[Federal Register Volume 81, Number 108 (Monday, June 6, 2016)]
[Notices]
[Pages 36336-36344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13164]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2016-0027; MMAA104000]


Atlantic Wind Lease Sale 6 (ATLW-6) for Commercial Leasing for 
Wind Power on the Outer Continental Shelf Offshore New York--Proposed 
Sale Notice

AGENCY: Bureau of Ocean Energy Management (BOEM or ``the Bureau''), 
Interior.

ACTION: Proposed Sale Notice for Commercial Leasing for Wind Power on 
the Outer Continental Shelf Offshore New York.

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SUMMARY: This document is the Proposed Sale Notice (PSN) for the sale 
of one commercial wind energy lease on the Outer Continental Shelf 
(OCS) offshore New York, pursuant to 30 CFR 585.216. BOEM proposes to 
offer Lease OCS-A 0512 for sale using an ascending bidding auction 
format. In this PSN, you will find information pertaining to the area 
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 public comment during a 60-day comment period following 
publication of this notice. The issuance of a lease resulting from this 
proposed sale would not constitute an approval of project-specific 
plans to develop offshore wind energy resources. Such plans, expected 
to be submitted by the auction winner, will be subject to subsequent 
environmental and technical reviews prior to a decision to proceed with 
development.

DATES: Comments should be submitted electronically or postmarked no 
later than August 5, 2016. 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).
    All entities interested in participating in the lease sale who have 
not previously been qualified by BOEM to participate in this 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 August 5, 2016. Entities that have already 
been qualified to participate in this lease sale are not required to 
take any additional action to affirm their interest.

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-2016-0027 then click 
``search.'' Follow the instructions to submit public comments.
    2. Written Comments: In written form, delivered by hand or by mail, 
enclosed in an envelope labeled, ``Comments on New York PSN'' to: BOEM 
Office of Renewable Energy Programs, 45600 Woodland Road, VAM-OREP, 
Sterling, Virginia 20166, (703) 787-1320.
    3. Qualifications Materials: Those submitting qualifications 
materials should contact Erin C. Trager, BOEM Office of Renewable 
Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia 
20166, (703) 787-1320, or [email protected]. If you wish to protect 
the confidentiality of your 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 suitable for public release.

FOR FURTHER INFORMATION CONTACT: Erin C. Trager, BOEM Office of 
Renewable Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, 
Virginia 20166, (703) 787-1320 or [email protected].

    Authority: This PSN is published pursuant to subsection 8(p) of 
the OCS Lands Act (43

[[Page 36337]]

U.S.C. 1337(p)) (OCSLA) and the implementing regulations at 30 CFR 
part 585, including 30 CFR 585.211 and 585.216.

Background

    The area described for leasing in this PSN is the same as the area 
described in the New York Call for Information and Nominations (79 FR 
30645) and announced as the New York Wind Energy Area (WEA) on March 
16, 2016. This Area Identification (Area ID) announcement is available 
at: http://www.boem.gov/New-York/. Detailed information regarding the 
lease area is provided in the section entitled, ``Proposed Area for 
Leasing.''

Call for Information and Nominations

    On May 28, 2014, BOEM published a Call for Information and 
Nominations (Call) to seek additional nominations from companies 
interested in commercial wind energy leases within the Call Area 
offshore New York. BOEM also sought public input on the potential for 
wind development in the Call Area, including comments on site 
conditions, resources, and existing uses of the area that would be 
relevant to BOEM's wind energy development authorization process. In 
response to the Call, BOEM received three expressions of interest and 
27 comment submissions, links to which are available at http://www.boem.gov/New-York/. Topics addressed in the comments included 
mitigation measures to protect wildlife and habitat; support for 
offshore wind's potential for job creation and as mitigation for 
climate change; concern about the potential impact of future 
development on maritime navigation, regional fisheries, and other 
competing uses; and desire for analysis at the leasing stage of 
potential environmental impacts of construction and operation of a wind 
facility, rather than just site assessment and characterization. BOEM 
considered these comments carefully during the Area ID process. To 
date, seven entities have expressed commercial interest in developing 
all or parts of the New York WEA.

