Notice2022-22871
Pacific Wind Lease Sale 1 (PACW-1) for Commercial Leasing for Wind Power on the Outer Continental Shelf in California-Final Sale Notice
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 21, 2022
Issuing agencies
Interior DepartmentOcean Energy Management Bureau
Abstract
This Final Sale Notice (FSN) contains information pertaining to the areas available for commercial wind energy leasing on the Outer Continental Shelf (OCS) offshore California. Specifically, this FSN details certain provisions and conditions of the leases, auction details, the lease form, criteria for evaluating competing bids, award procedures, appeal procedures, and lease execution. The Bureau of Ocean Energy Management (BOEM) will offer five leases for sale using a multiple-factor bidding auction format: Lease OCS-P 0561, Lease OCS-P 0562, Lease OCS-P 0563, Lease OCS-P 0564, and Lease OCS-P 0565 (Lease Areas). 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 203 (Friday, October 21, 2022)</title>
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[Federal Register Volume 87, Number 203 (Friday, October 21, 2022)]
[Notices]
[Pages 64093-64110]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-22871]
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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--Final Sale
Notice
AGENCY: Bureau of Ocean Energy Management, Interior.
ACTION: Final sale notice.
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SUMMARY: This Final Sale Notice (FSN) contains information pertaining
to the areas available for commercial wind energy leasing on the Outer
Continental Shelf (OCS) offshore California. Specifically, this FSN
details certain provisions and conditions of the leases, auction
details, the lease form, criteria for evaluating competing bids, award
procedures, appeal procedures, and lease execution. The Bureau of Ocean
Energy Management (BOEM) will offer five leases for sale using a
multiple-factor bidding auction format: Lease OCS-P 0561, Lease OCS-P
0562, Lease OCS-P 0563, Lease OCS-P 0564, and Lease OCS-P 0565 (Lease
Areas). 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: BOEM will hold an online mock auction for potential bidders
starting at 7:00 a.m. Pacific Standard Time (PST)/10 a.m. Eastern
Standard Time (EST) on December 5, 2022. The monetary auction will be
held online and will begin at 7 a.m. PST/10 a.m. EST on December 6,
2022. Additional details are provided in the section entitled
``Deadlines and Milestones for Bidders.''
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#deadbfacbff0b9abb7b2aab7b0bfb09ebcb1bbb3f0b9b1a8"><span class="__cf_email__" data-cfemail="addeccdfcc83cad8c4c1d9c4c3ccc3edcfc2c8c083cac2db">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
[[Page 64094]]
I. Background
The OCS Lands Act authorizes BOEM to offer renewable energy leases
for sale on the OCS competitively, unless BOEM determines there is no
competitive interest. 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). On July 29, 2021,
BOEM published a Call for Information and Nominations in the Federal
Register (86 FR 40869) (``2021 Call'') that delineated two extensions
to the Morro Bay Call Area, known as the East and West Extensions. In
response to the 2018 Call and 2021 Call, BOEM identified the Humboldt
Wind Energy Area (WEA) on July 28, 2021, and the Morro Bay WEA on
November 12, 2021, which together total 373,267 acres. BOEM proposed
this lease sale on May 31, 2022, in a Proposed Sale Notice (PSN)
published in the Federal Register (87 FR 32443). A 61-day comment
period followed. BOEM requested any prospective bidders wishing to
participate in a California lease sale to submit qualification
materials postmarked no later than August 1, 2022. BOEM also hosted an
auction seminar for prospective bidders on June 16, 2022, to discuss
the proposed auction format. BOEM received 84 comment submissions in
response to the PSN, which are available on <a href="http://regulations.gov">regulations.gov</a> (Docket ID:
BOEM-2022-0017) at: <a href="https://www.regulations.gov/document/BOEM-2022-0017-0001">https://www.regulations.gov/document/BOEM-2022-0017-0001</a>. BOEM has posted its responses to the comments that were
submitted during the PSN comment period. The document entitled,
Response to Comments, 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>.
In response to the comments received, BOEM made several changes to
the PACW-1 sale format and procedures from those proposed in the PSN
and to the lease stipulations in the Proposed Leases. The changes
include alterations to the sale format, which is now a single auction
in which all the Lease Areas will be offered. In each round of the
auction, a bidder can bid for at most one of the offered leases at a
time. A bidder can switch between different Lease Areas from round to
round, but it must bid in each round, and ultimately it can acquire at
most one of the leases in the auction. Other changes from the PSN
include the addition of a 5 percent bidding credit for bidders who have
committed to a qualifying General Community Benefit Agreement (CBA); an
increase in the amount of the credit offered for the Lease Area Use CBA
bidding credit from 2.5 to 5 percent; and removal of the requirement
for a 25 percent commitment of funds associated with the workforce
training and/or supply chain development bidding credit at the time of
the submission of the Lessee's first Construction and Operations Plan
(COP). In addition, BOEM developed and refined a number of lease
stipulations, based on feedback solicited in the PSN, including
provisions to: advance Lessee engagement with Tribes and parties that
may be affected by the Lessee's activities on the OCS; protect national
security; require the Lessee to coordinate with the California Coastal
Commission on plan submissions; require the Lessee to use an
independent Fisheries Liaison and protect the environment through the
imposition of vessel speed requirements, marine mammal monitoring
measures, a site-specific spill prevention and response plan, a
critical operations and curtailment plan, requirements related to the
avoidance of intentional contact within hard substrate, rock
outcroppings, seamounts, or deep-sea coral/sponge habitat, and use of
low-energy geophysical survey equipment.
II. List of Eligible Bidders
BOEM has determined that the following 43 entities are legally,
technically, and financially qualified to hold a commercial wind lease
offshore California, pursuant to 30 CFR 585.106 and 585.107, and
therefore may participate in this lease sale as bidders subject to
meeting the requirements outlined in this notice. Those entities are
listed below:
------------------------------------------------------------------------
Company name Company No.
------------------------------------------------------------------------
547 Energy LLC....................................... 15123
AEUG Offshore LLC.................................... 15158
Algonquin Power Fund (America) Inc................... 15090
Arevia Power LLC..................................... 15129
Avangrid Renewables, LLC............................. 15019
BP US Offshore Wind Energy LLC....................... 15122
California North Floating LLC........................ 15145
California Offshore Wind Development LLC............. 15147
California South Floating LLC........................ 15146
Castle Wind LLC...................................... 15085
Central California Offshore Wind LLC................. 15110
Cademo Corporation................................... 15093
Cierco Project Corporation........................... 15149
Clearway Renew LLC................................... 15109
Corio OSW Investments LLC............................ 15148
CPV Offshore Wind LP................................. 15114
EDF Renewables Development, Inc...................... 15027
EDPR Offshore North America LLC...................... 15074
Equinor Wind US LLC.................................. 15058
Ferrovial Energy US 1, LLC........................... 15150
GW Offshore Wind LLC................................. 15121
Hexicon USA, LLC..................................... 15151
Ideol USA Inc........................................ 15163
Invenergy California Offshore LLC.................... 15152
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
[[Page 64095]]
Orsted North America Inc............................. 15059
Pacific Moon Offshore Wind LLC....................... 15159
Pacific Offshore Wind LLC............................ 15153
Redwood Coast Energy Authority (RCEA)................ 15084
Redwood Coast Offshore Wind LLC...................... 15106
RWE Renewables Development, LLC...................... 15080
RWE Offshore Wind Holdings, LLC...................... 15061
Seaglass Offshore Wind I, LLC........................ 15154
Seaglass Offshore Wind II, LLC....................... 15155
Shell New Energies US LLC............................ 15140
SSE Renewable North America Offshore Wind LLC........ 15124
TotalEnergies Renewables USA, LLC.................... 15136
US Mainstream Renewable Power Inc.................... 15089
wpd offshore Alpha, LLC.............................. 15060
------------------------------------------------------------------------
a. Affiliated Entities: On the Bidder's Financial Form (BFF),
discussed in sections III(a)(i) and X below, eligible bidders must list
any other eligible bidders with whom they are affiliated. For the
purpose of identifying affiliated entities, ``person'' means any
individual, firm, corporation, association, partnership, consortium, or
joint venture (when established as a separate entity). BOEM considers
two entities to be affiliated if:
(1) They own or have common ownership of more than 50 percent of
the voting securities, or instruments of ownership or other forms of
ownership, of another person. Such ownership of less than 10 percent of
a person constitutes a presumption of non-control that BOEM may rebut.
(2) They own or have common ownership of 10 through 50 percent of
the voting securities or instruments of ownership, or other forms of
ownership, of another person, and BOEM determines that there is control
upon consideration of the following factors:
(i) The extent to which there are common officers or directors.
(ii) 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.
(iii) Shared operation of a lease, grant, or facility as defined in
BOEM's regulations at 30 CFR 585.112.
(iv) The extent of other owners' participation in operations and
day-to-day management of a lease, grant, or facility as defined in
BOEM's regulations at 30 CFR 585.112.
(v) Other evidence of power to exercise control over or common
control with another person.
(3) Regardless of any percentage of ownership or common ownership,
they are relatives, either by blood or marriage.
(4) They are both direct, or indirect, subsidiaries of the same
parent company.
Affiliated eligible bidders are not permitted to compete against
each other in the auction. Where multiple affiliated bidders have
qualified to bid in the auction, bidders must decide prior to the
auction which one eligible affiliated bidder (if any) will participate
in the auction. If two or more affiliated bidders attempt to
participate in the auction, BOEM will disqualify such bidders from the
auction.
