[Federal Register Volume 77, Number 232 (Monday, December 3, 2012)]
[Notices]
[Pages 71612-71621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29096]
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DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management
[Docket No. BOEM-2012-0095]
Atlantic Wind Lease Sale 2 (ATLW2) Commercial Leasing for Wind
Power on the Outer Continental Shelf Offshore Rhode Island and
Massachusetts--Proposed Sale Notice
AGENCY: Bureau of Ocean Energy Management (BOEM), Interior.
ACTION: Proposed Sale Notice for commercial leasing for wind power on
the Outer Continental Shelf offshore Rhode Island and Massachusetts.
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SUMMARY: This document is the Proposed Sale Notice (PSN) for the sale
of commercial wind energy leases on the Outer Continental Shelf (OCS)
offshore Rhode Island and Massachusetts, pursuant to BOEM's regulations
at 30 CFR 585.216. BOEM proposes to offer for sale, using a multi-
factor auction format, two leases that together encompass the Rhode
Island and Massachusetts Wind Energy Area (WEA) that was identified on
February 24, 2012 (see ``Areas Offered for Leasing'' below for a
description of the WEA and lease areas). In this PSN, you will find
information pertaining to the areas available for leasing, proposed
lease provisions and conditions, auction details, the lease form,
criteria for evaluating competing bids, award procedures, appeal
procedures, and lease execution. BOEM invites comments during a 60-day
comment period following this notice. The issuance of the proposed
leases resulting from this announcement would not constitute an
approval of
[[Page 71613]]
project-specific plans to develop offshore wind energy. Such plans,
expected to be submitted by successful lessees, will be subject to
subsequent environmental and public review prior to a decision to
proceed with development.
DATES: Comments should be submitted electronically or postmarked no
later than February 1, 2013. All comments received or postmarked during
the comment period will be made available to the public and considered
prior to publication of the Final Sale Notice (FSN).
The end of the comment period is also the deadline for potential
bidders to submit qualification materials. All bidders interested in
participating in the lease sale must submit the required qualification
materials by the end of the 60-day comment period for this notice. All
qualification materials must be postmarked no later than February 1,
2013.
ADDRESSES: Potential auction participants, Federal, state, and local
government agencies, tribal governments, and other interested parties
are requested to submit their written comments on the PSN in one of the
following ways:
1. Electronically: http://www.regulations.gov. In the entry
entitled, ``Enter Keyword or ID,'' enter BOEM-2012-0095 and then click
``search.'' Follow the instructions to submit public comments.
2. Written Comments: In written form, delivered by hand or by mail,
enclose comments in an envelope labeled ``Comments on Rhode Island and
Massachusetts PSN'' to: Office of Renewable Energy Programs, Bureau of
Ocean Energy Management, 381 Elden Street, HM 1328, Herndon, Virginia
20170.
3. Qualification Materials: Those submitting qualification
materials should contact Jessica Bradley, BOEM Office of Renewable
Energy Programs, at 381 Elden Street, HM 1328, Herndon, Virginia 20170,
(703) 787-1320, or [email protected].
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 the
section of this PSN entitled, ``Protection of Privileged or
Confidential Information.'' Information that is not labeled as
privileged or confidential will be regarded by BOEM as subject to
public release.
FOR FURTHER INFORMATION CONTACT: Jessica Bradley, BOEM Office of
Renewable Energy Programs, 381 Elden Street, HM 1328, Herndon, Virginia
20170, (703) 787-1320 or [email protected].
Authority: This PSN is published pursuant to subsection 8(p) of
the OCS Lands Act (43 U.S.C. 1337(p)) (``the Act''), as amended by
section 388 of the Energy Policy Act of 2005 (EPAct), and the
implementing regulations at 30 CFR Part 585, including 30 CFR
585.211 and 585.216.
Background: The proposed lease areas are the same as the WEA that
BOEM announced on February 24, 2012, (see Area Identification
announcement available at: http://www.boem.gov/Renewable-Energy-Program/State-Activities/Rhode-Island.aspx). BOEM published the Notice
of Availability (NOA) for the Commercial Wind Lease Issuance and Site
Assessment Activities on the Atlantic Outer Continental Shelf (OCS)
Offshore Rhode Island and Massachusetts Environmental Assessment (EA)
(77 FR 39508) on July 3, 2012. The EA may be found at: http://www.boem.gov/Renewable-Energy-Program/Smart-from-the-Start/Index.aspx.
BOEM is currently considering the comments on the EA and possible
revisions.
Ongoing consultations concurrent with the preparation of the EA
include consultations under the Endangered Species Act (ESA), Magnuson-
Stevens Fishery Conservation and Management Act (MSFCMA), Section 106
of the National Historic Preservation Act (NHPA), and the Coastal Zone
Management Act (CZMA). Once BOEM has completed the EA, and if the EA
concludes that the proposed action will not cause significant
environmental impacts, BOEM will publish a Finding of No Significant
Impact (FONSI).
The proposed lease areas identified in this PSN match the Rhode
Island and Massachusetts WEA described as the proposed action and
preferred alternative in the EA. In the event that BOEM decides to
substantially revise the terms and conditions outlined within this PSN
as a result of the completion of the environmental review and
consultation process, which will not occur until after the publication
of this PSN, BOEM will publish a second PSN that includes the revised
terms and conditions and publish it in the Federal Register for a 60-
day public comment period before moving forward with publication of a
Final Sale Notice (FSN). Additional environmental reviews will be
conducted upon receipt of the lessees' proposed project-specific plans,
such as a Site Assessment Plan (SAP) or Construction and Operations
Plan (COP).
This PSN was developed in consultation with the joint Rhode Island
and Massachusetts Renewable Energy Task Force. BOEM received comments
from several Task Force members during the development of this PSN,
including from the Rhode Island State Energy Office, the City of New
Bedford Economic Development Commission, a Task Force member from the
Town of Aquinnah, and the National Oceanic and Atmospheric
Administration's National Marine Fisheries Service (NMFS). In addition,
the Rhode Island Coastal Resources Management Council forwarded to BOEM
comments on the draft PSN and EA that it had received from members of
the Habitat Advisory Board established by the State. The Rhode Island
State Energy Office requested that BOEM consider non-monetary factors
in the multiple auction format and recommended that the Joint
Development Agreement (JDA) executed by the State of Rhode Island be
awarded a minimum 25 percent discount in the auction. Additional
information on the JDA can be found in this notice in the section
entitled, ``Multiple Factor Definitions.'' A member of the Rhode Island
Habitat Advisory Board expressed concern about publication of the PSN
before a FONSI determination has been made; reiterated concerns about
areas within the WEA where glacial moraines are located; proposed
additional requirements for protection of endangered species, in
particular the North Atlantic Right Whale; and requested that BOEM
consider implementing a discount for non-monetary values in the auction
format. The additional measures proposed for North Atlantic Right Whale
protection are similar to those previously developed by a consortium of
nongovernmental organizations and wind industry representatives and
presented to BOEM for consideration in issuing commercial wind leases
off New Jersey, Delaware, Maryland, and Virginia. A Task Force member
from the Town of Aquinnah suggested that BOEM consider proposals that
provide community benefits in the auction format and expressed concern
with the requirements for protection of North Atlantic Right Whales.