Environmental Reviews

    On May 28, 2014, BOEM published a Notice of Intent (NOI) to Prepare 
an Environmental Assessment (EA) for commercial wind lease issuance and 
approval of site assessment activities on the Atlantic OCS offshore New 
York with a 45-day public comment period (79 FR 30643). In response to 
the NOI, BOEM received 32 comment submissions, a link to which is 
available at http://www.boem.gov/New-York/. The comments addressed the 
same general topic categories as those addressed in the comment 
submissions in response to the Call. BOEM considered these comments in 
determining the scope of issues and alternatives analyzed in the EA.
    Concurrent with the publication of this notice, BOEM is publishing 
the EA for public comment. The EA is available at: http://www.boem.gov/New-York/.
    For the issuance of a commercial lease, BOEM considers the 
environmental consequences of associated site characterization 
activities (e.g., biological, archeological, geological and geophysical 
surveys, and core samples) and site assessment activities (i.e., 
installation of a meteorological tower and/or buoy on the lease). 
Mitigation measures designed to reduce or eliminate impacts from survey 
activities are included as the terms, conditions, and stipulations in 
Addendum ``C'' of the proposed lease (OCS-A 0512). Given ongoing 
development of the EA and associated consultations described below, the 
terms and conditions included in Addendum ``C'' are primarily based on 
the best available science and BOEM's prior consultations, and may be 
amended or revised and/or additional stipulations may be included as a 
result of our ongoing environmental review and consultations. 
Additional mitigation measures related to the installation and 
operation of meteorological towers and/or buoys will be included as 
terms and conditions of the eventual lessee's Site Assessment Plan 
(SAP) approval. BOEM will continue to work with affected stakeholders 
and assess ongoing and future research relating to potential survey and 
site assessment impacts, including possible mitigation measures.
    BOEM will complete consultations for lease issuance under the 
Endangered Species Act (ESA) and the Magnuson-Stevens Fishery 
Conservation and Management Act (MSFCMA) to inform the New York lease 
sale prior to publishing the FSN. BOEM will initiate consultations with 
the States of New York and New Jersey under the Coastal Zone Management 
Act (CZMA) concurrent with the publication of this PSN.
    BOEM has determined that the issuance of a commercial lease and 
subsequent approval, approval with modification, or disapproval of a 
lessee's plans constitute undertakings subject to review under Section 
106 of the National Historic Preservation Act. BOEM is currently in 
consultation with the State Historic Preservation Officers of New York 
and New Jersey, the Advisory Council on Historic Preservation, the 
Shinnecock Indian Nation, and the National Park Service to draft and 
execute a Programmatic Agreement (PA) to fulfill the bureau's 
obligations under Section 106 for renewable energy activities offshore 
New Jersey and New York. This PA will provide for consultation to 
continue throughout BOEM's staged decision-making process, and will 
establish the process to determine and document the area of potential 
effects for each undertaking; identify historic properties within the 
area of potential effects; assess potential adverse effects; and avoid, 
reduce, or mitigate any such effects through the process set forth in 
the agreement.
    As the effort to execute the PA is ongoing and BOEM has not yet 
initiated consultation for the issuance of a commercial lease, the 
draft lease stipulations included in Addendum ``C'' of the proposed 
lease (OCS-A 0512) may be amended or revised and/or additional 
stipulations may be included as a result of this consultation. BOEM 
will continue to consult with affected tribes government to government.
    Once BOEM has completed the EA and associated consultations, 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) and may proceed with a FSN. If BOEM concludes that the 
proposed action would cause significant environmental impacts to the 
human environment, then BOEM will prepare an Environmental Impact 
Statement (EIS) before proceeding with a FSN. If a lease is issued, 
BOEM will prepare additional environmental reviews upon receipt of the 
lessee's SAP and Construction and Operations Plan (COP).
    Additional Participation in the Lease Sale: Any parties that have 
not already been legally, financially and technically qualified to hold 
a lease for commercial wind development offshore New York must submit 
the required qualification materials by the end of the 60-day comment 
period for this notice if they wish to participate in the proposed New 
York lease sale. Guidelines to prospective lessees on meeting BOEM's 
requirements to qualify for and hold a renewable energy lease on the 
OCS--and the type of information that should be submitted to 
demonstrate your legal, technical and financial qualifications--can be 
found at: http://www.boem.gov/National-and-Regional-Guidelines-for-Renewable-Energy-Activities/. Any submitted documentation must be 
provided to BOEM in both paper and electronic formats. BOEM considers 
an Adobe PDF file stored on a storage

[[Page 36338]]

media device to be an acceptable format for submitting an electronic 
copy.

    Please note: that it may take a number of weeks for BOEM to 
assess a potential bidder's legal, technical, and financial 
qualifications. BOEM advises potential bidders who plan to 
participate in a 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 cannot determine a potential bidder to 
be qualified without a complete qualification package. Potential 
bidders, whom BOEM has not determined to be qualified before the FSN 
is published, will not be allowed to participate in the sale.

    Deadlines and Milestones for Bidders: This section describes the 
major deadlines and milestones in the auction process from publication 
of this PSN to lease execution, should BOEM decide to proceed with a 
sale for Lease OCS-A 0512. This process is organized into five stages: 
(1) The PSN comment period; (2) from the end of PSN comment period to 
publication of the FSN; (3) the FSN waiting period; (4) conducting the 
Auction; and (5) from the Auction to Lease Execution.
    The PSN Comment Period:
     Submit Comments: The public is invited to submit comments 
during this 60-day period, which will expire on August 5, 2016.
     Public 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 Web 
site at http://www.boem.gov/New-York/. No registration or RSVP is 
required to attend.
     Submit Qualifications Materials: All qualifications 
materials must be received by BOEM by the end of the 60-day PSN comment 
period, August 5, 2016. This includes materials sufficient to establish 
a company's legal, technical, and financial qualifications pursuant to 
30 CFR 585.106 and 107.