III. Deadlines and Milestones for Bidders
This section describes the major deadlines and milestones in the
auction process from publication of this FSN to execution of the lease
pursuant to this sale.
a. FSN Waiting Period: During the period between FSN publication
and the lease auction (i.e., minimum 30 days), qualified bidders must
take several steps to remain eligible to participate in the auction.
i. Bidder's Financial Form: Each bidder must submit a BFF to BOEM
to participate in the auction. The BFF must contain each bidder's
conceptual strategy for each non-monetary credit (also referred to
herein as ``bidding credit'') for which the bidder wishes to be
considered. BOEM will consider any BFF received on or before November
4, 2022, and it is each bidder's responsibility to ensure BOEM's timely
receipt. If a bidder does not submit a BFF by this deadline, BOEM, in
its sole discretion, may grant an extension to that bidder only if BOEM
determines the bidder's failure to timely submit a BFF was caused by
events beyond the bidder's control. The BFF can be downloaded at:
<a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
For purposes of this auction, BOEM will not consider BFFs submitted
by bidders for previous lease sales. The BFF must be executed by an
authorized representative listed on the bidder's legal qualifications
in the BFF, in accordance with 18 U.S.C. 1011 (Fraud and False
Statements). Further information about the BFF can be found in the
``Bidder's Financial Form'' section IX of this notice.
ii. Bid Deposit: Once BOEM has processed a BFF and provided the
appropriate information to Office of Natural Resources Revenue (ONRR),
ONRR will populate the Bid Deposit Forms and then will notify the
bidders that they should have access to <a href="http://pay.gov">pay.gov</a> for the bid deposits.
The bidder must log into <a href="http://pay.gov">pay.gov</a> to submit a bid deposit. To
participate in the mock auction and the monetary auction, each
qualified bidder must provide a bid deposit of $5,000,000 no later than
November 21, 2022. BOEM will consider extensions to this deadline only
if BOEM, in its sole discretion, determines that the failure to timely
submit the bid deposit was caused by events beyond the bidder's
control. Further information about bid deposits can be found in the
``Bid Deposit'' section XI of this notice. Per 30 CFR 585.222(e), BOEM
will send a written notice of its decision to accept or reject bids to
all bidders whose deposits we hold.
b. Conducting the Auction:
i. Affirmative Action: Prior to bidding in the monetary auction,
each bidder must file the Equal Opportunity Affirmative Action
Representation Form BOEM-2032 (February 2020, available on BOEM's
website at <a href="http://www.boem.gov/BOEM-2032/">http://www.boem.gov/BOEM-2032/</a>) and Equal Opportunity
Compliance Report Certification Form BOEM-2033 (February 2020,
available on BOEM's website at <a href="http://www.boem.gov/BOEM-2033/">http://www.boem.gov/BOEM-2033/</a>) with the
BOEM Pacific Regional Office. This certification is required by
[[Page 64096]]
41 CFR part 60 and Executive Order (E.O.) 11246, issued September 24,
1965, as amended by E.O. 11375, issued October 13, 1967, and by E.O.
13672, issued July 21, 2014. Both forms must be on file for the
bidder(s) in the BOEM Pacific Regional Office prior to the execution of
any lease contract.
ii. Mock Auction: BOEM will hold a Mock Auction on December 5,
2022, beginning at 7:00 a.m. PST/10:00 a.m. EST. BOEM will hold the
Mock Auction online. BOEM will contact each bidder that has timely
submitted a BFF and bid deposit and provide instructions for
participation. Only bidders that have timely submitted BFFs and bid
deposits may participate in the Mock Auction.
iii. Multiple-factor Auction: On December 6, 2022, BOEM, through
its contractor, will commence the monetary auction. The first round of
the auction will start at 7:00 a.m. PST/10:00 a.m. EST. The auction
will proceed electronically according to a schedule to be distributed
by the BOEM Auction Manager at the beginning of the auction, subject to
any revisions that will be communicated to bidders during the auction.
BOEM anticipates that the auction may extend over two or more
consecutive business days, as necessary, until the auction ends in
accordance with the procedures described in the ``Auction Procedures''
section of this notice.
iv. Announce Provisional Winners: BOEM will announce the
provisional winners of the lease sale after the auction ends.
c. From the Auction to Lease Execution:
i. Notice and Refunds to Non-Winners: Once the provisional winners
have been announced, BOEM will return the non-winners bid deposits.
ii. Department of Justice (DOJ) Review: DOJ will 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 will send three copies of the
lease to each provisional winner, with instructions for executing the
lease. The first year's rent is due 45 calendar days after the winners
receive the lease copies for execution.
iv. Return the Lease: Within 10 business days of receiving the
lease copies, the auction winners must post financial assurance, pay
any outstanding balance of their bonus bids (i.e., winning monetary bid
minus applicable non-monetary bidding credit and bid deposit), and sign
and return the three executed lease copies. In the event of a delay,
BOEM may extend the 10-business-day-time period for executing and
returning the lease if BOEM, in its sole discretion, determines the
delay to be caused by events beyond the winner'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 will make a final determination regarding its issuance of the
leases and will execute the leases, if appropriate.
IV. Areas Offered for Leasing
BOEM considered the following factors in delineating the Lease
Areas included in this FSN: reasonably comparable commercial viability
and size; prevailing wind direction and minimal wake effects; maximized
energy generating potential; mooring system anchor footprints; 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.
All five Lease Areas included in this FSN are the size and
orientation that BOEM described in the Proposed Sale Notice. BOEM's
designation of the five Lease Areas offered in the FSN was informed by
its years-long coordination with BOEM's intergovernmental task force
members, consultation and engagement with Tribes, stakeholder
engagement, consideration of the 84 comments that BOEM received in
response to the PSN, and the U.S. Coast Guard's (USCG's) Draft Pacific
Coast Port Access Route Study (PAC-PARS). BOEM is offering five Lease
Areas totaling 373,268 acres for sale through this notice (Figure 1).
The areas available for lease will be auctioned in a single auction
as listed in the table below.
Table 1 to Section IV--PACW-1 Final Lease Areas
------------------------------------------------------------------------
Total
Lease acres
------------------------------------------------------------------------
OCS-P 0561................................................... 63,338
OCS-P 0562................................................... 69,031
OCS-P 0563................................................... 80,062
OCS-P 0564................................................... 80,418
OCS-P 0565................................................... 80,418
------------------------------------------------------------------------
BOEM is aware that NOAA's Office of National Marine Sanctuaries has
initiated a designation process for the proposed Chumash Heritage
National Marine Sanctuary, an area comprising approximately 7,000
square miles off the central coast of California adjacent to the Morro
Bay Lease Areas. 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 due to BOEM's lack
of authority in National Marine Sanctuaries. BOEM is coordinating
closely with the NOAA Office of National Marine Sanctuaries to advance
both offshore wind energy projects and conservation and restoration of
ocean and coastal habitats. BOEM is a cooperating agency on NOAA's
Environmental Impact Statement on the Proposed Designation of the
Chumash Heritage National Marine Sanctuary and is providing input on
the ongoing renewable energy leasing process, as well as contributing
special expertise in marine energy and mineral matters. 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 USCG has published a Draft PAC-PARS
that evaluates 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 aims to determine whether a Shipping Safety Fairway
and/or routing measures should be established, adjusted, or modified.
The recommendation found in the Draft PAC-PARS calls for the
establishment of voluntary fairways to coordinate the flow of vessel
traffic along several USCG districts from California to Washington. The
Draft PAC-PARS recommends that offshore fairways traverse near the
Humboldt and Morro Bay lease areas and states that these recommended
fairway routes would allow for the continued flow of vessel traffic
without interference from wind energy leasing activities in California.
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 PAC-PARS is available at <a href="http://www.regulations.gov/">http://www.regulations.gov/</a>, under Docket No. USCG-2021-0345.
Additional information on potential restrictions due to navigation
and safety concerns can be found below in the Potential Future
Restrictions to Ensure Navigational Safety section VII(a).
BOEM is aware of two submarine cable systems that are scheduled for
installation or that are already installed in cable corridors that
overlap the Lease Areas. A planned submarine telecommunications cable
system,
[[Page 64097]]
known as the Bifrost Cable System, is expected to be installed in 2023
and completed in 2024 in a cable corridor that would overlap with the
southern portion of Lease OCS-P 0565. A telecommunications cables
project, known as RTI Infrastructure, Inc. Eureka Subsea Fiber Optic
Cables Project, was installed in August 2022 and overlaps with Lease
OCS-P 0561 and Lease OCS-P 0562.
a. Map of the Areas 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>.