The City of New Bedford Economic Development Commission expressed
concern regarding the inclusion of a discount in the auction format for
the State of Rhode Island's preferred developer. NMFS
[[Page 71614]]
provided recommendations for language to be clarified in the PSN, as
well as in Addendum C of the proposed lease.
Financial Terms and Conditions: This section provides an overview
of the basic annual payments required of the Lessee, which will be
fully described in the lease.
Rent: The first year's rent payment for the entire leased area is
due within 45 calendar days of the date the winning bidder receives the
lease for execution. Thereafter, annual rent payments are due on the
anniversary of the lease Effective Date until commercial operations on
the lease commence, i.e., when the generation of electricity begins.
The annual rental rate will be $3.00 per acre, and this rate will be
applicable to the entire leased area. For example, for a lease the size
of 164,750 acres (the size of the entire WEA), the amount of rent
payment will be $494,250 per year. The Lessee also must pay rent for
any project easement associated with the lease commencing on the date
that BOEM approves the COP (or modification) that describes the project
easement. Annual rent for a project easement, 200-feet wide and
centered on the transmission cable, is $70.00 per statute mile. For any
such additional acreage required, the Lessee must also pay the greater
of $5.00 per acre per year or $450.00 per year.
Operating Fee: The initial annual operating fee is prorated and due
within 45 calendar days after the commencement of commercial operations
on the lease, and subsequent payments are due on or before each Lease
Anniversary annually thereafter. The annual operating fee payment is
calculated by multiplying an operating fee rate by the imputed
wholesale market value of the projected electric power production. For
the purposes of this calculation, the imputed market value is the
product of the project's annual nameplate capacity, the total number of
hours in the year (8,760), an annual capacity factor, and the
historical, annual average regional wholesale power price index.
Operating Fee Rate: The operating fee rate is 0.02 through the
eighth year of commercial operations on the lease. Starting in the
ninth year of commercial operations, the operating fee rate is 0.04
through the remaining term of the lease.
Nameplate Capacity: The nameplate capacity at the start of each
year of commercial operations on the lease as specified in the COP will
be used to allow for installation schedules or repowering, recognizing
that a project's designed capacity may not be fully available in every
year. Using the capacity at the beginning of each year, as specified in
the COP, adjusts the nameplate capacity for these schedules.
Capacity Factor: The capacity factor for the first six full years
of commercial operations on the lease is set to 0.4 to allow for one
year of installation and testing followed by five years at full
availability. At the end of the sixth full year, the capacity factor
will be adjusted to reflect the performance over the previous five
years based upon the actual metered electricity generation at the
delivery point to the electrical grid. Similar adjustments to the
capacity factor will be made once every five years thereafter. The
maximum change in the capacity factor from one period to the next will
be limited to plus or minus 10 percent of the previous period's value.
Wholesale Power Price Index: The wholesale power price is
determined at the time each annual operating fee payment is due. The
wholesale power price will be based on the weighted average of the
inflation-adjusted peak and off-peak spot price indices for the
Northeast--Mass Hub power market for the most recent year of data
available as reported by the Federal Energy Regulatory Commission
(FERC) as part of its annual State of the Markets Report with specific
reference to the summary entitled ``Electric Market Overview: Regional
Spot Prices.''
Financial Assurance: BOEM will base the amounts of all SAP, COP,
and decommissioning financial assurance requirements on estimates of
the cost to meet all accrued lease obligations. The amount of
supplemental and decommissioning financial assurance requirements will
be determined on a case-by-case basis. The amount of financial
assurance required to meet all lease obligations includes:
The projected amount of rent and other payments due to the
Federal Government over the next 12 months;
Any past due rent and other payments;
Other monetary obligations (e.g., fines, liens); and
The estimated cost of facility decommissioning.
Prior to lease issuance the Lessee must provide: (1) An initial
lease-specific bond or other approved means of meeting the Lessor's
initial financial assurance requirements in the amount of $100,000; and
(2) a supplemental bond or other approved means of meeting the Lessor's
supplemental financial assurance requirements in the amount of $292,494
for Lease OCS A-0486, and $201,756 for Lease OCS A-0487, to guarantee
lease obligations from rental payments due to the Government over the
first 12 months of the lease. Additional financial assurances will be
required to address decommissioning, operating fee, and other
obligations as the lease progresses.
The financial terms can be found in Addendum ``B'' of the proposed
lease, which BOEM has made available with this notice on its Web site
at: http://boem.gov/Renewable-Energy-Program/State-Activities/Rhode
Island.aspx.
Place and Time: The auction will be held online. The time that the
auction will be held will be published in the FSN. The date has not
been finalized at this time, but will be no earlier than 30 days after
publication of the FSN in the Federal Register.
Public Seminar: BOEM will host a public seminar to introduce
potential bidders and other stakeholders to the auction format provided
in the PSN, explain the auction rules, and demonstrate the auction
process through meaningful examples. The time and place of the seminar
will be announced by BOEM and published on the BOEM Web site. No
registration or RSVP will be required in order to attend.
Mock Auction: BOEM will host a mock auction to educate qualified
bidders about the procedures to be employed during the auction and to
answer questions. The mock auction will take place between the
publication of the FSN in the Federal Register and the date of the
auction. Following publication of the FSN in the Federal Register,
details of the mock auction will be distributed to those eligible to
participate in the auction. All qualified bidders that intend to
participate in the auction are strongly encouraged to participate in
the mock auction. Bidders will be eligible to participate in the Mock
Auction if they have been legally, technically, and financially
qualified, as discussed below.
Bid Deposit and Minimum Bid: A bid deposit is an advance cash
deposit submitted to BOEM. No later than 14 calendar days following
publication of the FSN, each bidder must have submitted a bid deposit
(equal to a minimum cash bid) of at least $5.00 per acre, or fraction
thereof, offered for sale. Approximately 97,498 acres would be offered
for sale as Lease OCS-A 0486 (North Zone), and approximately 67,252
acres would be offered as Lease OCS-A 0487 (South Zone) in this
auction. The bid deposit amount of $5.00 per acre represents the
minimum bid that BOEM proposes for this lease sale. Therefore, the
minimum acceptable bid will be $487,490 for Lease OCS-A 0486 (North
Zone), and $336,260 for Lease OCS-A 0487 (South Zone). The required bid
deposit for any participant intending to
[[Page 71615]]
bid on both leases will be $5.00 per acre for the combined total
acreage being offered, which equals $823,750. Any participant intending
to bid on only one of the leases must submit a bid deposit of no less
than $5.00 per acre for the larger area being offered (Lease OCS-A 0486
(North Zone)), which equals $487,490. Any bidder that fails to submit
the bid deposit by the deadline described herein may be prevented by
BOEM from participating in the auction. Bid deposits will be accepted
online via pay.gov.