End of PSN Comment Period to FSN Publication

     Review Comments: BOEM will review all comments submitted 
in response to the PSN during the comment period.
     Finalize Qualifications Reviews: BOEM will complete any 
outstanding reviews of bidder qualifications materials submitted during 
the PSN comment period prior to the publication of the FSN. The final 
list of eligible bidders will be published in the FSN.
     Prepare the FSN: If BOEM continues with the lease sale, 
BOEM will prepare the FSN, and will update information contained in the 
PSN where necessary.
     Publish FSN: If BOEM continues with the lease sale, BOEM 
will publish the FSN in the Federal Register.
    FSN Waiting Period: During this period, qualified bidders must take 
several steps before participating in the Auction.
     Bidder's Financial Form (BFF): BOEM must receive each 
qualified bidder's completed and signed BFF no later than the date 
listed in the FSN. Typically, this deadline is approximately 14 
calendar days after publication of the FSN in the Federal Register. 
BOEM will consider extensions to this deadline only if BOEM determines 
that the failure to timely submit the BFF was caused by events beyond 
the bidder's control. Blank BFFs can be found at: http://www.boem.gov/New-York/. Once the BFF has been processed, bidders may log into 
pay.gov and submit bid deposits. BOEM will only accept an originally 
executed paper copy of the BFF, and will not consider for this auction 
BFFs submitted for previous lease sales. The BFF must be executed by an 
authorized representative as shown on the bidder's legal 
qualifications. Each bidder is required to sign the self-certification 
in the BFF, in accordance with 18 U.S.C. 1001 (Fraud and False 
Statements).
     Bid Deposits: Each qualified bidder must submit a bid 
deposit of $450,000 no later than the date listed in the FSN. 
Typically, this deadline is approximately 30 calendar days after the 
publication of the FSN. BOEM will 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.
     Mock Auction: BOEM will hold an online 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.
    Conduct the Auction: BOEM, through its contractor, will hold an 
auction as described in the FSN. The auction will take place no sooner 
than 30 days following publication of the FSN in Federal Register. The 
estimated timeframes described in this PSN assume the auction will take 
place approximately 45 days after publication of the FSN.
    From Auction to Lease Execution. There are several steps between 
the conclusion of the auction and execution of the lease.
     Bid Deposit Refund: BOEM will refund the bid deposit of 
any bidder that did not win the lease. BOEM will provide a written 
explanation as to why the bidder did not win.
     Department of Justice (DOJ) Review: The Department of 
Justice (DOJ) has 30 days to conduct an antitrust review of the auction 
in consultation with the Federal Trade Commission, pursuant to 43 U.S.C 
1337(c).
     Delivery of the Lease: BOEM will send three lease copies 
to the winner, with instructions on how to sign the lease. The first 
year's rent is due 45 days after the winner receives the lease copies 
for execution.
     Return the Lease: Within 10 business days of receiving the 
lease copies, the auction winner must post financial assurance, pay any 
outstanding balance of their bonus bid (i.e., winning monetary bid 
minus bid deposit), and sign and return the three signed lease copies.
     Execution of the Lease: Once BOEM has received the lease 
copies and verified that it has received all other required materials, 
BOEM will execute the lease, if appropriate.
    Area Proposed for Leasing: The area available for sale will be 
auctioned as one lease, Lease OCS-A 0512. The proposed New York lease 
area consists of approximately 81,130 acres. A description of the 
proposed New York lease area can be found in Addendum ``A'' of the 
proposed lease, which BOEM has made available with this notice on its 
Web site at: http://www.boem.gov/New-York/.
    Map of the Area Offered for Leasing: A map of the proposed New York 
lease area, GIS spatial files, 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 on BOEM's Web site 
at: http://www.boem.gov/New-York/.
    A large-scale map of the area, showing boundaries of the area with 
numbered blocks, is available from BOEM upon request at the following 
address: Bureau of Ocean Energy Management, Office of Renewable Energy 
Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia 20166, 
Phone: (703) 787-1300, Fax: (703) 787-1708.

Potential Mitigation Measures and Restrictions on Development

    During the Area ID process, BOEM analyzed three potential concerns 
associated with development of the New York WEA: (1) Navigational 
safety, (2) commercial fishing, and (3) visual impacts to historic 
properties. Although BOEM did not remove any areas from

[[Page 36339]]