V. Environmental Review
On January 11, 2022, BOEM announced the availability of the Draft
Environmental Assessment (EA) that assesses potential environmental
impacts from site characterization and site assessment activities
expected to take place after the issuance of commercial leases within
the identified Humboldt WEA. On April 6, 2022, BOEM announced the
availability of the Draft EA that assesses potential environmental
impacts from site characterization and site assessment activities
expected to take place after the issuance of commercial leases within
the identified Morro Bay WEA. The EAs focus on potential environmental
consequences of site characterization activities (i.e., biological,
archaeological, geological, and geophysical surveys and core samples)
and site assessment activities (i.e., installation of meteorological
buoys) expected to take place after issuance of wind energy leases in
the Humboldt and Morro Bay WEAs. Concurrently with its preparation of
the EAs, BOEM conducted consultations under the Endangered Species Act
(ESA) and the Magnuson-Stevens Fishery Conservation and Management Act
regarding potential impacts to listed species, designated critical
habitat, and essential fish habitat, and conducted consistency reviews
under the Coastal Zone Management Act. 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. The availability of the Final EA and Finding of No
Significant Impact for the Humboldt WEA was announced on May 5, 2022,
and the documents 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>. The availability of
the Final EA and Finding of No Significant Impact for the Morro Bay WEA
was announced on October 5, 2022, and the documents 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 determined that the Proposed Actions would not cause
any significant impacts and that implementing the Proposed Actions do
not constitute major Federal actions significantly affecting the
quality of the human environment within the meaning of section
102(2)(c) of the National Environmental Policy Act of 1969. BOEM will
conduct additional environmental reviews upon receipt of a lessee's
proposed project-specific plans, such as a Site Assessment Plan (SAP)
or Construction and Operations Plan (COP).
VI. New and Modified Lease Stipulations
Based on feedback on the Proposed Sale Notice, BOEM is adding lease
stipulations that: (i) were discussed conceptually in the PSN, (ii)
include conditions of the California Coastal Commission's conditional
concurrence with the consistency determinations for the Humboldt and
Morro Bay WEAs, and (iii) include conditions from the Department of
Defense (DoD) to protect national defense capabilities and military
operations. BOEM is also refining some stipulations identified in the
PSN and proposed leases.
a. Reporting requirements: BOEM is building upon stipulations in
previous leases requiring a semi-annual progress report from lessees
and regular engagement with Tribes and parties that may be affected by
lessees' activities on the OCS. The lease stipulations include working
with: the California Native American Heritage Commission to identify
Tribes that have cultural and or historical ties to the Lease Areas;
coastal communities; commercial and recreational fishing industries and
stakeholders; educational and research institutions; environmental and
public interest non-governmental organizations; federal, state, and
local agencies; Tribes; mariners and the maritime industry; ocean
users; submarine cable operators; and underserved communities, as
defined in Section 2 of Executive Order 13985. Within the progress
report, lessees will be required to identify Tribes and parties that
may be affected by lessees' activities on the OCS and with whom the
lessees have engaged; provide updates on engagement activities;
document potential adverse effects to the interests of Tribes and
parties; document how, if at all, a project has been informed or
altered to address those potential effects; include feedback from
engagement regarding transmission planning prior to proposing any
export cable route; provide information that can be made available to
the public; and include strategies to reach potentially affected
individuals with Limited English Proficiency.
The stipulations include requirements for lessees to engage in ways
that minimize linguistic, technological, cultural, capacity, or other
obstacles. The stipulations encourage lessees to work collaboratively
with governments, community leadership and organizations, and Tribes
and to develop specific frameworks for capacity building.
In acknowledgment of the existing and growing consultation burden
placed on many of the Tribes and parties, the stipulation also
requires, 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. Coordinated engagement among
Tribes and lessees is strongly encouraged and is in addition to BOEM's
responsibilities to federally recognized Tribes under Executive Order
13175.
In addition, the reporting stipulation requires that the progress
report incorporate separate lease requirements for the development of
communication plans for Tribal governments (Native American Tribes
Communications Plan), agencies (Agency Communications Plan), and
fisheries (Fisheries Communications Plan). Lastly, the progress report
must also include an update on activities executed under any survey
plan.
b. Expanding Engagement with Potentially Impacted 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
[[Page 64098]]
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
including lease stipulations designed to ensure that offshore wind
development projects are implemented in a manner that minimizes,
mitigates, and/or redresses the project's potential adverse effects, if
any, on Tribes and parties. The Lessee will engage in ways that
minimize linguistic, technological, cultural, capacity, or other
obstacles to Tribes and parties.
c. Commercial Fisheries: BOEM is including 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 adding elements to this stipulation in response to its extensive
engagement with Tribal governments, the fishing industry, and
governmental agencies. Major 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)
requiring 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.
d. Protected Species: In May 2022, BOEM published a Final Humboldt
WEA EA which includes the most current measures to minimize potential
adverse impacts to protected species, including Endangered Species Act
(ESA)-listed species of marine mammals and sea turtles. Similar
measures are included in the final Morro Bay WEA EA, published in
October 2022. BOEM has included in the leases these measures from the
EAs and from the ESA Concurrence Letter and EFH Response issued on
September 21, 2022 (<a href="https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/LOC-EFH%20for%20OSW%20leases%20in%20CA.pdf">https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/LOC-EFH%20for%20OSW%20leases%20in%20CA.pdf</a>).
e. Project Labor Agreements (PLAs) and Supply Chain: BOEM is
committed to 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 including two lease
stipulations, one that encourages construction efficiency for projects
and the other that contributes towards establishing a domestic supply
chain:
i. The first stipulation requires lessees to make every reasonable
effort to enter into a PLA covering the construction stage of any
project for the Lease Areas. The PLA provisions for the construction of
an offshore wind project apply to all contractors.
ii. The second stipulation requires lessees to establish a
Statement of Goals in which the Lessee describes its plans for
contributing to the creation of a robust and resilient U.S.-based
floating offshore wind industry supply chain that would facilitate this
or other renewable energy projects permitted by BOEM. The Lessee is
required to provide regular progress updates on the achievement of
those goals to BOEM, and BOEM will make those updates publicly
available.
f. Research Site Access: This stipulation makes explicit that BOEM,
its designated representative, or any entity to which the Lessor
provides access retains the right to access the Lease Area for purposes
of future research and other activities conducted under the lease.
g. Archaeological Survey Requirements: BOEM is including a
modification of lease stipulations in previous commercial leases
regarding archaeological survey requirements. The revised stipulation
requires that the Lessee provide to BOEM, in the associated plan
submissions, a description of the methods it uses to conduct
archaeological surveys in support of plans (i.e., SAP and/or COP), in
addition to the survey results. The Lessee is required to coordinate a
Tribal pre-survey meeting with Tribes that have cultural and/or
historical ties to the Lease Area; the Lessee must work with BOEM and
the California Native American Heritage Commission to identify such
Tribes). In the post-review discovery clauses, the revised stipulation
requires that, in the event of unanticipated discovery of a potential
archaeological resource, the Lessee will 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 also adds a requirement in the post-review
discovery clauses that the Lessee refers to the NATCP for additional
guidance on notifications.
h. Foreign Interest: To protect national defense capabilities and
military operations, BOEM is requiring the Lessee to provide to DoD
specific information, including names of entities or persons having a
direct ownership interest in an offshore wind facility, and changes in
ownership interests; the names of the material vendors, entities, and
persons with which the Lessee will potentially execute contracts to
perform construction, supply turbines or other components, or conduct
construction and operational activities at the facility; and the names
of any foreign entities and persons (as those terms are defined at 31
CFR 800.220 and 31 CFR 800.224) allowed to access the wind turbine
structures and associated data systems. In addition, security concerns
raised by DoD must be resolved prior to allowing access to the site by
foreign persons or representatives of foreign entities for which DoD
has raised concerns or the use of wind turbines or other permanent on-
site equipment manufactured by such an entity.
i. Notice of Assignment to the Committee on Foreign Investment in
the United States (CFIUS): Under BOEM's regulations, a lessee must be
one of the following: (1) a citizen or national of the United States;
(2) an alien lawfully admitted for permanent residence in the United
States as defined in 8 U.S.C. 1101(a)(20); (3) a private, public, or
municipal corporation organized under the laws of any State of the
United States, the District of Columbia, or any territory or insular
possession subject to U.S. jurisdiction; (4) an association of such
citizens, nationals, resident aliens, or corporations; (5) an Executive
Agency of the United States as defined in section 105 of Title 5 of the
U.S. Code; (6) a State of the United States; or (7) a political
subdivision of States of the United States. However, this condition
addresses a situation where a proposed Lessee, even if in compliance
with BOEM's regulations, is a foreign-controlled business entity under
the regulations at 31 CFR part 800. In this situation, BOEM and the
proposed Lessee must jointly provide notice of the proposed transaction
to CFIUS in accordance with applicable regulations (subpart D of 31 CFR
part 800) and provide a copy of the notice to the DoD. Approval of any
assignment of lease interest that is subject to this stipulation would
only take place after CFIUS provides notice that it has concluded all
action under section 721 of the Defense Production Act of 1950, as
amended, with respect to the assignment.
[[Page 64099]]
j. California Coastal Commission Consistency Determination
Conditions: The following conditions were the result of the California
Coastal Commission consistency determination for the Morro Bay and
Humboldt WEAs [CD-0004-22 and CD-0001-22]. Upon consideration of the
record, BOEM has determined that these stipulations are appropriate and
reasonable as a means of balancing the factors set forth in OCSLA
Section 8(p) or to further expeditious development of the lease.
i. Vessel Speed Requirements: Vessels conducting lease
characterization studies, surveys, metocean buoy installation,
maintenance, or decommissioning, or any other survey activities must
travel at speeds of no more than 10 knots during all related
activities, including vessel transit.
ii. Marine Mammal Monitoring Measures: Lessees must implement all
marine wildlife and protection and monitoring measures during all
marine operations (e.g., surveys, buoy installation and removal),
consistent with vessel and worker safety. In addition, prior to the
start of offshore activities, the Lessee must provide awareness
training to all Project-related personnel and vessel crew, including
viewing of an applicable wildlife and fisheries training video, on the
most common types of marine wildlife likely to be encountered in the
project area and the types of activities that have the most potential
for affecting the animals.
iii. Site-specific Spill Prevention and Response Plan: The Lessee
must submit a site-specific Spill Prevention and Response Plan a
minimum of 30 days before commencement of any in-water survey
activities or as part of any survey plan or SAP. The Plan must be kept
on the appropriate survey vessels during all survey and SAP operations.
