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Notice2022-11537

Pacific Wind Lease Sale 1 (PACW-1) for Commercial Leasing for Wind Power on the Outer Continental Shelf in California-Proposed Sale Notice

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Published

May 31, 2022

Issuing agencies

Interior DepartmentOcean Energy Management Bureau

Abstract

This document is the proposed sale notice (PSN) for the sale of commercial wind energy leases on the Outer Continental Shelf (OCS) in the Humboldt Wind Energy Area (WEA) and Morro Bay WEA offshore California. The Bureau of Ocean Energy Management (BOEM) proposes to offer multiple lease areas (Lease Areas) for sale in each WEA and to conduct simultaneous auctions for Lease Areas within each WEA using a multiple-factor bidding auction format. The PSN contains information pertaining to the areas available for leasing, certain provisions and conditions of the lease, auction details, lease forms, criteria for evaluating competing bids, award procedures, appeal procedures, and lease execution procedures. The issuance of any lease resulting from this sale would not constitute approval of project-specific plans to develop offshore wind energy. Such plans, if submitted by the Lessee, would be subject to subsequent environmental, technical, and public reviews prior to a BOEM decision on whether the proposed development should be authorized.

Full Text

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<title>Federal Register, Volume 87 Issue 104 (Tuesday, May 31, 2022)</title>
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[Federal Register Volume 87, Number 104 (Tuesday, May 31, 2022)]
[Notices]
[Pages 32443-32458]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11537]

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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2022-0017]

Pacific Wind Lease Sale 1 (PACW-1) for Commercial Leasing for
Wind Power on the Outer Continental Shelf in California--Proposed Sale
Notice

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Proposed sale notice; request for comments.

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SUMMARY: This document is the proposed sale notice (PSN) for the sale
of commercial wind energy leases on the Outer Continental Shelf (OCS)
in the Humboldt Wind Energy Area (WEA) and Morro Bay WEA offshore
California. The Bureau of Ocean Energy Management (BOEM) proposes to
offer multiple lease areas (Lease Areas) for sale in each WEA and to
conduct simultaneous auctions for Lease Areas within each WEA using a
multiple-factor bidding auction format. The PSN contains information
pertaining to the areas available for leasing, certain provisions and
conditions of the lease, auction details, lease forms, criteria for
evaluating competing bids, award procedures, appeal procedures, and
lease execution procedures. The issuance of any lease resulting from
this sale would not constitute approval of project-specific plans to
develop offshore wind energy. Such plans, if submitted by the Lessee,
would be subject to subsequent environmental, technical, and public
reviews prior to a BOEM decision on whether the proposed development
should be authorized.

DATES: Comments should be submitted electronically or postmarked no
later than August 1, 2022.
For prospective bidders who want to participate in this lease sale:
Unless you have received confirmation from BOEM that you are qualified
to participate in a California lease sale, your qualification materials
must be submitted during the comment period and must be submitted
electronically or postmarked no later than August 1, 2022.

ADDRESSES: Submit comments on the PSN in one of the following ways:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>.
In the search box on web page, enter BOEM-2022-0017 and click
``search.'' Follow the instructions to submit public comments.
<bullet> Mail or other delivery service: Enclose your comments in
an envelope

[[Page 32444]]

labeled ``Comments on California PSN,'' and addressed to: Bureau of
Ocean Energy Management, Pacific Regional Office, Mail Stop CM 102, 760
Paseo Camarillo (Suite 102), Camarillo, California 93010-6002.
Qualifications Materials: Prospective bidders who have not yet met
the qualifications to participate in a California lease sale should
follow the guidance provided at <a href="https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/">https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/</a>.
For more information regarding the submission of public comments
and qualification materials, see section V under the caption
SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Sara Guiltinan, Bureau of Ocean Energy
Management, Pacific Regional Office, Mail Stop CM 102, 760 Paseo
Camarillo (Suite 102), Camarillo, California 93010-6002, (805) 384-
6345, or <a href="/cdn-cgi/l/email-protection#88fbe9fae9a6effde1e4fce1e6e9e6c8eae7ede5a6efe7fe"><span class="__cf_email__" data-cfemail="3c4f5d4e5d125b4955504855525d527c5e535951125b534a">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background

a. Call for Information and Nominations: On October 19, 2018, BOEM
published a call for information and nominations in the Federal
Register (83 FR 53096) (``2018 Call'') that identified three
geographically distinct Call Areas on the OCS offshore California,
delineated as the Humboldt Call Area offshore the north coast and the
Morro Bay Call Area and the Diablo Canyon Call Area offshore the
central coast. Following the 2018 Call, the Morro Bay and Diablo Canyon
Call Areas were initially assessed as incompatible for wind energy
development by the U.S. Department of Defense (DoD). However, after the
initial assessment, BOEM, the State of California, various California
elected officials, the National Oceanic and Atmospheric
Administration's (NOAA's) Office of National Marine Sanctuaries (ONMS),
and DoD continued to have discussions and conduct stakeholder outreach
in efforts to accommodate offshore wind development within and adjacent
to the Morro Bay Call Area and DoD's mission requirements. More
information and results of these meetings and outreach can be viewed
at: <a href="https://www.boem.gov/renewable-energy/state-activities/public-information-meetings-and-outreach-efforts">https://www.boem.gov/renewable-energy/state-activities/public-information-meetings-and-outreach-efforts</a>.
In May 2021, the White House, the Department of the Interior, DoD,
and the State of California announced an agreement to advance an area,
known as the ``Morro Bay 399 Area,'' that could support approximately
three gigawatts of offshore wind on roughly 399 square miles (255,487
acres) off California's central coast within and adjacent to the
initial 2018 Morro Bay Call Area (<a href="https://www.doi.gov/pressreleases/biden-harris-administration-advances-offshore-wind-pacific">https://www.doi.gov/pressreleases/biden-harris-administration-advances-offshore-wind-pacific</a>).
On July 29, 2021, BOEM delineated the two extensions in the
identified Morro Bay 399Area, known as the East and West Extensions, in
a published Call for Information and Nominations in the Federal
Register (86 FR 40869) (``2021 Call'') to solicit public input and
industry interest in the extensions.
In response to the 2018 Call and 2021 Call, BOEM received over 180
comments from the general public, representatives of fishing
organizations and interests, offshore wind developers, other ocean
industry groups, non-governmental organizations, universities, Tribal
governments, local governments, Federal and State agencies, and other
stakeholders. In addition to the comments received in response to the
2018 Call and 2021 Call, BOEM received input during outreach and
engagement with Tribal governments, the State of California, and public
stakeholders in over 80 meetings. The outreach effort and input
received are documented in a California Offshore Wind Energy Planning
Outreach Summary Report published in September 2018 (<a href="https://www.boem.gov/renewable-energy/california-outreach-summary-report">https://www.boem.gov/renewable-energy/california-outreach-summary-report</a>) and
an Outreach Summary Report Addendum published in June 2021 (<a href="https://www.boem.gov/renewable-energy/state-activities/offshore-wind-outreach-addendum">https://www.boem.gov/renewable-energy/state-activities/offshore-wind-outreach-addendum</a>).
A total of 23 offshore wind developers submitted nominations in
response to the 2018 Call and 2021 Call with 10 nominations for the
Humboldt Call Area and 17 nominations for the Morro Bay Call Area.
b. Area Identification: After the close of the 2018 Call and the
2021 Call comment periods, BOEM initiated the Area identification (Area
ID) process. Through the Area ID process, BOEM considered information
sources, such as: Comments and nominations received on the 2018 Call
and 2021 Call; information from the BOEM California Intergovernmental
Renewable Energy Task Force; input from California State and Federal
agencies; input received via consultation meetings and written comment
from federally recognized Tribes; input received via Tribal outreach
meetings with federally and non-federally recognized Tribes; the
California Offshore Wind Energy Planning Outreach Summary Report and
Addendum; California Offshore Wind Energy Gateway data and information
(<a href="https://caoffshorewind.databasin.org/">https://caoffshorewind.databasin.org/</a>); outreach meetings and comments
received under the California Energy Commission Notice of Availability
of Outreach on Additional Considerations for Offshore Wind Energy off
the Central Coast; comments from relevant stakeholders and ocean users,
including the maritime community, environmental non-governmental
organizations, offshore wind developers, and the commercial fishing
industry; State and local renewable energy goals; and domestic and
global offshore wind market and technological trends.
BOEM also considered multiple existing uses of the California coast
in developing the Call Areas and WEAs. BOEM found that existing uses
and resources with the highest potential to be affected by offshore
wind energy development activities in the Call Areas, relative to other
uses and resources, include: (i) Commercial and recreational fishing;
(ii) avian species; (iii) marine mammals; (iv) maritime navigation; (v)
historic properties; (vi) visual impacts; (vii) DoD activities; (viii)
places and resources of importance to Tribes; and (ix) other
infrastructure. BOEM announced the Area ID by identifying within the
Call Areas the Humboldt WEA on July 28, 2021, and the Morro Bay WEA on
November 12, 2021. The Area ID announcements and maps of the WEAs are
available at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
c. Environmental Reviews: On July 28, 2021, BOEM announced its
intent to prepare an environmental assessment (EA) to consider
potential environmental impacts from site characterization activities
(i.e., biological, archaeological, geological, and geophysical surveys
and core samples) and site assessment activities (i.e., installation of
meteorological buoys) associated with issuing any wind energy leases in
the Humboldt WEA. As part of the EA process, BOEM sought comments on
the issues and alternatives that should inform the EA and received 52
comments. The written comments, comment summaries, and public meeting
recordings and transcripts are available at: <a href="https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area">https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area</a>. BOEM
announced the availability of the draft Humboldt EA on January 11,
2022, and initiated a 30-day public comment period. BOEM received 43
comments on the draft Humboldt EA. Written comments are available at
<a href="http://www.regulations.gov/">http://www.regulations.gov/</a>, under Docket No. BOEM-2021-0085. Public
meeting recordings and summaries are available

