Notice2023-27200
Atlantic Wind Lease Sale 10 for Commercial Leasing for Wind Power Development on the U.S. States Central Atlantic Outer Continental Shelf-Proposed 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
December 12, 2023
Issuing agencies
Interior DepartmentOcean Energy Management Bureau
Abstract
The Bureau of Ocean Energy Management (BOEM) proposes to hold Atlantic Wind Lease Sale 10 and offer one or more lease areas (Lease Areas) for commercial wind power development on the U.S. Central Atlantic Outer Continental Shelf (OCS). The Lease Areas are located in the previously identified wind energy areas (WEAs) A-2 and C-1 offshore the State of Delaware and the Commonwealth of Virginia. This proposed sale notice (PSN) contains information pertaining to the areas available for leasing, certain lease provisions and conditions, auction details, criteria for evaluating competing bids, and procedures for lease award, appeals, and lease execution. BOEM proposes a multiple factor bidding format using a simultaneous clock auction. BOEM will use new auction software for the lease sale, with attendant and minor changes in the auction rules used in previous OCS wind lease auctions. Any lease resulting from this sale does not constitute approval of any offshore wind energy facilities. Lessees must first submit project- specific plans to BOEM and obtain BOEM's approval before they may start any construction of an OCS wind energy facility. BOEM will subject such plans to environmental, technical, and public reviews prior to deciding whether the proposed development should be authorized.
Full Text
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<title>Federal Register, Volume 88 Issue 237 (Tuesday, December 12, 2023)</title>
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[Federal Register Volume 88, Number 237 (Tuesday, December 12, 2023)]
[Notices]
[Pages 86145-86156]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27200]
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DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management
[Docket No. BOEM-2023-0062]
Atlantic Wind Lease Sale 10 for Commercial Leasing for Wind Power
Development on the U.S. States Central Atlantic Outer Continental
Shelf--Proposed Sale Notice
AGENCY: Bureau of Ocean Energy Management, Interior.
ACTION: Proposed sale notice; request for comments.
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SUMMARY: The Bureau of Ocean Energy Management (BOEM) proposes to hold
Atlantic Wind Lease Sale 10 and offer one or more lease areas (Lease
Areas) for commercial wind power development on the U.S. Central
Atlantic Outer Continental Shelf (OCS). The Lease Areas are located in
the previously identified wind energy areas (WEAs) A-2 and C-1 offshore
the State of Delaware and the Commonwealth of Virginia. This proposed
sale notice (PSN) contains information pertaining to the areas
available for leasing, certain lease provisions and conditions, auction
details, criteria for evaluating competing bids, and procedures for
lease award, appeals, and lease execution. BOEM proposes a multiple
factor bidding format using a simultaneous clock auction. BOEM will use
new auction software for the lease sale, with attendant and minor
changes in the auction rules used in previous OCS wind lease auctions.
Any lease resulting from this sale does not constitute approval of any
offshore wind energy facilities. Lessees must first submit project-
specific plans to BOEM and obtain BOEM's approval before they may start
any construction of an OCS wind energy facility. BOEM will subject such
plans to environmental, technical, and public reviews prior to deciding
whether the proposed development should be authorized.
DATES: BOEM must receive your comments no later than February 12, 2024.
For prospective bidders who want to participate in this lease sale,
unless you have received confirmation from BOEM that you are qualified
to participate in the Central Atlantic auction, BOEM must receive your
qualification materials no later than February 12, 2024 and, prior to
the auction, BOEM must confirm your qualification to bid in the
auction.
ADDRESSES: You may send comments in any of the following ways:
<bullet> Electronically: Visit <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In the
entry entitled, ``Enter Keyword or ID,'' enter [BOEM-2023-0062] then
click ``search.'' Follow the instructions to submit comments.
<bullet> Mail or delivery service: Enclose comment in an envelope
labeled, ``Comments on Central Atlantic Wind Lease Sale PSN'' and send
to: Bridgette Duplantis, Bureau of Ocean Energy Management, Office of
Renewable Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling,
Virginia 20166.
<bullet> For prospective bidders who want to participate in this
lease sale: Submit your qualification materials in an envelope labeled,
``Qualification Materials for Central Atlantic Wind Energy Lease Sale''
to Bureau of Ocean Energy Management, Office of Renewable Energy
Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia 20166 or
electronically to <a href="/cdn-cgi/l/email-protection#3143545f544650535d54545f54435648710d5011594354570c" http: boem.gov">boem.gov</a>">renewableenergy@<a href="http://boem.gov">boem.gov</a></a>.
[[Page 86146]]
For more information about submitting comments, see Sections XX,
``Public Participation,'' and XXI, ``Protection of Privileged and
Confidential Information,'' under the SUPPLEMENTARY INFORMATION caption
below.
FOR FURTHER INFORMATION CONTACT: Bridgette Duplantis, Bureau of Ocean
Energy Management, <a href="/cdn-cgi/l/email-protection#caa8b8a3aeadafbebeafe4aebfbaa6aba4bea3b98af6abeaa2b8afacf7" http: boem.gov">boem.gov</a>">bridgette.duplantis@<a href="http://boem.gov">boem.gov</a></a> or (504) 736-7502.
SUPPLEMENTARY INFORMATION:
I. Background
a. Call for Information and Nominations: On April 29, 2022, BOEM
published the ``Call for Information and Nominations-Commercial Leasing
for Wind Power Development on the Central Atlantic Outer Continental
Shelf'' (Call). The Call consisted of six areas labelled A-F. BOEM
received 66 comments from the general public; Federal, State, and local
agencies; the fishing industry; industry groups; developers; non-
governmental organizations (NGOs); universities; and other
stakeholders. Comments can be viewed at <a href="https://www.regulations.gov/document/BOEM-2022-0023-0001/comment">https://www.regulations.gov/document/BOEM-2022-0023-0001/comment</a>. Three developers nominated areas
for a commercial wind energy lease within the Call Area.
b. Area Identification: After modifying the Area Identification
(Area ID) process in a Notice to Stakeholders, which is available at
<a href="https://www.boem.gov/newsroom/notes-stakeholders/boem-enhances-its-processes-identify-future-offshore-wind-energy-areas">https://www.boem.gov/newsroom/notes-stakeholders/boem-enhances-its-processes-identify-future-offshore-wind-energy-areas</a>, BOEM used this
process to support identification of Draft WEAs in the Central
Atlantic. After the close of the Call comment period on June 28, 2022,
BOEM initiated the Area ID process by reviewing the input received on
the Call. BOEM and the National Oceanic and Atmospheric
Administration's National Centers for Coastal Ocean Science (NCCOS)
Team used an ocean planning tool to identify the eight Draft WEAs on
the U.S. Central Atlantic OCS using the methodology outlined in the
BOEM and NCCOS Draft Report: Development of the Central Atlantic Wind
Energy Areas, which can be found at <a href="https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/BOEM_NCCOS_JointReport_DraftWEAs.pdf">https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/BOEM_NCCOS_JointReport_DraftWEAs.pdf</a>.
On November 16, 2022, BOEM opened a 30-day public comment period on
eight draft WEAs on the OCS offshore the U.S. Central Atlantic coast,
covering approximately 1.7 million acres. BOEM considered the following
non-exclusive information sources when identifying the draft WEAs:
comments and nominations received on the Call; information from the
Central Atlantic Intergovernmental Renewable Energy Task Force; input
from Delaware, Maryland, Virginia, and North Carolina State agencies;
input from Federal agencies; comments from stakeholders and ocean
users, including the maritime community, offshore wind developers, and
the commercial and recreational fishing industry; state and local
renewable energy goals; and information on domestic and global offshore
wind market and technological trends. BOEM's draft WEA recommendations
did not reflect a final assessment from the Department of Defense (DOD)
regarding compatibility of the draft WEAs with DOD needs.
After the close of the draft WEA comment period on December 16,
2022, BOEM finalized the Area ID process after reviewing the input
received from all stakeholders mentioned above and the DOD assessment.