The Plan must identify the worst-case spill scenario and demonstrate
that adequate spill response equipment will be available. The Plan must
also include preventative measures the Lessee will implement to avoid
spills; clearly identify responsibilities of onshore and offshore
contractors and the Lessee's personnel; and must list and identify the
location of oil spill response equipment (including booms), appropriate
protocols, and response times for deployment. Petroleum-fueled
equipment on the main deck of all vessels must have drip pans or other
means of collecting dripped petroleum, which must be collected and
treated with onboard equipment.
iv. Critical Operations and Curtailment Plan (COCP): The Lessee
must include a COCP as part of any survey plan. The COCP must define
the limiting conditions of sea state, wind, or any other weather
conditions that exceed the safe operation of offshore vessels,
equipment, or divers in the water; that hinder potential spill cleanup;
or that in any way pose a threat to personnel or the safety of the
environment. The COCP must provide for a minimum ongoing five-day
advance weather forecast during offshore operations. The Plan must also
identify the onsite person with authority to determine critical
conditions and suspend work operations when needed. The COCP must be
kept on the appropriate survey vessels during all survey and SAP
operations.
v. Anchoring Plan: The Lessee must submit an Anchoring Plan to BOEM
as part of any survey plan that requires vessel anchoring. The Plan
must describe how the Lessee will avoid placing anchors on sensitive
ocean floor habitats, cables, and pipelines and must include supporting
information.
vi. Bottom Contact: The Lessee must avoid intentional contact with
hard substrate, rock outcroppings, seamounts, or deep-sea coral/sponge
habitat, and include a buffer of at least 40 feet (12 meters) from hard
bottom substrates that fully protects these habitats from bottom
contact, including, but not limited to, anchoring, mooring, and
sediment sampling.
vii. Use Low-Energy Equipment: The Lessee must use low-energy
equipment, as defined by California State Regulation 2 CCR Sec.
2100.03(g), to complete its geophysical surveys. Low-energy equipment
is limited to sub-bottom profilers (e.g., mini-sparkers). The Lessee is
encouraged to use geophysical survey operators that conduct their
surveys consistent with the provisions of the California State Lands
Commission's low-energy geophysical survey program.
viii. Coordination with the California Coastal Commission: The
Lessee must coordinate with the California Coastal Commission to ensure
the Lessee's survey and SAP submissions are coordinated and consistent,
minimize impacts to coastal resources, and provide the data and
information necessary for analysis of future consistency
certifications.
ix. Fisheries Liaison: The Lessee is required to use an independent
Fisheries Liaison that is responsible for the coordination and
communication of site activities with affected commercial,
recreational, and subsistence fishing communities and harbor districts,
including such coordination and communication concerning development
and implementation of survey plans and SAPs.
VII. Potential Future Restrictions
a. Potential Future Restrictions to Ensure Navigational Safety:
i. USCG Navigational Safety Measures: Potential bidders should note
that the USCG has conducted the Pacific Coast Port Access Route Study
(PAC-PARS) (draft report dated September 2022) 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 draft PAC-PARS
evaluated the continued applicability of, and the need for
modifications to, current vessel routing measures. The draft PAC-PARS
recommends a voluntary fairway system with a 15-nautical-mile (NM)-wide
major thoroughfare that generally follows the existing offshore route
used by commercial container and bulk carrying vessels. The main trunk
of the fairway runs north-south, down to the Santa Barbara TSS north of
the Channel Islands. This fairway provides a voluntary, recommended
route for coastwise vessel traffic. Port approaches connect vessel
traffic entering and departing major California ports to the offshore
fairway. These fairways are generally 5 NMs wide, except for a larger
opening at the San Francisco east/west Transit Separation Scheme. While
data gathered during the finalization of the PAC-PARS may result in the
establishment of one or more new vessel routing measures, modification
of existing recommended routing measures, or disestablishment of
existing recommended routing measures off the Pacific Coast between
Washington and California, the draft PAC-PARS recommends offshore
fairways that traverse near the Humboldt and Morro Bay Lease Areas,
which are found in locations that allow for the continued flow of
vessel traffic along recommended fairway routes without interference
from wind energy leasing activities. The PAC-PARS study did not
consider issues that may arise relating to vessel anchorage needs,
particularly during emergency situations. Potential bidders should note
that the USCG is undertaking a national review of anchorage regulatory
standards. This may result in new recommendations from the USCG
relating to allowances for vessel anchors in certain portions of the
Lease Areas. BOEM may require mitigation measures in a COP once the
Lessee's site-specific navigational safety risk assessment is available
to inform BOEM's decision-
[[Page 64100]]
making. The final PAC-PARS and the review of vessel anchorage
regulatory standards 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 in the Lease Areas at lease execution and the Draft PAC-PARS
study recommends fairways that avoid the Lease Areas entirely. However,
at the COP stage BOEM may nonetheless consider designating portions of
the Lease Areas as areas of no surface occupancy to facilitate vessel
transit and continuance of existing uses.
b. 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 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 terms and
conditions of any COP approval, such as curtailment protocol, will be
required by DoD. Any such terms and conditions will result from
consultation with DoD on development within the Lease Areas. For
example, DoD will likely require a curtailment protocol with the Lessee
to avoid conflicts with electromagnetically sensitive activities
conducted in the area, including those associated with the Point Mugu
Sea Range, Vandenberg Space Force Base, and North American Aerospace
Defense Command (NORAD). DoD has indicated to BOEM that curtailment
will be temporary and limited to instances where it is necessary to
avoid conflicts with national security or defense requirements.
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.
Potential bidders should be aware that there may be national
security considerations associated with any request by DoD for
curtailment and any curtailment resulting therefrom. Future Lessees
will not be allowed to disclose any such request or any curtailment
resulting therefrom without the prior consent of DoD. DoD has stated
that consent to disclose to a business entity with a need to know and
with which a non-disclosure agreement is in place will not be
unreasonably withheld.
The DoD is exploring potential national security threats from
deployment of Distributed Optical Fiber Sensing (DOFS) technology
associated with offshore energy projects. BOEM retains the right to
unilaterally require a Lessee to implement mitigation measures
necessary to safeguard against these potential threats to national
security and military operations, as identified by the DoD.
VIII. Lease Terms and Conditions
BOEM has included terms and conditions for the OCS commercial wind
leases to be offered through this sale. After the leases are issued,
BOEM reserves the right to require compliance with additional terms and
conditions associated with approval of a SAP and COP. The leases are
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>. 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 lease terms
and conditions. Addenda D and E will be completed at the time of COP
approval or approval with modifications, should a COP be approved.
a. Required Plans for Potential Development of Executed Leases:
Under 30 CFR 585.601, if site assessment activities will be conducted,
the Lessee will 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 Lessee will be required to submit a COP at
least six months before the end of the site assessment term.
IX. Financial Terms and Conditions
This section provides an overview of the annual payments required
of the Lessee that are more fully described in the lease, and the
financial assurance requirements that will be associated with the
lease.
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 execution. 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, until commercial operations begin, 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 will 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 will be due on the relinquished portion of
the Lease Area. Later relinquishments of any portion of the Lease Area
will reduce the Lessee's rent payments starting in the year following
BOEM's approval of the relinquishment. A lease issued under this part
confers on the Lessee the right to one or more project easements,
without further competition, for the purpose of installing gathering,
[[Page 64101]]
transmission, and distribution cables, pipelines, and appurtenances on
the OCS as necessary for the full enjoyment of the lease. A Lessee must
apply for the project easement as part of the COP or SAP, as provided
under subpart F of 30 CFR part 585.
The Lessee must also pay rent for any project easement associated
with the lease, commencing on the date that BOEM approves the COP (or
modification thereof) that describes the project easement, with the
first rent payment due when the operations term begins, 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 applies 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 after 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 are 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 will be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN21OC22.001
i. Operating Fee Rate: The operating fee rate is 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 will set the fee rate at 0.02 (i.e., 2 percent) for the entire
life of commercial operations.
ii. Nameplate Capacity: Nameplate capacity is 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. The nameplate
capacity available at the start of each year of commercial operations
on the lease will be the capacity provided in the Fabrication and
Installation Report (FIR). For example, if the Lessee installed 100
turbines as documented in its FIR, 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 will 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, is determined at
the time each annual operating fee payment is due. For the leases
offered in this sale, BOEM will use the annual average of the
California Independent System Operator (California ISO) North of Path
15 (NP15) market hub price. The Lessee may also use aggregated data
from commercial subscription services, such as S&P Global Market
Intelligence Platform or Hitachi ABB Velocity Suite and this may be
posted by BOEM for reference.
c. Financial Assurance: Within 10 business days after receiving the
lease copies for execution and pursuant to 30 CFR 585.515-585.516, each
provisional winner must provide an initial lease-specific bond or other
BOEM-approved financial assurance instrument in the amount of $100,000.