Following publication of the FSN, each bidder must complete the
Bidder's Financial Form included in the FSN. BOEM has made a copy of
the proposed form available with this notice on its Web site at: http://boem.gov/Renewable-Energy-Program/State-Activities/Rhode Island. This
form requests that each bidder designate an email address, which the
bidder should use to create an account in pay.gov. After establishing
the pay.gov account, bidders may use the Bid Deposit Form on the
pay.gov Web site to submit a deposit.
Following the auction, bid deposits will be applied against any
bonus bids or other obligations a successful bidder owes to BOEM. If
the bid deposit exceeds the bidder's total financial obligation, the
balance of the bid deposit will be refunded to the bidder. BOEM will
refund the bid deposit to unsuccessful bidders.
Areas Offered for Leasing: The proposed lease area was identified
as the Rhode Island and Massachusetts Wind Energy Area (WEA) on
February 24, 2012 (see Area Identification announcement available at:
http://www.boem.gov/Renewable-Energy-Program/State-Activities/Rhode-Island.aspx). The proposed lease area offshore Rhode Island and
Massachusetts comprises 13 whole OCS blocks and 26 sub-blocks
encompassing 164,750 acres. The area available for sale will be
auctioned as two leases, Lease OCS-A 0486 (North Zone) and Lease OCS-A
0487 (South Zone). The North Zone consists of 97,498 acres, and the
South Zone consists of 67,252 acres. If there are adequate bids, two
leases will be issued pursuant to this lease sale. A description of the
lease areas and lease activities can be found in Addendum ``A'' of the
proposed leases, which BOEM has made available with this notice on its
Web site at: http://boem.gov/Renewable-Energy-Program/State-Activities/Rhode Island.aspx.
The two areas that will be offered for leased within the Rhode
Island/Massachusetts WEA are the North Zone and the South Zone, which
are separated by an exclusion area surrounding Cox Ledge. This division
into two Zones is based on the consideration of a number of factors,
including: the prevailing winds as demonstrated in the RI Ocean Special
Area Management Plan, which is available at: http://www.crmc.ri.gov/samp_ocean/finalapproved/RI_Ocean_SAMP.pdf; the project scale
requirements under state laws and regulations (including Rhode Island
General Laws, Chapter 39-26.1); the JDA executed by the State of Rhode
Island; developer responses to the August 2011 Call for Information and
Nominations; allowance for buffer zones between projects; and proximity
to onshore infrastructure and markets.
Each zone is expected to be capable of supporting a project of at
least 350 MW in nameplate capacity. The North Zone may be capable of
supporting over 1,000 MW and is expected to have the advantage of
closer proximity to onshore infrastructure. However, the South Zone
could potentially support a project of 1,000 MW and is expected to be
attractive due to its expansion opportunities to the south and east in
potential future lease sales.
Map of the Area Offered for Leasing: A map of the areas and a table
of the boundary coordinates in X, Y (eastings, northings) UTM Zone 18,
NAD83 Datum and geographic X, Y (longitude, latitude), NAD83 Datum can
be found at the following URL: http://boem.gov/Renewable-Energy-Program/State-Activities/Rhode Island.aspx.
A large scale map of these areas, showing boundaries of the area
with numbered blocks, is available from BOEM at the following address:
Bureau of Ocean Energy Management, Office of Renewable Energy Programs,
381 Elden Street, HM 1328, Herndon, Virginia 20170, Phone: (703) 787-
1300, Fax: (703) 787-1708.
Withdrawal of Blocks: BOEM reserves the right to withdraw areas
from this lease sale prior to the execution of a lease.
Lease Terms and Conditions: BOEM has included proposed lease terms
and conditions for OCS commercial wind leases in the Rhode Island and
Massachusetts WEA in Addendum ``C'' of the proposed lease. BOEM
reserves the right to apply additional terms and conditions that are
consistent with the terms of the lease to activities conducted on the
lease incident to any future approval or approval with modifications of
a SAP and/or COP. The proposed lease, including Addendum ``C'', is
available on BOEM's Web site at: http://boem.gov/Renewable-Energy-Program/State-Activities/Rhode Island.aspx. The proposed lease consists
of an instrument with 18 sections and the following six attachments:
Addendum ``A'' (Description of Leased Area and Lease Activities);
Addendum ``B'' (Lease Term and Financial Schedule);
Addendum ``C'' (Lease Specific Terms, Conditions, and
Stipulations);
Addendum ``D'' (Project Easement);
Addendum ``E'' (Rent Schedule); and
Appendix A (High Resolution Geophysical Surveys and Analysis for
the Identification or Reporting of Archaeological Resources).
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.
After considering comments on the PSN and these proposed
provisions, BOEM will publish final lease terms and conditions in a
FSN.
The lease form included as part of this proposed lease has been
updated since its publication on February 3, 2012. A discussion of
specific changes to the lease form is available separately on BOEM's
Web site at: http://www.boem.gov/Renewable-Energy-Program/Regulatory-Information/Index.aspx#Lease_Forms.
Plans: Pursuant to 30 CFR 585.601, the leaseholder must submit a
SAP within six months of lease issuance. If the leaseholder intends to
continue its commercial lease with an operations term, the leaseholder
must submit a COP at least six months before the end of the site
assessment term.
Pursuant to 30 CFR 585.629, a leaseholder may include in its COP a
request to develop its commercial lease in phases. If a leaseholder
requests and BOEM approves phased development, this approval will not
affect the length of the preliminary, site assessment, or commercial
terms offered under the lease. The COP must describe in sufficient
detail the activities proposed for all phases of commercial
development, including a schedule detailing the proposed timelines for
phased development. Further, the COP must include the results of all
site characterization surveys, as described in 30 CFR 585.626(a),
necessary to support each phase of commercial development. The
requirements of the SAP remain the same as they would under a non-
phased development scenario, and must meet the requirements set forth
in the regulatory provisions in 30 CFR 585.605-613 for the full
commercial lease area.
Qualifications--Who May Bid: Any potential bidder that has not
already
[[Page 71616]]
submitted a complete set of qualification materials must do so by the
end of the comment period of this PSN. To be eligible to participate in
the auction, each potential bidder must be legally, technically and
financially qualified under BOEM's regulations at 30 CFR 585.106-107 by
the time the FSN for this sale is published. Please note that technical
and financial qualifications are lease specific; it is not sufficient
to have been technically and financially qualified to pursue a project
offshore another state.
Guidance and examples of the appropriate documentation
demonstrating your legal qualifications can be found in Chapter 2 and
Appendix B of Guidelines for the Minerals Management Service Renewable
Energy Framework, available on BOEM's Web site at: http://www.boem.gov/Renewable-Energy-Program/Regulatory-Information/Index.aspx. Guidance
regarding how you may demonstrate your technical and financial
qualifications is provided in a document entitled, Qualification
Guidelines to Acquire and Hold Renewable Energy Leases and Grants and
Alternate Use Grants on the U.S. Outer Continental Shelf: (http://boem.gov/Renewable-Energy-Program/Regulatory-Information/QualificationGuidelines-pdf.aspx). BOEM strongly recommends that you
refer to this guidance before submitting your qualification materials,
as the guidance has been updated recently. You must submit the
documentation necessary to demonstrate your legal, technical, and
financial qualifications to BOEM in both paper and electronic formats.