BOEM announced the final WEAs on July 31, 2023, by designating three
WEAs within the Call Area. The first WEA (A-2) is 101,767 acres and
located approximately 26 nautical miles (nm) from Delaware Bay. The
second WEA (B-1) is 78,285 acres and located 23.5 nm offshore Ocean
City, Maryland. The third WEA (C-1) is 176,506 acres and located
approximately 35 nm from the mouth of the Chesapeake Bay. The final
WEAs comprise 356,558 acres and would support approximately 4.3-8.1 GW
of energy production if fully developed. BOEM, DOD (the Departments of
the Air Force and Navy), and the National Aeronautics and Space
Administration (NASA) agreed to undertake an in-depth review of WEA B-1
to determine if the impacts to military and NASA operations could be
acceptable and/or mitigated. The Central Atlantic Area Identification
process and documentation can be found at <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>.
c. Environmental Reviews: On August 1, 2023, BOEM published a
notice of intent to prepare an environmental assessment (EA) to
consider potential environmental consequences of site characterization
activities (e.g., biological, archaeological, geological, and
geophysical surveys and core samples) and site assessment activities
(e.g., installation of meteorological buoys) that are expected to take
place after issuance of wind energy leases in the Call Area. When
scoping the EA, BOEM sought comments on the issues and alternatives
that should inform the EA. BOEM received 104 comment submissions, which
can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a> under Docket No. BOEM-2023-
0034. In addition to the preparation of the Draft EA, including
compliance with threatened and endangered species requirements for
certain data collection activities associated with OCS leasing (<a href="https://www.boem.gov/sites/default/files/documents/renewable-energy/OSW-surveys-NLAA-programmatic.pdf">https://www.boem.gov/sites/default/files/documents/renewable-energy/OSW-surveys-NLAA-programmatic.pdf</a>), BOEM has initiated other required
consultations under the Endangered Species Act, the Magnuson-Stevens
Fishery Conservation and Management Act, and the Coastal Zone
Management Act. The EA and associated consultations will inform BOEM's
decision whether to proceed with the final sale notice (FSN). BOEM will
solicit comments on the EA before it is finalized. BOEM will conduct
additional environmental reviews upon receipt of a lessee's
Construction and Operations Plan (COP) if the proposed leases reach
that stage of development.
II. Areas Proposed for Leasing
BOEM proposes two areas for leasing. Lease Area A-2, OCS-A 0557,
which consists of 101,443 acres and is approximately 26.4 nm from
Delaware Bay; and Lease Area C-1, OCS-A 0558, which consists of 176,505
acres and is approximately 35 nm from the mouth of the Chesapeake Bay.
------------------------------------------------------------------------
Lease area name Lease area ID Acres
------------------------------------------------------------------------
A-2.................................. OCS-A 0557 101,443
C-1.................................. OCS-A 0558 176,505
----------------------------------
Total............................ ................. 277,948
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Descriptions of the proposed Lease Areas can be found in Addendum A
of the proposed leases, which can be found on BOEM's website at:
<a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>. As described
[[Page 86147]]
in Section I (b), the Federal team consisting of BOEM, DOD, and NASA
reviewed the constraints associated with Area B-1, and conducted an
analysis of the mitigations that would be necessary to keep that Area
viable during an initial Central Atlantic offshore wind sale. The team
identified the magnitude and cost of collective mitigation needed to
accommodate offshore wind construction and operations in this area.
After this review, BOEM decided to remove WEA B-1 from consideration as
part of the upcoming Central Atlantic lease sale due to the significant
costs and mitigation that would be required.
a. Map of the Area Proposed for Leasing: A map of the Lease Areas,
and GIS spatial files X, Y (eastings, northings) UTM Zone 18, NAD83
Datum, and geographic X, Y (longitude, latitude), NAD83 Datum can be
found on BOEM's website at: <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>.
b. Potential Future Restrictions to Ensure Navigational Safety:
Potential bidders are advised that portions of the Lease Areas may not
be available for future development (i.e., installation of wind energy
facilities) because of navigational safety concerns. BOEM may require
additional mitigation measures at the COP stage when the lessee's site-
specific navigational safety risk assessment is available to inform
BOEM's decision-making.
c. Potential Future Restrictions to Mitigate Potential Conflicts
with Department of Defense Activities: Those interested in bidding
should be aware of potential conflicts with DOD's existing uses of the
OCS. BOEM coordinates with DOD throughout the leasing process and the
Military Aviation and Installation Assurance Siting Clearinghouse
conducted a DOD assessment of the Call Area. The assessment identified
the following potential issues that may require mitigation.
i. Air Surveillance and Radar: The North American Aerospace Defense
Command (NORAD) mission may be affected by the development of the Lease
Area(s). Considering both the expected height of offshore turbines and
future cumulative wind turbine effects, adverse impacts can be
mitigated through the use of Radar Adverse-impact Management (RAM) \1\
and overlapping radar coverage. For projects where RAM mitigation is
acceptable, BOEM anticipates including the following project approval
conditions:
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\1\ RAM is the technical process designed to minimize the
adverse impact of obstruction interference on a radar system.
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(1) Lessee will notify NORAD when the project is within 30-60 days
of completion of commissioning of the last wind turbine generator (WTG)
(meaning every WTG in the Project is installed with potential for blade
rotation), and again when the project is complete and operational, for
RAM scheduling;
(2) Lessee will contribute funds to DOD in the amount of no less
than $80,000 toward the cost of DOD's execution of the RAM procedures
for each radar system affected; and
(3) Lessee will curtail wind turbine operations for national
security or defense purposes as described in the lease.
ii. Advanced Dynamic Aircraft Measurement System (ADAMS)
operations: The Department of the Navy identified ADAMS operations that
could be impacted by development off the coast of Norfolk, Virginia,
and may require curtailment or other mitigation.
iii. U.S. Air Force and U.S. Air Force Air National Guard
operations: The U.S. Air Force noted that the airspace above both
proposed Lease Areas has a floor of 1,000 feet above sea level. The
U.S. Air Force requested BOEM limit structure heights to no higher than
1,000 feet above sea level.
BOEM may require the lessee to enter into an agreement with DOD to
implement these conditions and mitigate any identified impacts. BOEM
will further coordinate with DOD and the lessee to deconflict potential
impacts throughout the project review stage, which may result in adding
mitigation measures or terms and conditions as part of any plan
approval.
d. Proposed Restrictions Related to National Aeronautics and Space
Administration (NASA) Wallops Island Flight Facility Operations: NASA
and the Missile Defense Agency identified potential impacts to
operations originating from the Wallops Island Flight Facility. BOEM
has included stipulations in proposed Lease OCS-A 0558 (NASA
Operations, section 11) to avoid and minimize this potential conflict
with wind energy development.
e. Potential Future Restrictions to Mitigate Potential Conflicts
with Sand Resources: Potential bidders are advised that BOEM has
developed sand resource areas in aliquots offshore the Mid Atlantic
(MMIS Application (<a href="https://mmis.doi.gov/BOEMMMIS/">https://mmis.doi.gov/BOEMMMIS/</a>)). OCS sand resource
areas are composed of sand deposits found on or below the surface of
the OCS seabed. If it is determined that significant OCS sand resources
may be impacted by a proposed activity, BOEM may require you to
undertake measures deemed economically, environmentally, and
technically feasible to protect the resources to the maximum extent
practicable, including minimizing, avoiding, and mitigating impact to
these resources. Measures may include modification of proposed
transmission corridor locations. There is potential for sand resources
to exist in aliquots not currently identified. BOEM and/or BSEE will
not approve future requests for in-place decommissioning of cables in
sand resource areas unless BOEM's Marine Minerals Program has
determined that the cable corridor does not unduly interfere with other
uses of the OCS, specifically sand resource use.
III. Participation in the Proposed Lease Sale
a. Bidder Participation: Entities that have been notified by BOEM
that their qualification is pending or that they are qualified to
participate in the upcoming Central Atlantic auction through their
response to the Call, or by separate submission of qualification
materials, are not required to take any additional action to affirm
their interest. Those entities are listed below:
------------------------------------------------------------------------
Company name Company No.
