems was missing, inaccurate, or out of date, BLM has  limited assurance that either system is reliable for tracking wind and solar  bonds to ensure that bonding policies are being followed and that all  projects have the required bonds.
Officials told us that staff shortages and limited access to BLM’s data  systems may account for some of the inaccurate and missing data.  Specifically, officials in several BLM state and field offices told us that  because of a shortage of land law examiners—staff trained on data  systems and requirements and responsible for entering data—the data  entry is being done by realty specialists, who manage the rights-of-way  and may not be as well trained in data entry.  Further, officials at some  BLM state and field offices also said not all staff have access to the Bond  and Surety System, which affects their ability to ensure that the bond  information for their projects is complete, accurate, and matches what is  in LR2000. An official in BLM headquarters told us that because access  to the Bond and Surety System is limited, the information in that system is  not as frequently updated or modified as the information in LR2000. If  required data are not being correctly entered into the data systems, BLM  may not have accurate and complete data with which to manage wind  and solar bonds to ensure that bonding policies are being followed.
Realty specialists are involved in a number of land management activities that include,  among other things, administering rights-of-way. and prompt data entry in LR2000. BLM also implemented this  recommendation. Similar problems were found by Interior’s Office of  Inspector General in its 2012 review of BLM’s management of the  renewable energy program.
BLM has taken some limited steps to improve its bonding data.  Specifically, to reduce potential errors or omissions in the bonding data in  LR2000 and the Bond and Surety System, BLM made changes to link  certain data in the two systems. Starting in late September 2014, when an  action code showing that a bond has been filed, accepted, or returned is  entered into the Bond and Surety System for a particular right-of-way, the  same information is automatically entered into LR2000. However, when a  bond action code is entered into LR2000, the same information must still  be entered manually into the Bond and Surety System. In addition, these  changes only apply to data entered into the Bond and Surety System  starting in September 2014, so all previously entered data will not be  added to LR2000 unless manually entered.
section_title: BLM Has Limited Assurance That Bonds for Wind and Solar Rights-of-Way Will Cover Reclamation Costs
paragraphs: BLM has limited assurance that bonds for wind and solar rights-of-way  will cover reclamation costs. Specifically, we found that 14 wind and solar  development rights-of-way were underbonded by as much as $15 million  in total. In addition, we found wide variation in how BLM staff documented  bond decisions for wind and solar project rights-of-way. Further, BLM  does not adequately ensure that wind and solar bond instruments are  properly secured, handled, and stored. BLM also inconsistently adheres  to its policies for the periodic review of the amounts of wind and solar  bonds to verify their adequacy.
subsections: section_title: Fourteen Wind and Solar Rights-of-Way Were Underbonded
paragraphs: We found that 14 out of 45 wind and solar development rights-of-way  were underbonded by as much as $15 million in total—approximately  $5.5 million for wind rights-of-way and as much as $9 million for solar  rights-of-way—according to our review of BLM project files and data.  Specifically, we identified 10 wind rights-of-way where the bond amount  was lower than the $10,000-per-turbine minimum established in BLM’s  2008 wind policy. These 10 rights-of-way were underbonded by a total of  approximately $5.5 million. Nine of those rights-of-way were authorized  prior to the 2008 policy; however, for rights-of-way that were authorized  before the policy took effect, BLM officials told us they directed staff to  obtain bonds that meet the $10,000-per-turbine minimum. BLM officials  told us that they are in the process of obtaining bonds for these 9 rights- of-way. The remaining right-of-way was reauthorized in 2012 at about  $1,500 per turbine. BLM’s files show that the bond amount for the right- of-way was determined using salvage values of the equipment. While  salvage values may be considered in estimating reclamation costs, BLM  officials told us the 2008 policy does not permit salvage values to be used  to reduce the bond below the $10,000-per-turbine minimum. BLM  officials told us they are currently developing a reclamation cost estimate  for this right-of-way, which will help them develop a revised bond. Since  BLM accepted a bond amount that was lower than the $10,000-per- turbine minimum, BLM officials acknowledged that BLM was put at  financial risk. BLM officials could offer no explanation for why a lower  bond was accepted.