[[Page 32445]]

at: <a href="https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area">https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area</a>. The EA was subsequently revised based on comments
received during the comment period and public meetings. The revised EA
and the finding of no significant impact were published on May 5, 2022,
and are available at: <a href="https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-final-ea">https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-final-ea</a>.
Concurrently with its preparation of the Humboldt EA, BOEM
conducted a consistency review under the Coastal Zone Management Act.
The California Coastal Commission implements the Coastal Zone
Management Act in California. BOEM submitted a consistency
determination to the California Coastal Commission on January 24, 2022;
Commission staff filed a Staff Report recommending conditional
concurrence with BOEM's consistency determination on March 17, 2022
(see Staff Report at <a href="https://documents.coastal.ca.gov/reports/2022/4/Th8a/Th8a-4-2022%20staffreport.pdf">https://documents.coastal.ca.gov/reports/2022/4/Th8a/Th8a-4-2022%20staffreport.pdf</a>); and, on April 7, 2022, the
Commission unanimously concurred with the staff's conditional
consistency recommendation. BOEM will update lease conditions to ensure
that the activities authorized under the lease are consistent with the
conditional concurrence of the Commission.
On November 12, 2021, BOEM announced its intent to prepare an EA to
consider potential environmental impacts from site characterization
activities (i.e., biological, archaeological, geological, and
geophysical surveys and core samples) and site assessment activities
(i.e., installation of meteorological buoys) associated with issuing
any wind energy leases in the Morro Bay WEA. As part of the EA process,
BOEM sought comments on the issues and alternatives that should inform
the EA and received 88 unique comments. Written comments are available
at <a href="http://www.regulations.gov/">http://www.regulations.gov/</a> gov/, under Docket No. BOEM-2021-0044.
Public meeting recordings and summaries are available at: <a href="https://www.boem.gov/renewable-energy/state-activities/morro-bay-wind-energy-area">https://www.boem.gov/renewable-energy/state-activities/morro-bay-wind-energy-area</a>. BOEM announced the availability of the draft Morro Bay EA on
April 6, 2022, and initiated a 30-day public comment period. On May 4,
2022, BOEM announced the extension of the comment period by 10 days in
response to stakeholder request.
Concurrently with its preparation of the Morro Bay EA, BOEM
conducted a consistency review under the Coastal Zone Management Act.
BOEM submitted a consistency determination to the California Coastal
Commission on April 15, 2022.
The Morro Bay EA will be concluded before and inform BOEM's
decision whether to proceed with the final sale notice (FSN).
BOEM prepared and executed a programmatic agreement (PA) to guide
its consultations under section 106 of the National Historic
Preservation Act. The PA provides for consultations to continue through
BOEM's decision-making process regarding the issuance of leases, right-
of-way grants, and right-of-use and easement grants on the OCS offshore
California. The PA also includes BOEM's phased identification and
evaluation of historic properties. BOEM is conducting consultations
under the Endangered Species Act and the Magnuson-Stevens Fishery
Conservation and Management Act regarding potential impacts to listed
species, designated critical habitat, and essential fish habitat. BOEM
will continue to engage as required with Tribal governments throughout
the wind energy authorization process, including through Government-to-
Government consultation with federally recognized Tribes.

II. Area Proposed for Leasing

The areas available for sale are proposed to be auctioned as
multiple leases within two California regions as listed in the table
below.

------------------------------------------------------------------------
Lease area name Lease area ID Acres
------------------------------------------------------------------------
North Coast Region:
Humboldt NE......................... OCS-P 0561 63,338
Humboldt SW......................... OCS-P 0562 69,031
Central Coast Region:
Morro Bay NW........................ OCS-P 0563 80,062
Morro Bay C......................... OCS-P 0564 80,418
Morro Bay E......................... OCS-P 0565 80,418
-------------------------------
Total........................... .............. 373,268
------------------------------------------------------------------------

The proposed Lease Areas include the entirety of the Humboldt and
Morro Bay WEAs. The WEAs were subdivided so that each proposed Lease
Area:
<bullet> Is of roughly equal power generation potential and
geographical size;
<bullet> is delineated in a manner to maximize energy generation;
and
<bullet> facilitates fair return to the Federal Government pursuant
to the OCS Lands Act through competition for commercially viable Lease
Areas.
The Morro Bay WEA has been divided into three Lease Areas and the
Humboldt WEA has been divided into two Lease Areas. The Lease Area
delineations are based on findings of a National Renewable Energy
Laboratory (NREL) study called ``Assessment of Offshore Wind Energy
Leasing Areas for Humboldt and Morro Bay Wind Energy Areas,
California,'' available at: <a href="https://www.nrel.gov/docs/fy22osti/82341.pdf">https://www.nrel.gov/docs/fy22osti/82341.pdf</a>. The designation of final Lease Areas in the FSN will be
informed by comments received in this PSN and other relevant data.
BOEM is aware of the proposed designation of the Chumash Heritage
National Marine Sanctuary, an area comprising approximately 7,000
square miles off the central coast of California adjacent to the Morro
Bay WEA. BOEM does not have authority under the OCS Lands Act to issue
leases, right-of-way grants, or right-of-use and easement grants within
any unit of the National Marine Sanctuary System. Potential bidders
should note that future designation of a National Marine Sanctuary
adjacent to a Lease Area may have implications for development of OCS
leases for commercial wind energy. BOEM is coordinating closely with
the NOAA Office of National Marine Sanctuaries to advance offshore wind
energy projects and conservation and restoration of ocean and coastal
habitats. More information on the proposed designation of Chumash
Heritage National Marine Sanctuary is available at: <a href="https://sanctuaries.noaa.gov/chumash-heritage/">https://sanctuaries.noaa.gov/chumash-heritage/</a>.
BOEM is also aware that the U.S. Coast Guard (USCG) is conducting a
Port Access Route Study on the Pacific Coast from Washington to
California (PACPARS) to evaluate safe access routes for the movement of
vessel traffic

[[Page 32446]]

proceeding to or from ports along the western seaboard, and,
specifically, to determine whether a Shipping Safety Fairway and/or
routing measures should be established, adjusted, or modified. BOEM is
coordinating closely with the USCG to address potential maritime
impacts from any future offshore wind development in the Lease Areas.
More information on the PACPARS is available at <a href="http://www.regulations.gov/">http://www.regulations.gov/</a> gov/, under Docket No. USCG-2021-0345.
BOEM is aware of two planned submarine cable systems that are
scheduled for installation in cable corridors that overlap the proposed
Lease Areas. A planned submarine telecommunications cable system, known
as BIFROST, is expected to be installed in 2023 in a cable corridor
that would overlap with the southern portion of the proposed Morro Bay
E Lease Area. A planned telecommunications cable, known as ECHO, is
expected to be installed in Eureka, California, in 2023 and would
overlap with both proposed Humboldt Lease Areas.
A description of the proposed Lease Areas can be found in Addendum
``A'' of the proposed lease, which BOEM has made available with this
notice on its website at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
a. Map of the Areas Proposed for Leasing: A map of the Lease Areas
and GIS spatial files X, Y (eastings, northings) UTM Zone 18, NAD83
Datum, and geographic X, Y (longitude, latitude), NAD83 Datum can be
found on BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
b. Potential Future Restrictions to Ensure Navigational Safety:
i. USCG Navigational Safety Measures: Potential bidders should note
that the USCG is conducting a PACPARS to evaluate safe access routes
for the movement of vessel traffic proceeding to or from ports or
places along the western seaboard of the United States and to determine
whether a Shipping Safety Fairway and/or routing measures should be
established, adjusted, or modified. The PACPARS will evaluate the
continued applicability of, and the need for modifications to, current
vessel routing measures. The data gathered during the PACPARS may
result in the establishment of one or more new vessel routing measures,
modification of existing routing measures, or disestablishment of
existing routing measures off the Pacific Coast between Washington and
California. BOEM may require mitigation measures in the construction
and operations plan (COP) once the Lessee's site-specific navigational
safety risk assessment is available to inform BOEM's decision-making.
The PACPARS may result in additional navigational mitigation measures
at the COP review stage.
ii. Measures for Vessel Transit: The information currently
available does not indicate that vessel routing mitigation measures are
warranted, but BOEM may nonetheless consider designating portions of
the proposed Lease Areas as areas of no surface occupancy to facilitate
vessel transit and continuance of existing uses. Vessels cross the
Morro Bay WEA to enter the USCG Recommended Tracks within the Monterey
Bay National Marine Sanctuary and traffic lanes outside the San
Francisco Bay. Bidders should be aware that a lease stipulation may be
included in the FSN that addresses vessel routing measures, depending
on the outcome of additional discussions with the USCG, ocean users,
and stakeholders, and consideration of comments submitted in response
to this PSN.
c. Potential Future Restrictions to Mitigate Potential Conflicts
with Department of Defense Activities: In 2018, DoD reviewed the
Humboldt and Morro Bay Call Areas (83 FR 53096) in support of BOEM's
efforts to deconflict potential wind energy development in the areas in
northern and central California, respectively. DoD provided its
assessment of the California Offshore Planning Areas, and the 2018 DoD
assessment indicated that its mission activities along most of the
central coast, including the Morro Bay Call Area, are incompatible with
wind energy development. DoD determined that the Humboldt Call Area,
located off the coast of northern California, was DoD-mission
compatible, with site-specific stipulations.
On May 25, 2021, the Departments of the Interior and Defense and
the State of California announced an agreement to accelerate wind
energy offshore the central and northern coasts of California. The
Department of the Interior, in cooperation with DoD and the State of
California, identified the Morro Bay 399 Area that could support
approximately three gigawatts of offshore wind on roughly 399 square
miles off California's central coast, northwest of Morro Bay. The
announcement also acknowledged the critical nature of current and
future military testing, training, and operations in the central coast
and noted the parties' commitment to ensuring long-term protection of
military testing, training, and operations in the area while pursuing
new domestic clean energy resources. This announcement came after years
of collaboration between the Departments of the Interior and Defense to
find areas offshore the central coast of California that are compatible
with DoD's training and testing operations. The proposed Lease Areas
offshore Morro Bay are all located within the Morro Bay 399 Area and
have been determined by DoD to be suitable for development, with site-
specific stipulations.
Prospective bidders should be aware that site specific stipulations
may be required in consultation with DoD for development within the
Lease Areas. For example, the North American Aerospace Defense Command
mission may be affected by the development of the Lease Areas. BOEM
will coordinate with DoD and the Lessee to deconflict these potential
impacts throughout the project review stage. Mitigation measures or
terms and conditions of a plan approval may result from this
coordination effort.

III. Participation in the Proposed Lease Sale

a. Bidder Participation: Entities that are already qualified to
participate in an upcoming sale through their response to a Call or
submission of qualification materials are not required to take any
additional action to affirm their interest. Those entities are listed
below:

------------------------------------------------------------------------
Company
Company name No.
------------------------------------------------------------------------
547 Energy LLC.............................................. 15123
Algonquin Power Fund (America) Inc.......................... 15090
Arevia Power LLC............................................ 15129
Avangrid Renewables, LLC.................................... 15019
Castle Wind LLC............................................. 15085
Central California Offshore Wind LLC........................ 15110
Cademo Corporation.......................................... 15093
Clearway Renew LLC.......................................... 15109
EDF Renewables Development, Inc............................. 15027
EDPR Offshore North America LLC............................. 15074
Equinor Wind US LLC......................................... 15058
JERA Renewables NA, LLC..................................... 15131
Marubeni Power International, Inc........................... 15128
Mission Floating Wind LLC................................... 15087
Northcoast Floating Wind LLC................................ 15088
Northland Power America Inc................................. 15068
Orsted North America Inc.................................... 15059
Redwood Coast Energy Authority (RCEA)....................... 15084
Redwood Coast Offshore Wind LLC............................. 15106
RWE Renewables Development, LLC............................. 15080
Shell New Energies US LLC................................... 15140
US Mainstream Offshore, Inc................................. 15120
wpd offshore Alpha, LLC..................................... 15060
------------------------------------------------------------------------

All other entities who would like to participate in the proposed
lease sale must submit the required qualification materials by the end
of the 60-day comment period for this PSN.
b. Affiliated Entities: On the Bidder's Financial Form (BFF),
discussed in section V.(c)(i), below, eligible bidders