------------------------------------------------------------------------
Avangrid Renewables, LLC................................ 15019
US Mainstream Offshore, Inc............................. 15089
OW North America Ventures LLC........................... 15133
energyRe Offshore Wind Holdings, LLC.................... 15171
------------------------------------------------------------------------
All other entities wishing to participate in this proposed Central
Atlantic auction must submit the required qualification materials to
BOEM by the end of the 60-day comment period for this PSN.
b. Affiliated Entities: On the Bidder's Financial Form (BFF),
discussed below, eligible bidders must list any other eligible bidders
with whom they are affiliated. For the purpose of identifying
affiliated entities, a bidding entity is any individual, firm,
corporation, association, partnership, consortium, or joint venture
(when established as a separate entity) that is participating in the
same auction. BOEM considers bidding entities to be affiliated when:
i. 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 bidding entity. Ownership of less than 10 percent
of a bidding entity constitutes a presumption of non-control that BOEM
may rebut.
ii. They own or have common ownership of 10 through 50 percent of
the voting securities or instruments of ownership, or other forms of
ownership,
[[Page 86148]]
of another bidding entity, and BOEM determines that there is control
upon consideration of factors including the following:
(1) The extent to which there are common officers or directors.
(2) 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 bidding
entities, if a bidding entity is the greatest single owner, or if there
is an opposing voting bloc of greater ownership.
(3) Shared ownership, operation, or day-to-day management of a
lease, grant, or facility as those terms are defined in BOEM's
regulations at 30 CFR 585.112.
iii. They are both direct or indirect subsidiaries of the same
parent company.
iv. If, with respect to any lease(s) offered in this auction, they
have entered into an agreement prior to the auction regarding the
shared ownership, operation, or day-to-day management of such lease.
v. Other evidence indicates the existence of power to exercise
control, or that multiple bidders collectively have the power to
exercise control over another bidding entity or entities.
Affiliated entities are not permitted to compete against each other
in the auction. Where two or more affiliated entities have qualified to
bid in the auction, the affiliated entities must decide prior to the
auction which one (if any) will participate in the auction. If two or
more affiliated entities attempt to participate in the auction, BOEM
will disqualify those bidders from the auction.
BOEM solicits comments from stakeholders on this definition and
will consider this feedback to potentially update its definition of
affiliated entities in the Final Sale Notice (FSN).
IV. Questions for Stakeholders
Stakeholders are encouraged to comment on any matters related to
this proposed lease sale that are of interest or concern. In addition,
BOEM has identified the following issues as particularly important, and
we encourage commenters to address these issues specifically:
a. Number, size, orientation, and location of the proposed Lease
Areas: BOEM is requesting comment on the number of leases that should
be offered within the Lease Areas, the size and orientation of the
Lease Areas, and any portions of the Lease Areas that should be
prioritized for inclusion or exclusion from this lease sale.
b. Considerations for the delineation of a Lease Area: These
delineation considerations may include comparable commercial viability
and size; prevailing wind direction and minimizing wake effects;
maximized energy generating potential; possible setbacks at Lease Area
boundaries; distance to shore, port infrastructure and electrical grid
interconnections; and fair return to the Federal Government pursuant to
the Outer Continental Shelf Lands Act through competition for
commercially viable Lease Areas. BOEM welcomes additional comments
regarding other considerations for how best to delineate Lease Areas.
i. Lease Area C-1: BOEM is specifically requesting comment on the
need for a buffer or setback between proposed Lease Area C-1 (Lease
OCS-A 0558) and the existing Lease Area OCS-A 0483 to the West.
Comments on the need for a buffer, the size or distance of the buffer
between leases, and the method for implementing a buffer between Lease
Areas are requested. A buffer from the existing Lease Area could be
accomplished through removal of lease blocks from proposed Lease Area
C-1 or through a lease stipulation that prohibits surface structures
within a specified distance of Lease OCS-A 0483. BOEM has included such
lease stipulation (Siting Conditions, section 10) in Addendum ``C'' of
proposed Lease OCS-A 0558.
c. Existing uses and how they may be affected by the development of
the proposed Lease Areas: BOEM asks commenters to submit technical and
scientific data in support of their comments.
d. Bidding Credit for Workforce Training or Supply Chain
Development: Are there additional activities that should qualify for
this bidding credit or are there other changes to the structure of the
credit that will best aid in developing a sustained and robust U.S.
offshore wind workforce and/or energy supply chain?
e. Fisheries Compensatory Mitigation Fund Credit: BOEM seeks
comment on its proposal for a fisheries compensatory mitigation fund
and the associated bidding credit as described in Section XII.
f. Potential future bidding credit for Conservation Programs: While
this bidding credit is not being considered for the Central Atlantic,
BOEM is requesting comments on a conservation program bidding credit,
which would allow a bidder to receive a credit in exchange for a
commitment to advance conservation for threatened and endangered
species, migratory birds, or North Atlantic right whales (NARWs). The
Contribution to advance conservation programs would need to result in
demonstrable benefits to: (i) species conservation and/or recovery
goals; and/or (ii) net positive impacts associated with habitat
restoration, enhancement, or preservation for these species.
Specifically, BOEM is considering for future sales a credit that
would include one or more of the following: (i) contributions
supporting the development and operation of a near-real-time acoustic
surveillance system to detect and report the location of NARWs that
would directly inform adaptive management strategies for the protection
of NARWs; (ii) establishment of an on-demand gear program that would
provide, exchange, or otherwise replace gear used in Federal- and
State-permitted commercial fisheries that deploy vertical lines with
on-demand gear that would avoid entanglements with NARWs; (iii)
programs that reduce underwater ambient noise caused by the operation
of vessels; (iv) programs that meet recovery objectives for threatened
and endangered bird species; and/or (v) restoration, enhancement, or
protection of migratory bird breeding, resting, feeding, or migratory
habitats. BOEM is seeking stakeholder feedback on the following:
i. What portion of the total bidding credits should go towards a
conservation program?
ii. Eligible activities or projects authorized under a conservation
bidding credit.
iii. Documentation and enforcement mechanisms.
g. Limits on the Number of Lease Areas per Bidder: BOEM is
proposing to allow each qualified entity to bid for one Lease Area at a
time and ultimately acquire only one Lease Area.
h. New national security stipulations related to foreign interest:
BOEM has included new lease stipulations (4.4 and 4.5) for an Atlantic
renewable energy lease related to foreign entities and national
security. Stipulation 4.4 requires the lessee to provide the names of
entities who own, or will engage in activities at, an OCS facility, and
the names of any foreign entities allowed access to such facilities, to
DOD for review at least 14 days prior to the lessee taking any actions
in the Lease Area. Stipulation 4.5 requires an assignor and assignee to
notify the Committee on Foreign Investment in the United States as part
of the assignment process. BOEM requests comment on both of these
proposed lease stipulations.
[[Page 86149]]
V. Proposed Lease Sale Deadlines and Milestones
This section describes the major deadlines and milestones in the
auction process from publication of this PSN to execution of a lease
issued pursuant to this sale.
a. The PSN Comment Period:
i. Submit Comments: The public is invited to submit comments during
this 60-day period, which will expire on February 12, 2024. All
comments received or postmarked during the comment period will be made
available to the public and considered by BOEM prior to publication of
the FSN.
ii. Public Auction Seminar: BOEM will host a public seminar to
discuss the lease sale process and the auction format. The time and
place of the seminar will be announced by BOEM and published on the
BOEM website at <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>. No registration or RSVP is required to attend.
iii. Submit Qualification Materials: Unless you have already
received confirmation from BOEM that you are qualified to participate
in the Central Atlantic auction, all qualification materials must be
received by BOEM by February 12, 2024. This requirement includes the
submission of materials sufficient to establish a company's legal,
technical, and financial qualifications pursuant to 30 CFR 585.106-107.