leasing consideration during Area ID, potential bidders should be aware 
that future analysis of these issues could result in required 
mitigation measures and/or development restrictions within the proposed 
New York lease area. In addition, mitigation measures and/or 
development restrictions could result from future BOEM environmental 
reviews and consultations (e.g., future consultations under the Section 
106 of the National Historic Preservation Act or future government-to-
government consultations with federally recognized tribes). It is 
possible that some mitigation measures/development restrictions could 
have the same effect as removal of areas from leasing.
    Navigational Safety: Potential bidders should note that future 
mitigation measures may be applied to development within all or 
portions of the New York proposed lease area to ensure navigation 
safety and the U.S. Coast Guard's ability to maintain mission 
readiness.
    The New York proposed lease area has been delineated to accommodate 
a setback of 1 nautical mile (nmi) from the adjacent Traffic Separation 
Schemes (TSSs) for the Port of New York and New Jersey. This setback is 
consistent with BOEM's delineation of other lease areas that are in 
close proximity to TSSs (e.g., the areas offshore Massachusetts, Rhode 
Island/Massachusetts, Delaware, and Maryland; and the Wilmington West 
area offshore North Carolina), and is based on input provided by the 
U.S. Coast Guard (USCG) as a member of the BOEM New York Renewable 
Energy Task Force during development of the 2013 Request for Interest 
(RFI). As noted in the RFI, the proposed lease area includes aliquots 
that are transected by the 1 nmi setback line, and BOEM will require 
that no structures be installed on portions of those aliquots located 
within the setback.
    In September 2015, BOEM received additional input from USCG 
recommending a larger setback of 2 nmi from the TSSs. USCG's 
correspondence to BOEM, which explains the recommendation, is available 
on BOEM's Web site at http://www.boem.gov/New-York/. In addition, on 
March 22, 2016, USCG released the Final Report for its Atlantic Coast 
Port Access Route Study (ACPARS), available for review at http://www.uscg.mil/lantarea/acpars. The USCG's Marine Planning Guidelines, 
included as Enclosure 2 of the ACPARS, are consistent with their 
September 2015 recommendation to BOEM. Although BOEM did not adopt the 
USCG's recommendation during Area ID, BOEM may determine at a later 
stage in the process (e.g., after evaluating a Navigational Safety Risk 
Assessment that is submitted as a part of a COP) that portions of the 
proposed lease area would be inappropriate for the installation of wind 
facilities due to navigational safety concerns.
    Commercial Fishing: Potential bidders should note that future 
mitigation measures/development restrictions may be applied to 
development within all or portions of the proposed New York lease area 
due to the use of the area as a fishery.
    BOEM received fishery-related comments in response to the RFI, 
Call, and NOI from National Marine Fisheries Service (NMFS); New 
England Fishery Management Council (NEFMC); and the Fisheries Survival 
Fund (FSF), a group representing members of the sea scallop fishery. 
BOEM also received comments from commercial squid fishery operators 
during BOEM's November 2015 fisheries workshops. A meeting summary of 
BOEM's November 2015 fisheries workshops and comments associated with 
these workshops are available on BOEM's Web site at http://www.boem.gov/New-York/, along with those comments received in response 
to BOEM's Federal Register notices relating to commercial fishing 
activities within the proposed New York lease area.
    Through a joint study with NMFS, BOEM has also gathered information 
regarding the use of the lease area as a fishery. This data, specific 
to the proposed New York lease area, is available on BOEM's Web site at 
http://www.boem.gov/Fishing-Revenue-NY-Call-Area/. The full dataset is 
available at http://www.boem.gov/Renewable-Energy-GIS-Data/. Potential 
bidders should be aware that BOEM will be gathering additional data and 
may develop plan-specific mitigation measures/development restrictions 
to mitigate, minimize, or avoid impacts.
    In addition, between 2012 and 2016, BOEM collaborated with numerous 
stakeholders in the fishing and offshore wind industries to develop 
best management practices (BMPs) in furtherance of its goal of 
eliminating or minimizing potential multiple use conflicts between 
offshore renewable energy developers and the fishing industry. As a 
result of this effort, BOEM recommends that lessees facilitate 
cooperation with the fishing industry by utilizing a fisheries liaison 
and fisheries representative during the development of their plans. 
BOEM has issued guidance to lessees for providing information on 
fisheries social and economic conditions for renewable energy 
development on the Atlantic Outer Continental Shelf: http://www.boem.gov/Social-and-Economic-Conditions-Fishery-Communication-Guidelines/.
    Visual Impacts to Historic Properties: Potential bidders should 
note that the National Park Service (NPS) and New York State Historic 
Preservation Office (NY SHPO) have expressed concern regarding the 
potential for wind energy development within the New York WEA to cause 
adverse effects to onshore historic properties. Correspondence 
outlining these concerns is available for reference on BOEM's Web site 
at http://www.boem.gov/New-York/.
    During the summer and fall of 2015, OREP conducted stakeholder 
outreach with the NPS, NY SHPO, and the New Jersey State Historic 
Preservation Office. OREP also completed a study entitled, ``Renewable 
Energy Viewshed Analysis and Visualization Simulation for the New York 
Outer Continental Shelf Call Area'' to assist in this outreach effort 
and to provide scientific and technical information about visual 
impacts to inform the Area ID decision. Results from this study are 
available under the header ``Visual Simulations'' at the following 
link: http://www.boem.gov/New-York/.
    Withdrawal of Blocks: BOEM reserves the right to withdraw portions 
of the proposed lease area prior to its execution of the lease, based 
upon relevant information provided to the Bureau.
    Lease Terms and Conditions: BOEM has made available proposed terms, 
conditions, and stipulations for the OCS commercial wind lease to be 
offered through this sale. After the lease is issued, BOEM reserves the 
right to require compliance with additional terms and conditions 
associated with approval of a SAP or COP. The proposed lease is on 
BOEM's Web site at: http://www.boem.gov/New-York/.
    The lease includes the following seven 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 post COP approval);
     Appendix A to Addendum ``C'': (Incident Report: Protected 
Species Injury or Mortality); and
     Appendix B to Addendum ``C'': (Required Data Elements for 
Protected Species Observer Reports).

Addenda ``A,'' ``B,'' and ``C'' provide detailed descriptions of lease 
terms and

[[Page 36340]]