[[Page 32447]]

must list any other eligible bidders with whom they are affiliated.
BOEM considers two entities to be affiliated if (a) one entity (or its
parent or subsidiary) has or retains a right, title, or interest in the
other entity (or its parent or subsidiary), including the ability to
control or direct actions with respect to such entity, either directly
or indirectly, individually or through any other party; or (b) the
entities are both direct or indirect subsidiaries of the same parent
company. BOEM further considers the following regarding affiliated
entities:
i. BOEM considers two entities to be affiliated if ownership or
common ownership of more than 50 percent of the voting securities, or
instruments of ownership or other forms of ownership, of another person
constitutes control (person means any individual, firm, corporation,
association, partnership, consortium, or joint venture (when
established as a separate entity)). Ownership of less than 10 percent
constitutes a presumption of non-control that BOEM may rebut.
ii. If there is ownership or common ownership of 10 through 50
percent of the voting securities or instruments of ownership, or other
forms of ownership, of another person, BOEM will consider each of the
following factors to determine if there is control under the
circumstances of a particular case:
a. The extent to which there are common officers or directors.
b. With respect to the voting securities, or instruments of
ownership or other forms of ownership: The percentage of ownership or
common ownership, the relative percentage of ownership or common
ownership compared to the percentage(s) of ownership by other persons,
if a person is the greatest single owner, or if there is an opposing
voting bloc of greater ownership.
c. Operation of a lease, plant, or other facility.
d. The extent of other owners' participation in operations and day-
to-day management of a lease, plant, or other facility.
e. Other evidence of power to exercise control over or common
control with another person.
BOEM solicits comments from stakeholders on this definition. See
Section 4 below.
c. Affiliated eligible bidders are not permitted to compete against
each other in either the North Coast or Central Coast auctions.
However, one affiliate may participate in the North Coast and one in
the Central Coast because they would not be bidding against each other.
Where multiple affiliated bidders have qualified to bid in the same
lease sale, bidders must decide prior to the auction which one eligible
affiliated bidder (if any) will participate in each of the two
simultaneous auctions. If two or more affiliated bidders seek to
participate in the auction for the same Region, BOEM will disqualify
such bidders from the auction.

IV. Questions for Stakeholders

Stakeholders are encouraged to comment on any matters related to
this lease sale that are of interest or concern. However, BOEM has
identified certain issues as particularly important in developing this
lease sale and encourages commenters to address these issues
specifically.
a. Number, Size, Orientation, and Location of the Proposed Lease
Areas: In this PSN, BOEM proposes five Lease Areas in California. BOEM
is seeking feedback on the proposed number, size, orientation, and
location of the Lease Areas and welcomes comments on which Lease Areas,
if any, should be prioritized for inclusion, or exclusion, from this
lease sale or future lease sales.
Considerations for the delineation of Lease Area may include: Equal
commercial viability and size; prevailing wind direction and minimal
wake effects; maximized energy generating potential; mooring system
anchor footprints and extents; possible setbacks at Lease Area
boundaries; distance to shore, port infrastructure, and electrical grid
interconnections; and fair return to the Federal Government pursuant to
the OCS Lands Act through competition for commercially viable lease
areas. Additional comments are welcome regarding other considerations
for delineating Lease Areas.
b. Engaging Underserved Communities: Executive Order 13985,
``Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government,'' directs advancement of equity for
all, including people of color and others who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality. Executive Order 14008, ``Tackling the Climate Crisis at
Home and Abroad,'' establishes a policy to secure environmental justice
and spur economic opportunity for disadvantaged communities through
investing in and building a clean energy economy and making
environmental justice part of every agency's mission.
Consistent with its statutory and regulatory authorities, BOEM is
considering lease stipulations to ensure that communities, particularly
underserved communities, are considered and engaged throughout the
offshore wind energy development process, that potential impacts and
benefits from Lessees' projects are documented, and Lessees' project
proposals are informed by or altered to address those impacts and
benefits.
BOEM invites comments on the appropriate mechanisms and evaluation
metrics for lease stipulations to benefit underserved communities,
including how the stipulations would further development of the
proposed Lease Areas and the purposes of OCS Lands Act. BOEM requests
that commenters provide references to any studies that support their
recommendations.
c. Bidding Credits: As authorized under 30 CFR 585.220(a)(4) and
585.221(a)(6), BOEM proposes to use a multiple-factor auction format,
with a multiple-factor bidding system, for this lease sale. The bidding
system for this lease sale is proposed as a multiple-factor combination
of a monetary bid and up to two non-monetary factors.
BOEM is proposing to grant bidding credits to potential bidders for
commitments to:
(1) Support workforce training programs for the offshore wind
industry and/or development of a U.S. domestic supply chain for the
offshore wind industry, and
(2) establish a community benefit agreement (CBA) with a community
or stakeholder group whose use of the geographic space of the Lease
Area, or whose use of resources harvested from that geographic space,
is directly impacted by the Lessee's potential offshore wind
development.
In previous commercial lease sales, BOEM has proposed non-monetary
auction factors to enhance, through training, the offshore wind
workforce or to stand up the domestic supply chain for offshore wind
manufacturing, assembly, or services. For this sale, BOEM is also
considering non-monetary auction factors to foster development of the
Lease Area through cooperation with communities affected by activities
on the OCS, as described in section V.(c)(iii) below. BOEM is also
exploring an additional bidding credit, targeting other effects from
OCS development, as described in section V.(c)(iv) below.
In a multi-factor auction, BOEM appoints a panel to review the
requirements and restrictions of the non-monetary component(s) and the
bidder's conceptual strategy, submitted with the BFF. Following the
panel's review of the bidding credit conceptual strategy, BOEM would
notify the bidder if it qualifies for a credit(s) prior to the mock
auction. The bid made by a particular bidder in each round would

[[Page 32448]]

represent the sum of a monetary (cash) amount and non-monetary factors
(bidding credit(s)). The structure of the proposed bidding credits is
explained in the subsection below. BOEM would start the auction using
the minimum bid price for each Lease Area and would increase those
prices incrementally until no more than one active bidder per Lease
Area remains in the auction. A bidder would be eligible to elect to
qualify for one or both of the bidding credits. A work force training
credit or supply chain development credit would be worth 20 percent of
the cash bid. A bidder could commit to both workforce training and
supply chain development, but the total amount of the credit would
still be 20 percent. The proposed CBA bidding credit would be worth 2.5
percent of the cash bid. If a bidder qualifies for all proposed bidding
credits, the credits would be additive, for a total potential credit of
maximum 22.5 percent of the cash bid. Bidders are encouraged to review
the proposed BFF Addendum if they are interested in qualifying for
these bidding credits.
i. Bidding credit calculation: Bidders interested in a bidding
credit would have the option to qualify for:
1. Both proposed bidding credits described below for a cumulative
22.5 percent credit;
2. A workforce training and/or supply chain development credit
(with the opportunity to target either workforce training, supply chain
development, or a combination thereof) for a 20 percent credit; or
3. The CBA credit for a 2.5 percent credit.
BOEM provides the following example. For a cumulative 22.5 percent
bidding credit with a $50 million Asking Price, the bidding credit
would be calculated within the auction software as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.221

As proposed, only the 20 percent workforce training and/or supply
chain development credit would require an explicit financial
commitment. Under BOEM's proposal, bidders seeking a CBA credit would
retain the flexibility to determine the optimal benefits (both monetary
and non-monetary) on which the parties can agree. Thus, per the example
above, the required financial commitment for the workforce training
and/or supply chain development credit would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.222

BOEM has prepared a table demonstrating the financial commitment
calculations if a $50 million asking price is paid for in part with
various bidding credits. Any financial commitment is calculated solely
from the value of the 20 percent workforce training and/or supply chain
development bidding credit, with no financial commitment required for a
CBA credit.

--------------------------------------------------------------------------------------------------------------------------------------------------------
Commitment (80%
Bidding credits qualified for Asking price Cash bid Percent credit Credit value of the 20%
credit)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Workforce Training/Supply Chain Development; $50 million..................... $40,816,326.53 22.5 $9,183,673.47 $6,530,612.24
Lease Area Use CBA (22.5%).
Workforce Training/Supply Chain Development 50 million...................... 41,666,666.67 20.0 8,333,333.33 6,666,666.67
(20%).
Lease Area Use CBA Credit (2.5%).............. 50 million...................... 48,780,487.80 2.5 1,219,512.20 N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. 20 Percent Bidding Credit Either for Workforce Training or
Supply Chain Development or a Combination of Both: The proposed bidding
credit would allow a bidder to receive a credit of 20 percent of its
cash bid in exchange for committing to make a qualifying monetary
contribution (``Contribution'') to programs or initiatives, as
described in the BFF Addendum and lease, that either support workforce
training programs for the offshore wind industry, support development
of a U.S. domestic supply chain for the offshore wind industry, or
support a combination of both. To qualify for the credit, the winning
bidder would be required to commit to make a financial Contribution of
at least 80 percent of the bidding credit cash value toward a workforce
training program and/or the development of a domestic supply chain, as
described in the BFF Addendum and lease. The 80 percent Contribution of
the bid credit value is designed to incentivize bidders to commit funds
to workforce training and to develop the domestic offshore wind supply
chain. The discount to the bid credit value recognizes the Lessee's
administrative burden associated with fulfilling bidding credit
requirements. A mathematical example is shown in section IV.(c)(i)
above. If a bidder qualifies to bid for a Lease Area in both regions
and seeks to qualify for a credit in both regions, the bidder must
submit one bidding credit conceptual strategy, but identify any
differences in the strategy for each region.
1. As proposed, the Contribution to workforce training must result
in a better trained and/or larger domestic offshore wind work force
that would provide for more efficient operations via

[[Page 32449]]