BOEM's qualification guidelines available at <a href="https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/">https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/</a> provide guidance on the
types of information you should submit to BOEM. BOEM will inform you if
you are qualified to participate in the auction.
iv. Confidential information. If you wish to protect the
confidentiality of your comments or qualification materials, clearly
mark the relevant sections and request that BOEM treat them as
confidential. Please label privileged or confidential information with
the caption ``Contains Confidential Information'' and consider
submitting such information as a separate attachment. Treatment of
confidential information is addressed in section XXI entitled,
``Protection of Privileged or Confidential Information.'' Information
that is not labeled as privileged or confidential will be regarded by
BOEM as suitable for public release.
b. End of PSN Comment Period to FSN Publication:
i. Review Comments: BOEM will review all comments submitted in
response to the PSN during the comment period.
ii. Finalize Qualifications Reviews: Prior to the publication of
the FSN, BOEM will complete any outstanding reviews of bidder
qualification materials submitted during the PSN comment period. The
final list of eligible bidders will be published in the FSN.
iii. Prepare the FSN: BOEM will prepare the FSN by updating
information contained in the PSN where necessary.
iv. Publish FSN: BOEM will publish the FSN in the Federal Register
at least 30 calendar days before the date of the sale.
c. FSN Waiting Period: During the period between FSN publication
and the lease auction, qualified bidders would be required to 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 include each bidder's
Conceptual Strategy for each non-monetary bidding credit for which that
bidder wishes to be considered. BOEM must receive each bidder's BFF no
later than the date listed in the FSN. BOEM could consider extensions
to this deadline only if BOEM determines that the failure to timely
submit a BFF was caused by events beyond the bidder's control. The
proposed BFF can be downloaded at: <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>.
(1) Once BOEM has processed a bidder's BFF, the bidder would be
allowed to log into <a href="https://www.pay.gov">https://www.pay.gov</a> and submit a bid deposit. For
purposes of this auction, BOEM would not consider BFFs submitted by
bidders for previous lease sales. An original signed BFF may be mailed
to BOEM's Office of Renewable Energy Programs for certification. A
signed copy of the form may be submitted in PDF format to
<a href="/cdn-cgi/l/email-protection#b7c5d2d9d2c0d6d5dbd2d2d9d2c5d0cef78bd697dfc5d2d18a" http: boem.gov">boem.gov</a>">renewableenergy@<a href="http://boem.gov">boem.gov</a></a>. A faxed copy will not be accepted. Your BFF
submission should be accompanied with a transmittal letter on company
letterhead.
(2) 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. 1001 (fraud and false statements).
(3) Additional information regarding the BFF may be found below in
Section IX entitled, ``Bidder's Financial Form.''
ii. Bid Deposit: Each qualified bidder must submit a bid deposit of
$5,000,000 in order to bid for one (1) Lease Area. Further information
about bid deposits can be found below in Section X ``Bid Deposit.''
d. Notification of Eligibility for Non-Monetary Credits: Prior to
the Mock Auction, BOEM would notify each bidder of its determination of
eligibility for bidding credits for each auction in which the bidder is
participating.
e. Mock Auction: BOEM will hold a Mock Auction that is open only to
qualified bidders who have met the requirements and deadlines for
auction participation, including submission of the bid deposit. Final
details of the Mock Auction will be provided in the FSN.
f. The Auction: BOEM, through its contractor, will hold an auction
as described in the FSN. The auction will take place no sooner than 30
calendar days following the publication of the FSN in the Federal
Register. The estimated timeframes described in this PSN assume the
auction will take place approximately 45 calendar days after the
publication of the FSN. Final dates will be included in the FSN. BOEM
will announce the provisional winners of the lease sale after the
auction ends.
g. From the Auction to Lease Execution:
i. Refund Non-Winners: Once the provisional winners have been
announced, BOEM will provide the non-winners with a written explanation
of why they did not win and will return their bid deposits.
ii. Department of Justice (DOJ) Review: DOJ will have up to 30
calendar days 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 lease copies to
each provisional winner, with instructions on how to execute the lease.
Once the lease has been fully executed, a provisional winner becomes an
auction winner. The first year's rent is due 45 calendar days after the
auction winners receive the lease copies for execution.
iv. Return the Lease: Within ten business days of receiving the
lease copies, the auction winners must post financial assurance, pay
any outstanding balance of their winning bids (i.e., winning monetary
bid minus applicable bid deposit and value of the bidding credit, as
applicable), and sign and return the three executed lease copies. The
winners may request extensions and BOEM may grant such extensions if
BOEM determines the delay was caused by events beyond the requesting
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 materials have been
received, BOEM will make a final determination regarding its issuance
of the leases and will execute the leases, if appropriate.
[[Page 86150]]
VI. Withdrawal of Blocks
BOEM reserves the right to withdraw all or portions of the Lease
Areas prior to executing the leases with the winning bidders.
VII. Lease Terms and Conditions
BOEM has made available the proposed terms, conditions, and
stipulations for the commercial leases that would be offered through
this proposed sale. BOEM reserves the right to require compliance with
additional terms and conditions associated with the approval of a site
assessment plan (SAP) and COP. The proposed lease is on BOEM's website
at: <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>. Each lease would include the following attachments:
a. Addendum A (``Description of Leased Area and Lease
Activities'');
b. Addendum B (``Lease Term and Financial Schedule'');
c. Addendum C (``Lease-Specific Terms, Conditions, and
Stipulations''); and
d. Addendum D (``Project Easement'').
VIII. Lease Financial Terms and Conditions
This section provides an overview of the required annual payments
and financial assurances under the lease. Please see the proposed
lease, particularly Addendum ``B,'' for more detailed information,
including any changes from past practices.
a. Rent: Pursuant to 30 CFR 585.224(b) and 585.503, the first
year's rent payment of $3 per acre is due within 45 calendar days after
the lessee receives the lease copies from BOEM. Thereafter, annual rent
payments are 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). For example, for
the 101,443 acres Lease Area of OCS-A 0557 (A-2), the rent payment
would be $304,329 per year until commercial operations begin.
If the lessee submits an application for relinquishment of a
portion of its leased area within the first 45 calendar days after
receiving the lease copies from BOEM and BOEM approves that
application, no rent payment would be due on the relinquished portion
of the Lease Area. Later relinquishments of any portion of the Lease
Area would reduce the lessee's rent payments starting in the year
following BOEM's approval of the relinquishment.
The lessee also must pay rent for any project easement associated
with the lease. Rent commences on the date that BOEM approves the COP
that describes the project easement (or any modification of such COP
that affects the easement acreage), as outlined in 30 CFR 585.507. If
the COP revision results in increased easement acreage, additional rent
would be required at the time the COP revision is approved. Annual rent
for a project easement is the greater of $5 per acre per year or $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 will be prorated to reflect the period
between the commencement of commercial operations and the Lease
Anniversary. The initial annual operating fee payment will be due
within 90 calendar days of the commencement of commercial operations.
Thereafter, subsequent annual operating fee payments will be due on or
before the Lease Anniversary.
The subsequent annual operating fee payments will be calculated by
multiplying the operating fee rate by the imputed wholesale market
value of the projected annual electric power production. For the
purposes of this calculation, the imputed market value will be the
product of the project's annual nameplate capacity, the total number of
hours in a year (8,760), the capacity factor, and the annual average
price of electricity derived from a regional wholesale power price
index. For example, the annual operating fee for a 976 megawatt (MW)
wind facility operating at a 40 percent capacity (i.e., capacity factor
of 0.4) with a regional wholesale power price of $40 per megawatt hour
(MWh) and an operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN12DE23.012
i. Operating Fee Rate: The operating fee rate is the share of the
imputed wholesale market value of the projected annual electric power
production due to the Office of Natural Resources Revenue (ONRR) as an
annual operating fee. For the Lease Areas, BOEM proposes to set the fee
rate at 0.02 (2 percent) for the entire life of commercial operations.
ii. Nameplate Capacity: Nameplate capacity is the maximum rated
electric output, expressed in MW, which the turbines of the wind
facility under commercial operations can produce at their rated wind
speed as designated by the turbine's manufacturer.
iii. Capacity Factor: BOEM proposes to set the capacity factor at
0.4 (i.e., 40 percent) for the year in which the commercial operations
date occurs and for the first six 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 the following table provides the proposed price
data. A similar price dataset may also be used and may be posted by
BOEM at <a href="http://boem.gov">boem.gov</a> for reference.