The provisional winners may meet financial assurance requirements by
posting a surety bond or financial assurance instrument or alternative
detailed in 30 CFR 585.526-585.529. 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 will 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. BOEM will
determine the required amount of supplemental and decommissioning
financial assurance on a case-by-case basis.
d. Payments: The annual lease payments and financial assurance
requirements described above can be found in Addendum ``B'' of the
leases, which BOEM has made available with this notice on its website
at: https: <a href="https://www.boem.gov/renewable-energy/state-activities/california">https://www.boem.gov/renewable-energy/state-activities/california</a>.
X. Bidder's Financial Form
Each bidder must fill out the BFF referenced in this FSN. A copy of
the 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>. Bidders seeking to use the bidding credits must
mark the appropriate box(es) on their BFF and submit a conceptual
strategy(ies) with their BFF as described in the BFF Addendum. Bidders
are encouraged to carefully read the BFF and BFF Addendum. Bidders who
do not elect to attempt to qualify for a bidding credit should mark the
box on their BFF next to the paragraph declining the bidding credits.
If the bidder does not select bid credits on the BFF or does not submit
[[Page 64102]]
conceptual strategy(ies), then BOEM will assume that the bidder has no
interest in a bidding credit. BOEM must receive each BFF and conceptual
strategy(ies), as appropriate, no later than November 4, 2022. If a
bidder does not submit a BFF for this sale by the deadline, BOEM, in
its sole discretion, may grant an extension to that bidder only if BOEM
determines the bidder's failure to timely submit a BFF was caused by
events beyond the bidder's control.
BFFs submitted by bidders for previous lease sales will not satisfy
the requirements of this auction. For the PACW-1, BOEM will accept
bidder's BFFs and conceptual strategies electronically or by mail.
Instructions for submission can be found in the BFF. The BFF must be
executed by an authorized representative listed in the qualifications
package on file with BOEM as authorized to bind the company. Winning
bidders committing to the bidding credit(s) must meet the bidding
credit requirements no later than submission of their first Facility
Design Report (FDR).
XI. Bid Deposit
A bid deposit is an advance cash payment submitted to BOEM to
participate in the auction. ONRR will notify the bidders that they have
access to the Bid Deposit Form in <a href="http://pay.gov">pay.gov</a>, and bidders must use the Bid
Deposit Form on the <a href="http://pay.gov">pay.gov</a> website to leave a deposit. Bidders may
need to create an account in <a href="http://pay.gov">pay.gov</a> to access the Bid Deposit Form and
leave a deposit. Each bidder must submit a bid deposit of $5,000,000 no
later than November 21, 2022, to be eligible to bid for one lease area.
Any bidder who fails to submit the bid deposit by this deadline may be
disqualified from participating in the auction. BOEM will consider
extensions to this deadline only if BOEM, in its sole discretion,
determines that the failure to timely submit the bid deposit was caused
by events beyond the bidder's control.
Following the auction, bid deposits will be applied against bonus
bids. Once BOEM has announced the provisional winners, BOEM will refund
bid deposits to the other bidders.
If BOEM offers a lease to a provisionally winning bidder and that
bidder fails to timely return the signed lease form, establish
financial assurance, or pay the balance of its bid, BOEM may retain the
bidder's $5,000,000 bid deposit. In such a circumstance, BOEM may
determine which bid would have won in the absence of the bid previously
determined to be the winning bid and may offer a lease pursuant to this
next highest bid if the Lessee that provided it has not won one of the
other Lease Areas.
XII. Minimum Bid
The minimum bid is the lowest bid BOEM will accept as a winning
bid, and it is where BOEM will start the bidding in the auction. BOEM
has established a minimum bid of $100.00 per acre for this lease sale.
See table in section XIII.e below for total minimum bids for each lease
to be offered in these sales.
XIII. Auction Procedures
Multiple-Factor Bidding Auction: As authorized under 30 CFR
585.220(a)(4) and 585.221(a)(6), BOEM will use a multiple-factor
bidding auction for this lease sale. The bidding system for this lease
sale will be a multiple-factor combination of a monetary bid and a non-
monetary factor. BOEM will grant bidding credits to potential bidders
for commitments to:
(1) support workforce training programs for the floating offshore
wind industry and/or develop a U.S. domestic supply chain for the
floating offshore wind industry;
(2) establish a Lease Area Use CBA with one or more communities,
stakeholder groups, or Tribal entities whose use of the geographic
space of the Lease Area, or whose use of resources harvested from that
geographic space, is expected to be impacted by the Lessee's potential
offshore wind development, and
(3) establish a General CBA with one or more communities, Tribes,
or stakeholder groups that are expected to be affected by the potential
impacts on the marine, coastal, and/or human environment (such as
impacts on visual or cultural resources) from activities resulting from
lease development that are not otherwise addressed by the Lease Area
Use CBA.
This auction format was selected to:
(1) enhance, through training, the floating offshore wind workforce
and enhance the establishment of a domestic supply chain for floating
offshore wind manufacturing, assembly, or services, and that is
designed to lead to expeditious and orderly development of offshore
wind resources on the OCS;
(2) support the expeditious and orderly development of OCS
resources by mitigating potential direct impacts from proposed projects
and encouraging the investment in infrastructure germane to the
offshore wind industry; and
(3) advance the purposes of OCSLA by facilitating the coexistence
of multiple ocean uses on the OCS, promoting meaningful comment and
participation in the leasing and plan review process, and mitigating
potential economic impacts on communities impacted by potential
offshore wind development.
BOEM will appoint a panel to review the non-monetary component
after the BFFs and bid deposits have been received but before the
auction, and the panel will verify the results of the lease sale.
Following review of the strategy to support workforce training programs
for the floating offshore wind industry; development of a U.S. domestic
supply chain for the floating offshore wind energy industry; either
CBA; or a combination thereof, BOEM will notify bidders if they qualify
for the credit prior to the mock auction. BOEM reserves the right to
change the composition of this panel at any time. The bid made by a
particular bidder in each round will represent the sum of a monetary
(cash) amount and a non-monetary factor (bidding credit). The structure
of this bidding credit is explained in the subsection below.
A bidder will be eligible to elect to qualify for one or more of
the bidding credits. A bidder may target either workforce training,
supply chain development, or a combination thereof for a 20 percent
credit. The Lease Area Use CBA bidding credit will be worth 5 percent
of the cash bid. The General CBA bidding credit will be worth 5 percent
of the cash bid. If a bidder qualifies for all three bidding credits,
the credits will be additive, for a total potential credit of a maximum
30 percent of the cash bid. Bidders are encouraged to review the BFF
Addendum if they are interested in qualifying for these bidding
credits.
a. Bidding credit calculation: BOEM provides the following example.
For a cumulative 30 percent of cash bid bidding credit with a $50
million Asking Price, the bidding credit will be calculated (subject to
rounding) as follows:
[[Page 64103]]
[GRAPHIC] [TIFF OMITTED] TN21OC22.002
Only the 20 percent workforce training and/or supply chain
development credit will require an explicit financial commitment.
Bidders seeking a CBA credit will 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 is calculated as 20 percent of the cash bid. It will be
calculated as follows:
Commitment = Cash Bid * Workforce Training Supply Chain Credit% =
$38,461,538 * 20% = $7,692,308
Though no specific financial commitment is required, the value of
the credit for the two CBAs are similarly calculated, but for 5 percent
of the cash bid.
BOEM has prepared a table demonstrating the credit value
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. The same calculations of cash bids and credits are
applicable to exit bids, as well as to live bids. Note that, in the
monetary auction, all fractional dollar amounts will be subject to
rounding to the nearest dollar.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Workforce
training/ Lease area use General CBA
Bidding credits qualified for Asking price Cash bid Percent credit Credit value supply chain CBA credit credit (5%)
credit (20%) (5%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Workforce Training/Supply Chain $50 million......... $38,461,538 30 $11,538,462 $7,692,308 $1,923,077 $1,923,077
Development; and Lease Area Use
CBA and General CBA.
Workforce Training/Supply Chain $50 million......... 40,000,000 25 10,000,000 8,000,000 2,000,000 N/A
Development; and Lease Area Use
CBA.
Workforce Training/Supply Chain $50 million......... 40,000,000 25 10,000,000 8,000,000 N/A 2,000,000
Development; and General CBA.
Workforce Training/Supply Chain $50 million......... 41,666,667 20 8,333,333 8,333,333 N/A N/A
Development only.
