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12 The Carbon Market: A Primer for Airports 1.4.1 Use of Airport Revenue and Revenue Diversion There does not appear to be a likely violation of airport revenue use restrictions resulting from the on-airport installation of alternative energy systems or offset-eligible projects, provided that either (1) those facilities would be used directly by the airport or (2) the airport were compen- sated appropriately for the use of airport land. For example, an airport generating renewable power would likely have to retain any revenue accruing from the sale of excess power or RECs to a utility company or to a third party for its own use. As such, one interpretation could be that a municipal airport sponsor might be violating revenue use restrictions if it were to take the REC revenues "downtown," i.e., to use them for municipal purposes not related to airport operations without fair market value compensation to the airport. An analogous activity is that of revenue generated from mineral extraction as set forth in the 1999 Policy and Procedures Concerning the Use of Airport Revenue (FAA 2009). In a power-purchase agreement (PPA)--a contract between an entity that generates power and an entity that purchases and consumes electricity where a third party owns and operates an alternative energy or offset-eligible project on airport property--the airport would need to be compensated for the fair market value of the property. In some circumstances, where a PPA project is conducted on property purchased with AIP noise grants, the FAA may demand repayment of the grants. The FAA is starting to look at the release of this land for non-aviation use. 1.4.2 Airport Layout Plan and Compatible Land Use Before an airport sponsor can "sell, lease, encumber, or otherwise transfer or dispose of any part of its title or other interests" in the airport, the FAA needs to approve the action, as part of its grant assurances. Airport sponsors should coordinate with their Airport District Office before entering into long-term leases for renewable energy and offset-eligible projects that result in either a release of airport land or a change in the airport's land use. The FAA must approve all land uses on airport property. Should the land uses interfere with the safety and efficiency of the airport operation or other critical evaluation factors, they may not be approved. Wind farms and solar farms alike could have safety implications at the airport. While solar farms are an increas- ingly common site at airports, wind farms are not typically observed due to a number of factors, such as their size and potential interference with radar technology. Over 15 airports around the country are operating solar facilities and airport interest in solar energy is growing rapidly. The FAA has published "Technical Guidance for Evaluating Selected Solar Technologies on Airports" (FAA 2010b). This guidance, published in October 2010, provides a checklist of FAA procedures to ensure that proposed photovoltaic or solar thermal hot water systems are safe and pose no risk to pilots, air traffic controllers or airport opera- tions. This checklist should be reviewed in detail, as a starting point for all airport sponsors considering solar at their airport. Case studies of operating airport solar facilities are provided within the guidance document, including Denver International Airport, Fresno Yosemite In- ternational Airport, and Albuquerque International Sunport. The feasibility of solar projects, as well as other renewable energy projects on airport grounds, will be discussed in later sections of the Primer. Land use in the vicinity of the airport is also governed by the grant assurances, which specify that it must be compatible to the extent reasonable so as to minimize interference with airport operations. However, airport operators do not directly control the use of off-airport land. This restriction would limit the ability of the airport sponsor to "partner" with an adjacent landowner to implement an offset-eligible project if that offset-eligible project is not compatible with the airport operation.