------------------------------------------------------------------------
Lease area name Wholesale power price
------------------------------------------------------------------------
A-2, OCS-A 0557........................... PJM DPL.
C-1, OCS-A 0558........................... PJM DOM.
------------------------------------------------------------------------
c. Financial Assurance: Within ten business days after receiving
the lease copies and pursuant to 30 CFR 585.515-.516, the provisional
winner would be required to provide an initial lease-specific bond or
other BOEM-approved
[[Page 86151]]
financial assurance instrument in the amount of $100,000. BOEM
encourages the provisional winner to discuss financial assurance
requirements with BOEM as soon as possible after the auction has
concluded.
BOEM would base the amount of all SAP, COP, and decommissioning
financial assurance on cost estimates for meeting all accrued lease
obligations at the respective stages of development. The required
amount of supplemental and decommissioning financial assurance will be
determined on a case-by-case basis.
The financial terms described above can be found in Addendum ``B''
of the lease, which is available at: <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>.
IX. Bidder's Financial Form
Each bidder is required to provide the information listed in the
BFF referenced in this PSN. A copy of the proposed form is available
at: <a href="https://www.boem.gov/renewable-energy/state-activities/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>. BOEM recommends that each bidder designate an email address
in its BFF that the bidder will use to create an account in <a href="https://www.pay.gov">https://www.pay.gov</a> (if it has not already done so). BOEM will not consider
previously submitted BFFs for previous lease sales to satisfy the
requirements of this auction. BOEM may consider BFFs submitted after
the deadline set in the FSN if BOEM determines that the failure to
timely submit the BFF was caused by events beyond the bidder's control.
The BFF is required to be executed by an authorized representative
listed in the qualification package on file with BOEM.
X. Bid Deposit
Each qualified bidder must submit a bid deposit no later than the
date listed in the FSN. Typically, the deadline is approximately 30
calendar days after the publication of the FSN. BOEM may consider
extensions to this deadline only if BOEM determines that the failure to
timely submit the bid deposit was caused by events beyond the bidder's
control.
Following the auction, bid deposits will be applied against the
winning bid and other obligations owed to BOEM. If a bid deposit
exceeds that bidder's total financial obligation, BOEM will refund the
balance of the bid deposit to the bidder. BOEM will refund bid deposits
to the unsuccessful bidders once BOEM has announced the provisional
winners.
If BOEM offers a lease to a provisional winner and that bidder
fails to timely return the signed lease, establish financial assurance,
or pay the balance of its bid, BOEM will retain the bidder's $5,000,000
bid deposit for the Lease Area. In such a circumstance, BOEM reserves
the right to offer a lease to the next highest bidder as determined by
BOEM.
XI. Minimum Bid
The minimum bid is the lowest dollar amount per acre that BOEM will
accept as a winning bid and is the amount at which BOEM will start the
bidding in the auction. BOEM proposes a minimum bid of $100.00 per acre
for this lease sale.
XII. Auction Procedures
a. Multiple-Factor Bidding Auction: As authorized under 30 CFR
585.220(a)(4) and 585.221(a)(6), BOEM proposes to use a multiple-factor
auction format, with a multiple-factor bidding system, for this lease
sale. Under BOEM's proposal, the bidding system for this lease sale
would be a multiple-factor combination of monetary and non-monetary
factors. The bid made by a particular bidder in each round would
represent the sum of the monetary factor (cash bid) and the value of
any non-monetary factors in the form of bidding credits. BOEM proposes
to start the auction using the minimum bid price for the Lease Area and
to increase prices incrementally until no more than one active bidder
per Lease Area remains in the auction.
BOEM is proposing to grant bidding credits to bidders that commit
to one or both of the following:
i. Supporting workforce training programs for the offshore wind
industry or developing a domestic supply chain for the offshore wind
industry, or a combination of both; or
ii. Establishing and contributing to a fisheries compensatory
mitigation fund or contributing to an existing fund to mitigate
potential negative impacts to commercial and for-hire recreational
fisheries caused by OCS offshore wind development in the Central
Atlantic.
These bidding credits are intended to:
i. Enhance, through training, the offshore wind workforce and/or
enhance the establishment of a domestic supply chain for offshore wind
manufacturing, assembly, or services, both of which will contribute to
the expeditious and orderly development of offshore wind resources on
the OCS;
ii. 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
iii. Minimize potential economic effects on commercial fisheries
impacted by potential offshore wind development, as cooperation with
commercial fisheries impacted by OCS operations will enable development
of the Lease Area to advance.
b. Changes to Auction Rules: BOEM will be employing new auction
software for the Central Atlantic lease sale. The auction format
remains an ascending clock auction with multi-factor bidding. Three
primary changes have been made to the ascending clock auction rules in
the new software.
The first change is that if a bidder decides to bid on a different
Lease Area in a subsequent round of the auction, it will be allowed to
submit an intra-round bid for the Lease Area it bid on in the previous
round and, simultaneously, submit a bid for another Lease Area. This
allows a bidder to possibly switch to another Lease Area if the price
of the first Lease Area exceeds its specified intra-round bid price.
The second change is that the determination of provisional winners
will no longer use a two-stage process. The auction rules are
implemented in a way such that, when the auction concludes, the bidder
who remains on a Lease Area after the final round becomes its
provisional winner. There will be no additional processing to determine
if any other Lease Areas can be awarded to other bidders.
The third change is that the upcoming auctions will use a `second
price' rule. A given Lease Area will be won by the bidder that
submitted the highest bid amount for the Lease Area, but the winning
bidder will pay the highest bid amount at which there was competition
(i.e., the `second price').
All potential bidders should review the complete Auction Procedures
for Offshore Wind Lease Sales (Version 1) located at: <a href="https://www.boem.gov/renewable-energy/lease-and-grant-information">https://www.boem.gov/renewable-energy/lease-and-grant-information</a>.
c. The Auction: Using an online bidding system to host the auction,
BOEM will start the bidding for the Lease Areas as described below.
----------------------------------------------------------------------------------------------------------------
Lease area name Lease area ID Acres Minimum bid
----------------------------------------------------------------------------------------------------------------
A-2.................................................... OCS-A0557 101,443 $10,144,300
[[Page 86152]]
C-1.................................................... OCS-A0558 176,505 17,650,500
----------------------------------------------------------------------------------------------------------------
Each auction will be conducted in a series of rounds. Before each
round, the auction system will announce a clock price for each Lease
Area offered in the auction. In Round 1, the clock prices (also known
as the `opening prices') are the minimum bid prices, and each bidder
can bid for one Lease Area at those prices. After Round 1, the
processed demand for a bidder is the Lease Area for which it bid in
Round 1. After any round, if there is no processed demand for a bidder,
the bidder's eligibility drops to zero, and the bidder can no longer
bid in the auction.
Starting in Round 2, each Lease Area is assigned a range of prices
for the round. The start-of-round price is the lowest price in the
range, and the clock price is the highest price in the range. A bidder
still eligible to bid after the previous round can either continue
bidding at the new round's clock price for the Lease Area for which the
bidder's processed demand is one or submit a bid to exit (reduce demand
for) that Lease Area at any price in the range for that round. A bid to
reduce demand at some price indicates that the bidder is not willing to
acquire that Lease Area at a price exceeding the specified bid price. A
bidder that submits a bid to reduce demand for a Lease Area can
optionally bid on another Lease Area. If an eligible bidder does not
place a bid for that Lease Area during the round, the auction system
will consider this a request to exit that Lease Area at the start-of-
round price.
If an eligible bidder does not place a bid for that Lease Area
during the round, the auction system will consider this a request to
exit that Lease Area at the start-of-round price.
After each round, the auction system processes the bids and
determines each bidder's processed demand for each Lease Area and the
posted prices for all the Lease Areas. The posted price is the price
determined for each Lease Area after processing of all bids for a
round. The posted price for a Lease Area in each round is the start-of-
round price for that Lease Area in the next round. Because of the `one-
per-customer' rule, a bidder will have at most one bid on one Lease
Area.