BOEM considers an Adobe PDF file stored on a compact disc (CD) to be an
acceptable format for submitting an electronic copy. In your
qualification materials, provide a general description of the project
you would like to construct on the lease area sought in this sale,
including estimates of the project area and total nameplate capacity of
the proposed facilities.
Please note that it may take a number of weeks for you to establish
your legal, technical, and financial qualifications. We advise
potential bidders planning to participate in this sale to establish
their qualifications promptly. It is not uncommon for BOEM to request
additional materials establishing qualifications following an initial
review of the qualifications package. BOEM will find any potential
bidder whose qualification package is incomplete at the time the FSN
for this sale is published in the Federal Register to have failed to
establish its qualifications to participate in the sale, and,
therefore, will be unable to participate in the sale.
Auction Procedures
Summary
For the sale of these leases, BOEM will use a multi-factor auction
format, with a multiple-factor bidding system. Under this system, BOEM
may consider a combination of monetary and nonmonetary factors, or
``variables,'' in determining the outcome of the auction. There will be
two such variables considered by BOEM in this auction--(1) a cash bid,
and (2) a credit if a bidder holds a Joint Development Agreement (JDA)
or a Power Purchase Agreement (PPA), as defined below. A multi-factor
auction, wherein both monetary and nonmonetary bid variables are
considered, is provided for under BOEM's regulations at 30 CFR
585.220(a)(4) and 585.221(a)(6).
Under a multiple-factor bidding format, as set forth at 30 CFR
585.220(a)(4), BOEM may consider many factors as part of a bid. The
regulation states that one bid proposal per bidder will be accepted,
but does not further specify the procedures to be followed in the
multiple-factor format. This multiple-factor format is intended to
allow BOEM flexibility in administering the auction and in balancing
the variables presented. The regulation leaves to BOEM the
determination of how to administer the multiple-factor auction format
in order to try to best achieve BOEM's goals of encouraging bidding,
enhancing price discovery, and ensuring that BOEM receives a fair
return for the leases auctioned, as required by the Outer Continental
Shelf Lands Act, (OCSLA), 43 U.S.C. 1337(p)(2)(A).
BOEM's regulations at 30 CFR 585.220(a)(4) permit a multi-round
auction provided only one cash bid proposal per zone or set of zones
per bidder, per round of the auction, is accepted. This regulation
presents an administratively efficient auction process. It also takes
advantage of the flexibility built into the regulation by enabling BOEM
to benefit from both the consideration of more than one factor and the
price discovery involved in successive rounds of bidding.
The auction will be conducted in a series of rounds. At the start
of each round, BOEM will state an asking price for each zone being
offered. In each round, each bidder will have the opportunity to submit
one cash bid per zone at the asking price. A bid submitted at the
asking price in a particular round is referred to as a ``live bid'' and
a live bid signifies that the bidder is willing to pay that auction
round's asking price for a particular zone. A bidder must submit a live
bid on at least one of the zones in each round to remain ``active''
into the next round of the auction. As long as at least two live bids
are submitted at the asking price on any zone in a particular round,
the auction continues, and the next round is held. If there is only one
live bid for a zone, and that bidder is not bidding on the other zone,
BOEM automatically carries that bid forward into the next round. If
BOEM carries a bid forward, the bid will be considered the equivalent
of a live bid for the purpose of determining bidder eligibility. If
there is more than one live bid for a zone, the stated price for that
zone is raised in each subsequent round until there is only one live
bid or no live bids for that zone. The auction concludes when there are
one or zero live bids for each zone.
The series of rounds and the escalating asking prices set by BOEM
will allow consideration of the first variable--the cash bid. BOEM will
set one asking price per zone in each round. Each bidder will either
place a live bid at this asking price or not, but no bidder will be
permitted more than one bid per zone in any one round. Thus, bidders
will not be outbidding each other in each round, but will be limited to
one bid per zone per round, at the asking price, (or at a price subject
to a credit due to the second variable, as explained below).
The second variable--a credit for holding a JDA or PPA of at least
350 megawatts each--will be applied throughout the auction rounds as a
form of imputed credit against the amount of a cash bid proposal made
by a particular bidder in a particular round. A bidder holding only a
qualified JDA will receive a credit of 15%, a bidder holding only a
qualified PPA will receive a credit of 25 percent, and a bidder that
holds both will receive the larger of the two possible credit amounts,
i.e. 25 percent. The total percentage credit is limited to 25 percent
in the auction to address concerns about creating too large an
advantage to certain bidders in the auction, as discussed in BOEM's
Auction Format Information Request (76 FR 76174). BOEM considered the
overall impact and relative strength of the JDA compared to that of a
PPA in enabling a lessee to install a viable project on the OCS in
setting the JDA credit at 15 percent. In the case of a bidder holding a
credit and bidding on more than one zone, the credit will be applied
only to the zone being offered at the higher asking price. By way of
[[Page 71617]]
example, a bidder holding a qualified JDA and bidding on two zones, one
with an asking price of $1,000,000 and one with an asking price of
$2,000,000, will receive a 15 percent credit against the higher priced
$2,000,000 bid in that round, obligating the bidder to a payment of
$1,700,000, or 15 percent less than the asking price for that zone, and
$1,000,000 for the other zone, equal to the asking price for that other
zone. Each bid in each round will thus be considered based on both
factors--the amount of the cash bid proposed and the amount of a
potential credit for holding a qualified JDA or PPA.
BOEM's regulations concerning multi-factor bidding require the use
of a panel 30 CFR 585.222 (d), whose members are selected by the
agency, to help weigh the variables considered in such an auction. The
regulations state that BOEM ``will determine the winning bid for
proposals submitted under the multiple-factor bidding format on the
basis of selection by the panel * * *.'' 30 CFR 585.224(h). The panel
will evaluate any purported JDA or PPA proffered by a bidder to
determine whether it is acceptable to BOEM, and therefore whether it
will qualify for a credit for its holder. The panel will determine the
winning bids for each zone on the basis of the Stage 1 and Stage 2
rules set forth herein.
Details of the Auction Process
Bidding--Live Bids
Each bidder is allowed to submit live bids on one or more zones
based on its eligibility at the opening of each round. A bidder's
initial eligibility to bid on either one or both zones in the opening
round of the auction is determined based on the amount of the bid
deposit submitted by the bidder prior to the auction. The required
deposit for bidding on one zone is equal to the minimum bid of the zone
with the most acreage. If a bidder wants to bid on both zones, the
bidder is required to submit a deposit equal to the sum of the minimum
bids for both zones. As the auction continues, a bidder's eligibility
is determined by the number of live bids submitted in the round prior
to the current round.