In addition, we found four solar rights-of-way that may be underbonded by  as much as $9 million. These rights-of-way were part of a single solar  project with a total estimated reclamation cost of approximately $27.5  million. This figure includes $18.5 million for decommissioning and removal of project structures and equipment and $9 million for  revegetation and restoration. However, the project is currently bonded at  $18.5 million, an amount that will only cover the decommissioning and  removal of structures. BLM officials explained that because the project is  in California—where recycling of materials is required—the $9 million  estimated for revegetation and restoration would be covered by the  salvage value of project structures removed during decommissioning.  While the salvage value presented in the documents we reviewed may be  sufficient to cover estimated revegetation and restoration costs, the  project’s documentation did not indicate that BLM officials included these  costs when setting the total bond amount. Moreover, the documentation  indicated that BLM based the bond amount on a decommissioning plan  without salvage value estimates.
When wind and solar rights-of-way are underbonded, BLM is at risk of  having to assume responsibility for reclamation costs not covered by a  bond if the right-of-way holder does not meet its obligations.
section_title: BLM Did Not Clearly Document How It Made Bond Decisions
paragraphs: We found wide variation in how BLM staff documented bond decisions for  wind and solar project rights-of-way. Specifically, for 21 of the 33 wind  rights-of-way we reviewed, there was little or no documentation to support  the bond amount. For some of these rights-of-way, there was no  documentation because BLM staff defaulted to the minimum amount set  by BLM’s wind policy without conducting any site- or project-specific  analysis. BLM staff told us that they bonded wind rights-of-way at the  minimum without knowing whether the minimums would be sufficient to  cover reclamation costs. Some of these staff said that they used the  minimum bond amount because they had no experience with bonding  renewable energy projects and lacked training on making bond decisions.
For the remaining 12 wind rights-of-way, the project files contained  documentation that BLM officials used to support their bond decisions;  however, this documentation varied widely. Examples include:
For one right-of-way, the holder developed a reclamation cost  estimate,project and the estimated costs were greater than the bond that BLM  required. According to agency officials, this was due to subsequent  changes in the project’s size that were not captured in the project  files.   but the estimate did not reflect the current state of the
For four rights-of-way, the project files included plans for specific  reclamation activities, but these did not include cost estimates. For  one of these, the right-of-way holder had provided a detailed  decommissioning and site reclamation plan, including specific plant  species for revegetation, but there was no documentation of cost  estimates for any aspect of the plan.
For six rights-of-way, the documentation outlined the cost of  decommissioning and removal of structures, but it did not include cost  estimates for revegetation of the project site.
We also found that BLM inconsistently documented bonding decisions for  two solar rights-of-way, as follows:
For one right-of-way, the holder did not develop a reclamation cost  estimate, as directed by BLM’s 2010 solar policy. This estimate is to  form the basis for the bond amount. As a result, it was not clear from  the project files what BLM considered in determining the amount of  the bond that was in place.
In another case, BLM allowed the right-of-way holder to provide the  bond in phases as the project was constructed, but there was no  documentation demonstrating how each phase’s reclamation costs  were estimated. Specifically, the reclamation cost estimate for the  entire right-of-way is about $23 million, but the project file reflected  that BLM accepted a bond for approximately $4 million for the first  phase of the project. Moreover, the project file did not contain  information about what the project phases are, how the $4 million was  determined, or what the payment schedule and amounts of future  bonds would be.
In addition, we found discrepancies between information in the project  files and what was recorded in LR2000 or the Bond and Surety System in  13 of the 45 wind and solar rights-of way. Examples include:
For one wind right-of-way, the files reflected the number of turbines  originally planned and the bond that would have been required for that  number of turbines, but LR2000 recorded a lower bond amount. In  this case, BLM officials explained that the right-of-way holder decided  to install fewer turbines, thereby reducing the required bond amount.  However, the project files did not reflect these changes.
For another wind right-of-way, the files indicated the applicant’s initial  plan to build 24 turbines, but LR2000 showed the project had 20  turbines. A BLM official told us that since the right-of-way’s original  authorization in the 1980s, the type and number of turbines had  changed over time. However, there was no documentation of these  changes in the files and the BLM official told us that, as a result of our  inquiry, he had to go and physically inspect the right-of-way to confirm  the type and number of turbines.