an increase in the supply of fully trained personnel.
2. The Contribution to domestic supply chain development must
result in a more stable domestic supply chain by reducing the upfront
capital or certification cost for manufacturing offshore wind
components, including the building of facilities, the purchasing of
capital equipment, and the certifying of existing manufacturing
facilities.
3. Bidders interested in obtaining the bidding credit could choose
to commit to workforce training programs, domestic supply chain
initiatives, or a combination of both. Bidders would be required to
note, on the BFF, their commitment to earn the bidding credit. A bidder
interested in using a bidding credit would be required to submit its
bidding credit conceptual strategy with its BFF. The strategy would be
required to describe the verifiable actions the Lessee would take and
that would allow BOEM to confirm compliance when the Lessee submits its
documentation. Bidders are encouraged to review the proposed BFF
Addendum if they are considering qualifying for the bidding credit.
4. BOEM proposes to permit a Lessee to defer its payment fulfilling
the commitment, with 25 percent due prior to the first COP submittal
for the Lease Area, and the remainder due prior to the first Facility
Design Report (FDR) submittal to BOEM. Lessees would be required to
provide documentation showing that they had met the commitment and
complied with the applicable bidding credit requirements no later than
the submission to BOEM of the first COP (25 percent) and first FDR
(remainder) for the Lease, as described below. Deferring the payment
until the COP and FDR would enable the Lessee to identify programs or
recipients best suited to meet the bidding credit purpose and goals, as
described in the BFF Addendum.
5. As proposed, contributions to workforce training must consist of
one or more of the following: (i) Contributions in support of union
apprenticeships, labor management training partnerships, stipends for
workforce training, or other technical training programs or
institutions focused on providing skills necessary for the planning,
design, construction, operation, maintenance, or decommissioning of
offshore wind energy projects in the United States; (ii) Contributions
toward maritime training necessary for the crewing of vessels to be
used for the construction, servicing, and/or decommissioning of wind
energy projects in the United States; (iii) Contributions toward
training workers in skills or techniques necessary to manufacture or
assemble offshore wind components, subcomponents or subassemblies.
Examples of these skills and techniques include welding; wind energy
technology; hydraulic maintenance; braking systems; mechanical systems,
including blade inspection and maintenance; or computers and
programmable logic control systems; (iv) Contributions toward training
in any other job skills that the Lessee can demonstrate are necessary
for the planning, design, construction, operation, maintenance, or
decommissioning of offshore wind energy projects in the United States.
6. As proposed, contributions to domestic supply chain development
must consist of one or more of the following: (i) Contributions
supporting the development of a domestic supply chain for the offshore
wind industry, including manufacturing of components and sub-assemblies
and the expansion of related services; (ii) Contributions to domestic
tier-2 and tier-3 offshore wind component suppliers, including
suppliers of components specifically needed to develop floating wind
technology, and domestic tier-1 supply chain efforts, including quay-
side fabrication; (iii) Contributions for technical assistance grants
to help U.S. manufacturers re-tool or certify (e.g., ISO-9001) for
offshore wind manufacturing; (iv) Contributions for the development of
Jones Act-compliant vessels for the construction, servicing, and/or
decommissioning of wind energy projects in the United States; (v)
Contributions to establish a new or existing bonding support reserve or
revolving fund available to all businesses providing goods and services
to offshore wind energy companies, including disadvantaged businesses;
(vi) Other Contributions to supply chain development efforts that the
Lessee can demonstrate further the manufacture of offshore wind
components or subassemblies, or the provision of offshore wind
services, in the United States.
7. Documentation: Under the proposed sale, if a lease is awarded
pursuant to a winning bid that includes a bidding credit for workforce
training and/or supply chain development, the Lessee must provide
documentation to BOEM showing that the Lessee has met at least 25
percent of the commitment and complied with the applicable bidding
credit requirements by no later than the submission of the Lessee's
first COP, and must provide documentation that it has met the remainder
of the commitment no later than the submission of the first FDR. As
proposed, the documentation must enable BOEM to objectively verify the
amount of the Contribution and the beneficiary(ies) of the
Contribution. At a minimum, the documentation submitted with the first
COP, and that submitted with the first FDR, must include: All written
agreements between the Lessee and beneficiary(ies) of the Contribution;
all receipts documenting the amount, date, financial institution, and
the account and owner of account to which the Contribution was made;
and sworn statements by the entity that made the Contribution and the
beneficiary(ies) of the Contribution, attesting: The amount and date(s)
of the Contribution; that the Contribution is being (or will be) used
in accordance with the bidding credit requirements in the lease; and
that all information provided is true and accurate. The documentation
would need to describe how the funded initiative or program has
advanced, or is expected to advance, U.S. offshore wind workforce
training and/or supply chain development. The documentation should also
provide qualitative and/or quantitative information that includes the
estimated number of trainees or jobs supported, or the estimated
leveraged supply chain investment resulting or expected to result from
the Contribution. The documentation must contain any information
specified in the conceptual strategy that the Lessee submitted with its
BFF. If the Lessee's implementation strategy has changed due to market
needs or other factors, the Lessee must explain this change. As
proposed, BOEM would reserve all rights to determine that the bidding
credit has not been satisfied if changes relative to the Lessee's
conceptual strategy, submitted with its BFF, do not meet the criteria
for the bidding credit described in the lease.
8. Enforcement: The commitment for the bidding credit would be made
in the BFF and would be included in a lease addendum that would bind
the Lessee and all future assignees of the lease. If BOEM were to
determine that a Lessee or assignee had failed to satisfy the
requirements of the bidding credit, or if a Lessee were to relinquish
or otherwise fail to develop the lease by the tenth anniversary date of
lease issuance, the amount corresponding to the bidding credit awarded
would be immediately due and payable to the Office of Natural Resources
Revenue (ONRR) with interest from the date of lease execution. The
interest rate would be the underpayment interest rate identified by
ONRR. BOEM could, at its sole discretion, extend the documentation

[[Page 32450]]

deadline beyond the COP, FDR or the 10-year timeframe.
iii. Questions Regarding Bidding Credit for Workforce Training and/
or Supply Chain Development:
1. Is the proposed maximum 20 percent bidding credit for workforce
training and/or supply chain development the optimal percentage to
support workforce training and supply chain development? If not, please
propose percentage(s) that may be optimal and explain why that level is
most appropriate to drive the benefits intended by the credit while
simultaneously supporting a competitive lease sale. Please also explain
how your proposal better supports workforce training programs and/or
development of a U.S. domestic supply chain for the offshore wind
industry, and how it is consistent with the requirement that the
government receive a fair return from the lease auction.
2. As proposed, the winning bidder would be required to commit to
make a financial Contribution of at least 80 percent of the bidding
credit cash value toward a workforce training program and/or the
development of the domestic supply chain. BOEM solicits any views as to
whether it should choose a Contribution threshold other than 80
percent, or should eliminate this Contribution discount on the bid
credit value.
3. What other activities should qualify for this bidding credit to
best support a sustained and robust U.S. offshore wind supply chain,
particularly a floating wind supply chain? For example, are there
activities related to manufacturing, sourcing of raw materials and
components, or other offshore wind-related industries that BOEM should
consider as possibly qualifying for this credit? Please explain how the
proposed qualifying activity supports the development of a domestic
supply chain and how that support can best be documented.
4. Should the sale encompass a bidding credit for a bidder who
proposes that its financial commitment include entering into a long-
term contract for components needed to build or maintain its project
that will also benefit the offshore wind industry as a whole, such as
the construction of new manufacturing capacity or investment in
expanding or re-tooling existing capacity? Are other effects of such
contracts conducive to development of renewable energy on the OCS? How
might the bidder document that its contract facilitated such
development? Should BOEM require the manufacturer or bidder to
demonstrate that the new or expanded capacity also will be used to
fulfill contracts with other developers? How much of the value of such
a contract should count toward any potential credit, and why?
iv. Lease Area Use Bidding Credit: The second bidding credit
proposed would allow a bidder to receive a credit of 2.5 percent of its
cash bid in exchange for an existing CBA or a commitment to enter into
a new CBA with a community or stakeholder group whose use of the
geographic space of the Lease Area, or whose use of resources harvested
from that geographic space, is directly impacted by the Lessee's
potential offshore wind development. The CBA is intended to mitigate
potential impacts to the community or stakeholder group from renewable
energy activity or structures on the Lease Area, and particularly to
assist fishing and related industries to manage transitions, gear
changes, or other similar impacts which may arise from the development
of the Lease Area. To qualify for the credit, the bidder would be
required to commit to the bidding credit requirements in the BFF and
submit a strategy as described in the BFF Addendum. If a bidder were to
qualify to bid for a Lease Area in both regions, and would like to
qualify for a CBA credit in each of those regions, bidders need only
submit a single Lease Area Use Bidding Credit conceptual strategy,
including any measures tailored to the individual regions. The CBA(s)
must be between the Lessee (or affiliated entity) and a qualifying
community or stakeholder group in each region for which the bidder
wishes to receive a credit. A mathematical example showing how this
bidding credit would be calculated is available in section V.(c)(i)
above.
1. As proposed, bidders interested in pursuing a bidding credit for
this CBA must note on the BFF whether they have an existing CBA that
conforms with BOEM's requirements or are instead making a commitment to
enter into a CBA. Bidders seeking the bidding credit must submit their
conceptual strategy with their BFF, further described below and in the
BFF Addendum. The conceptual strategy would need to describe the
verifiable actions that the Lessee intends to take that would enable
BOEM to confirm compliance when the Lessee submits its documentation
showing how it is satisfying the requirements for the bidding credit. A
Lessee would be required to provide documentation showing that the
Lessee has met the commitment and complied with the applicable bidding
credit requirements no later than the submission to BOEM of the first
FDR for the lease. Deferring the fulfillment of the commitment until
the first FDR would enable the Lessee to identify stakeholders with
impacts in need of mitigation or the greatest potential to expedite or
facilitate orderly OCS renewable energy development.
2. As proposed, a qualifying CBA must meet the following
requirements: (i) The CBA must be an agreement between (a) the Lessee
or its affiliated entity, or, if appropriate, its assignee(s), and (b)
a community or stakeholder group whose use of the geographic space of
the Lease Area, or whose use of resources harvested from that
geographic space, is directly impacted by the Lessee's potential
offshore wind development; (ii) Specify the monetary, material, or
other benefits provided, or to be provided, by the Lessee to the
directly impacted community or stakeholder group; (iii) Indicate
commitment of parties to collaboration and resolution of issues,
communication methods, engagement methods, or educational opportunities
for the impacted community or stakeholder group; (iv) Specify plans (or
strategies) to mitigate potential impacts from the proposed development
of the Lease Area on the community or stakeholder group.
3. No part of any CBA otherwise eligible for this credit may
include exclusivity or preferential clauses that prevent or
disincentivize an entity, community, or stakeholder from entering into
similar agreements with other OCS lessees or potential lessees.
4. As proposed, a Lessee may enter into a CBA with a single
counterparty or with multiple counterparties and may enter into more
than one CBA.
5. Documentation: As proposed, if a lease is awarded pursuant to a
winning bid that includes a CBA credit, the Lessee must provide written
documentation to BOEM demonstrating execution of the CBA commitment no
later than submission of the Lessee's first FDR. The documentation must
enable BOEM to objectively verify the CBA has met all applicable
requirements as outlined in the BFF Addendum and Lease. At a minimum,
this documentation must include: All written agreements between the
Lessee and beneficiary(ies), including the executed CBA; any receipts
proving monetary contributions as required by the CBA, documenting the
amount, date, financial institution, and the account and owner of the
account to which the contribution was made; and sworn statements by the
CBA signatories or their assignees attesting to: The date the CBA was
entered; explaining how the CBA addresses (or