Before each round of the auction, BOEM raises the asking price for
each zone that received more than one live bid in the previous round,
while the asking price for zones that received one or no live bids in
the previous round remains the same. Bidders must submit a live bid in
each round of the auction (or have a bid automatically carried forward
by BOEM) to remain active and continue bidding in future rounds.
Between rounds, all bidders who are still active are informed, with
respect to each zone, of the asking price for the upcoming round and
the number of live bids submitted in the previous round. In cases where
one of the zones which a bidder has bid on in the previous round has
competition, i.e., the zone received two or more live bids, the bidder
must independently submit bids identifying which zones it continues to
be interested in acquiring in the current round. In cases where the
bidder has bid on only one zone in the previous round and there is no
competition for that zone, i.e., only that bidder has submitted a live
bid, BOEM will automatically carry forward the bid for that bidder by
recording that the bidder ``submitted'' a live bid in the current round
on that zone at the previous round's asking price. In these latter
cases i.e., when the bidder has bid on only one zone and BOEM has
carried that bid forward, switching bids to other zones or submitting
an intra-round bid are prohibited, as is reducing the number of zones
on which the bidder has bid. Additional auction rounds occur as long as
at least one of the zones offered receives two or more live bids in the
previous round. The auction concludes at the end of the round in which
the number of live bids received on each zone falls to one or zero.
A bidder may not increase the number of zones it bids on from one
round to a subsequent round. Provided one or more live bids were
received on at least one of the zones that the bidder itself has bid on
in the previous round, a bidder may voluntarily reduce the number of
the zones it bids on from one round to the next, switch its bids from
one zone to another, or submit an ``intra-round'' bid in conjunction
with reducing its eligibility as to the number of zones on which it can
bid in future rounds. (Intra-round bids are discussed below.)
Otherwise, in general, if there are no other bidders on any of the
zones on which the bidder has bid in the previous round, the bidder
must maintain its existing bids and BOEM will automatically record the
bidder as having ``submitted'' its standing live bids at the previous
round's asking price. For this two-zone sale, however, this situation
can only occur for the case of one zone, because if there had been only
a single live bid on each zone in the previous round, the auction would
have closed.
Thus, if a bidder placed a live bid for both zones in the previous
round, it can submit live bids for both zones in the current round. The
bidder also has the option of submitting a live bid for only one of the
zones or none of the zones in the current round.
If a bidder placed a live bid on only the South Zone in the
previous round, and there was at least one other competing bid for that
zone, then the bidder can submit a live bid on either the North or
South Zone in the current round, or not bid on either zone, but it
cannot bid on both zones. If there are no competing bids on the South
Zone, the bidder cannot switch its bid to the North Zone or reduce its
eligibility by not bidding on either zone. Once a bidder fails to
submit a live bid for any zone (or have a bid carried forward by BOEM),
it must depart the auction and will no longer be allowed to submit bids
for any zone in any subsequent round.
Bidding--Intra-Round Bids
Subject to certain conditions, bidders are allowed to submit an
``intra-round'' bid in any round after the first round. Intra-round
bids are similar to what were termed ``exit bids'' in BOEM's Auction
Format Information Request (76 FR 76174). In contrast to exit bids,
however, intra-round bids do not necessarily require that the bidder
exit the auction--only that the number of live bids that the bidder is
eligible to submit must be reduced.
An intra-round bid consists of a single offer price for exactly the
same zone or set of zones that the bidder placed live bids on in the
previous round. The single offer price must be greater than the sum of
the asking prices for the zones bid on in the previous round and less
than the sum of the asking prices for these zones in the current round.
A bidder may not submit an intra-round bid for a single zone or set of
zones in the current round when this bidder was the only bidder placing
a live bid for all of these zone(s) in the previous round, i.e., an
intra-round bid is prohibited in the current round when the asking
price does not increase from the previous round on all of the zones on
which the bidder bid (or was credited with bidding on) in the previous
round. This situation can only arise in this two-zone sale for a bid on
a single zone, because the auction would have closed in the previous
round if both zones had only a single live bid.
A bidder may submit both live bids and an intra-round bid in the
same round, as long as the bidder reduces the number of live bids by at
least one zone in the current round compared to the previous round. The
zones on which the live bids are submitted may coincide with some of
the zones included in the intra-round bid. In the specific case of this
two-zone sale, this situation can arise only if the bidder has
submitted
[[Page 71618]]
live bids on both zones in the previous round, chooses to submit an
intra-round bid in the current round (consisting of both zones as
required in this example), and also submits a live bid at the current
round's asking price on one of the zones in the bidder's intra-round
bid.
A bidder may submit additional intra-round bids in subsequent
rounds, following the same rules as applied to the first intra-round
bid. A bidder now eligible to bid on one zone may submit an intra-round
bid on one zone, but cannot also submit any live bids, because its
eligibility to submit live bids from having submitted this intra-round
bid is reduced from one to zero zones.
Intra-round bids are not considered to be live bids for the purpose
of determining whether to conclude the auction or for determining
whether to increase the asking price for a particular zone. When a
bidder submits an intra-round bid on one zone, the bidder's bid
eligibility is reduced to zero, and this bid represents the bidder's
best-and-final offer prior to leaving the auction. In contrast, a
bidder's intra-round bid for both zones represents a best-and-final
offer for both zones and reduces a bidder's eligibility in the auction
to one or zero zones, based on the number of live bids submitted in the
round. In this manner, bidders are able to express their maximum bid
amount for both zones and an individual zone prior to reducing their
eligibility.
For example, consider the case of a bidder who has bid on both
zones in previous rounds, and hence is eligible to continue bidding on
both zones in the current round. Suppose the asking prices for the
North and South Zones were $750,000 and $600,000 in the previous round
and are now $800,000 and $600,000 in the current round, respectively.
These results reflect that in the previous round the bidder had
competition for the North Zone (because the asking price was increased
in the current round), but not for the South Zone. The bidder may only
enter a single, intra-round bid for both zones that it bid on in the
previous round. This single offer price must be more than $1,350,000
and less than $1,400,000, and the bidder must simultaneously reduce its
eligibility to submit live bids from two zones to one or zero zones.
The bidder can satisfy this requirement by choosing to submit (along
with its intra-round bid) a single live bid of $800,000 for the North
Zone or $600,000 for the South Zone, or choose not to submit any live
bids and hence exit the auction.
If the bidder had only bid on one zone in the previous round, it
may be eligible to submit an intra-round bid during the current round.
If its previous round's bid was for the North Zone, the bidder could
submit an intra-round bid for that zone of more than $750,000 and less
than $800,000, reduce its live bid eligibility to zero, and hence exit
the auction. Alternatively, if the bidder's previous round's bid was on
the South Zone, it cannot submit an intra-round bid, because the
current round's asking price is unchanged from the asking price in the
previous round, as there were no other competitive bids. In this case,
since the bidder had no competition for the South Zone, its sole bid of
$600,000 from the previous round is automatically recorded by BOEM as a
submitted live bid of the same amount in the current round.
