Last week, the Government Accountability Office (GAO) released a new report on the Bureau of Land Management (BLM)’s bonding requirements for renewable energy projects. Specifically, the report addressed BLM’s limited ability to guarantee that wind and solar projects on federal lands are adequately bonded. Bonds are paid to the federal government before development to help ensure wind and solar operators ultimately cleanup lease sites on federal lands, but as the report notes, insufficient requirements have left taxpayers paying for the reclamation of these projects.

The report found BLM’s bonding policies for wind and solar projects to be inconsistent, their systems for tracking bonding data to be unreliable and unable to ensure adequate bonding, and that many wind and solar projects are under-bonded, which forces taxpayers to pick up the tab for their reclamation. GAO found that 14 wind and solar projects were under-bonded by as much as $15 million in total. Furthermore, GAO reported inconsistencies in BLM’s review process for wind and solar bonds – if bonds are not reviewed, BLM cannot guarantee that they are adequate to cover reclamation costs, putting taxpayers at risk.

Taxpayers should not be forced to pay for the cleanup costs of wind and solar projects. BLM’s bonding policies should be updated so as to cover all potential reclamation costs, and ensure that lessees meet their obligation to protect taxpayers from the financial risk of abandoned projects. Inadequate bonding allows wind and solar companies to incur less risk and provides little incentive for them to properly clean up, leaving BLM and taxpayers to pay for the mess. GAO’s report emphasizes the need for BLM to improve its bonding policies, and BLM has stated that it plans to complete a new rule for wind and solar bonding requirements by the end of 2015 (BLM released a proposal for this rule in September 2014.)

TCS is concerned with inadequate bonding for all natural resource development on public lands, and we believe that wind and solar development should protect taxpayers from financial risk.  We hope that BLM’s final rule will provide adequate protection for taxpayers from the costs of wind and solar reclamation. Unless bonding requirements are changed, taxpayers will continue to lose.