[[Page 32451]]

will address) the potential impacts to the use of the geographic space
of the Lease Area, or resources harvested from that geographic space,
arising from the potential development of the Lease Area; and the truth
and accuracy of all the information provided. The documentation must
contain any information specified in the conceptual strategy that was
submitted with the BFF. If the Lessee's conceptual strategy has changed
due to market needs or other factors, the Lessee must explain this
change.
6. Enforcement: The commitment for the Lease Area Use Bidding
Credit will be made in the BFF and will be included in a lease addendum
that binds the Lessee and all assignees of the lease. If BOEM were to
determine that a Lessee or assignee had failed to satisfy the
commitment at the FDR stage, or if a Lessee were to relinquish or
otherwise fail to develop the lease by the tenth anniversary date of
lease issuance, the amount corresponding to the bidding credit awarded
would be immediately due and payable to ONRR with interest from the
date of lease execution. The interest rate would be the underpayment
interest rate identified by ONRR. BOEM could, at its sole discretion,
extend the documentation deadline beyond the FDR or the 10-year
timeframe.
v. Potential Additional Credit: BOEM is exploring whether it has
the authority to pursue an additional bidding credit for a CBA
addressing impacts attributable to potential offshore wind development
not covered under the contemplated Lease Area Use Bidding Credit. BOEM
is seeking comments on all aspects of this potential CBA and
specifically on how it can be justified under the OCS Lands Act), for
example:
1. What goals of the OCS Lands Act would be furthered by such a
CBA? What restrictions, if any, does OCS Lands Act impose on such a
CBA?
2. What benefits could be promoted by a more general CBA? Would a
CBA be effective in promoting benefits, such as job creation, education
opportunities, or increased engagement, that mitigate the potential
impacts of the development of the Lease Areas?
3. What potential impacts should be addressed? What quantifiable
impacts will be felt by local communities associated with cultural and
visual resources, the human environment, or other resources? How might
a CBA lead to expeditious and orderly development of offshore wind
resources in the Lease Areas?
4. What types of groups or legally recognized entities should be
eligible to enter into a CBA?
5. What are the key elements of a CBA that BOEM should consider?
Should the requirements for eligibility for bidding credits for a CBA
include transparency, coalition building, inclusiveness, or enhanced
communication?
6. How can BOEM use this potential type of credit to encourage
early community engagement, mutual benefits, and a long-lasting
dialogue between a potential developer and community or stakeholder
group? What types of agreements could BOEM promote that result in
mutually beneficial outcomes to both the Lessee and community or
stakeholder groups, or lead to expeditious and orderly development of
offshore wind resources in the Lease Areas?
vi. General Questions Regarding CBA credits: BOEM is interested in
comments answering the following questions in this section relevant to
CBAs and the associated bidding credits as described in sections
IV.(c)(iv) and IV.(c)(v) above.
1. How should BOEM evaluate the agreements? On what metrics can
BOEM evaluate CBAs? How can BOEM verify actions to be undertaken
pursuant to the CBA?
2. How and when should BOEM enforce and monitor CBA commitments?
3. What level of credit should BOEM offer in exchange for bidders
entering into a CBA, and how does that level affect receipt of fair
return to the United States?
4. If BOEM grants a bidding credit for a CBA, at what point in
BOEM's renewable energy leasing process must the CBA be executed?
5. Should the two CBA credits BOEM discussed above be combined?
6. Should executed CBAs be posted publicly?
7. What disclosures/certifications should be required to be part of
any CBA? Anything else BOEM should take into consideration when
evaluating the use of CBAs?
8. Should BOEM explicitly allow a Lessee's CBA to include payments
into a mitigation or innovation fund? For example, funds established or
created to address fishermen's gear changes, technology improvements
that minimize impacts, lost revenue, or other various impacts
potentially resulting from the development of the Lease Area. If so,
what metrics should BOEM use to evaluate whether the use of the fund is
acceptable in meeting OCS Lands Act goals such as leading to
expeditious and orderly development of the OCS?
9. Is offering a bidding credit to enter into a CBA the most
effective method to encourage similar types of agreements between
developers and stakeholders or community groups, or is there a more
effective format BOEM should consider? Commenters should consider that
bidding credits must be consistent with BOEM's authority under the OCS
Lands Act.
d. Limits on the Number of Lease Areas per Bidder: BOEM recognizes
that the offering for sale of two regions (i.e., Humboldt WEA and Morro
Bay WEA), hundreds of miles apart, is novel. BOEM is proposing to allow
each qualified entity to bid for one lease per region (North Coast
Region and Central Coast Regions) and ultimately acquire one Lease Area
per region via simultaneous auctions occurring at the same time, as
described in section XII.(b)(i) below. BOEM is seeking feedback on this
proposal, including feedback on how different leasing scenarios (e.g.,
number of Lease Areas offered, size of Lease Areas, etc.) may influence
the advisability of such a limitation.
e. The Definition of ``Affiliated Entities'': BOEM is prohibiting
``affiliated entities'' from bidding against each other in an auction.
This measure limits a single entity to bidding on and winning a single
lease. BOEM seeks comments on the definition and concepts of
affiliation contained in Section 3 of the Proposed Sale Notice.
Furthermore, in past lease sales, BOEM's definition of ``affiliated
entities'' was tied to direct or indirect ownership or control of one
entity over another. This effectively prevented a bidder and several
subsidiaries from bidding in the same lease sale. This definition,
however, does not explicitly preclude bidding by multiple entities that
have formed agreements with the effect of circumventing the spirit of a
one-per-customer sale. For example, BOEM's prior auctions arguably did
not cover a situation in which a bidder had obtained development rights
in other bidders' projects. Accordingly, BOEM requests comment on
revising the definition of ``affiliated entities'' for this sale to
include bidders that have, prior to the auction, entered into agreement
with each other that is related to the disposition of leases offered in
either of the auctions. This change would likely be accompanied by a
new requirement to disclose any agreements with affiliated bidders
regarding the disposition of leases that may be acquired in the
auction. BOEM invites comment on whether this adjustment to the
definition of ``affiliated'' sufficiently promotes the objectives of a
``one-per-customer'' sale.
f. Tribal Governments, Ocean Users, Underserved Communities,
Agencies, and Other Stakeholders Engagement

[[Page 32452]]

and Reporting: In an effort to require early and regular engagement
with Tribal governments, ocean users, underserved communities,
agencies, and other stakeholders that may be potentially affected by
activities on the OCS (collectively ``Tribes and parties''), BOEM is
proposing to require a semi-annual progress report and minimum
engagement requirements. Within the progress report, Lessees would be
required to identify Tribes and parties potentially affected by
proposed activities and provide updates on engagement activities,
impacts on or benefits to the Tribes and parties from proposed
activities, and how, if at all, a project proposal has been informed or
altered to address those impacts or benefits, as well as any planned
engagement activities during the next reporting period.
In acknowledgment of the existing and growing consultation burden
placed on many Tribes and parties, the stipulation would also require,
to the maximum extent practicable, that Lessees coordinate with one
another on engagement activities. It is BOEM's intention that this
requirement to coordinate engagement apply not only to meetings
proposed by Lessees, but also to reasonable requests to coordinate
engagement made by Tribes and parties. For example, one possible lease
stipulation to facilitate coordinated Tribal engagement could require
Lessees to offer coordination meetings at regular intervals throughout
the year (i.e., quarterly, biannually, annually, etc.). Coordinated
engagement among Tribal Nations and Lessees that may be required would
not excuse BOEM from meeting its responsibilities to federally
recognized Tribes under Executive Order 13175.
In addition, the proposed stipulation would require that the
progress report incorporate separate lease requirements for the
development of communication plans for fisheries, Tribes, and agencies,
that would serve to guide engagement activities with those groups.
Lastly, the progress report would be required to include an update on
activities executed under any survey plan.
BOEM seeks comment on this progress report and engagement concept
generally. BOEM also seeks specific comments on how to improve the
frequency, duration, and sustainability of collaborative engagement
among these parties; and on the contents, timing, and review of
progress reports.
g. Uniform Layouts: BOEM seeks comment on whether BOEM should
consider uniform and aligned turbine layouts in the Lease Areas. Would
the establishment of uniform turbine layouts negate the need for vessel
transit measures and/or areas of no surface occupancy?
h. Industry Standards for Environmental Protection: Are there new
industry standards (e.g., technology standards, vessel standards, etc.)
for environmental protection for any phase of development that BOEM
should consider?
i. Vessel Transit: BOEM welcomes comments on measures to facilitate
vessel transit and continuance of existing uses within the Lease Areas.
Such measures may include areas of no surface occupancy where surface
structures will not be permitted. If areas of no surface occupancy are
warranted, BOEM welcomes comment on the preferred placement and
orientation (e.g., length, width, etc.) that would facilitate
continuance of existing uses. BOEM asks commenters to submit technical
and scientific data in support of their comments.

V. Proposed Lease Sale Deadlines and Milestones

This section describes the major deadlines and milestones in the
auction process from publication of this PSN to potential execution of
the lease pursuant to this sale.
a. The PSN Comment Period:
i. Submit Comments: The public is invited to submit comments during
this 60-day period, which will expire on August 1, 2022. All comments
received or postmarked during the comment period will be made available
to the public and considered by BOEM prior to publication of the FSN.
ii. Public Auction Seminar: BOEM will host a public seminar to
discuss the lease sale process and the auction format. The time and
place of the seminar will be announced by BOEM. The announcement will
also be posted on the BOEM website at <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
Neither registration nor RSVP is required to attend the auction
seminar.
iii. Submit Qualifications Materials: All qualification materials
must be received by BOEM by August 1, 2022. This includes materials
sufficient to establish a company's legal, technical, and financial
qualifications pursuant to 30 CFR 585.106-.107. To qualify to
participate in this lease sale, qualification materials would need to
be developed in accordance with the guidelines available at <a href="https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/">https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/</a>. If you wish to
protect the confidentiality of your comments or qualification
materials, clearly mark the relevant sections and request that BOEM
treat them as confidential. Please label privileged or confidential
information with the caption ``Contains Confidential Information'' and
consider submitting such information as a separate attachment.
Treatment of confidential information is addressed in section XX
entitled, ``Protection of Privileged or Confidential Information.''
Information that is not labeled as privileged or confidential would be
regarded by BOEM as suitable for public release.
b. End of PSN Comment Period to FSN Publication:
i. Review Comments: BOEM will review all comments submitted in
response to the PSN during the comment period.
ii. Finalize Qualifications Reviews: Prior to the publication of
the FSN, BOEM will complete its review of bidder qualification
materials submitted during the PSN comment period. The final list of
eligible bidders will be published in the FSN.
iii. Prepare the FSN: BOEM will prepare the FSN by updating
information contained in the PSN where appropriate.
iv. Publish FSN: BOEM will publish the FSN in the Federal Register.
c. FSN Waiting Period: During the period between FSN publication
and the lease auction (i.e., minimum 30 days), qualified bidders would
be required to take several steps to remain eligible to participate in
the auction.
i. Bidder's Financial Form: Each bidder would be required to submit
a BFF to BOEM to participate in the auction. The BFF would be required
to contain each bidder's conceptual strategy for each non-monetary
credit for which the bidder wishes to be considered, or qualifying
Lease Area Use CBA if applicable. Each bidder would be required to
submit to BOEM its BFF no later than the date listed in the FSN. BOEM
may consider extensions to this deadline if BOEM determines that the
failure to timely submit a BFF was caused by events beyond the bidder's
control. The BFF will be available for download at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
As proposed, once BOEM has processed a BFF, the bidder would log
into <a href="http://pay.gov">pay.gov</a> to submit a bid deposit. For purposes of this auction,
BOEM will not consider BFFs submitted by bidders for previous lease
sales. Bidders must submit an original BFF signed by an authorized
signatory by mail to BOEM's Pacific Regional Office for certification.
Digital signatures affixed to the paper copy would be acceptable until
further notice.