Both CBA Credits only............. $50 million......... 45,454,545 10 4,545,455 N/A 2,272,727 2,272,727
Lease Area Use CBA Credit only.... $50 million......... 47,619,048 5 2,380,952 N/A 2,380,952 N/A
General CBA Credit only........... $50 million......... 47,619,048 5 2,380,952 N/A .............. 2,380,952
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Cash bid and credit values are rounded to the nearest dollar in the Power Auctions software. BOEM will then use those values to calculate the
credit values and will also round to the nearest dollar.
b. 20 Percent Non-Monetary (Bidding) Credit for Workforce Training
or Supply Chain Development or a Combination of Both: This type of
bidding credit allows 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. The workforce training
programs must support the floating offshore wind industry, development
of a U.S. domestic supply chain for the floating offshore wind energy
industry, or both. To qualify for this credit, the winning bidder is
required to financially contribute the value of this bidding credit
toward a workforce training program or the development of a domestic
supply chain, as described in the BFF Addendum and lease.
i. The Contribution to workforce training must result in a better
trained and/or larger domestic floating offshore wind workforce that
would provide for more efficient operations via increasing the supply
of fully trained personnel.
ii. The Contribution to domestic supply chain development must
result in (i) overall benefits to the U.S. floating offshore wind
supply chain available to all potential purchasers of offshore wind
services, components, or subassemblies, not solely the Lessee's
project; (ii) either the demonstrable development of new domestic
capacity (including vessels) or the demonstrable buildout of existing
capacity; or (iii) a more robust floating offshore wind 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 or assembly facilities.
iii. No portion of the Contribution may also be used to meet the
requirements of any other bidding credits for which the Lessee
qualifies.
iv. Bidders seeking to use the bidding credit under this provision
can choose to commit to workforce training programs, domestic supply
chain initiatives, or a combination of both. The strategy must describe
the verifiable actions to be taken by the Lessee that would allow BOEM
to confirm compliance when the documentation for satisfying the bidding
credit is submitted. The Contribution must be made no later than the
time of the submission of the Lessee's first FDR. Lessees must provide
documentation showing that the Lessee has made the Contribution and
complied with the applicable requirements no later than the submission
of the first FDR for the Lease. Deferring the payment until no later
than the FDR will enable the Lessee to identify programs or recipients
with the greatest potential to expedite or facilitate orderly OCS
renewable energy development.
v. Contributions to workforce training must be to one or more of
the following: (i) Contributions toward 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,
[[Page 64104]]
operation, maintenance, or decommissioning of floating 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 floating
offshore wind energy projects in the United States; (iii) Contributions
toward training workers in skills or techniques necessary to
manufacture or assemble floating offshore wind components,
subcomponents, or subassemblies. Examples of these skills and
techniques include those in the areas of welding; floating offshore
wind energy technology; hydraulic maintenance; braking systems;
mechanical systems, including blade inspection and maintenance; or
computers and programmable logic control systems; (iv) Contributions
toward Tribal workforce development programs or training for employees
of wholly owned Tribal corporations that lead to the expeditious and
orderly development of floating offshore wind; or (v) 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 floating offshore wind energy
projects in the United States.
vi. Contributions to domestic supply chain development must be one
or more of the following: (i) Contributions supporting the development
of a domestic supply chain for the floating 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 floating offshore wind component suppliers, such as mooring
line manufacturers, and domestic Tier 1 supply chain efforts, including
quay-side fabrication of floating foundations and assembly of the
floating tower, as defined in the Lease and BFF Addendum; (iii)
Contributions for technical assistance grants to help U.S.
manufacturers re-tool or certify (e.g., ISO-9001) for floating offshore
wind manufacturing; (iv) Contributions for the development of Jones
Act-compliant vessels for the construction, servicing, and/or
decommissioning of floating offshore wind energy projects in the United
States, including semi-submersible barges for use during quayside
manufacturing, assembly, or installation; (v) Contributions to the
purchase and installation of self-propelled modular transporter systems
(SPMTs), lift cranes capable of installing foundations, towers, and
nacelles quayside, and domestic mooring manufacturing facilities; (vi)
Contributions to port infrastructure related to floating offshore wind
component manufacturing and preparation of quayside manufacturing and
assembly areas for the construction and deployment of floating
foundations for, or other components of, offshore wind turbines; (vii)
Contributions to establish a new or existing bonding support reserve or
revolving fund available to all businesses providing goods and services
to floating offshore wind energy companies, including disadvantaged
businesses, and/or wholly owned Tribal corporations; or (viii) Other
Contributions to supply chain development efforts that the Lessee can
demonstrate further the manufacture of floating offshore wind
components or subassemblies, or the provision of floating offshore wind
services, in the United States.
vii. Documentation: 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 the commitment no later than the
submission of the first FDR. The documentation must enable BOEM to
objectively verify the amount of the Contribution and the
beneficiary(ies) of the Contribution.
At a minimum, this documentation must include: all written
agreements between the Lessee and beneficiary(ies) of the Contribution,
which must detail the amount of the Contribution and how they will be
used by the beneficiaries of the Contribution in order to satisfy the
goals of the bidding credit for which the Contribution was made; all
receipts 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 entity that made the Contribution and the
beneficiary(ies) of the Contribution, attesting that all information
provided is true and accurate in the above documentation. The
documentation must describe how the funded initiative or program has
advanced, or is expected to advance, U.S. floating offshore wind
workforce training and/or supply chain development. The documentation
must also provide qualitative and/or quantitative information that
includes the estimated number of trainees or jobs supported, and/or the
estimated leveraged supply chain investment resulting or expected to
result from the Contribution. The documentation must contain and
elaborate on for the information specified in the conceptual strategy
submitted with the BFF and must allow BOEM to objectively verify (i)
the amount of the Contribution and the beneficiary(ies) of the
Contribution; and (ii) compliance with the bidding credit criteria
provided in Addendum ``C'' of the Lease. If the Lessee's implementation
strategy has changed from that in the conceptual strategy due to market
needs or other factors, the Lessee must explain the changed approach.
BOEM reserves the right to determine that the bidding credit has not
been satisfied if changes to the Lessee's conceptual strategy do not
meet the criteria for the bidding credit described in Addendum ``C'' of
the Lease or the BFF Addendum.
viii. 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 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 first FDR submission or the
10-year timeframe.
c. 5 Percent Non-Monetary (Bidding) Credit for a Lease Area Use
CBA: The second bidding credit will allow a bidder to receive a credit
of 5 percent of its cash bid in exchange for an existing CBA or a
commitment to enter into a new CBA with one or more communities,
stakeholder groups, or Tribal entities whose use of the geographic
space of the Lease Area, or whose use of resources harvested from that
geographic space, is expected to be impacted by the Lessee's potential
offshore wind development (hereinafter, in the context of the Lease
Area Use CBA bidding credit, referred to as ``impacted community'').
The Lease Area Use CBA may assist fishing and related industries
(including Tribal fisheries) by supporting their resilience and ability
to adapt to gear changes or any potential gear loss or damage, as well
as any loss of income, or other similar potential impacts that may
arise from the development of the Lease Area. The Lease Area Use CBA
may include payments into a special purpose fund, such as payments to
support gear changes, navigation technology
[[Page 64105]]
improvements, and other efforts to improve safety and navigation, or to
compensate the fishing and related industries whose use of the
geographic space of the Lease Area is impacted by the Lessee's
potential offshore wind development. To qualify for the credit, the
bidder will be required to commit to the requirements in the BFF
Addendum and the lease, and to submit a strategy as described in the
BFF Addendum. A bidder that is qualified to bid for a Lease Area and
would like to qualify for the Lease Area Use CBA credit may do so with
an executed CBA, even if future revisions to the CBA are necessary to
comply with the conceptual strategy described in the BFF Addendum.
However, in order to satisfy the requirements for this bidding credit,
such bidders must ensure compliance with the conceptual strategy by the
time the Lessee's first FDR is submitted.
i. Bidders seeking the bidding credit must submit their conceptual
strategy with their BFF, further described below and in the BFF
Addendum. The conceptual strategy must contain either a qualifying
executed Lease Area Use CBA or a conceptual strategy describing how the
bidder intends to qualify for the Lease Area Use CBA bidding credit,
which can be accomplished through the execution of a new CBA or
revising an already executed CBA. Bidders qualifying using a conceptual
strategy must: (i) Explain how the Lessee will select or identify
impacted communities with whom to enter into a Lease Area Use CBA; (ii)
Describe the provisions that may be included in the Lease Area Use CBA
and how the provisions mitigate potential impacts from the proposed
development of the Lease Area; and (iii) Describe the process for
documentation and verification that the Lease Area Use CBA has been
executed according to the requirements in the BFF Addendum and the
Lease. A Lessee will be required to provide documentation showing that
the Lessee has met the commitment and complied with the applicable
requirements no later than the submission of the Lessee's first FDR.
Deferring the fulfillment of the commitment until the first FDR will
enable the Lessee to identify stakeholders with impacts in need of
mitigation.
ii. A qualifying CBA must meet the following requirements: (i) Be
between the Lessee or its affiliated entity, or if appropriate, its
assignee(s), and an impacted community; (ii) Specify how the impacted
community's use of the Lease Area or how the impacted community's use
of resources harvested from the geographic space of the Lease Area is
expected to be impacted by the Lessee's potential offshore wind
development; (iii) Address impacts to the impacted community arising
from lease development; (iv) Specify any monetary, material, or other
benefits provided, or to be provided, by the Lessee to the impacted
community, including any mitigation or other compensatory measures
provided by the Lessee to the impacted community, such as the
establishment of any special purpose funds and the mechanisms through
which monies therein will be disbursed; (v) Indicate the commitment of
the parties to collaboration and resolution of issues. This commitment
may be indicated by a statement that the parties will agree to
mediation, a strategy for collaboration, or other type of plan
describing how the parties will collaborate or resolve issues as
needed; (vi) Describe communication methods, engagement methods, or
educational opportunities for the impacted community; and (vii) Specify
plans (or strategies) to mitigate potential impacts from the proposed
development of the Lease Area on the impacted community.
iii. No CBA otherwise eligible for a bidding credit may include
exclusivity or preferential clauses that prevent or disincentivize an
impacted community from entering into such agreements with other
lessees or potential lessees.
iv. No portion of a CBA, fund, or agreement used for this credit
may be used to meet the requirements of any other bidding credit for
which the Lessee qualifies.
v. Lessees may execute a Lease Area Use CBA with a single entity,
which may be a coalition that represents the diverse interests and
inclusive needs of more than one impacted community, or multiple
entities, or multiple impacted communities, and may execute more than
one Lease Area Use CBA.
vi. Any benefits provided to the impacted community should not
duplicate benefits or mitigation measures imposed on the Lessee
through, or pursuant to, statutes other than OCSLA.
vii. A bidder who receives this credit must use best efforts to
provide benefits at least commensurate to the value of the bidding
credit received. This may include both monetary and non-monetary
benefits.
viii. Documentation: If a lease is awarded pursuant to a winning
bid that includes this 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 the impacted community, including the executed Lease Area
Use CBA; description of work done with impacted communities, including
the monetary and non-monetary commitments that reflect the value of the
bidding credit received; and sworn statements by the Lease Area Use CBA
signatories or their assignees, attesting to the truth and accuracy of
all the information provided in the above documentation. The
documentation must contain and elaborate on the 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.
ix. 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 enter into a Lease
Area Use CBA that satisfies the commitment by the Lessee's first FDR
submission, 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 will be immediately
due and payable to ONRR with interest from the date of lease execution.