For one solar right-of-way, the bond that BLM held—and what was  reflected in LR2000—was $200,000 higher than the reclamation cost  estimate in the project file. BLM officials told us that they required the  right-of-way holder to provide an additional bond to mitigate potential  effects on the pale kangaroo mouse, a protected species under  Nevada state law.
Government standards for internal control call for transactions and other  significant events to be clearly documented, and that the documentation  should be readily available for examination. BLM has not issued policies  that direct BLM staff to document information related to bond decisions in  the project files. According to BLM officials, they will develop these  policies once the proposed rule is finalized. Without accurate  documentation that clearly shows how the bond decision was made,  officials have limited assurance that the bonds in place will be adequate  to cover reclamation costs if the right-of-way holder does not meet their  obligations.
section_title: BLM’s Handling and Storing of Bond Instruments Is Inadequate
paragraphs: BLM does not adequately ensure that wind and solar bond instruments  are properly secured, handled, and stored. BLM staff in two field offices  told us bonds were stored in the files for the rights-of-way, rather than in a  locked cabinet or safe. In one of these offices, a staff member told us that  about 20 percent of the bond instruments were stored in the project files  and the remaining bond instruments were stored in a safe. However, in  that office, that staff member told us that someone had mistakenly  shredded the bond instruments kept in the safe because the individual did  not know what they were.
According to BLM’s manual regarding records administration, offices  should ensure that appropriate internal controls and safeguards are in  place to prevent the loss of official documentation. This includes  adequate administrative, physical, and system security safeguards to  protect electronic and non-electronic records against unauthorized  access, modification, or destruction. In addition, the standards for internal  control in government specify that an agency must establish physical  control to secure and safeguard vulnerable assets, specifically citing cash  and securities, which are among the types of bond instruments held in  BLM field offices.
BLM has general guidance on records retention and storage, and at least  one office within BLM’s Energy, Minerals, and Realty Management  Directorate has detailed guidance on the acceptance, assessment, and  storage of bond instruments. However, the National Renewable Energy  Coordination Office, which oversees wind and solar energy projects, does  not have policies or guidance related to the proper handling and storage  of bond instruments. Moreover, in one 1998 informational bulletin, a  BLM state office highlighted concerns that bonds and negotiable  securities were being placed in case files and unlocked filing cabinets.  This bulletin listed measures that BLM staff should take to address these  concerns; however, we found no indication that these measures were  implemented, when we spoke to officials in that particular state or at other  BLM offices. As a result, BLM cannot assure that all bonds are properly  maintained and secured, leaving the federal government potentially at risk  financially if reclamation costs are not covered by the right-of-way  holders.
section_title: BLM Does Not Consistently Follow Its Policy for Periodic Reviews of Bond Amounts
paragraphs: BLM inconsistently adheres to its policies for the periodic review of wind  and solar bonds to verify their adequacy. BLM’s wind and solar policies  direct officials to review the adequacy of wind bonds every 5 years and  solar bonds every year. Of the 45 wind and solar rights-of-way we  reviewed, 23 had bonds that were at least 4 months overdue for an  adequacy review. Some BLM officials responsible for these reviews told  us that they were not aware that bonds were supposed to be reviewed.  Others told us they were aware that bonds were to be reviewed but had  not completed the reviews due to workload and staffing constraints. BLM  officials told us that LR2000 contains information such as the  authorization date that can be used to determine when a right-of-way is  due for review. However, LR2000 does not automatically notify BLM  officials that a right-of-way is due for its periodic review. Several BLM  officials told us that it would be possible to set up an action code in  LR2000 to provide such automatic notification. If reviews of bond  amounts are not conducted in a timely manner, BLM officials cannot be  sure that bonds in place are adequate to cover reclamation costs.
section_title: Conclusions
paragraphs: BLM is in the process of developing regulations that would establish  requirements for wind and solar bonds to cover the costs of returning the  land to its original state if right-of-way holders fail to complete the required  reclamation. However, we found limitations in how BLM handles and  stores bonds, documents bond decisions, and tracks bonds that are in  place. Specifically, BLM has no policies in place to ensure that wind and  solar bond instruments are properly handled and stored, and in one  office, a staff member told us that someone mistakenly shredded some  bonds. By not having detailed policies to ensure that all bonds are  properly maintained and secured, BLM is potentially putting the federal  government at financial risk if reclamation costs are not covered by  project right-of-way holders.