[[Page 32453]]

1. Your submission should be accompanied with a transmittal letter
on company letterhead.
2. The BFF would be required to be executed by an authorized
representative listed in the bidder's legal qualifications. Each bidder
would be required to sign the self-certification in the BFF truthfully,
under threat of criminal penalty for false statements in accordance
with 18 U.S.C. 1001 (fraud and false statements).
3. Additional information regarding the BFF may be found below in
section IX entitled, ``Bidder's Financial Form.''
ii. Bid Deposit: Each qualified bidder would be required to submit
a bid deposit of $5,000,000 in order to bid for one Lease Area. If the
FSN allows bidders to win up to two Lease Areas (one per region), a bid
deposit of $10,000,000 would be required to bid on two Lease Areas (one
per region). Bid deposits would be due no later than the date specified
in the FSN. Further information about bid deposits can be found below
in section X entitled, ``Bid Deposit.''
d. Notification of Eligibility for Non-Monetary Credits: BOEM will
determine bidder eligibility for bid credits in each auction in which
the bidder participates and will notify each bidder of the agency's
determination prior to the mock auction.
e. Mock Auction: BOEM proposes to hold a mock auction that is open
only to qualified bidders who have met the requirements and deadlines
for auction participation, including submission of the bid deposit.
Final details of the mock auction will be provided in the FSN.
f. The Auction: BOEM, through its contractor, would conduct the
auction as described in the FSN. The auction would occur no sooner than
30 days following publication of the FSN in the Federal Register. The
estimated timeframes described in this PSN assume the auction would
occur approximately 45 days after FSN publication. Final dates would be
included in the FSN. BOEM would announce the provisional winners of the
lease sale after the auction ends.
g. From the Auction to Lease Execution:
i. Notice and Refunds to Non-Winners: Once the provisional winners
have been announced, BOEM would notify the other bidders, include a
written explanation of why they did not win, and return their bid
deposits.
ii. Department of Justice (DOJ) Review: DOJ would have 30 days in
which to conduct an antitrust review of the auction, pursuant to 43
U.S.C 1337(c).
iii. Delivery of the Lease: BOEM would send three copies of the
lease to each winning bidder, with instructions on how to sign the
lease. Each winning bidder would be required to pay the first year's
rent within 45 calendar days after receiving the lease copies.
iv. Return the Lease: Within 10 business days of receiving the
lease copies, each winning bidder would be required to file financial
assurance, pay any outstanding balance of its bonus bids (i.e., winning
monetary bid less the applicable non-monetary bidding credit and bid
deposit), and sign and return the three lease copies. A winning bidder
would be allowed to request a deadline extension. BOEM could grant the
request if BOEM determines the cause of the delay was beyond the
winning bidder's control pursuant to 30 CFR 585.224(e).
v. Execution of Lease: Once BOEM has received the signed lease
copies and verified that all other required obligations have been met,
BOEM would determine, in its discretion, whether to sign and execute
the lease.

VI. Withdrawal of Blocks

BOEM reserves the right to withdraw all or portions of the Lease
Areas prior to executing the leases with the winning bidders.

VII. Lease Terms and Conditions

BOEM has made available the proposed terms and conditions for the
commercial leases that might be offered through this proposed sale.
BOEM reserves the right to require compliance with additional terms and
conditions associated with approval of a site assessment plan (SAP) and
COP. The proposed leases are on BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>. Each lease
would include the following attachments:
1. Addendum A (``Description of Leased Area and Lease
Activities'');
2. Addendum B (``Lease Term and Financial Schedule'');
3. Addendum C (``Lease-Specific Terms, Conditions, and
Stipulations'');
4. Addendum D (``Project Easement''); and
5. Addendum E (``Rent Schedule'').
Addenda A, B, and C provide detailed descriptions of proposed lease
terms and conditions. Addenda D and E would be completed at the time of
COP approval or approval with modifications. After considering comments
on the PSN and proposed lease, BOEM would publish final lease terms and
conditions in the FSN.
a. Required Plans for Potential Development of Executed Leases:
Under 30 CFR 585.601, if site assessment activities will be conducted,
the leaseholder would be required to submit a SAP within 12 months of
lease issuance. Approval of the SAP will initiate the Lessee's five-
year site assessment term. If the Lessee intends to continue its
commercial lease with an operations term, the leaseholder would be
required to submit a COP at least six months before the end of the site
assessment term.
b. Proposed New or Revised Lease Stipulations: BOEM proposes to
include or revise the following lease stipulations or provisions from
previous commercial leases as follows:
i. Commercial Fisheries: BOEM proposes to include a stipulation in
the lease entitled ``Commercial Fisheries,'' which would contain
components of stipulations in prior commercial leases issued by BOEM,
including a requirement for a Fisheries Communications Plan (FCP). BOEM
is proposing to add elements to this stipulation in response to its
extensive engagement with Tribal governments, the fishing industry, and
governmental agencies. Major proposed revisions include: (i)
Identifying dock space and transit routes that would minimize space use
conflicts and potential impacts to protected species; (ii) minimizing
both congestion and the creation of obstacles that could result in an
increased risk of entanglement; (iii) to the extent practicable,
prioritizing Federal and State climate change adaptation strategies for
fisheries; and (iv) requirement that the Lessee contact potentially
affected commercial fishing communities prior to submitting its COP to
discuss potential conflicts between seasonal fishing operations and the
Lessee's survey and development activities.
ii. Protected Species: In May 2022, BOEM published a Final Humboldt
Wind Energy Area EA, that included the most current Measures to
Minimize Potential Adverse Impacts to Birds and Typical Mitigation
Measures for Protected Marine Species. BOEM proposes to include in the
leases these measures, or the most current version of these measures
from either the Final Morro Bay Wind Energy EA, or from consultation
processes undertaken for/applicable to this lease sale, as appropriate.
These measures for protecting birds and marine species are based upon
the most up-to-date information. Any additional protective measures
arising from consultation processes undertaken for/applicable to this
lease sale would be incorporated into the leases.

[[Page 32454]]

iii. Native American Tribes Communications Plan (NATCP): BOEM
proposes to revise the NATCP requirements in previous commercial leases
to require the Lessee to work with BOEM and the California Native
American Heritage Commission to identify Tribes with cultural and/or
historical ties to the Lease Areas and invite those Tribes to
participate in the development of the NATCP. The NATCP would also
include protocols for unanticipated discovery of any potential pre-
contact archaeological resource(s).
iv. Project Labor Agreements (PLAs) and Supply Chain: BOEM is
committed to a clean energy future, workforce development and safety,
and the establishment of a durable domestic supply chain that can
sustain the U.S. offshore wind energy industry. To advance this vision,
BOEM is proposing two lease stipulations, one that would encourage
construction efficiency for projects and the other that would
contribute towards establishing a domestic supply chain:
1. The first stipulation would require Lessees to make every
reasonable effort to enter into a PLA covering the construction stage
of any project proposed for the Lease Areas. The PLA provisions for the
construction of an offshore wind project would apply to all
contractors.
2. The second stipulation would require Lessees to establish a
Statement of Goals in which the Lessee would describe its plans for
contributing to the creation of a robust and resilient U.S.-based
offshore wind industry supply chain. The Lessee would be required to
provide regular progress updates on the achievement of those goals to
BOEM, and BOEM would make those updates publicly available.
v. Research Access: This stipulation would make explicit BOEM's
reservation of the right to access the lease area for purposes of
future research and other activities.
vi. Archaeological Survey Requirements: BOEM proposes a
modification of BOEM's prior lease stipulations regarding
archaeological survey requirements. The revised stipulation would
require that the Lessee provide a description of the methods it uses to
conduct archaeological surveys in support of Plans (i.e., SAP and/or
COP), in addition to survey results. The Lessee would be required to
coordinate a Tribal pre-survey meeting with Tribes identified by BOEM
and in the NATCP. In the post-review discovery clauses, the revised
stipulation would require that, in the event of unanticipated discovery
of a potential archaeological resource, the Lessee would immediately
halt bottom-disturbing activities within the area of discovery by a
minimum of 50 meters (164 feet), and the avoidance distance must be
calculated from the maximum discernible extent of the archaeological
resource. The revised stipulation would also add a requirement in the
post-review discovery clauses that the Lessee refer to the NATCP for
additional guidance on notifications.

VIII. Lease Financial Terms and Conditions

This section provides an overview of the required annual payments
and financial assurances under the leases. Please see the proposed
leases for more information.
a. Rent: Pursuant to 30 CFR 585.224(b) and 585.503, the first
year's rent payment of $3 per acre would be due within 45 calendar days
after the Lessee receives the lease copies from BOEM. For example, for
a 69,031-acre lease (the size of OCS-P 0562), the rent payment will be
$207,093 per year until commercial operations begin. Thereafter, annual
rent payments would be due on the anniversary of the effective date of
the lease (the ``Lease Anniversary''). Once commercial operations under
the lease begin, BOEM would charge rent only for the portions of the
Lease Area remaining undeveloped (i.e., non-generating acreage).
If the Lessee submits an application for relinquishment of a
portion of its leased area within the first 45 calendar days after
receiving the lease copies from BOEM and BOEM approves that
application, no rent payment would be due on the relinquished portion
of the Lease Area. Later relinquishments of any portion of the Lease
Area would reduce the Lessee's rent payments starting in the year
following BOEM's approval of the relinquishment.
The Lessee also would be required to pay rent for any project
easement associated with the lease. Rent would commence on the date
that BOEM approves the COP (or modification thereof) that describes the
project easement as outlined in 30 CFR 585.500(a)(5) and 585.507(b).
Annual rent for a project easement is $5 per acre, subject to a minimum
of $450 per year.
b. Operating Fee: For purposes of calculating the initial annual
operating fee payment under 30 CFR 585.506, BOEM would apply an
operating fee rate to a proxy for the wholesale market value of the
electricity expected to be generated from the project during its first
12 months of operations. This initial payment would be prorated to
reflect the period between the commencement of commercial operations
and the Lease Anniversary. The initial annual operating fee payment
would be due within 45 days of the commencement of commercial
operations. Thereafter, subsequent annual operating fee payments would
be due on or before the Lease Anniversary.
The subsequent annual operating fee payments would be calculated by
multiplying the operating fee rate by the imputed wholesale market
value of the projected annual electric power production. For the
purposes of this calculation, the imputed market value would be the
product of the project's annual nameplate capacity, the total number of
hours in the year (8,760), the capacity factor, and the annual average
price of electricity derived from a regional wholesale power price
index. For example, the annual operating fee for a 976 megawatt (MW)
wind facility operating at a 40 percent capacity (i.e., capacity factor
of 0.4) with a regional wholesale power price of $40 per megawatt hour
(MWh) and an operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.223

i. Operating Fee Rate: The operating fee rate would be the share of
imputed wholesale market value of the projected annual electric power
production due to ONRR as an annual operating fee. For the Lease Areas,
BOEM proposes to set the fee rate at 0.02 (i.e., 2 percent) for the
entire life of commercial operations.
ii. Nameplate Capacity: Nameplate capacity would be the maximum
rated electric output, expressed in MW, that the turbines of the wind
facility under commercial operations can produce at their rated wind
speed, as designated by the turbine's manufacturer. For

[[Page 32455]]

example, if the Lessee installed 100 turbines, and each is rated by the
manufacturer at 12 MW, the nameplate capacity of the wind facility
would be 1,200 MW.
iii. Capacity Factor: The capacity factor relates to the amount of
energy delivered to the grid during a period of time compared to the
amount of energy the wind facility would have produced at full capacity
during that same period of time. This factor is represented as a
decimal between zero (0) and one (1). There are several reasons why the
amount of power delivered is less than the theoretical 100 percent of
capacity. For a wind facility, the capacity factor is mostly determined
by the availability of wind. Transmission line loss and downtime for
maintenance or other purposes also affect the capacity factor.
BOEM proposes to set the capacity factor at 0.4 (i.e., 40 percent)
for the year in which the commercial operation date occurs and for the
first six full years of commercial operations on the lease. At the end
of the sixth year, BOEM may adjust the capacity factor to reflect the
performance over the previous five years based upon the actual metered
electricity generation at the delivery point to the electrical grid.
BOEM may make similar adjustments to the capacity factor once every
five years thereafter.
iv. Wholesale Power Price Index: Under 30 CFR 585.506(c)(2)(i), the
wholesale power price, expressed in dollars per MWh, would be
determined at the time each annual operating fee payment is due. For
the leases offered in this sale, BOEM proposes to use the annual
average of CAISO North of Path 15 (NP15) market hub price. Aggregated
data from commercial subscription services such as S&P Global Market
Intelligence Platform or Hitachi ABB Velocity Suite can also be used
and may be posted by BOEM for reference.
c. Financial Assurance: Within 10 business days after receiving the
lease copies and pursuant to 30 CFR 585.515-.516, each provisional
winner would be required to provide an initial lease-specific bond or
other BOEM-approved financial assurance instrument in the amount of
$100,000. BOEM encourages the provisionally winning bidders to discuss
the financial assurance instrument requirements with BOEM as soon as
possible after the auction has concluded.
BOEM would base the amount of all SAP, COP, and decommissioning
financial assurance on cost estimates for meeting all accrued lease
obligations at the respective stages of development. The required
amount of supplemental and decommissioning financial assurance would be
determined on a case-by-case basis.
The financial terms described above can be found in Addendum ``B''
of the lease, which is available at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.