Stages--Stage 1
After the bidding ends, a panel will determine the winning bids in
two stages. This determination, in both stages, will be based on the
two auction variables, as well as on a bidder's adherence to the rules
of the auction, and on confirmation of the absence of conduct
detrimental to the integrity of the competitive auction.
In Stage 1, a zone is awarded to the bidder with a live bid in the
final round of the auction. A bidder who submits a final round live bid
for a zone is guaranteed to be the winning bidder for that zone. A
bidder who is awarded a zone only as a result of a final round live bid
is obligated to pay the cash bid amount for that zone (i.e., the asking
price of that zone in the final round less any credit earned).
If both zones are awarded to bidders in Stage 1, the second award
stage would not be necessary. If at least one zone is not awarded in
Stage 1, which received either an intra-round bid within any round or a
live bid in a prior-to-final round, then a second award stage would be
conducted.
Stages--Stage 2
In Stage 2, all of the remaining prior-to-final round live bids and
any intra-round bids received during the auction are considered
alongside one another to award any remaining unsold zones.
Determination of the winning Stage 2 bids is based on the principle of
maximization of gross auction revenue subject to the award of zones in
Stage 1.
Live bids from previous rounds are considered in the same way as
intra-round bids received within any round, i.e., at a single aggregate
price per round per bidder based on the sum of the asking prices for
each zone in the round the bid was received. For example, if a bidder
placed live bids in a previous round for both the North and South Zones
and the asking prices in that round for each zone were $600,000 and
$750,000, respectively, the bid would be evaluated at $1,350,000 for
award purposes.
Thus, in Stage 2, bids from bidders in each applicable round are
considered as unique packages of intra-round bids and live bids. A
bidder is able to win bids submitted from only a single round, which
will consist of either all of the zones in an intra-round bid or all of
the zones on which it submitted live bids in the winning round for that
bidder. A bidder cannot win only some of the zones on which it
submitted live bids in a round. Rather, a bidder wins all of the zones
or none of them from one round based on its live bids. Further, a
bidder may only win one intra-round bid and may not win a set of live
bids and an intra-round bid--it wins one or the other based on auction
revenue maximization subject to the Stage 1 awards.
In particular, any intra-round bids or sets of prior-to-final round
live bids from one bidder, which include a zone awarded in Stage 1 to
another bidder, are eliminated from consideration. Thus, if Bidder A
was awarded the South Zone in Stage 1, and Bidder B submitted either an
intra-round bid or set of live bids for both the North Zone and South
Zone in one or more previous rounds, those bids of Bidder B would be
eliminated because they overlap with a zone that has already been
awarded to Bidder A in Stage 1.
Also, any intra-round bids or sets of prior-to-final round live
bids from a bidder who itself was awarded one or more zones in Stage 1
are eliminated unless such bids represent a superset of the zones
(i.e., in this sale, both zones) won by the bidder in Stage 1, i.e.,
those bids must contain all the zones won by this bidder in Stage 1 to
be considered in Stage 2. For example, if a bidder was already awarded
the North Zone in Stage 1, any previous rounds' bids by that bidder for
just the South Zone would be eliminated from consideration, whereas
that bidder's previous rounds' bids for both zones would be considered
for award in Stage 2.
Acceptance of a bidder's superset bid over the final round bid
would depend on whether the superset bid was consistent with maximizing
gross auction revenue. To demonstrate, suppose only the North Zone
received a final round live bid, equal to $1,000,000, and the same
bidder submitted the highest previous round's set of live bids or an
intra-round bid for
[[Page 71619]]
both the North and South Zones with a gross auction price of
$1,400,000. In this case, the bidder's superset bid of $1,400,000 for
both zones would replace the final round live bid from this same bidder
for only the North Zone of $1,000,000.
In summary, unsold zones following the Stage 1 evaluations are
considered for award to the bidders in Stage 2 for eligible intra-round
bids and sets of live bids in a manner that would yield the highest
gross auction revenue to BOEM given the Stage 1 awards. If more than
one combination of remaining previous-round live and intra-round bids
exist that would yield the same highest gross auction revenue to the
seller, while preserving the zones awarded in Stage 1, the resulting
tie is settled by a random draw.
All zone awards are based on the bids submitted during the auction
at their asking and intra-round bid (i.e., ``as-bid'') prices. For each
bidder, the as-bid price will be considered to have a cash component
and an imputed credit component, if applicable, as described in the
following section. The amount each bidder is obligated to pay at the
conclusion of the auction will be equal to the cash component of the
as-bid auction price (i.e., the as-bid auction price less the imputed
amounts associated with the credits, as described in the following
section).
Factor Two Credits: Prior to the auction, BOEM will convene a panel
(as provided in BOEM's regulations, discussed above) to evaluate
whether and to what extent each bidder is eligible for a credit
applicable to the as-bid auction price for one of the zones in each
round of the auction, as described below. In order to receive the JDA
or PPA credit a bidder must be legally, technically, and financially
qualified to acquire a commercial OCS wind lease, and must not be
affiliated with any other bidding entity also seeking credit for the
same JDA or PPA.
The percentage credit is determined based on the panel's evaluation
of required documentation submitted by the bidders as of the deadline
specified in the Final Sale Notice. Bidders will be informed prior to
the first round of the auction about the percentage credit applicable
to their bid for a single zone. Then, in subsequent rounds, bidders
will be provided information showing how their as-bid auction prices
are affected by the credit imputed to their bid to determine their net
payment due to BOEM, should their bids prevail as winning bids in the
award stages. This process is conceptually similar to one in which the
multiple bid factors are combined into an aggregate score for the
purpose of awarding zones, but is more transparent to bidders and
facilitates the bidding process in a dynamic, multi-factor, multiple
round auction process, such as we propose to use for this sale.
The percentage amount of credit imputed will be based on the
greater of the following two conditions associated with the development
activities within the Rhode Island lease sale area:
A bidder having entered into one or more qualified joint
development agreements (JDAs) supporting 350 MW or more of total
capacity will receive a credit of 15 percent; or
A bidder having entered into one or more qualified Power
Purchase Agreements (PPAs) supporting 350 MW or more of total capacity
under contract will receive a credit of 25 percent.
The panel will determine whether a proffered JDA or PPA is
qualified to receive a credit, based on the definitional information
provided below.
A bidder with both a qualified JDA and a qualified PPA is eligible
to receive the larger of the two credits. For example, if a bidder's
winning bid for its highest-priced zone is $1,000,000 and the bidder
has entered into a JDA for 400 MW and a PPA for 570 MW, the bidder
would qualify for a credit of 15 percent for the JDA and 25 percent for
the PPA, and be eligible for an award equal to the larger of the two
credit amounts, in this case 25 percent. Accordingly, the bidder would
have an imputed credit of $250,000 for its winning bid and would pay
BOEM the cash component of its bid, which would be $750,000.