We found wide variation in how BLM staff documented bond decisions for  wind and solar project rights-of-way. For two-thirds of the wind projects  we reviewed, there was little or no documentation to support the bond  amount. When files contained documentation to support the bond  decisions, the documentation varied widely in terms of capturing  reclamation activities or cost estimates. The same inconsistent  documentation was found in some solar rights-of-way we reviewed. BLM  does not have policies that require bond decisions to be documented in  the project files. Without accurate documentation that clearly shows how  the bond decision was made, officials have limited assurance that the  bonds in place will be adequate to cover reclamation costs if the right-of- way holder does not meet its obligations.
BLM tracks bonds through LR2000 and the Bond and Surety System, but  we found that neither system was reliable for tracking wind and solar  bonds. Specifically, we found instances in both systems where  information was missing, inaccurate, or had not been updated. BLM has  no standard for the timely entering of wind and solar project data into  LR2000. However, BLM staff in the agency’s mining program are directed  to enter data into LR2000 within 5 business days of an action taking  place. BLM also has issued no data standards for the Bond and Surety  System. If needed data are not being entered correctly and in a timely  manner, BLM may not have accurate and complete information with  which to track wind and solar bonds to ensure that bonding policies are  being followed and that all projects have bonds.
Lastly, we found that BLM inconsistently adhered to its policies for a  periodic review of the amounts of wind and solar bonds to verify their  adequacy, resulting in 23 overdue reviews. There is currently no code in  LR2000 to notify staff when a bond adequacy review is due. Without  periodic adequacy reviews, BLM cannot be sure that the bond amounts  reflect a right-of-way’s current status and conditions and that the bond will  cover reclamation costs.
section_title: Recommendations for Executive Action
paragraphs: To help ensure that bonds are adequate to cover reclamation costs for  wind and solar projects on federal land, we recommend that the Secretary  of the Interior direct the Director of the Bureau of Land Management to  take the following five actions: develop detailed policies for processing wind and solar bonds to  ensure bonds are properly secured, handled, and stored; develop policies that detail how information related to bonding  decisions should be documented in project files; develop a policy that all data for wind and solar energy projects be  entered in LR2000 and the Bond and Surety System within 10  business days; establish data standards for the Bond and Surety System; and develop an LR2000 action code to automatically notify BLM staff that  a right-of-way is due for a bond adequacy review.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of the Interior for  review and comment. In its written comments, Interior stated that it  concurred with four of the recommendations and partially concurred with  the fifth. (See app. II for the comment letter from Interior.) Specifically, we  recommended that BLM develop a policy that all data for wind and solar  energy projects be entered into LR2000 and the Bond and Surety System  within 5 business days. Interior acknowledged that BLM needs to  establish a requirement for routine data entry, but said that doing so  would be difficult given the shortage of adequately trained staff and said  that BLM plans to require routine data entry within 10 business days  when it develops new policies related to its ongoing rulemaking related to  wind and solar development on federal lands. We understand the  agency’s concerns with regard to staff levels and believe that entering the  relevant data within 10 business days comports with the spirit of the  recommendation and is consistent with government standards for internal  control. As a result, we have modified the recommendation accordingly by  changing the number of days acceptable for timely data entry from 5 to 10  business days. Interior stated that it would be taking action on our  remaining recommendations as part of the implementation of its final rule.  In addition, Interior noted in its comment letter that it conducted a  preliminary review of our observation that one staff member told us bonds  had been mistakenly shredded. We appreciate Interior following up on  this observation and for letting us know that they found that all needed  bonds are now adequately documented. Interior also provided technical  comments, which we incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of the  Interior, appropriate congressional committees, and other interested  parties. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or fennella@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made key contributions to  this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report examines (1) the Bureau of Land Management’s (BLM)  policies for the bonding of wind and solar projects on federal land; (2) the  amount and types of bonds held by BLM for the reclamation of wind and  solar projects, and how BLM tracks these bonds; and (3) the extent to  which BLM ensures that bonds for wind and solar rights-of-way are  adequate to cover reclamation costs. For purposes of this report, all  financial instruments used to cover reclamation costs are called bonds.