IX. Bidder's Financial Form

Each bidder would be required to fill out the BFF referenced in
this PSN. A copy of the proposed form is available at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>. BOEM
recommends that each bidder designate an email address in its BFF that
the bidder would then use to create an account in <a href="http://pay.gov">pay.gov</a> (if it has
not already done so). BOEM would not consider previously submitted BFFs
for previous lease sales to satisfy the requirements of this auction.
BOEM may consider BFFs submitted after the deadline set in the FSN if
BOEM determines that the failure to timely submit the BFF was caused by
events beyond the bidder's control. BOEM would only accept an original,
executed paper copy of the BFF. The BFF would be required to be
executed by an authorized representative listed in the qualification
package on file with BOEM.

X. Bid Deposit

Each qualified bidder would be required to submit a bid deposit no
later than the date listed in the FSN. Typically, this deadline is
approximately 30 calendar days after the publication of the FSN. BOEM
may consider extensions to this deadline only if BOEM determines that
the failure to timely submit the bid deposit was caused by events
beyond the bidder's control.
Following the auction, bid deposits would be applied against the
winning bid and other obligations owed to BOEM. If a bid deposit
exceeds that bidder's total financial obligation, BOEM would refund the
balance of the bid deposit to the bidder. BOEM would refund bid
deposits to the other bidders once BOEM has announced the provisional
winner.
If BOEM offers a lease to a provisionally winning bidder and that
bidder fails to timely return the signed lease, establish financial
assurance, or pay the balance of its bid, BOEM would retain the
bidder's $5,000,000 bid deposit for one Lease Area or $10,000,000 bid
deposit for two Lease Areas (one per region). In such a circumstance,
BOEM would reserve the right to offer a lease to the next highest
bidder as determined by BOEM.

XI. Minimum Bid

The minimum bid is the lowest bid BOEM would accept as a winning
bid, and it is where BOEM would start the bidding in the auction. BOEM
proposes a minimum bid of $100.00 per acre for this lease sale. See
chart in section XII.(b) below for total minimum bids for each lease to
be offered in these sales.

XII. Auction Procedures

a. Multiple-Factor Bidding Auction: As authorized under 30 CFR
585.220(a)(4) and 585.221(a)(6), BOEM proposes to use a multiple-factor
bidding auction for this lease sale. Under BOEM's proposal, the bidding
system for this lease sale would be a multiple-factor combination of
monetary and non-monetary factors. The bid made by a particular bidder
in each round would represent the sum of a monetary (cash) amount and a
non-monetary factor (bidding credit). BOEM proposes to start the
auction using the minimum bid price for the Lease Areas and to increase
that price incrementally until no more than one active bidder per Lease
Area remains in the auction.
b. The Auction: Using an online bidding system to host the auction,
BOEM would start the bidding for Leases OCS-P 0561 through 0565, as
described below.

----------------------------------------------------------------------------------------------------------------
Lease area name Lease area ID Acres Minimum bid
----------------------------------------------------------------------------------------------------------------
North Coast Region:
Humboldt NE................................................. OCS-P 0561 63,338 $6,333,800
Humboldt SW................................................. OCS-P 0562 69,031 6,903,100
Central Coast Region:
Morro Bay NW................................................ OCS-P 0563 80,062 8,006,200
Morro Bay C................................................. OCS-P 0564 80,418 8,041,800
Morro Bay E................................................. OCS-P 0565 80,418 8,041,800
-----------------------------------------------
Total................................................... .............. 373,268 ..............
----------------------------------------------------------------------------------------------------------------

[[Page 32456]]

The precise auction process will depend on limitations, to be
established in the FSN, on the number of Lease Areas a bidder can bid
for and win. BOEM is proposing that bidders will be able to bid for at
most one Lease Area in the offered Central Coast Region at a time and
for at most one Lease Area in the offered North Coast Region at a time.
Ultimately, a bidder could win a maximum of one Lease Area in the
Central Coast Region and one Lease Area in the North Coast Region, as
described in section XIII.(b)(i), below. BOEM also requests comments on
an alternative limitation, whereby bidders would be permitted to bid
for at most one Lease Area in total at a time, and ultimately win at
most one Lease Area in total, as described in section XIII.(b)(ii),
below.
i. If bidders are allowed to bid for and win one Lease Area per
region: The two regions (North Coast and Central Coast) would be
offered in two separate auctions that would run simultaneously. A
bidder would need to indicate in its BFF which region's auction it is
entering (or select both) and it would need to submit a deposit for
each region's auction that it is entering. Bidders eligible to bid in
each auction must select the correct region's page from the auction
homepage before placing a bid. A bidder's eligibility is region-
specific. There would be no switching between regions. Thus, if a
bidder elects to bid in only one region, it may not bid in the other
region at any time in the auction. Once a bidder places an exit bid in
a region (or submits no bid in the region at all, in a round when the
bidder is eligible to bid), it would become ineligible to continue to
bid in that region.
Alternatively, BOEM is considering administering the auction as
described in section XIII.(b)(ii) below.
ii. If bidders are allowed to bid for and win only one Lease Area:
All of the Lease Areas would be offered in a single auction, and there
would be no distinctions made between the North Coast and Central Coast
Regions within the auction process. A bidder would not be required to
select in its BFF the region in which it is bidding and would supply a
single deposit. Under this proposal, a bidder could bid for at most one
Lease Area at a time and ultimately win at most one Lease Area, but a
bidder could switch its bids among Lease Areas between rounds.
iii. Regardless of whether BOEM ultimately structures the lease
sale as described in (i) or (ii), above, BOEM proposes to apply the
following auction rules: Each auction would be conducted in a series of
rounds. At the start of each round, BOEM would state an asking price
for each Lease Area. If a bidder is willing to meet that asking price
for one of the Lease Areas, it would indicate its intent by submitting
a bid equal to the asking price. A bid at the full asking price is
referred to as a ``live bid.'' To participate in the next round of the
auction, a bidder would be required to have submitted a live bid for
one of the Lease Areas (or have a carried-forward bid) in each previous
round.
As long as there are two or more live bids (including carried-
forward bids) for at least one of the Lease Areas in the given auction,
the auction would move to the next round. BOEM would raise the asking
price for each Lease Area that received two or more live bids in the
previous round. Asking price increments would be determined based on
several factors, including (but not necessarily limited to) the
expected time needed to conduct the auction and the number of rounds
that have already occurred. BOEM would reserve the right to increase or
decrease bidding increments as it deems appropriate. If there was only
one live bid (including carried-forward bids) or no live bids for a
Lease Area in the previous round, the asking price would not be
increased. A bid would automatically be carried forward if it was
uncontested in the previous round, and the bidder who placed the
uncontested bid would not be permitted to place any other bid in the
current round of the auction.
A bidder that submitted a contested live bid in the previous round
would be free to bid on any Lease Area in the given auction in the next
round, at the new asking prices.
If a bidder decides to stop bidding before the final round of the
auction, there could be circumstances in which the bidder could
nonetheless win a lease. For example, that bidder could be ultimately
selected in the winner determination that is described in detail below,
or the winning bidder might be disqualified at the award stage of the
auction. In these circumstances, the bidder would be bound by its bid
and thus obligated to pay the full bid amount. Bidders therefore might
be bound by any of their bids up to and until the point at which the
auction results are finalized.
Between rounds, BOEM would disclose to all bidders that submitted
bids in the previous round: (1) The number of live bids (including
carried-forward bids) for each Lease Area in the previous round of the
auction (i.e., the level of demand at the asking price); and (2) the
asking price for each Lease Area in the upcoming round of the auction.
In any round after the first round, a bidder would be allowed to
submit an ``exit bid'' only for the same Lease Area as the bidder's
contested live bid in the previous round. An exit bid is a bid that is
greater than the previous round's asking price, but less than the
current round's asking price. An exit bid is not a live bid, and it
represents the final bid that a bidder may submit in the given auction.
A bidder would not be allowed to submit both an exit bid on one of the
Lease Areas and a live bid on a different Lease Area in the given
auction. During the auction, the exit bid would be seen only by BOEM
and not by other bidders.
An auction would end when a round occurs in which each of the Lease
Areas in the auction receives one or zero live bids (including carried-
forward bids), regardless of the number of exit bids on any Lease Area.
If the North Coast Region and Central Coast Region are offered in two
separate auctions, then one of these separate auctions may end before
the other. After the bidding ends, BOEM would determine the
provisionally winning bid for each Lease Area in the given auction by
the following two-stage procedure, applying the procedure separately to
each auction if there are two separate auctions.
In stage one, the highest bid (live bid or exit bid) received for
each Lease Area in the final round would be designated the
provisionally winning bid, if there is a single highest bid. In the
event of a tie (i.e., if two or more bidders submitted identical
highest exit bids for the same Lease Area), the selection of one of the
highest exit bids would be deferred until stage two.
In stage two, BOEM would assign to provisionally winning bidders
all Lease Areas that were not so assigned to provisionally winning
bidders in stage one (either because a Lease Area received two or more
identical highest exit bids in the final round or because it received
no bids in the final round). BOEM would, in stage two, consider bids
from all bidding rounds for Lease Areas that were not assigned in stage
one from bidders not assigned a Lease Area in stage one. BOEM would
select the combination of such bids that maximizes the sum of the bid
amounts of the selected bids, subject to the following constraints: (1)
Each Lease Area that received multiple highest exit bids in the final
round (but no live bid) must be assigned to one of the bidders that
submitted the highest exit bid; (2) at most one bid from each bidder
can be selected; and (3) at most one bid for each Lease Area can be
selected. If there is a unique combination of bids that solves this
maximization problem, then these bids would be deemed to be the