After the bids are processed, if each Lease Area has received one
or fewer bids, the auction will end and each bidder on a Lease Area
will become a provisional winner for that Lease Area. Otherwise, the
auction will continue with a new round in which the start-of-round
price for a Lease Area equals the posted price of the previous round.
The provisional winners of the auction will pay the ``second
price'' 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, post financial assurance, and submit the outstanding
balance of its winning bid (i.e., winning monetary bid minus the
applicable bid deposit and the value of bidding credits, as applicable)
within ten business days of receiving the lease copies, pursuant to 30
CFR 585.224. BOEM reserves the right to not issue the lease to the
provisionally winning bidder if that bidder fails to: timely execute
three copies of the lease and return them to BOEM, timely post adequate
financial assurance, timely pay the balance of its winning bid, or
otherwise comply with applicable regulations or the terms of the FSN.
In any of these cases, the bidder will forfeit its bid deposit.
BOEM will publish the names of 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, will be published on BOEM's website after a review of the results
and announcement of the provisional winner.
Additional Information Regarding the Auction Format:
i. Authorized Individuals and Bidder Authentication: An entity that
is eligible to participate in the auction will identify on its BFF up
to three individuals who will be authorized to bid on behalf of the
company, including their names, business telephone numbers, and email
addresses. All individuals will log into the auction system using
<a href="http://login.gov">login.gov</a>. Prior to the auction, all the individuals listed on the BFF
form must obtain a FIDO-compliant security key,\2\ and must register
this security key on <a href="http://login.gov">login.gov</a> using the same email address that was
listed in the BFF. The <a href="http://login.gov">login.gov</a> registration, together with the FIDO-
compliant security key, will enable the individual to log into the
auction website. BOEM will provide information on this process on its
website.
---------------------------------------------------------------------------
\2\ FIDO-keys are produced by many manufacturers, such as Yubico
and Google. They are widely available and can easily be purchased
from Amazon, Best Buy, Walmart, or any other seller of electronics.
The latest generation of the FIDO standard is FIDO2, and you should
obtain the key compliant with FIDO2 authentication standard.
Depending on the computer you use, you might need to obtain an
adapter as FIDO-keys require a USB port.
---------------------------------------------------------------------------
After BOEM has processed the bid deposits, the auction contractor
will send an email to the authorized individuals, inviting them to
practice logging into the auction website on a specific day in advance
of the mock auction. The <a href="http://login.gov">login.gov</a> login process, along with the
authentication for the auction helpdesk, will also be tested during the
mock auction.
If an eligible bidder fails to submit a bid deposit or does not
participate in the first round of the auction, BOEM will deactivate
that bidder's login information.
ii. Timing of Auction: The FSN will provide specific information
regarding when bidders can enter the auction system and when the
auction will start.
iii. Messaging Service: BOEM and the auction contractors will use
the auction platform messaging service to keep bidders informed on
issues of interest during the auction. For example, BOEM could change
the schedule at any time, including during the auction. If BOEM changes
the schedule during an auction, it 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 could place bids at any time during the round. At the top
of the bidding page, a countdown clock shows how much time remains in
each round. Bidders will have until the scheduled time to place bids.
Bidders should do so according to the procedures described in the FSN
and the Auction Procedures for Offshore Wind Lease Sales. Information
about the round results will be made available only after the round has
closed, so there is no strategic advantage to placing bids early or
late in the round.
The Auction Procedures for Offshore Wind Lease Sales will elaborate
on the auction procedures described in this
[[Page 86153]]
PSN. In the event of any inconsistency between the Auction Procedures
for Offshore Wind Lease Sales, the Bidder Manual, and the FSN, the FSN
is 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 confirm during the Mock Auction that each authorized
individual is able to access the auction system. A 4G card or other
form of wireless access may prove helpful if the bidder's primary
internet connection should fail. As a last resort, an authorized
individual facing technical issues may request to submit its bid by
telephone. 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. The caller must also explain the reasons why a telephone bid
is necessary. 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. The auction help desk requires codes from
the Google Authenticator app as part of its procedure for identifying
individuals who call for assistance. Prior to the auction, all
individuals listed on the BFF should download the Google
Authenticator\TM\ mobile app \3\ onto their smartphone or tablet.\4\
The first time the individual logs into the auction system, the system
will provide a QR token to be read into the Google Authenticator\TM\
app. This token is unique to the individual and enables the Google
Authenticator\TM\ app to generate time-sensitive codes that will be
recognized by the auction system. When an individual calls the auction
help desk, the current code from the app must be provided to the help
desk representative as part of the user authentication process. BOEM
will provide information on this process on its website.
---------------------------------------------------------------------------
\3\ Google Authenticator must be installed from either the Apple
App Store or the Google Play Store.
\4\ Installing the app is only required if the Google
Authenticator is not already installed on the smartphone or tablet.
---------------------------------------------------------------------------
d. 17.0 Percent Bidding Credit for Workforce Training or Supply
Chain Development or a Combination of Both: This proposed bidding
credit would allow a bidder to receive a credit of 17.0 percent in
exchange for a commitment to make a qualifying monetary contribution
(``Contribution''), in the same amount as the bidding credit received,
to programs or initiatives that support workforce training programs for
the U.S. offshore wind industry or development of a U.S. domestic
supply chain for the offshore wind industry, or both, as described in
the BFF Addendum and the lease. To qualify for this credit, the bidder
must commit to the bidding credit requirements on the BFF and submit a
conceptual strategy as described in the BFF Addendum.
e.
i. As proposed, the Contribution to workforce training must result
in a better trained and/or larger domestic offshore wind workforce that
would provide for more efficient operations via increasing the supply
of fully trained personnel. Training of existing lessee employees,
lessee contractors, or employees of affiliated entities would not
qualify.
ii. The Contribution to domestic supply chain development must
result in overall benefits to the U.S. offshore wind supply chain
available to all potential purchasers of offshore wind services,
components, or subassemblies, not solely the lessee's project; and
either: (i) the demonstrable development of new domestic capacity
(including vessels) or the demonstrable buildout of existing capacity;
or (ii) an improved 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
facilities.
iii. Contributions cannot be used to satisfy private cost shares
for any Federal tax or other incentive programs where cost sharing is a
requirement. No portion of the Contribution may be used to meet the
requirements of any other bidding credits for which the lessee
qualifies.
iv. Bidders interested in obtaining a bidding credit could choose
to contribute to workforce training programs, domestic supply chain
initiatives, or a combination of both. The Conceptual Strategy must
describe verifiable actions that the lessee will take that would allow
BOEM to confirm compliance when the documentation for satisfying the
bidding credit is submitted. The Contribution must be tendered in full,
and the lessee must provide documentation evidencing it has made the
Contribution and complied with applicable requirements, no later than
the date the lessee submits its first Facility Design Report (FDR).
v. As proposed, Contributions to workforce training would need to
promote and support one or more of the following purposes: (i) Union
apprenticeships, labor management training partnerships, stipends for
workforce training, or other technical training programs or
institutions focused on providing skills necessary for the planning,
design, construction, operation, maintenance, or decommissioning of
offshore wind energy projects in the United States; (ii) Maritime
training necessary for the crewing of vessels to be used for the
construction, servicing, and/or decommissioning of wind energy projects
in the United States; (iii) Training workers in skills or techniques
necessary to manufacture or assemble offshore wind components,
subcomponents, or subassemblies (examples of areas involving these
skills and techniques include welding; wind energy technology;
hydraulic maintenance; braking systems; mechanical systems, including
blade inspection and maintenance; or computers and programmable logic
control systems); (iv) Tribal offshore wind workforce development
programs or training for employees of an Indian Economic Enterprise \5\
in skills necessary in the offshore wind industry; or (v) Training in
any other job skills that the lessee can demonstrate are necessary for
the planning, design, construction, operation, maintenance, or
decommissioning of offshore wind energy projects in the United States.
---------------------------------------------------------------------------
\5\ <a href="https://www.bia.gov/sites/default/files/dup/assets/as-ia/ieed/Primer%20on%20Buy%20Indian%20Act%20508%20Compliant%202.6.18">https://www.bia.gov/sites/default/files/dup/assets/as-ia/ieed/Primer%20on%20Buy%20Indian%20Act%20508%20Compliant%202.6.18</a>(Reload).p
df.