conditions. As discussed above, given ongoing development of the EA and 
associated consultations, the mitigation measures included in Addendum 
``C'' may be amended or revised, and/or additional stipulations may be 
included prior to publication of the FSN. Addendum ``D'' will be 
completed at the time of COP approval or approval with modifications. 
Addendum ``E'' will be completed after COP approval or approval with 
conditions.
    BOEM is soliciting comments on the provisions of Addendum ``C'' 
that require the submission of SAP and COP survey plans. Specifically, 
BOEM is interested in whether potential lessees and other stakeholders 
find the timeframes associated with those requirements to be 
reasonable, and whether those provisions could be written in a manner 
that better describes the realities associated with offshore wind 
survey efforts (e.g., referring to survey mobilizations as opposed to 
``SAP'' surveys and ``COP'' surveys specifically).
    Plans: Pursuant to 30 CFR 585.601, the leaseholder must submit a 
SAP within 12 months of lease issuance and a COP at least 6 months 
before the end of the site assessment term of the lease.
    Financial Terms and Conditions: This section provides an overview 
of the annual payments required of a lessee that are described in the 
proposed lease, and the financial assurance requirements that will be 
associated with the lease if it is awarded.
    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 days of the date the 
lessee receives the lease for execution. 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 not 
authorized for commercial operations, i.e., not generating electricity. 
However, instead of geographically dividing the lease area into acreage 
that is ``generating'' and ``non-generating,'' the fraction of the 
lease accruing rent will be based on the fraction of the total 
nameplate capacity of the project that is not yet in operation. This 
fraction is calculated by dividing the nameplate capacity not yet 
authorized for commercial operations at the time payment is due by the 
anticipated nameplate capacity after full installation of the project 
(as described in the COP). The annual rent due for a given year is then 
derived by multiplying this fraction by the amount of rent that would 
have been due for the lessee's entire lease area at the rental rate of 
$3 per acre.
    For example, an 81,130 acre lease (the size of the entire proposed 
New York lease area) will have a rent payment of $243,390 per year if 
no portion of the leased area is authorized for commercial operations. 
If 300 megawatts (MW) of a project's nameplate capacity is operating 
(or authorized for operation), and the approved COP specifies a maximum 
project size of 500 MW, the rent payment will be $97,356. This payment 
is based on the 200 MW of nameplate capacity BOEM has not yet 
authorized for commercial operations. For the above example, this would 
be calculated as follows: 200MW/500MW x ($3/acre x 81,130 acres) = 
$97,356.
    If the lessee submits an application for relinquishment of a 
portion of its lease area within the first 45 calendar days following 
the date that the lease is received by the lessee for execution, and 
BOEM approves that application, no rent payment will be due on that 
relinquished portion of the lease area. Later relinquishments of any 
portion of the lease area will reduce the lessee's rent payments 
starting in the year following BOEM's approval of the relinquishment.
    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 thereof) that describes the project easement. Annual rent 
for a project easement that is 200 feet wide and centered on the 
transmission cable is $70 per statute mile. For any additional acreage 
required, the lessee must also pay the greater of $5 per acre per year 
or $450 per year.
    Operating Fee: For purposes of calculating the initial annual 
operating fee payment and pursuant to 30 CFR 585.506, an operating fee 
rate is applied to a proxy for the wholesale market value of the 
electricity expected to be generated from the project during its first 
twelve 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 is 
due within 45 days of the commencement of commercial operations. 
Thereafter, subsequent annual operating fee payments are due on or 
before each Lease Anniversary.
    The subsequent annual operating fee payments are calculated by 
multiplying the operating fee rate by the imputed wholesale market 
value of the projected annual electric power production for the 
project. 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), the capacity factor, and the 
annual average price of electricity derived from a historical regional 
wholesale power price index. For example, the annual operating fee for 
a 100 MW wind facility operating at a 40% capacity (i.e., capacity 
factor of 0.4) with a regional wholesale power price of $50/MWh and an 
operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN06JN16.000

    Operating Fee Rate: The operating fee rate is the share of imputed 
wholesale market value of the projected annual electric power 
production due to BOEM as an annual operating fee. For the proposed New 
York lease area, BOEM will set the fee at 0.02 (i.e., 2%) during the 
entire life of commercial operations.
    Nameplate Capacity: Nameplate capacity is the maximum rated 
electric output, expressed in MW, that the turbines of the wind 
facility under commercial operations can produce at their rated wind 
speed as designated by the turbine's manufacturer. The lessee will 
specify in its COP the nameplate capacity available at the start of 
each year of commercial operations on the lease. For example, if the 
lessee specifies 20 turbines in its COP, and each is rated by the 
design manufacturer at 5 MW, the nameplate capacity of the wind 
facility would be 100 MW.
    Capacity Factor: The capacity factor compares the amount of energy 
delivered to the grid during a period of time to the amount of energy 
the wind facility would have produced at full capacity. The amount of 
power delivered will always be less than the theoretical 100% capacity, 
largely because of the variability of wind speeds, transmission line 
loss, and down time for maintenance or other purposes.

[[Page 36341]]