The interest rate will be the underpayment interest rate identified by
ONRR. BOEM can, at its sole discretion, extend the documentation
deadline beyond the first FDR submission or the 10-year timeframe.
d. 5 Percent Non-Monetary (Bidding) Credit for a General CBA: The
third bidding credit will allow a bidder to receive a credit of 5
percent of its cash bid in exchange for an existing CBA or a commitment
to enter into a new CBA with one or more communities, Tribes, or
stakeholder groups that are expected to be affected by the potential
impacts on the marine, coastal, and/or human environment (such as
impacts on visual or cultural resources) from activities resulting from
lease development that are not otherwise addressed by the Lease Area
Use CBA (hereinafter, in the context of the General CBA bidding credit,
referred to as ``impacted community''). The General CBA credit is
designed mitigate effects from OCS energy development and promote that
development by enabling greater collaboration between lessees and the
impacted communities on which the development depends. To qualify for
[[Page 64106]]
the credit, the bidder must commit to the requirements in the BFF
Addendum and the lease, and submit a strategy as described in the BFF
Addendum. A bidder that is qualified to bid for a Lease Area and would
like to qualify for the General CBA credit may do so with an executed
CBA, even if future revisions to the CBA are necessary to comply with
the conceptual strategy described in the BFF Addendum. However, in
order to satisfy the requirements for this bidding credit, such bidders
must ensure compliance with the conceptual strategy by the time the
Lessee's first FDR is submitted.
i. Bidders seeking the bidding credit must submit their conceptual
strategy with their BFF, further described below and in the BFF
Addendum. The conceptual strategy must contain either a qualifying
executed General CBA or a conceptual strategy describing how the bidder
intends to qualify for the General CBA bidding credit, which can be
accomplished through the execution of a new CBA or revising an already
executed CBA. Bidders qualifying using a conceptual strategy must: (i)
Explain how the Lessee will identify impacted communities with whom to
enter into a General CBA; (ii) Describe the bidder's commitments,
including the form of investments, that will be made, subject to the
requirements and restrictions described above and in the BFF Addendum;
(iii) Describe the provisions that will be included in the General CBA
and how the provisions will address the potential impacts arising from
activities performed in connection with lease development; and (iv)
Describe the process for documentation and verification through which
the General CBA has been executed according to the requirements in the
BFF Addendum. A Lessee will be required to provide documentation
showing that the Lessee has met the commitment and complied with the
applicable requirements no later than the submission of the Lessee's
first FDR. Deferring the fulfillment of the commitment until the first
FDR will enable the Lessee to identify impacted communities likely
affected by the impacts on the marine, coastal, and/or human
environment from activities resulting from lease development.
ii. A qualifying CBA must meet the following requirements: (i) Be
between the Lessee or its affiliated entity, or, if appropriate, its
assignee(s), and an impacted community; (ii) Specify how the impacted
community is likely to be affected by the potential impacts on the
marine, coastal, and/or human environment from activities resulting
from lease development; (iii) Address impacts to the impacted community
arising from lease development that are not addressed by a Lease Area
Use CBA; (iv) Specify the monetary, material, or other benefits
provided, or to be provided, by the Lessee to the impacted community,
including any mitigation or other compensatory measures provided by the
Lessee to the impacted community; (v) Indicate commitment of parties to
collaboration and resolution of issues. This commitment may be
indicated by a statement that the parties will agree to mediation, a
strategy for collaboration, or other type of plan describing how the
parties will collaborate or resolve issues as needed; (vi) Describe
communication methods, engagement methods, or educational opportunities
for the impacted community; and (vii) Specify plans (or strategies) to
mitigate potential impacts from the proposed development of the Lease
Area on the impacted community.
iii. No General CBA otherwise eligible for a bidding credit may
include exclusivity or preferential clauses that prevent or
disincentivize an impacted community from entering into such agreements
with other lessees or potential lessees.
iv. No portion of a CBA, fund, or agreement used for this credit
may be used to meet the requirements of any other bidding credit for
which the Lessee qualifies.
v. Lessees may execute a General CBA with a single entity, which
may be a coalition that represents the diverse interests and inclusive
needs of more than one impacted community, or multiple entities, or
multiple impacted communities, and may execute more than one General
CBA.
vi. Any benefits provided to the impacted community should not
duplicate benefits or mitigation measures imposed on the Lessee
through, or pursuant to, statutes other than OCSLA. For example, such
benefits could include: (i) Contributions to a community benefit fund
whose purpose is to provide funds for infrastructure to impacted
communities to alleviate impacts from the Lessee's project; (ii)
Increased support to facilitate engagement in the process through which
the lease will be developed; and (iii) Mitigating potential impacts to
cultural viewsheds or potential impacts on marine and land species that
are of significance to Tribal culture or impacted communities.
vii. A bidder who receives this credit must use best efforts to
provide benefits at least commensurate to the value of the bidding
credit received. This may include both monetary and non-monetary
benefits.
viii. Documentation: If a lease is awarded pursuant to a winning
bid that includes this 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; description of
work done with impacted communities to reach monetary and non-monetary
commitments that reflect the value of the bidding credit received; and
sworn statements by the CBA signatories or their assignees attesting to
the truth and accuracy of all the information provided in the above
documentation. The documentation must contain and elaborate on the
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.
ix. Enforcement: The commitment for the General CBA 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 enter into a General
CBA that satisfies the commitment by the Lessee's first FDR submission,
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 will be immediately due and
payable to ONRR with interest from the date of lease execution. The
interest rate will be the underpayment interest rate identified by
ONRR. BOEM can, at its sole discretion, extend the documentation
deadline beyond the first FDR submission or the 10-year timeframe.
e. The Auction: Using an online bidding system to host the auction,
BOEM will start the bidding for Leases OCS-P 0561 through 0565, as
described below. All five of the Lease Areas will be offered in a
single auction, and there will be no distinction made between Lease
Areas in the Humboldt WEA and the Morro Bay WEA within the auction
process. Each bidder may only bid for one of the offered Lease Areas at
a time and, ultimately, acquire only one of the Lease Areas in the
auction.
[[Page 64107]]
------------------------------------------------------------------------
Lease area ID Acres Minimum bid
------------------------------------------------------------------------
OCS-P 0561...................................... 63,338 $6,333,800
OCS-P 0562...................................... 69,031 6,903,100
OCS-P 0563...................................... 80,062 8,006,200
OCS-P 0564...................................... 80,418 8,041,800
OCS-P 0565...................................... 80,418 8,041,800
-----------------------
Total....................................... 373,268
------------------------------------------------------------------------
f. Live Bids: The auction will be conducted in a series of rounds.
At the start of each round, BOEM will 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 will indicate its intent by submitting a bid equal
to the asking price for the selected lease area. A bid at the full
asking price is referred to as a ``live bid.'' If the bidder has
qualified for a non-monetary credit, it will meet the asking price by
submitting a multiple-factor bid--that is, a live bid that consists of
a monetary (cash) element and a non-monetary credit (5%, 10%, 20%, 25%,
or 30% of the cash element, depending on the bidder's qualification for
bidding credits), the sum of which equals the asking price. Bidders
without a non-monetary credit will submit a cash bid equal to the
asking price. To participate in the next round of the auction, a bidder
is 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, the auction moves to
the next round. BOEM will raise the asking price for each Lease Area
that received two or more live bids in the previous round. Asking price
increments will 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
reserves 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 live bid would automatically be carried forward if it was
uncontested in the previous round (i.e., if it was the only live bid
for that Lease Area 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.
Conversely, if a live bid was contested in the previous round
(i.e., if there was at least one other live bid for the same Lease
Area, including carried-forward bids), the bidder who placed the
contested bid would be free to bid on any Lease Area in the auction in
the next round, at the new asking price.
A bidder's eligibility is for either one or zero lease areas and
corresponds to the maximum number of lease areas that a bidder may
include in a live bid during a single round of the auction.
If a bidder decides to stop bidding before the final round of the
auction, there are 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
provisionally winning bidder could be disqualified at the award stage
of the auction. In these circumstances, the bidder will 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 will disclose to all bidders that submitted
bids: (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.
g. Exit Bids: In any round after the first round, a bidder may
submit an ``exit bid'' (also known as an ``intra-round 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 auction. A bidder may not submit both an exit bid on
one of the Lease Areas and a live bid on a different Lease Area. During
the auction, the exit bid can be seen only by BOEM and not by other
bidders.