---------------------------------------------------------------------------
vi. As proposed, Contributions to domestic supply chain development
must promote and support one or more of the following: (i) Development
of a domestic supply chain for the offshore wind industry, including
manufacturing of components and sub-assemblies and the expansion of
related services; (ii) Domestic Tier 2 and Tier 3 offshore wind
component suppliers and domestic Tier-1 supply chain efforts, including
quay-side fabrication; \6\ (iii) Technical assistance grants to help
U.S. manufacturers re-tool or certify (e.g., ISO-9001) for offshore
wind manufacturing; (iv) Development of Jones Act-compliant vessels for
the construction, servicing, and/or decommissioning of wind energy
projects in the United States; (v) Purchase and installation of lift
cranes or other equipment capable of lifting or moving foundations,
towers, and
[[Page 86154]]
nacelles quayside, or lift cranes on vessels with these capabilities;
(vi) Port infrastructure directly related to offshore wind component
manufacturing or assembly of major offshore wind facility components;
(vii) Establishing a new or existing bonding support reserve or
revolving fund available to all businesses providing goods and services
to offshore wind energy companies, including disadvantaged businesses
and/or Indian Economic Enterprises; or (viii) Other supply chain
development efforts that the lessee can demonstrate advance the
manufacturing of offshore wind components or subassemblies or the
provision of offshore wind services in the United States.
---------------------------------------------------------------------------
\6\ Tier-1 denotes the primary offshore wind components such as
the blades, nacelles, towers, foundations, and cables. Tier 2
subassemblies are the systems that have a specific function for a
Tier 1 component. Tier 3 subcomponents are commonly available items
that are combined into Tier 2 subassemblies, such as motors, bolts,
and gears.
---------------------------------------------------------------------------
vii. Documentation: If a lease is issued pursuant to a winning bid
that includes a bidding credit for workforce training or supply chain
development, the lessee would be required to provide documentation
showing that the lessee has met the financial commitment before the
lessee submits the first FDR for the lease. The documentation must
allow BOEM to objectively verify the amount of the Contribution and the
beneficiary(ies) of the Contribution.
At a minimum, the documentation would need to include: all written
agreements between the lessee and beneficiary(ies) of the Contribution,
which must detail the amount of the Contribution(s) and how it will be
used by the beneficiaries of the Contribution(s) 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 in the above documentation is true and accurate. The
documentation would need to describe how the funded initiative or
program has advanced, or is expected to advance, U.S. offshore wind
workforce training or supply chain development. The documentation must
also provide qualitative and/or quantitative information that includes
the estimated number of trainees or jobs supported, or the estimated
leveraged supply chain investment resulting or expected to result from
the Contribution. The documentation would need to contain any
information called for in the Conceptual Strategy that the lessee
submitted with its BFF and to 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
of its Conceptual Strategy changes due to market needs or other
factors, the lessee would need to explain the changed approach. BOEM
would reserve all rights to determine that the bidding credit has not
been satisfied if changes from the lessee's Conceptual Strategy result
in the lessee not meeting the criteria for the bidding credit described
in Addendum ``C'' of the lease.
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
lease Effective Date. The interest rate would be the underpayment
interest rate identified by ONRR. The lessee would not be required to
pay said amount if the lessee satisfied its bidding credit requirements
but failed to develop the lease by the tenth Lease Anniversary. BOEM
could, at its sole discretion, extend the documentation deadline beyond
the first FDR submission or extend the lease development deadline
beyond the 10-year timeframe.
f. Eight percent Bidding Credit for Fisheries Compensatory
Mitigation Fund: The second bidding credit proposed would allow a
bidder to receive a credit of 8.0 percent of its bid in exchange for a
commitment to establish and contribute to a fisheries compensatory
mitigation fund, or to contribute to a similar existing fund, to
compensate for potential negative impacts to commercial and for-hire
recreational fisheries. The term ``commercial fisheries'' refers to
commercial and processing businesses engaged in the act of catching and
marketing fish and shellfish for sale from the Central Atlantic. The
term ``for-hire recreational fisheries'' refers to charter and headboat
fishing operations involving vessels-for-hire engaged in recreational
fishing in the Central Atlantic that are hired for a charter fee by an
individual or group of individuals for the exclusive use of that
individual or group of individuals. Lessees are encouraged to
contribute to a regional fund, such as the initiative by eleven East
Coast states to establish a regional fund that would provide financial
compensation for economic loss from offshore wind development off the
Atlantic Coast. At a minimum, the compensation must address the
following:
i. Gear loss or damage; and
ii. Lost fishing income in Central Atlantic wind energy Lease
Areas.
The fisheries compensatory mitigation fund would assist commercial
and for-hire recreational fisheries directly impacted by income or gear
losses due to offshore wind activities on offshore wind leases or
easements and is intended to address the impacts identified in BOEM's
environmental and project reviews. The compensatory mitigation must
cover impacts that result directly from the preconstruction,
construction, operations and decommissioning of an offshore wind
project being developed on Central Atlantic wind energy leases or
easements. The fund must be established and the Contribution made
before the lessee submits the lease's first FDR or before the fifth
Lease Anniversary, whichever is sooner. To qualify for this credit, the
bidder must commit to the bidding credit requirements on the BFF and
submit a conceptual strategy as described in the BFF Addendum.
(1) Bidders committing to use the fisheries compensatory mitigation
fund bidding credit must submit their Conceptual Strategy along with
their BFF, further described below and in the BFF Addendum. The
Conceptual Strategy would describe the actions that the lessee intends
to take that would allow BOEM to verify compliance when the lessee
seeks to demonstrate satisfaction of the requirements for the bidding
credit. The lessee would be required to provide documentation showing
that the lessee has met the commitment and complied with the applicable
bidding credit requirements before the lessee submits the lease's first
FDR or before the fifth Lease Anniversary, whichever is sooner.
(2) As proposed, gear loss, damage, and fishing income loss claims
should be prioritized at each phase of offshore wind project
development, including impacts from surveys conducted before the
establishment of the fund. BOEM encourages lessees to coordinate with
other lessees to establish or contribute to a regional fund. A regional
fund should be flexible enough to incorporate future contributions from
future lease auctions and actuarially sound enough to recognize the
multi-decade life of offshore wind projects in the Central Atlantic.
While the fund's first priority is to compensate for gear loss or
damage
[[Page 86155]]
and income loss, funds that have been determined to be excess based on
an actuarial accounting may be used to:
a. Promote participation of fishers and fishing communities in the
project development process or other programs that better enable the
fishing and offshore wind industries to co-exist;
b. Offset the cost of gear upgrades and transitions for operating
within a wind facility.
Any fund established or selected by the lessee to meet this bidding
credit requirement must include a process for evaluating the actuarial
status of funds at least every five years and publicly reporting
information on fund disbursement and administrative costs at least
annually.
(3) The fisheries compensatory mitigation fund must be
independently managed by a third party and designed with fiduciary
governance and strong internal controls while minimizing administrative
expenses. The Contribution may be used for fund startup costs, but the
Fund should minimize costs by leveraging existing processes,
procedures, and information from BOEM Fisheries Mitigation Guidance,
the Eleven Atlantic States' Fisheries Mitigation Project, or other
sources.
(4) Documentation: As proposed, if a lease is awarded pursuant to a
winning bid that includes a fisheries compensatory mitigation fund
bidding credit, the lessee must provide written documentation to BOEM
that demonstrates that it completed the fund Contribution before it
submits the lease's first FDR or before the fifth Lease Anniversary,
whichever is sooner. The documentation must enable BOEM to objectively
verify the Contribution has met all applicable requirements as outlined
in Addendum ``C'' of the lease. At a minimum, this documentation must
include:
a. The procedures established to compensate for gear loss or damage
resulting from all phases of the project development on the Lease Area
(pre-construction, construction, operation, and decommissioning);
b. The fisheries compensatory mitigation fund charter, including
the governance structure, audit and public reporting procedures, and
standards for paying compensatory mitigation for impacts to fishers
from development on wind energy Lease Areas in the Central Atlantic;
c. All receipts documenting the amount, date, financial
institution, and the account and owner of the account to which the
Contribution was made; and
d. Sworn statements by the entity that made the Contribution,
attesting to:
i. The amount and date(s) of the Contribution;
ii. That the Contribution is being (or will be) used in accordance
with the bidding credit requirements in the lease; and
iii. That all information provided is true and accurate.