    The capacity factor is expressed as a decimal between zero and one, 
and represents the share of anticipated generation of the wind facility 
that is delivered to the interconnection grid (i.e., where the lessee's 
facility interconnects with the electric grid) relative to the wind 
facility's generation at continuous full power operation at nameplate 
capacity. For the proposed lease area, BOEM has set the capacity factor 
for the year in which commercial operations commence and the six full 
years thereafter at 0.4 (i.e., 40%). 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. 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: Pursuant to 30 CFR 585.506(c)(2)(i), 
the wholesale power price, expressed in dollars per MW-hour, is 
determined at the time each annual operating fee payment is due, based 
on the weighted average of the inflation-adjusted peak and off-peak 
spot price indices for the NYC Zone J (NYISO) electric region for the 
most recent year of spot price data available. The wholesale power 
price is adjusted for inflation from the year associated with the 
published spot price indices to the year in which the operating fee is 
to be due, based on the Lease Anniversary and using annual implicit 
price deflators as reported by the U.S. Department of Commerce Bureau 
of Economic Analysis.
    BOEM proposes to use the NYC Zone J power price as the price in its 
operating fee formula due to its geographic proximity to the proposed 
lease area. BOEM is soliciting further comments on the merits of other 
electric power prices, including Long Island Zone K, that may be used 
in lieu of or in combination with the current proposed power price. In 
particular, BOEM would like to know if and why other electric power 
prices may be preferred over NYC Zone J.
    Financial Assurance: Within 10 business days after receiving the 
lease copies and pursuant to 30 CFR 585.515-.516, the provisional 
winner of the New York lease area must provide an initial lease-
specific bond or other approved means of meeting the lessor's initial 
financial assurance requirements. The provisional winner 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. BOEM encourages the 
provisional winner to discuss the financial assurance requirement with 
BOEM as soon as possible after the auction has concluded.
    BOEM will base the amount of all SAP, COP, and decommissioning 
financial assurance requirements 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 proposed lease, which BOEM has made available with this notice 
on its Web site at: http://www.boem.gov/New-York/.
    Bid Deposit: A bid deposit is an advance cash payment submitted to 
BOEM in order to participate in the auction. Each qualified bidder must 
submit a bid deposit of $450,000 no later than the deadline provided in 
the FSN. Any qualified bidder who fails to submit the bid deposit by 
this deadline may be disqualified from participating in the auction. 
Bid deposits will be accepted online via pay.gov.
    Following the auction, bid deposits will be applied against bonus 
bids or other obligations owed to BOEM. If the bid deposit exceeds a 
bidder's total financial obligation, the balance of the bid deposit 
will be refunded to the bidder. BOEM will refund bid deposits to non-
winners.
    Bidder Financial Form: Each bidder must fill out the BFF referenced 
in this PSN. BOEM has also made a copy of the form available with this 
notice on its Web site at: http://www.boem.gov/New-York/. BOEM 
recommends that each bidder designate an email address in its BFF that 
the bidder will then use to create an account in pay.gov (if it has not 
already done so). Bidders may then use the BFF on the pay.gov Web site 
to leave a deposit.
    BOEM will not consider BFFs submitted by qualified bidders for 
previous lease sales to satisfy the requirements of the proposed New 
York lease sale. BOEM will also only consider BFFs submitted after the 
deadline if BOEM determines that the failure to timely submit the BFF 
was caused by events beyond the bidder's control. BOEM will only accept 
an original, executed paper copy of the BFF. The BFF must be executed 
by an authorized representative who has been identified in the 
qualifications package on file with BOEM as authorized to bind the 
company.
    Minimum Bid: The minimum bid is the lowest price BOEM will accept 
as a winning bid. BOEM has established a minimum bid per acre of $2.00, 
or $162,260, for the proposed lease sale.
    Auction Procedures: Following is a summary of the auction 
procedures that BOEM intends to use if it proceeds with the proposed 
New York lease sale.

Summary of Auction Format

    As authorized under 30 CFR 585.220(a)(2) and 585.221(a)(1), BOEM 
intends to conduct the proposed lease sale using an ascending format 
with cash as the bid variable. Using an online bidding system to host 
the auction, BOEM sets an initial asking price for Lease OCS-A 0512 and 
increases that price incrementally based on the number of active 
bidders in each round until no more than one active bidder remains in 
the auction. A bid submitted at the full asking price for the lease in 
a particular round is referred to as a live bid. During each round, 
active bidders may: (1) Submit a live bid indicating that they are 
interested in acquiring the lease at the current round's stated asking 
price, (2) submit an exit bid (see below for discussion of exit bids), 
or (3) exit the auction. All bids are considering binding until BOEM 
has determined the winning bid.
    A bidder remains active in the auction as long as it continues to 
meet BOEM's asking price in each round. If more than one live bid is 
received in a round, BOEM increases the asking price incrementally and 
conducts another auction round. BOEM plans to raise the asking price 
following any round in which two or more bidders submitted live bids. 
The auction concludes at the end of the round in which the number of 
live bids received falls to one or zero.
    Asking price increments are in BOEM's sole discretion. They will be 
determined round-by-round, based on a number of factors, including, but 
not necessarily limited to, the expected time needed to conduct the 
auction and the number of rounds that have already occurred. BOEM 
reserves the right to increase or decrease bidding increments as 
necessary.
    Between rounds, BOEM will disclose to all bidders eligible to bid 
in the next round: (1) The number of live bids in the previous round of 
the auction (i.e., the level of demand); and (2) the asking price in 
the upcoming round of the auction.
    If a bidder is not willing to meet the asking price in the upcoming 
round, the bidder may submit an exit bid and then exit the auction. 
Bidders exiting the auction are allowed to submit one exit bid at an 
offer price greater than the

[[Page 36342]]

asking price in the previous round but less than the asking price in 
the current round. Exit bids allow bidders to express precisely the 
maximum price they are willing to offer and minimize the chance of 
ties. If a bidder exits the auction by placing an exit bid or by not 
submitting a live bid in the current round, it will no longer be 
allowed to submit bids in any subsequent round. If a bidder leaves the 
auction without submitting an exit bid, BOEM will treat the previous 
round's asking price as the bidder's exit bid in the current round. 
BOEM will not consider exit bids for the purpose of determining whether 
to increase the asking price or to end the auction.
    BOEM will determine the provisionally winning bidder to be the 
bidder with the highest bid, whether the bid was a live bid or an exit 
bid. If there is a tie, BOEM will resolve the tie by randomized means. 
The provisional winner may be disqualified if it is subsequently found 
to have violated auction rules or otherwise engaged in conduct 
detrimental to the integrity of the competitive auction.
    The auction winner for the proposed lease sale will have 10 
business days from receiving the lease copies in which to post 
financial assurance, pay any outstanding balance of its bonus bid, and 
sign and return three copies of the lease. BOEM reserves the right to 
not issue the lease to the provisionally winning bidder if that bidder 
fails to timely sign and pay for the lease or otherwise fails to comply 
with applicable regulations or terms of the FSN. In that case, that 
bidder will forfeit its bid deposit. BOEM may consider failure of a 
bidder to timely pay the full amount due an indication that the bidder 
is no longer financially qualified to participate in other lease sales 
under BOEM's regulations at 30 CFR 585.106 and 585.107. If a winning 
bidder does not sign the lease pursuant to the proposed lease sale, 
BOEM reserves the right to identify the next best bid submitted during 
the proposed lease sale and offer the lease pursuant to this next 
highest bid.

