Policy for Bonding on Bureau of Land Management (BLM) – authorized Energy Rights-of-Way (ROWs)
In Reply Refer To: January 22, 2020
2800 (933) P
EMS TRANSMISSION: 1/23/2020
Instruction Memorandum No. ID-2020-008
Expires: 09/30/2023
To: District Managers
From: John F. Ruhs,
State Director
Subject: Policy for Bonding on Bureau of Land Management (BLM) – authorized Energy Rights-of-Way (ROWs)
Program Area: Lands and Realty Management
Purpose: The purpose of this Instruction Memorandum (IM) is to provide supplemental guidance to Districts and Field Offices for implementing ROW bonding requirements, as discussed in IM WO-2019-013, on BLM-authorized energy ROWs in Idaho to ensure that Federal resources and values impacted by construction, operation, and/or termination (decommissioning) activities are appropriately and timely restored to a condition acceptable to the Authorized Officer (AO).
Administrative or Mission Related: Mission
Policy/Action: IM WO-2019-013 provides direction for requiring bonding, when appropriate, on BLM ROWs and other land use authorizations. This IM provides supplemental guidance regarding the types of ROWs in Idaho that do not require a bond. This supplemental guidance assumes that ROW holders are/have been operating according to the terms and conditions of their authorization.
Federal regulations at 43 CFR 2805.20, and IM WO-2019-013, allow BLM to require a bond for all new commercial or non-commercial ROW grants and land use authorizations on public land (including renewals, assignments, and amendments of existing authorizations) unless specifically exempted per the IM. The IM identifies processes for documenting whether or not a bond is warranted, how to determine appropriate bond amounts, acceptable financial instruments, record keeping, and periodic review for adequacy. Where bonding is clearly warranted, AOs should proceed using the protocols outlined in IM WO-2019-013. For example, bonding would be warranted when issuing a ROW or other authorization where BLM would incur significant costs if the holder failed to complete required facility decommissioning, and associated site restoration or remediation.
Public and private regulated electrical utilities must adhere to a number of Federal and State regulatory requirements that address reliability, continuity of service, and operation and maintenance standards. Taken together, these regulations provide for oversight of nearly every aspect of utility operations by various Federal and/or State commissions and regulatory agencies. In exchange for a monopoly franchise within its service territory, the Idaho State regulatory compact requires an electrical utility’s continuous obligation to serve its customers and requires approval prior to transfer or removal of utility assets (e.g., Idaho Code (I.C.) §§ 61-302 and 61-328). Federal laws or regulations similarly oversee specific types of utility assets. For instance, Section 203(a) of the Federal Power Act prevents the sale or disposition of a utility’s assets without the prior approval of the Federal Energy Regulatory Commission (FERC).
The State of Idaho has adopted the 2017 Edition of the National Electric Safety Code (NESC) via Rule 101 of the Safety and Accident Reporting Rules for Utilities, which is regulated by the Idaho Public Utilities Commission (PUC) (codified in IDAPA 31.11.01.101). Under Rule 101, regulated utilities must adhere to construction and maintenance standards as defined by the NESC. In addition, public utilities seeking to construct a transmission line, plant or system must receive from the Idaho PUC a Certificate of Public Convenience and Necessity (CPCN) prior to beginning construction (I.C. 61-526). The CPCN includes approval of detailed site restoration plans, and incorporates appropriate restoration standards and stipulations from BLM’s authorizing document(s). Before issuing a Notice to Proceed, Realty Specialists should ensure that BLM-approved restoration plans have been included in an Idaho PUC-approved CPCN.
The above-described regulatory structure precludes regulated utilities from abandoning infrastructure and provides for a smooth transition if ownership of a utility changes or when a transmission or distribution system is constructed, reconfigured, reconstructed, or decommissioned. Due to the described Federal and State regulations and oversight, bonds for regulated electrical utility ROWs are not warranted to protect BLM from incurring costs associated with construction and decommissioning. As directed by IM WO-2019-013, a determination that bonding is not warranted for a regulated electrical utility ROW will be documented in writing and placed in the associated ROW casefile.
On a case by case basis, however, the AO may determine that a bond is warranted (usually for short-term ROWs) due to specific site conditions or resource concerns within a transmission or distribution line ROW that could be affected by construction activities. The purpose of the bond would be to ensure that construction-related reclamation activities that take longer than the term of the ROW are completed to the standards identified in the authorizing document.
For independent power producers or transmission companies that are not subject to Idaho’s regulatory structure, the AO should evaluate the need for a bond using the procedures outlined in IM WO-2019-013.
The State Director is to be briefed on energy-related ROW bond determinations that address decommissioning activities associated with transmission or distribution lines authorized through the above-described Idaho PUC process.
Timeframe: This IM is effective upon date of issuance.
Budget Impact: None
Background: Until recently, BLM’s lack of a national policy for bonding ROW grants and other land use authorizations resulted in inconsistent application of bonding requirements at the field level both within and between States, thereby causing BLM to accrue liability for restoring sites that should have been restored by the holder. IM WO-2019-013 addressed these issues by requiring that, where warranted, holders are bonded to ensure adequate restoration of habitat or other resource damage resulting from initial construction, as well as appropriate facility repair and/or decommissioning following ROW termination or expiration.
Manual/Handbook Sections Affected: No Manual or Handbook sections are affected.
Coordination: Boise Field Solicitor’s Office, BLM Washington Office, Idaho State Office, Districts, and Field Office staff.
Contact: Questions may be directed to Marlo Draper, Acting Branch Chief for Lands, Minerals, and Water Rights, at (208)373-3827 or mdraper@blm.gov.
Boise District with Union: Management is reminded to notify and satisfy any bargaining requirements prior to implementation.
Signed by:
John F. Ruhs
State Director
Authenticated by:
Robyn Anderson
Administrative Specialist