[[Page 32457]]

remaining provisionally winning bids. If two or more combinations of
bids tie by producing the same maximized sum of bid amounts, the
auction system would select one of the combinations by use of
pseudorandom numbers. The provisional winners would pay the amounts of
their provisionally winning bids, or risk forfeiting their bid
deposits. A provisional winner will be disqualified if it is
subsequently found to have violated auction rules or BOEM regulations,
or otherwise engaged in conduct detrimental to the integrity of the
competitive auction. If a bidder submits a bid that BOEM determines to
be a provisionally winning bid, the bidder must sign the applicable
lease documents, establish financial assurance, and submit the balance
(if any) of its bonus bid (i.e., winning monetary bid less the
applicable non-monetary bidding credit and bid deposit) within 10
business days of receiving the lease copies, pursuant to 30 CFR
585.224. BOEM would reserve the right not to issue the lease to a
provisionally winning bidder if that bidder fails to: Timely return the
signed lease form, establish adequate financial assurance, pay the
balance of its winning bid, or otherwise fail to comply with applicable
regulations or the terms of the FSN. In that case, the bidder would
forfeit its bid deposit.
BOEM would publish the provisional winners and the provisionally
winning bid amounts shortly after the conclusion of the sale. Full bid
results, including round-by-round results of the entire sale, including
exit bids, would be published on BOEM's website after review of the
results and announcement of the provisional winners.
c. Additional Information Regarding the Auction Format:
i. Authorized Individuals and Bidder Authentication: A company that
is eligible to participate in the auction would identify on its BFF up
to three individuals who would be authorized to bid on behalf of the
company, including their names, business telephone numbers, and email
addresses. After BOEM processes the bid deposits, the auction
contractor would send several emails to the authorized individuals. The
emails would contain user login information and instructions for
accessing the bidder manual for the auction system and the auction
system technical supplement (ASTS).
The auction system would require software tokens for two-factor
authentication. To set up the tokens, authorized individuals would
download an app onto their smartphone or tablet with a recent operating
system. One of the emails sent to authorized individuals would contain
instructions for installing the app and the credentials needed to
activate the software token. A short telephone conversation with the
auction contractor could also be needed to use the credentials. The
login information, along with the tokens, would be tested during the
mock auction. If an eligible bidder failed to submit a bid deposit or
did not participate in the auction, BOEM would de-activate that
bidder's tokens and login information.
ii. Timing of Auction: The FSN will provide specific information
regarding when bidders can enter the auction system and when the
auction will start.
iii. Messaging service: BOEM and the auction contractors would use
the auction platform messaging service to keep bidders informed on
issues of interest during the auction. For example, BOEM could change
the schedule at any time, including during the auction. If BOEM changes
the schedule during an auction, it would use the messaging feature to
notify bidders that a revision has been made and will direct bidders to
the relevant page. BOEM would also use the messaging system for other
updates during the auction.
Bidders could place bids at any time during the round. At the top
of the bidding page, a countdown clock shows how much time remains in
the round. Bidders would have until the scheduled time to place bids.
Bidders should do so according to the procedures described in the FSN
and the ASTS. Information about the round results would be made
available only after the round has closed, so there would be no
strategic advantage to placing bids early or late in the round.
The ASTS elaborates on the auction procedures described in this
PSN. In the event of any inconsistency between the Bidder Manual, the
ASTS, and the FSN, the FSN would be controlling.
iv. Alternate Bidding Procedures: It would be the responsibility of
the bidder to ensure it has a working internet connection and backup
procedures in place in case its internet connection is disrupted during
the auction. Such backup procedures may include redundant internet
connections, multiple individuals authorized to place bids on behalf of
the company, geographically dispersing individuals who are authorized
to bid (with different internet connections), or placing bids using a
mobile data connection. The bidder would be responsible for testing its
backup procedures ahead of time. This could be done during the mock
auction, for example.

XIII. Rejection or Non-Acceptance of Bids

BOEM would reserve the right and authority to reject any and all
bids that do not satisfy the requirements and rules of the auction, the
FSN, or applicable regulations and statutes.

XIV. Anti-Competitive Review

Bidding behavior in this sale would be subject to Federal antitrust
laws. Following the auction, but before the acceptance of bids and the
issuance of the lease, BOEM would ``allow the Attorney General, in
consultation with the Federal Trade Commission, thirty days to review
the results of [the] lease sale.'' 43 U.S.C. 1337(c)(1). If a
provisionally winning bidder is found to have engaged in anti-
competitive behavior in connection with this lease sale, BOEM will
reject its provisionally winning bid. Compliance with BOEM's auction
procedures and regulations would not be an absolute defense to
violations of antitrust laws.
Anti-competitive behavior determinations would be fact-specific.
However, such behavior could manifest itself in several different ways,
including, but not limited to:
1. An express or tacit agreement among potential bidders not to bid
in an auction, or to bid a particular price;
2. An agreement among potential bidders not to bid;
3. An agreement among bidders not to bid against each other; or
4. Other agreements among bidders that have the potential to affect
the final auction price.
Pursuant to 43 U.S.C. 1337(c)(3), BOEM will decline to award a
lease if the Attorney General, in consultation with the Federal Trade
Commission, determines that awarding the lease could be inconsistent
with antitrust laws.
For more information on whether specific communications or
agreements could constitute a violation of Federal antitrust law,
please see <a href="https://www.justice.gov/atr/business-resources">https://www.justice.gov/atr/business-resources</a> and consult
legal counsel.

XV. Process for Issuing the Lease

Once all post-auction reviews have been completed to BOEM's
satisfaction, BOEM would issue three unsigned copies of the lease to
each provisionally winning bidder. Within 10 business days after
receiving the lease copies, the provisionally winning bidders would be
required to:
1. Sign and return the lease copies on the bidder's behalf;
2. File financial assurance, as required under 30 CFR 585.515-537;
and

[[Page 32458]]

3. Pay by electronic funds transfer (EFT) the balance (if any) of
the bonus bid (winning monetary bid less the applicable non-monetary
bidding credit and bid deposit). BOEM would require bidders to use EFT
procedures (not <a href="http://pay.gov">pay.gov</a>, the website bidders used to submit bid
deposits) for payment of the balance of the bonus bid, following the
detailed instructions contained in the ``Instructions for Making
Electronic Payments'' available on BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/eft-payment-instructions-ca">https://www.boem.gov/renewable-energy/state-activities/eft-payment-instructions-ca</a>.
BOEM would not execute the lease until the three requirements above
have been satisfied. BOEM could extend the 10 business-day deadline if
BOEM determines the delay was caused by events beyond the provisionally
winning bidder's control.
If a provisionally winning bidder does not meet these requirements
or otherwise fails to comply with applicable regulations or the terms
of the FSN, BOEM reserves the right not to issue the lease to that
bidder. In such a case, the provisionally winning bidder would forfeit
its bid deposit. Also, in such a case, BOEM reserves the right to
identify the next highest bid for that Lease Area submitted during the
lease sale by a bidder who has not won one of the other Lease Areas and
to offer the lease to that bidder pursuant to its bid.
Within 45 calendar days after receiving the lease copies, each
provisionally winning bidder would be required to pay the first year's
rent using the ``ONRR Renewable Energy Initial Rental Payments'' form
available at: <a href="https://www.pay.gov/public/form/start/27797604/">https://www.pay.gov/public/form/start/27797604/</a>.
Subsequent annual rent payments would be required to be made
following the detailed instructions contained in the ``Instructions for
Making Electronic Payments,'' available on BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.

XVI. Non-Procurement Debarment and Suspension Regulations

Pursuant to 43 CFR part 42, subpart C, an OCS renewable energy
Lessee would be required to comply with the Department of the
Interior's non-procurement debarment and suspension regulations at 2
CFR parts 180 and 1400. The Lessee would also be required to
communicate this requirement to persons with whom the Lessee does
business relating to this lease by including this term as a condition
in their contracts and other transactions.

XVII. Final Sale Notice

The development of the FSN would be informed through the EAs,
related consultations, and comments received during the PSN comment
period. The FSN will provide the final details concerning the offering
and issuance of an OCS commercial wind energy lease in the Lease Areas
offshore California. The FSN will be published in the Federal Register
at least 30 days before the lease sale is conducted and will provide
the date and time of the auction.

XVIII. Changes to Auction Details

The Regional Director of BOEM's Pacific Regional Office has the
discretion to change any auction detail specified in the FSN, including
the date and time, if s/he deems that events outside BOEM's control may
interfere with a fair and proper lease sale. Such events may include,
but are not limited to, natural disasters (e.g., earthquakes,
hurricanes, floods, and blizzards), wars, riots, act of terrorism,
fire, strikes, civil disorder, Federal Government shutdowns,
cyberattacks against relevant information systems, or other events of a
similar nature. In case of such events, BOEM would notify all qualified
bidders via email, phone, and BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>. Bidders should call (703)
787-1121 if they have concerns.

XIX. Appeals

The bid rejection procedures are provided in BOEM's regulations at
30 CFR 585.225 and 585.118(c). Under 30 CFR 585.225:
(a) If BOEM rejects your bid, BOEM will provide a written statement
of the reasons and will refund any money deposited with your bid,
without interest.
(b) You may ask the BOEM Director for reconsideration, in writing,
within 15 business days of bid rejection, under 30 CFR 585.118(c)(1).
The Director will send you a written response either affirming or
reversing the rejection.
The procedures for requesting reconsideration of a bid rejection
are described in 30 CFR 585.118(c).

XX. Public Participation

BOEM does not consider anonymous comments; please include your name
and address as part of your comment. You should be aware that your
entire comment, including your name, address, and any other personal
identifiable information (PII) included in your comment, may be made
publicly available. All submissions from identified individuals,
businesses, and organizations may be available for public viewing on
<a href="http://regulations.gov">regulations.gov</a>.
In order for BOEM to withhold from disclosure your PII, you must
identify any information contained in your comment that, if released,
would constitute a clearly unwarranted invasion of your personal
privacy. You must also briefly describe any possible harmful
consequences of the PII disclosure, such as embarrassment, injury, or
other harm. BOEM is unable to guarantee that your PII will be protected
from public disclosure because a court may determine that the benefits
of disclosure about who may influence public policy outweigh possible
harms.

XXI. Protection of Privileged or Confidential Information

BOEM will protect privileged or confidential information that you
submit consistent with the Freedom of Information Act (FOIA) and 30 CFR
585.113. Exemption 4 of FOIA applies to ``trade secrets and commercial
or financial information obtained from a person'' that is privileged or
confidential (5 U.S.C. 552(b)(4)). If you wish to protect the
confidentiality of such information, clearly mark it ``Contains
Privileged or Confidential Information'' and consider submitting such
information as a separate attachment. BOEM will not disclose such
information, except as required by FOIA. Information that is not
labeled as privileged or confidential may be regarded by BOEM as
suitable for public release. Further, BOEM will not treat as
confidential aggregate summaries of otherwise non-confidential
information.
a. Access to Information (54 U.S.C. 307103): BOEM is required,
after consultation with the Secretary of the Interior, to withhold the
location, character, or ownership of historic resources if it
determines that disclosure may, among other things, cause a significant
invasion of privacy, risk harm to the historic resources, or impede the
use of a traditional religious site by practitioners. Tribal entities
and other interested parties should designate information that they
wish to be held as confidential and provide the reasons why BOEM should
do so.

(Authority: 43 U.S.C. 1337(p)); 30 CFR 585.211 and 585.216)

Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2022-11537 Filed 5-27-22; 8:45 am]
BILLING CODE 4310-MR-P

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.