The auction ends 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.
h. Determination of Provisional Winners: After the bidding ends,
BOEM will determine the provisionally winning bid for each Lease Area
by the following two-stage procedure.
In stage one, the highest bid (live bid or exit bid) received for
each Lease Area in the final round will 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
will be deferred until stage two.
In stage two, BOEM will consider bids from all bidding rounds for
Lease Areas that were not assigned in stage one made by bidders who
were not assigned a Lease Area in stage one. BOEM will 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 will be deemed to be the remaining provisionally
winning bids. If two or more combinations of bids tie by producing the
same maximized sum of bid amounts, the auction system will select one
of the combinations by use of pseudorandom numbers. The provisional
winners will 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 cash balance (if any) of its bid (i.e., its winning cash bid
less its bid deposit) within 10 business days of receiving the lease
copies, pursuant to 30 CFR 585.224. BOEM reserves 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 comply with
applicable regulations or the terms of the FSN. In that case, the
bidder would forfeit its bid deposit.
BOEM will 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, will be published on BOEM's website after review of the
results and announcement of the provisional winners.
i. Additional Information Regarding the Auction Format:
i. Authorized Individuals and Bidder Authentication: A company that
is eligible to participate in the auction will identify on its BFF up
to three
[[Page 64108]]
individuals who would be authorized to bid on behalf of the company,
including their names, business telephone numbers, and email addresses.
After BOEM has processed the bid deposits, the auction contractor will
send several emails to the authorized individuals. The emails will
contain user login information and instructions for accessing the
bidder manual for the auction system and any auction system technical
supplement (ASTS) that may be issued.
The auction system will require software tokens for two-factor
authentication. To set up the tokens, authorized individuals will
download an app onto their smartphone or tablet with a recent operating
system. One of the emails sent to authorized individuals will contain
instructions for installing the app and the credentials needed to
activate the software token. A short telephone conversation with the
auction contractor may also be required to use the credentials. The
login information, along with the tokens, will be tested during the
mock auction. If an eligible bidder fails to submit a bid deposit or
does not participate in the auction, BOEM will deactivate that bidder's
tokens and login information.
ii. Timing of Auction: The auction will begin at 10:00 a.m. EST on
December 6, 2022. Bidders may log in as early as 9:30 a.m. EST on that
day. BOEM recommends that bidders log in earlier than 10:00 a.m. EST on
that day to ensure that any login issues are resolved prior to the
start of the auction. Once bidders have logged in, they should review
the auction schedule, which lists the anticipated start times, end
times, and recess times of each round in the auction. Each round is
structured as follows:
<bullet> Round bidding begins;
<bullet> Bidders enter their bids;
<bullet> Round bidding ends and the recess begins;
<bullet> During the recess, previous round results and next round
asking prices are posted;
<bullet> Bidders review the previous round results and prepare
their next round bids; and
<bullet> Next round bidding begins.
The first round will last about 30 minutes, though subsequent
rounds will be substantially shorter. Recesses are anticipated to last
approximately 10 minutes. This description of the auction schedule is
tentative. Bidders should consult the auction schedule on the auction
system during the auction for updated times. Bidding will continue
until about 6:00 p.m. EST each day. BOEM anticipates that the auction
will last one to two business days, but may continue for additional
business days as necessary until the auction has concluded.
iii. Messaging service: BOEM and the auction contractors will use
the auction platform messaging service to keep bidders informed on
issues of interest during the auction. For example, BOEM may change the
schedule at any time, including during the auction. If BOEM changes the
schedule during an auction, it will use the messaging feature to notify
bidders that a revision has been made and will direct bidders to the
relevant page. BOEM will also use the messaging system for other
updates during the auction.
Bidders may 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 have until the end of the round to place bids. Bidders
should place bids according to the procedures described in this notice
and the Bidder Manual. Information about the round results will only be
made available after the round has closed, so there is no strategic
advantage to placing bids early or late in the round.
BOEM may issue an ASTS to elaborate on the auction procedures
described in this FSN. In the event of any inconsistency between the
Bidder Manual, the ASTS, and the FSN, the FSN will be controlling.
iv. Alternate Bidding Procedures: Redundancy is the most effective
way to mitigate technical and human issues during an auction. Bidders
should strongly consider authorizing more than one individual to bid in
the auction--and confirming during the mock auction that each
individual is able to access the auction system. A 4G card or other
form of wireless access is helpful in case a company's main internet
connection should fail. As a last resort, an authorized individual
facing technical issues may request to submit its bid by telephone. In
order to be authorized to place a telephone bid, an authorized
individual must call the help desk number listed in the auction manual
before the end of the round. BOEM will authenticate the caller's
identity, including requiring the caller to provide a code from the
software token. The caller must also explain the reasons why a
telephone bid needs to be submitted. BOEM may, in its sole discretion,
permit or refuse to accept a request for the placement of a bid using
this alternate telephonic bidding procedure.
j. Prohibition on Communications Between Bidders During Auction:
During the auction, bidders are prohibited from communicating with each
other regarding their participation in the auction. Also, during the
auction, bidders are prohibited from communicating to the public
regarding any aspect of their participation or lack thereof in the
auction, including, but not limited to, through social media, updated
websites, or press releases.
XIV. Post-Auction Procedures
a. Rejection or Non-Acceptance of Bids
BOEM reserves the right to reject any and all bids that do not
satisfy the requirements and rules of the auction, the FSN, or
applicable regulations and statutes.
b. Anti-Competitive Review
Bidding behavior in this sale is subject to Federal antitrust laws.
Following the auction, but before the acceptance of bids and the
issuance of the lease, BOEM will ``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 is not an absolute defense to violations of
antitrust laws.
Anti-competitive behavior determinations are fact-specific. Such
behavior may manifest itself in several different ways, including, but
not limited to:
1. An express or tacit agreement among bidders not to bid in an
auction, or to bid a particular price;
2. An agreement among 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 would 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> or consult
legal counsel.
c. Process for Issuing the Lease
Once all post-auction reviews have been completed to BOEM's
satisfaction, BOEM will provide three unsigned copies of the lease to
each provisionally
[[Page 64109]]
winning bidder. Within 10 business days after receiving the lease
copies, the provisionally winning bidders must:
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
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 requires 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 will not execute the lease until the three requirements above
have been satisfied, BOEM has accepted the provisionally winning
bidder's financial assurance pursuant to 30 CFR 585.515, and BOEM has
processed the provisionally winning bidder's payment. BOEM may extend
the 10-business-day deadline for signing a lease, filing the required
financial assurance, and paying the balance of the bonus bid if BOEM
determines, in its sole discretion, that the provisionally winning
bidder's inability to comply with the deadline was caused by events
beyond the provisionally winning bidder's control pursuant to 30 CFR
585.224(e).
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 will 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 of the date that a provisionally winning
bidder receives lease copies, each provisionally winning bidder will 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 will 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>.
d. Non-Procurement Debarment and Suspension Regulations
Pursuant to 43 CFR part 42, subpart C, an OCS renewable energy
Lessee will 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 must also communicate this requirement to persons
with whom the Lessee does business relating to this lease by including
this requirement as a condition in their contracts and other
transactions.
e. 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.
f. 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. If BOEM
exercises this right, it will refund bid deposits to winning bidders,
without interest, as provided in 30 CFR 585.224(f).
g. 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 will then be able to 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).
h. Protection of Privileged or Confidential Information
BOEM will protect privileged or confidential information that the
Lessee submits, as authorized by the Freedom of Information Act (FOIA),
30 CFR 585.113, or other applicable statutes. If the Lessee wishes to
protect the confidentiality of information, the Lessee should 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. If your
submission is requested under the FOIA, your information will only be
withheld if a determination is made that one of the FOIA's exemptions
to disclosure applies. Such a determination will be made in accordance
with the Department's FOIA regulations and applicable law. Labeling
information as privileged or confidential will alert BOEM to more
closely scrutinize whether it warrants withholding. Further, BOEM will
not treat as confidential aggregate summaries of otherwise
nonconfidential information.
XV. Compliance With the Inflation Reduction Act (Pub. L. 117-169 (Aug.
16, 2022)(Hereinafter, the ``IRA''):
Section 50265(b)(2) of the IRA provides that ``[d]uring the 10-year
period beginning on the date of enactment of this Act . . . the
Secretary may not issue a lease for offshore wind development under
section 8(p)(1)(C) of the Outer Continental Shelf Lands Act (43 U.S.C.
1337(p)(1)(C)) unless-- (A) an offshore lease sale has been held during
the 1-year period ending on the date of the issuance of the lease for
offshore wind development; and (B) the sum total of acres offered for
lease in offshore lease sales during the 1-year period ending on the
date of the issuance of the lease for offshore wind development is not
less than 60,000,000 acres.'' Section 50264(d) of the IRA provides that
``. . . not later than March 31, 2023, the Secretary shall conduct
Lease Sale 259[.]'' Conducting Lease Sale 259 is needed for BOEM to
satisfy the requirements in section 50265(b)(2) of the IRA and issue
the leases resulting from this lease sale. Notwithstanding the
foregoing, nothing in the IRA prevents BOEM from holding this auction.
[[Page 64110]]
Authority: 43 U.S.C. 1337(p); 30 CFR 585.211 and 585.216.
Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2022-22871 Filed 10-20-22; 8:45 am]
BILLING CODE 4310-MR-P
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</html>Indexed from Federal Register on October 21, 2022.
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.