Additional Information Regarding the Auction Format

Bidder Authentication

    For the proposed online auction, BOEM will require two-factor 
authentication. Prior to the auction, the Auction Manager will send 
several bidder authentication packages to the bidders shortly after 
BOEM has processed the BFFs. One package will contain digital 
authentication tokens for each authorized individual allowing access to 
the auction Web site. The tokens will be mailed to the Primary Point of 
Contact indicated on the BFF. This individual is responsible for 
distributing the tokens to the individuals authorized to bid for that 
company. Bidders are to ensure that each token is returned within three 
business days following the auction. An addressed, stamped envelope 
will be provided to facilitate this process. In the event that a bidder 
fails to submit a bid deposit or does not participate in the proposed 
auction, BOEM will de-activate that bidder's token and login 
information, and the bidder will be asked to return its tokens.
    The second package contains login credentials for authorized 
bidders. The login credentials will be mailed to the address provided 
in the BFF for each authorized individual. Bidders can confirm these 
addresses by calling 703-787-1320. This package will contain user login 
information and instructions for accessing the Auction System Technical 
Supplement and Alternative Bidding Form. The login information, along 
with the tokens, will be tested during the Mock Auction.

Timing of Auction

    The FSN will provide specific information regarding when bidders 
can enter the auction system and when the proposed auction will start. 
Once bidders have logged in they should review the auction schedule, 
which lists the start, end, and recess times of each round in the 
auction. Each round is structured as follows:
     Round bidding begins;
     Bidders enter their bids;
     Round bidding ends and the recess begins;
     During the recess, the number of live bids received in the 
previous round and the next round's asking price are posted;
     Bidders review the previous round results and prepare 
their next round bids (or exit bids, as applicable);
     Next round bidding begins.
    The first round will last about 30 minutes, though subsequent 
rounds may be shorter. Recesses are anticipated to last approximately 
10 minutes. The descriptions of the auction schedule and asking price 
increments included in the PSN and FSN are tentative. Bidders should 
consult the auction schedule on the bidding Web site just before and 
during the auction for updated times. BOEM anticipates the auction will 
last one or two business days, but bidders are advised to prepare to 
continue bidding for additional business days as necessary to resolve 
the auction.
    BOEM and the auction contractors will use the auction platform 
messaging service to keep bidders informed on issues of interest during 
the proposed auction. BOEM will use the messaging system for auction 
schedule changes and other updates during the auction.
    Bidders may place bids at any time during the round. At the top of 
the bidding page, a countdown clock will show how much time remains in 
the round. Bidders have until the scheduled ending time to place bids. 
Bidders should bid according to the procedures described in both the 
FSN and the Auction System Technical Supplement. No information about 
bidding during the round is available until the round has closed and 
results have been posted, so there is no tactical advantage to placing 
bids early or late in the round.
    The timing of the auction will be elaborated on and clarified in 
the Auction System Technical Supplement available on BOEM's Web site 
at: http://www.boem.gov/New-York/ if and when the FSN is published in 
the Federal Register. The Auction System Technical Supplement will 
describe auction procedures that are incorporated by reference into the 
FSN. All bidders are required to comply with any rules or instructions 
in the Auction System Technical Supplement, except in the unexpected 
circumstance that any of the information in the Auction System 
Technical Supplement is inconsistent with the FSN, in which case, the 
provisions of the FSN will take precedence.

Alternate Bidding Procedures

    Alternate Bidding Procedures enable a bidder who is having 
difficulties accessing the Internet to submit its bid via fax using an 
Alternate Bidding Form available on BOEM's Web site at: http://www.boem.gov/New-York/.
    In order to be authorized to use an Alternative Bidding Form, a 
bidder must call the help desk number listed in the Auction Manual 
before the end of the round. BOEM will authenticate the caller to 
ensure he/she is authorized to bid on behalf of the company. The bidder 
must explain the reasons for which he/she cannot place a bid using the 
online bidding platform. BOEM may, in its sole discretion, permit or 
refuse to accept a request for the placement of a bid using the 
Alternate Bidding Procedures.

