Cleaning Up After Alternative Energy Projects
Solar and wind energy systems have become common structures around the country for creating renewable energy. But when the project is completed, or if the project is abandoned, the cost of decommissioning — tearing down the facilities and restoring the land to its original state — can cost several million dollars.
Activities that may be necessary for decommissioning include removing foundations, underground electrical wires, structures, access roads, and hazardous materials from the site, plus returning the land to its original condition and restoring vegetation.
If the project was built on private property, the expense of decommissioning could fall on the landowner. Projects built on government land or public land could place the cost burden of decommissioning on the taxpayers.
Decommissioning is usually at the local level, but some states and the U.S. Government also have the authority to enact decommissioning rules. Landowners, municipalities, states, and the Federal Government may require a decommission surety bond, or performance and reclamation bond, to be posted before a project begins.
A surety bond is a financial guarantee that covers losses, damages, and injury to human health, the environment, or property, plus other costs. A decommission bond relieves the burden on the landowners and taxpayers and puts the responsibility of proper decommission on the project owner.
The Bureau of Land Management
The Bureau of Land Management supports the use of public lands to help supplement the nation’s energy needs. This includes obtaining oil, gas, coal, minerals, and renewable energy such as wind, geothermal, and solar power from public lands.
The Bureau may grant a right-of-way on public land except when there is a statute or regulation that specifically excludes a right-of-way, or it has been determined as an inappropriate use as a right-of-way. The right-of-way program helps protect public lands and adjacent lands.
The Bureau requires a performance and reclamation bond as a financial guarantee that covers potential liabilities or specific requirements for the construction, decommissioning, and reclamation of a right-of-way on, over, under or through public land.
What is the Surety Bond Amount?
The required amount for a surety bond is determined by several factors that include environmental liabilities, decommissioning costs, and reclamation costs.
A Reclamation Cost Estimate is an estimate of expenses that it will take to return the land to its original state, which includes removing improvements made under the right-of-way, returning the land to its original contour, and establishing sustainable vegetation. Limiting the amount of vegetation removal in the project planning phase can help reduce the bond amount.
Once a project is completed and the restoration is satisfactory, the bond may be released.
Besides a surety bond, other acceptable security instruments may include cash, cashiers or certified check, certificate or book-entry deposits, negotiable US Treasury securities, irrevocable letters of credit, and policy of insurance.
How Do I Get A Surety Bond?
Contact SuretyGroup.com and we’ll help you get bonded quickly and easily. We offer free, no-obligation quotes that fit your specific project, so you know what your premium will be before purchasing your bond. Call 844-432-6637 or email email@example.com.
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