The documentation must contain any information specified in the
Conceptual Strategy that was submitted with the BFF. If the lessee's
implementation of its Conceptual Strategy changes due to market needs
or other factors, the lessee would need to explain this change. BOEM
reserves the right to determine that the bidding credit has not been
satisfied if changes from the lessee's Conceptual Strategy result in
the lessee not meeting the criteria for the bidding credit described in
Addendum ``C'' of the lease.
(5) Enforcement: The commitment to the fisheries compensatory
mitigation fund bidding credit will be made in the BFF. It will be
included in Addendum ``C'' of the lease and will 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 commitment at the time the
first FDR is submitted, or by the fifth Lease Anniversary, whichever is
sooner, the amount corresponding to the bidding credit awarded would be
immediately due and payable to ONRR with interest from the lease
effective date. The interest rate would be the underpayment interest
rate identified by ONRR. The lessee would not be required to pay said
amount if the lessee satisfied its bidding credit requirements by the
time the first FDR is submitted, or the fifth Lease Anniversary,
whichever is sooner. BOEM may, at its sole discretion, extend the
documentation deadline beyond the first FDR or beyond the 5-year
timeframe.
XIII. Rejection or Non-Acceptance of Bids
BOEM reserves the right and authority to reject any and all bids
that do not satisfy the requirements and rules of the auction, the FSN,
or applicable regulations and statutes.
XIV. Anti-Competitive Review
Bidding behavior in this sale is subject to Federal antitrust laws.
Following the auction, but before the acceptance of bids and the
issuance of the lease, BOEM must ``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
provisional winner is found to have engaged in anti-competitive
behavior in connection with this lease sale, BOEM may reject its
provisionally winning bid. Compliance with BOEM's auction procedures
and regulations is not an absolute defense against violations of
antitrust laws.
Anti-competitive behavior determinations are fact specific.
However, such behavior may manifest itself in several different ways,
including, but not limited to:
a. An express or tacit agreement among bidders not to bid in an
auction, or to bid a particular price;
b. An agreement among bidders not to bid against each other; or
c. Other agreements among bidders that have the potential to affect
the final auction price.
Pursuant to 43 U.S.C. 1337(c)(3), BOEM may decline to award a lease
if the Attorney General, in consultation with the Federal Trade
Commission, determines that awarding the lease may 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">https://www.justice.gov/atr</a> and consult legal counsel.
XV. Process for Issuing the Lease
Once all post-auction reviews have been completed to BOEM's
satisfaction, BOEM will issue three unsigned copies of the lease to the
provisional winner. Within ten business days after receiving the lease
copies, the provisional winner must:
a. Execute and return the lease copies on the bidder's behalf;
b. File financial assurance, as required under 30 CFR 585.515-537;
and
c. Pay by electronic funds transfer (EFT) the balance of the
winning bid (winning monetary bid minus the applicable bid deposit and
value of bidding credit, as applicable). BOEM would require bidders to
use EFT procedures (not <a href="https://www.pay.gov">https://www.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 the ``Instructions for
Making Electronic Payments'' available on BOEM's website at: <a href="https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/EFT-Payment-Instructions.pdf">https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/EFT-Payment-Instructions.pdf</a>.
BOEM will not execute the lease until the three requirements above
have been satisfied. BOEM may extend the 10-business-day deadline if
BOEM determines the delay was caused by events beyond the provisional
winner's control.
[[Page 86156]]
If the provisional winner does not meet these requirements or
otherwise fails to comply with applicable regulations or the terms of
the FSN, BOEM reserves the right to not issue the lease to that bidder.
In such a case, the provisional winner would forfeit its bid deposit.
Also, in such a case, BOEM reserves the right to offer the lease to the
next highest bidder as determined by BOEM.
Within 45 calendar days after receiving the lease copies, the
provisional winner must 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 must 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/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>.
XVI. Non-Procurement Debarment and Suspension Regulations
Pursuant to 43 CFR part 42, subpart C, an OCS renewable energy
lessee must 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 term or condition in their contracts and other
transactions.
XVII. Final Sale Notice
The development of the FSN will be informed through the EA, related
consultations, and comments received during the PSN comment period. The
FSN will provide the final details concerning the offering and issuance
of an OCS commercial wind energy lease for the Lease Areas in the
Central Atlantic. The FSN will be published in the Federal Register at
least 30 calendar days before the lease sale is conducted and will
provide the date and time of the auction.
XVIII. Changes to Auction Details
BOEM has the discretion to change any auction detail specified in
the FSN, including the date and time, if events outside BOEM's control
have been found to 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/central-atlantic">https://www.boem.gov/renewable-energy/state-activities/central-atlantic</a>. Bidders should call
BOEM's Auction Manager at (703) 787-1121 if they have concerns.
XIX. Appeals
The appeals and reconsideration procedures are provided in BOEM's
regulations at 30 CFR 585.225 and 585.118(c). BOEM's decision on a bid
is the final action of the Department, except that an unsuccessful
bidder may apply for reconsideration by the Director under 30 CFR
585.225 as follows:
a. If BOEM rejects your bid, BOEM will provide a written statement
of the reasons and will refund any money deposited with your bid,
without interest.
b. You may ask the BOEM Director for reconsideration, in writing,
within 15 business days of bid rejection. The Director will send you a
written response either affirming or reversing the rejection.
XX. Public Participation
BOEM will make all comments publicly available on <a href="https://www.regulations.gov">https://www.regulations.gov</a> under the docket number and will consider each
comment prior to publication of the FSN. BOEM does not consider
anonymous comments; please include your name, address, and telephone
number or email address as part of your comment. You should be aware
that your entire comment, including your name, address, and any other
personally identifiable information (PII) included in your comment, may
be made publicly available at any time.
For BOEM to consider withholding from disclosure your PII, you must
identify, in a cover letter, any information contained in the submittal
of your comments that, if released, would constitute a clearly
unwarranted invasion of your personal privacy. You must also briefly
describe any possible harmful consequences of the disclosure of
information, such as embarrassment, injury, or other harm.
Even if BOEM withholds your information in the context of this PSN,
your comment is subject to the Freedom of Information Act (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.
Note that BOEM will make available for public inspection, in their
entirety, all comments submitted by organizations and businesses, or by
individuals identifying themselves as representatives of organizations
or businesses.
XXI. Protection of Privileged and Confidential Information
BOEM will protect privileged and confidential information that you
submit consistent with FOIA and 30 CFR 585.113. Exemption 4 of FOIA
applies to ``trade secrets and commercial or financial information
obtained from a person'' that is privileged or confidential. (5 U.S.C.
552(b)(4)). If you wish to protect the confidentiality of such
information, clearly mark it ``Contains Privileged or Confidential
Information'' and consider submitting such information as a separate
attachment. BOEM will not disclose such information, except as required
by FOIA. Information that is not labeled as privileged or confidential
may be regarded by BOEM as suitable for public release. Further, BOEM
will not treat as confidential aggregate summaries of otherwise non-
confidential information.
a. Access to Information (54 U.S.C. 307103): BOEM may, after
consultation with the Secretary of the Interior, withhold the location,
character, or ownership of historic properties if it determines that
disclosure may, among other things, cause a significant invasion of
privacy, risk harm to the historic resources, or impede the use of a
traditional religious site by practitioners. Tribes and other
interested parties should designate information that they wish to be
held as confidential and provide the reasons why BOEM should do so.
Authority: 43 U.S.C. 1337(p); 30 CFR 585.211 and 585.216.
Elizabeth Klein,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2023-27200 Filed 12-11-23; 8:45 am]
BILLING CODE 4340-98-P
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</html>Indexed from Federal Register on December 12, 2023.
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.