Articles, Newsletters and Advisories
In an effort to ensure that owners of solar and wind energy facilities (“renewable energy facilities”) do not decommission production facilities without completing proper reclamation, on April 10, 2021, the West Virginia Legislature enacted Senate Bill 492, creating the West Virginia Wind and Solar Energy Facility Reclamation Act (as new Article 32 of Chapter 22 of the West Virginia Code (“Reclamation Act”)). The Reclamation Act (effective July 9, 2021) generally requires that an owner of a wind generation facility or a solar generation facility submit certain information to the West Virginia Department of Environmental Protection (“DEP”), including the date the facility commenced operation; a proposed decommissioning plan (prepared by a “qualified independent licensed professional engineer”); and a cost estimate for execution of that plan. The DEP will use that and other relevant information in preparing (or approving) a decommissioning plan for the site and in determining an appropriate reclamation bond amount for the facility.
Renewable energy facilities with a nameplate capacity of less than 1.0 megawatts are excluded from coverage. In addition to that limitation, the following are exempt from the application and bonding requirements of the statute: (1) those facilities owned by entities that are “regulated public utilities” who can convince the Public Service Commission (“PSC”) and DEP that they have sufficient “financial integrity and long-term viability” to obviate the need for a reclamation bond; (2) facilities whose owners are legally bound by a decommissioning agreement “based upon a qualified independent party” executed prior to July 9, 2021; and (3) facilities that are subject to a siting certificate or other authorization from the PSC that was conditioned on execution of a decommissioning agreement prior to July 9, 2021 (as long as the owner is in compliance with the agreement, the facility has not been sold to a successor who is not bound by the agreement, and the facility has not been “substantially expanded” in terms of disturbed acreage). A separate section (W.Va. Code § 22-32-8) outlines the minimum elements of acceptable decommissioning agreements.
Generally, the owner of a covered solar or wind project that is not exempt must submit an application for a reclamation bond to the DEP within twelve (12) months of starting operation, along with an application fee of $100 per megawatt of nameplate generation capacity. For wind or solar projects that are already in operation or commence operation prior to July 1, 2021, the deadline for submitting a complete application is July 1, 2022. However, that same deadline applies to the posting of a decommissioning bond, so it would be prudent to submit the application for a bond well in advance of that date.
The statute directs that the amount of any such bond shall be “based upon the total disturbed acreage of land” upon which the solar or wind energy facility is operated, less salvage value. It further specifies that the amount of any required bond may not exceed the total projected future costs of decommissioning (less salvage value).
The property owner and the owner of a renewable energy facility (along with any local governing body with jurisdiction) may enter into an agreement that calls for “alternative restoration” of buildings, fixtures, infrastructure and surface lands associated with the facility. Though it is not clear, such “alternative restoration” may be akin to an “alternative post-mining land use” that may be approved in connection with the reclamation of coal mines under the West Virginia Surface Coal Mining and Reclamation Act, W.Va. Code § 22-3-1, et seq. (“WVSCMRA”). As with WVSCMRA, any such proposal must be submitted for review and approval by the DEP before it takes effect. Under the Reclamation Act, the DEP is required to review such a proposal and render a decision regarding its acceptability within ninety (90) days of its submission.
Either separately or in conjunction with an alternative restoration plan, an owner of a renewable energy facility may petition the DEP to modify the approved decommissioning plan and adjust the bond requirements associated with it. A request for reduction in the posted bond amount based on a reduction in the total disturbed acreage may only be submitted once every five years.
Should the DEP unilaterally modify a decommissioning plan and adjust the required bond amount for any solar or wind generation facility, the owner may appeal such an order to the West Virginia Environmental Quality Board (the “EQB,” an independent, quasi-judicial appellate body within the DEP). Any failure to submit a required bond may be subject to an administrative penalty of up to $10,000 for the first day of violation and up to $500 per day for each day the failure continues. The DEP’s assessment of a penalty for such a violation is also appealable to the EQB. The statute also includes provisions addressing requests for bond release upon successful reclamation and for bond forfeiture for failure to properly decommission a solar or wind energy facility. All such DEP orders relating to bond release and forfeiture are also appealable to the EQB.
As this summary suggests, there is much to be determined by the DEP regarding how the Reclamation Act will be implemented. Interested persons should keep an eye out for proposed rules (regulations) as well as policy development from the DEP. For questions about S.B. 492 or renewable energy development in West Virginia, contact Christopher B. (“Kip”) Power at (681) 265-1362 or email@example.com.