To determine BLM’s policies for the bonding of wind and solar projects on  federal land, we reviewed the agency’s policies regarding wind and solar  bonding, the reclamation activities that the bonds are to cover, and the  frequency with which bonds are to be reviewed. We compared bonding  provisions, such as minimum bond amounts, acceptable bond  instruments, and the basis for determining bonds, in the wind and solar  policies. We also reviewed BLM’s Notice of Proposed Rulemaking— issued in September 2014—that would revise and codify the agency’s  current bonding policies for wind and solar projects. We interviewed BLM  headquarters officials regarding the agency’s existing bonding policies, as  well as its proposed bonding requirements, the rationale behind the  changes, and agency plans to implement the final rule.
To determine the amount and types of bonds held by BLM, we obtained  data from BLM’s Legacy Rehost 2000 System (LR2000) and its Bond and  Surety System for wind and solar rights-of-way for which BLM held a  bond as of April 15, 2014. To ensure that the data were sufficiently  reliable for our purposes, we cross-checked the data from the two  systems and identified discrepancies. To address these discrepancies,  we combined the two sets of data into one dataset and asked BLM to  review this dataset, provide missing data, and make corrections as  needed. We followed up with BLM officials and obtained documentation  to clarify and verify the information we received. To help ensure that we  identified all the rights-of-way that met our criteria, we compared our  dataset with lists of authorized wind and solar rights-of-way pulled from  LR2000. If a right-of-way did not appear in our dataset, we obtained  additional information from LR2000 and worked with BLM staff to  determine whether the right-of-way met our criteria—a right-of-way for  which BLM held or should have held a bond as of April 15, 2014—and  should have been included in our dataset. We then analyzed the data to  determine the amount and types of bonds held by BLM. To determine  how BLM tracks these bonds, we interviewed officials in BLM  headquarters, and all 9 state offices and 11 field officessolar energy development projects to understand how LR2000 and the  Bond and Surety System are used, the frequency of updates, and the  reliability of the data in each system. We also interviewed BLM  headquarters officials to obtain information on the agency’s efforts to  improve its bonding data.
To determine the extent to which BLM ensures that bonds for wind and  solar rights-of-way are adequate to cover reclamation costs, we  conducted an in-depth file review of all 45 wind and solar energy  development project rights-of-way (33 wind and 12 solar) authorized, and  for which BLM held a bond, as of April 15, 2014. We compared the bond  held with what is specified in BLM’s wind and solar policies as well as any  reclamation cost estimates in the project files, and determined the extent  to which the documentation of bond decisions was consistent with  government standards for internal controls. For each project, we reviewed  key project documents to determine adherence to existing BLM bonding  provisions contained in wind and solar policies, the depth and detail of the  reclamation cost estimates where available, and the extent of  documentation supporting bond amounts. We also analyzed data from  LR2000 and the Bond and Surety System to compare project bond  amounts to the minimum amount set by policy and the bond amount  indicated in the project files; determine projects bonded at the minimum  amount; and compare information in the project files provided by BLM  and data in LR2000 and the Bond and Surety System. We interviewed  BLM officials and staff in all 9 state offices and 11 field offices where wind  and solar rights-of-way were managed to obtain information on the types  of staff involved in determining bond amounts, training they received on  the bonding of rights-of-way, and their views on the challenges that BLM  may face in managing the bonding of wind and solar energy development  projects. We obtained and analyzed information on whether BLM was  annually certifying that bonds are in place, as called for in BLM policies.
Within the universe of field offices that manage wind and solar energy  rights-of-way, we visited three field offices in two states, based on the  number and size of wind and solar projects. During our visits, we looked  at four wind projects and three solar projects of varying sizes and types of  technology. In addition, we spoke to BLM officials and staff responsible  for the bonding of the projects, as well as representatives from the  companies managing and operating these projects.
We conducted this performance audit from January 2014 through May  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of the Interior
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Anne-Marie Fennell, (202) 512-3841 or fennella@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Elizabeth Erdmann (Assistant  Director), Morgan Jones, Jessica Lewis, Susan Malone, and Jarrod West  made key contributions to this report. Cheryl Arvidson, Antoinette  Capaccio, Kirsten B. Lauber, and Dan Royer also made important  contributions.