In another example, if the bidder entered a JDA for 400 MW and a
PPA for 170 MW, then under the first condition, the bidder with a
qualified JDA would receive a credit of 15 percent, while under the
second condition, the bidder would not receive any credit since the
capacity under the PPA contract falls below the 350 MW threshold level.
The bidder would be eligible for an award equal to 15 percent, and
hence would have an imputed credit of $150,000 and pay BOEM $850,000
(the cash component of its bid) for its winning gross auction priced
zone of $1,000,000.
The bidding software interface will be tailored to each bidder
based on the percentage credit awarded to the bidder. In each round of
the auction, the bidder will be provided with the gross and net stated
auction prices for each zone, along with the aggregate bid price the
bidder would be obligated to pay if the zones were to be awarded to
them based on that round's bids, both with and without the bidder's
credit. For a bid on both zones in a given round, the software
interface would highlight the zone with the highest stated auction
price among the zones selected by the bidder to which the credit would
be applied in each round. For example, suppose a bidder is eligible for
a 15 percent credit, and the gross stated auction prices for the North
and South Zones in the current round are $1,000,000 and $800,000
respectively. The potential net payment to be made by the bidder for
its live bids for both zones would be shown as a net bid of $850,000
for the higher-priced North Zone, and a gross bid of $800,000 for the
lower-priced South Zone.
The same principle is applied when an intra-round bid, rather than
a live bid, is offered. If an intra-round bid includes only one zone,
the percent credit will be applied to the zone's asking price in the
previous round. Note that the credit does not apply to the full amount
of the intra-round bid, i.e., it does not apply to the increment above
the asking price in the previous round. For example, say the stated
auction price for the North Zone was $800,000 in the previous round and
$1,000,000 in the current round and a bidder who was awarded a 15
percent credit submits an intra-round bid price of $900,000 for the
zone. The bidder would be obligated to pay $780,000 if its bid is
successful. This amount would reflect an imputed $120,000 credit to its
$900,000 bid price which would be calculated by applying its 15 percent
credit to the previous-round's asking price of $800,000, and then
subtracting the amount of that calculation $120,000 from its bid of
$900,000.
In the case of an intra-round bid for both zones, the highest
priced zone will be determined based on the asking prices of both zones
in the round previous to the submission of the intra-round bid.
Continuing with the previous example, assume the stated auction price
for the South Zone is $500,000 in both the previous and current rounds,
and for the North Zone the stated auction prices are the same as
before, i.e., $800,000 in the previous round and $1,000,000 in the
current round. Suppose the bidder offers an intra-round bid price of
$1,400,000 for both zones. In this instance, the price of the North
Zone ($800,000) is greater than the South Zone ($500,000) in the
previous round, and the dollar value of the credit is calculated to be
15 percent of $800,000, equal to $120,000 as before. So, the bidder
would be obligated to pay $1,280,000 for its intra-round bid if
successful.
BOEM considered alternative specifications of these conditions,
[[Page 71620]]
including options to have the maximum credit for the JDA and PPA be 10
percent and 15 percent, respectively, and where the total credit would
then be the sum of two conditions. BOEM also considered the option to
provide a pro-rated credit for JDAs and PPAs involving less than the
350 MW level anticipated to be needed to support a viable project. BOEM
recognizes that few if any developers will have entered into PPA at the
time of the proposed lease sale, but has elected to include the
discussion of PPA and the alternative specifications in this PSN to
obtain comment that will be considered for both this and future lease
sales.
Factor Two Definitions: The definitions below will apply to the
factors for which bidders may earn a credit.
Joint development agreement (JDA) is a binding agreement between a
State and a legal entity that proposes to develop renewable (wind)
energy, which sets forth the rights, obligations, and certain economic
development activities of the parties in connection with the
development of an offshore wind project. The legal entity named in a
JDA must be selected through a competitive selection process, such as a
request for proposals (RFP), that is conducted by a state adjacent to
the wind energy area issuing and entering into the JDA agreement, where
the subsequent submitted proposals are evaluated by a State agency,
committee, or public utility board. The JDA will qualify if the panel
determines that the agreement includes the following identifiable
factors: (1) Sufficient specificity to the size, timing, and location
of the proposed project on the OCS; (2) the financial commitment of the
State, the identified legal entity, and/or a third party (buyer of
power), if applicable, included in the agreement; (3) the
developmental, financial, and/or regulatory processes through which the
State will support the identified legal entity that proposes to develop
renewable (wind) energy; (4) significant project milestones; (5) the
ramifications for not meeting said milestones; and (6) any exclusionary
rights awarded to said identified legal entity.
Power purchase agreement (PPA) is any legally enforceable contract
negotiated between an electricity generator (Generator) and a power
purchaser (Buyer) that identifies, defines, and stipulates the rights
and obligations of one party to produce, and the other party to
purchase, energy from an offshore wind project to be located in the
lease sale area. The PPA must have been approved by a public utility
commission or similar legal authority. The PPA must state that the
Generator will sell to the Buyer and the Buyer will buy from the
Generator capacity, energy, and/or environmental attribute products
from the project, as defined in the terms and conditions set forth in
the PPA. Energy products to be supplied by the Generator and the
details of the firm cost recovery mechanism approved by the State's
public utility commission or other applicable authority used to recover
expenditures incurred as a result of the PPA must be specified in the
PPA. In order to qualify, a PPA must contain the following terms or
supporting documentation:
(i) A complete description of the proposed project;
(ii) Identification of both the electricity Generator and (Buyer)
that will enter into a long term contract;
(iii) A time line for permitting, licensing, and construction;
(iv) Pricing projected under the long term contract being sought,
including prices for all market products that would be sold under the
proposed long term contract;
(v) A schedule of quantities of each product to be delivered and
projected electrical energy production profiles;
(vi) The term for the long term contract;
(vii) Citations to all filings related to the PPA that have been
made with state and Federal agencies, and identification of all such
filings that are necessary to be made; and
(viii) Copies of or citations to interconnection filings related to
the PPA.
Additional Information Regarding the Auction Format
Specific details about certain administrative aspects of the
auction sale process will be described in the FSN. These aspects
include how much the asking price will increase in various stages of
the auction, the duration of each bidding round, the amount of time
provided between rounds, the number of rounds expected per day, and the
days on which the auction process will continue, if necessary, beyond
the first day. Bidders may expect multiple rounds per day to occur
during normal business hours. The amount of time allowed for bidders to
enter bids and the time between rounds may be reduced as the auction
progresses based on the patterns of bidding, to increase the pace of
the auction. At the start of each day, bidders will be notified of the
round schedule for that day.
Acceptance, Rejection or Return of Bids: BOEM reserves the right
and authority to reject any and all bids. In any case, no lease will be
awarded to any bidder, and no bid will be accepted, unless (1) the
bidder has complied with all requirements of the FSN, applicable
regulations and statutes, including, but not limited to, bidder
qualifications, bid deposits, and adherence to the integrity of the
competitive bidding process, (2) the bid conforms with the requirements
and rules of the auction, and (3) the amount of the bid has been
determined to be adequate by the authorized officer. Any bid submitted
that does not satisfy any of these requirements may be returned to the
bidder submitting that bid by the Program Manager of BOEM's Office of
Renewable Energy Programs and not considered for acceptance.
