PA Decommissioning Bill Passes the House
House Bill 2104 (“HB 2104”) has finally through the PA House of Representatives. As we have detailed over the past few months, HB 2104 creates a new chapter for standardized requirements related to the decommissioning of alternative energy facilities, including wind and solar. It has been a while, so what exactly does HB 2104 change? HB 2104 presents a uniform approach to alternative energy decommissioning plans as opposed to the broad range of requirements and timelines found in the municipalities across Pennsylvania:
Decommissioning Timeline: except in the event where a grantee is actively working to recommence the production of electricity, a grantee shall be responsible for decommissioning the alternative energy facility in accordance with this chapter no later than 18 months after the facility has ceased producing electricity.
Decommissioning Plan Form: Within 180 days of the effective date of this section, the department shall, by regulation and in consultation with the alternative energy facility industry, develop a provisional standard form for a decommissioning plan and financial assurance to be filed with the county recorder of deeds in accordance with this chapter. For now, the department has provided temporary regulations located in section 4304(b), which must be contained in the final regulations the department creates.
Financial Assurance Requirements:A grantee who executes an alternative energy facility agreement on or after the effective date of this section shall provide a decommissioning plan, submit proof of financial assurance from a banking institution or a Federal credit union as defined in 17 Pa.C.S. § 103 (relating to definitions) to the county recorder of deeds and provide notice to the surface property owner party (underlying landowner). Acceptable methods of financial assurance shall include a bond, an escrow account or an irrevocable letter of credit from a banking institution in accordance with HB 2104. The irrevocable letter of credit may be terminated at the end of an alternative energy facility agreement only upon 90 days’ prior written notice by the banking institution to the grantee and surface property owner.
Financial Assurance Amount: The amount of financial assurance shall be equal to the cost of decommissioning the alternative energy facility in accordance with section 4304(b) (relating to financial assurance forms and decommissioning plans) and shall be calculated and updated every five years by a third-party professional engineer retained by the grantee from a list of professional engineers compiled by the department and published on the department’s publicly accessible Internet website.
Financial Assurance Timeline: A grantee shall deliver a decommissioning plan and proof of financial assurance to the county recorder of deeds no later than 30 days before the commencement of construction of the alternative energy facility, the grantee shall provide the decommissioning plan and proof of financial assurance to the county recorder of deeds in an amount equal to 10% of the total cost of decommissioning as determined by a third-party engineer. The grantee shall update the decommissioning plan and provide proof of financial assurance (in an increasing amount) on or before the fifth (10%), tenth (25%), fifteenth (40%), twentieth (60%) and twenty-fifth (70%) anniversary of the commencement of construction,
Subsequent Grantees: The decommissioning plan and associated financial assurance may not be separated from the alternative energy facility through a change in grantee ownership to a new grantee. The new grantee shall submit proof of financial assurance in a similar manner to the original grantee as stated above. The prior grantee may not release or revoke the prior grantee’s financial assurance until the new grantee’s proof of financial assurance is filed with the county recorder of deeds and notices is provided to the surface property owner party.
OK, but what does that mean for a solar developer in Pennsylvania? When/If HB 2104 passes through the PA Senate, these decommissioning provisions preempt all local ordinances which materially impede the purpose of this bill. These will be the new decommissioning rules to follow and adhere to. OK, but when do these provisions take effect? The addition of 27 Pa. C. S. §4304 (temporary guidelines for decommissioning plans) takes effect immediately following the passage of the bill. The remainder of the act takes effect in 180 days.
COMMUNITY SOLAR UPDATE: We all anxiously await any positive movement on the various PA community solar bills. Here is the most recent status of House Bill 1555 and here is the most recent status of Senate Bill 472.
If you have other specific questions about third-party approvals, renewable energy, or anything related or unrelated, please don’t hesitate to call our firm at (717-845-1524) or email Andy Miller (email@example.com) or Cory Dillinger (firstname.lastname@example.org) with any questions or comments.