[[Page 36343]]

If Bidders Need To Submit an Alternate Bidding Form, They Are Strongly 
Encouraged To Do so Before the Round Ends

Consideration of Potential Non-Monetary Factor

    BOEM has received a request to recognize a non-monetary credit for 
any bidder who has an executed power purchase agreement (PPA) term 
sheet with a potential power purchaser involving offshore wind energy 
generated from the proposed New York lease area. While a PPA term sheet 
is not typically a fully binding contract and may differ in that 
respect from other non-monetary factors that BOEM has credited to date, 
BOEM is considering whether to add this element to the auction in a 
fashion similar to prior BOEM offshore wind lease sales (e.g., 
Maryland, New Jersey). It is BOEM's policy to offer non-monetary 
credits in an auction only for factors that (1) can be simply and 
objectively identified, and (2) reflect a true development advantage 
for the recipient. BOEM is soliciting comments on the merits of 
adopting a PPA term sheet as a non-monetary credit for this auction, as 
well as the specific parameters of such an instrument.
    In particular, BOEM would like to know what key commercial terms 
should be included in a qualifying PPA term sheet to qualify for a 
credit; whether BOEM should only provide a credit for PPA term sheets 
that are executed with specific types of entities (e.g., electric 
utility, municipality, government agency); whether the public utility 
commission of New York or a nearby state should be a party to or 
otherwise endorse a qualifying PPA term sheet; and whether and to what 
extent such a qualifying PPA term sheet should be binding on the 
signatories. BOEM is also soliciting comments on what percentage of the 
monetary bid would be appropriate for this bidding credit. At this 
time, should BOEM find it appropriate to add this element to the 
auction, BOEM would potentially consider offering a 5% credit for a 
qualifying PPA term sheet. BOEM is interested in receiving feedback on 
whether a 5% credit would sufficiently reflect the value of an executed 
PPA term sheet. Based on the comments that BOEM receives, BOEM will 
decide whether, and in what amount, to provide for this type of non-
monetary credit in the FSN.
    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 proposed auction, the FSN, or applicable 
regulations and statutes.
    Anti-Competitive Review: This sale is subject to Federal antitrust 
laws. Accordingly, following the auction but before the acceptance of 
the bid and the issuance of the lease, BOEM will ``allow the Attorney 
General, in consultation with the Federal Trade Commission, 30 days to 
review the results of the lease sale.'' 43 U.S.C. 1337(c). If a 
provisionally winning bidder is found to have engaged in anti-
competitive practices in connection with this sale, BOEM may reject its 
bid.
    Anti-competitive practices may include, but are not limited to:
     An express or tacit agreement among bidders to not bid in 
an auction, or to bid at a particular price;
     An agreement among bidders not to bid against each other; 
and
     Other agreements among bidders that have the potential to 
affect the final auction price.
    BOEM will decline to award the lease if the Attorney General, in 
consultation with the Federal Trade Commission, determines that doing 
so would be inconsistent with the antitrust laws. See 43 U.S.C. 
1337(c).
    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 legal counsel.
    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 provisionally winning bidder. Within 10 
business days after receiving the lease copies, the provisionally 
winning bidder must:
    1. Sign the lease on the bidder's behalf;
    2. File financial assurance, as required under 30 CFR 585.515-537; 
and
    3. Pay by electronic funds transfer (EFT) the balance (if any) of 
the bonus bid (winning bid less the bid deposit). BOEM requires bidders 
to use EFT procedures (not pay.gov, the Web site bidders used to submit 
bid deposits) for payment of the balance of the bonus bid, following 
the detailed instructions contained in the ``Instructions for Making 
Electronic Payments'' available on BOEM's Web site at: http://www.boem.gov/New-York/.
    BOEM will not execute a lease until the three requirements above 
have been satisfied, BOEM has accepted the provisionally winning 
bidder's financial assurance pursuant to 30 CFR 585.515, and BOEM has 
processed the provisionally winning bidder's payment.
    If BOEM determines the delay was caused by events beyond the 
provisional winning bidder's control, BOEM may extend the ten business 
day deadline for executing the lease on the bidder's behalf, filing the 
required financial assurance, and/or paying the balance of the bonus 
bid.
    If the provisionally winning bidder does not meet these 
requirements or otherwise fails to comply with applicable regulations 
or the terms of the FSN, BOEM reserves the right to not issue the lease 
to that bidder. In such a case, the provisionally winning bidder will 
forfeit its bid deposit.
    Within 45 days of the date that the provisionally winning bidder 
receives copies of the lease, it must pay the first year's rent using 
the pay.gov Renewable Energy Initial Rental Payment form, available at: 
https://pay.gov/paygov/forms/formInstance.html?agencyFormId=27797604. 
Subsequent annual rent payments must be made following the detailed 
instructions contained in the ``Instructions for Making Electronic 
Payments,'' available on BOEM's Web site at: http://www.boem.gov/New-York/.
    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 Department of the Interior's non-
procurement debarment and suspension regulations at 2 CFR 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 term 
as a condition in their contracts and other transactions.
    Force Majeure: The Program Manager of BOEM's Office of Renewable 
Energy Programs has the discretion to change any auction details 
specified in the FSN, including the date and time, 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, 
blizzards), wars, riots, acts of terrorism, fire, strikes, civil 
disorder or other events of a similar nature. In case of such events, 
BOEM will notify all qualified bidders via email, phone, or through the 
BOEM Web site at: http://www.boem.gov/Renewable-Energy-Program/index.aspx. Bidders should call 703-787-1320 if they have concerns.
    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

[[Page 36344]]

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 final decisions with respect to lease 
sales are described in 30 CFR 585.118(c).
    Protection of Privileged or Confidential Information: 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.'' 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 will be 
regarded by BOEM as suitable for public release.
    BOEM will not treat as confidential aggregate summaries of 
otherwise confidential information or comments not containing such 
information. Additionally, BOEM will not treat as confidential the 
legal title of the commenting entity (e.g., the name of your company).

Abigail Ross Hopper,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2016-13164 Filed 6-3-16; 8:45 am]
 BILLING CODE 4310-MR-P