Process for Issuing the Lease: If BOEM proceeds with lease
issuance, it will issue three unsigned copies of the lease form to each
winning bidder. Within 10 business days after receiving the lease
copies, each winning bidder must:
1. Execute the lease on the bidder's behalf;
2. File financial assurance, as required under 30 CFR 585.515-537;
and
3. Pay the balance of the bonus bid (bid amount less the bid
deposit).
If a winning bidder does not meet these three requirements within
10 business days of receiving the lease copies as described above, or
if a winning bidder otherwise fails to comply with applicable
regulations or the terms of the FSN, the winning bidder will forfeit
its bid deposit. BOEM may extend this 10 business-day time period if it
determines the delay was caused by events beyond the winning bidder's
control.
BOEM will not execute a lease until the three requirements above
have been satisfied, BOEM has accepted the winning bidder's financial
assurance, and BOEM has processed the winning bidder's payment. Please
note the required timelines for providing financial assurance. The
winning bidder may meet financial assurance requirements by posting a
surety bond or by setting up an escrow account with a trust agreement
giving BOEM the right to withdraw the money held in the account on
demand by BOEM. BOEM may accept other forms of financial assurance on a
case-by-case basis in accordance with its regulations. BOEM encourages
winning bidders to discuss the financial assurance requirement with
BOEM as soon as possible after the auction has concluded.
Within 45 calendar days of the date that the lessee receives the
lease copies, the lessee must pay the first year's rent.
Anti-Competitive Behavior: In addition to the auction rules
described in this notice, bidding behavior is governed by Federal
antitrust laws
[[Page 71621]]
designed to prevent anticompetitive behavior in the marketplace.
Compliance with the BOEM's auction procedures will not insulate a party
from enforcement of the antitrust laws.
In accordance with the Act at 43 U.S.C. 1337(c), following the
auction, and before the acceptance of bids and the issuance of leases,
BOEM will ``allow the Attorney General, in consultation with the
Federal Trade Commission, thirty days to review the results of the
lease sale.''
If a bidder is found to have engaged in anti-competitive behavior
or otherwise violated BOEM's rules in connection with its participation
in the competitive bidding process, BOEM may reject the high bid
pursuant to its regulations at 30 CFR 585.222(a)(2).
Anti-competitive behavior determinations are fact specific.
However, such behavior may manifest itself in several different ways,
including, but not limited to:
An agreement, either express or tacit, among bidders to
not bid in an auction, or to bid a particular price;
An agreement among bidders not to bid in a particular
location;
An agreement among bidders not to bid against each other;
and
Other agreements among bidders that have the effect of
limiting the final auction price.
BOEM may decline to award a lease if doing so would otherwise create a
situation inconsistent with the antitrust laws (e.g., heavily
concentrated market, etc.).
For more information on whether specific communications or
agreements could constitute a violation of Federal antitrust law,
please see: http://www.justice.gov/atr/public/business-resources.html,
or consult counsel.
Post-Auction Certification: In addition to the steps described in
the section entitled, ``Process for Issuing the Lease,'' following the
lease sale, each winning bidder will be required to certify the
following, in accordance with 18 U.S.C. 1001 (Fraud and False
Statements):
I certify that [name of qualified bidder] did not engage in
anticompetitive bidding behavior in violation of Federal law, BOEM's
regulations, or auction procedures.
I certify that this bid is made in a good faith effort to win a
lease to engage in the development of renewable energy resources.
Non-Procurement Debarment and Suspension Regulations: Pursuant to
regulations at 43 CFR Part 42, Subpart C, an OCS renewable energy
Lessee must comply with the U.S. Department of the Interior's non-
procurement debarment and suspension regulations at 2 CFR parts 180 and
1400 and agree to communicate the requirement to comply with these
regulations to persons with whom the Lessee does business as it relates
to this lease, by including this term as a condition in their contracts
and other transactions.
Final Sale Notice: BOEM will consider comments received or
postmarked during the PSN comment period in preparing a FSN that will
provide the final details concerning the offering and issuance of an
OCS commercial wind energy lease in the Rhode Island and Massachusetts
WEA. The FSN will be published in the Federal Register at least 30 days
before the lease sale is conducted and will provide the date and time
of the auction. The possibility also exists that there could be a
second PSN, with another 60-day public comment period, prior to
issuance of the FSN.
Force Majeure: The Program Manager of BOEM's Office of Renewable
Energy Programs has the discretion to change any date, time, and/or
location specified in the FSN in case of a force majeure event that the
Program Manager deems may interfere with a fair and proper lease sale
process. Such events may include, but are not limited to, natural
disasters (e.g., earthquakes, hurricanes, floods), wars, riots, acts of
terrorism, fire, strikes, civil disorder or other events of a similar
nature. In case of such events, bidders should call 703-787-1300 or
access the BOEM Web site at: http://www.boem.gov/Renewable-Energy-Program/index.aspx.
Appeals: The appeals procedures are provided in BOEM's regulations
at 30 CFR 585.225 and 585.118(c). Pursuant to 30 CFR 585.225:
(a) If BOEM rejects your bid, BOEM will provide a written statement
of the reasons, and 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). We will send you a written response either
affirming or reversing the rejection.
The procedures for appealing adverse final decisions with respect
to lease sales are described in 30 CFR 585.118(c).
Protection of Privileged or Confidential Information:
Freedom of Information Act: BOEM will protect privileged or
confidential information that you submit as required by the Freedom of
Information Act (FOIA). Exemption 4 of FOIA applies to trade secrets
and commercial or financial information that you submit that is
privileged or confidential. If you wish to protect the confidentiality
of such information, clearly mark it and request that BOEM treat it as
confidential. BOEM will not disclose such information, subject to the
requirements of FOIA. Please label privileged or confidential
information ``Contains Confidential Information'' and consider
submitting such information as a separate attachment.
However, BOEM will not treat as confidential any aggregate
summaries of such information or comments not containing such
information. Additionally, BOEM may not treat as confidential the legal
title of the commenting entity (e.g., the name of your company).
Information that is not labeled as privileged or confidential will be
regarded by BOEM as suitable for public release.
Section 304 of the National Historic Preservation Act (16 U.S.C.
470w-3(a)): BOEM is required, after consultation with the Secretary of
the Interior, to withhold the location, character, or ownership of
historic resources if it determines that disclosure may, among other
things, cause a significant invasion of privacy, risk harm to the
historic resources or impede the use of a traditional religious site by
practitioners. Tribal entities and other interested parties should
designate information that they wish to be held as confidential.
Dated: November 27, 2012.
Tommy P. Beaudreau,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2012-29096 Filed 11-30-12; 8:45 am]
BILLING CODE 4310-MR-P