[Federal Register Volume 86, Number 112 (Monday, June 14, 2021)]
[Notices]
[Pages 31524-31536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12442]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2021-0033]


Atlantic Wind Lease Sale 8 (ATLW-8) for Commercial Leasing for 
Wind Power on the Outer Continental Shelf in the New York Bight--
Proposed Sale Notice

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Proposed sale notice; request for comments.

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SUMMARY: This document is the proposed sale notice (PSN) for the sale 
of commercial wind energy leases on the Outer Continental Shelf (OCS) 
in the New York Bight. The Bureau of Ocean Energy Management (BOEM) 
proposes to offer for sale eight lease areas (Lease Areas) using a 
single factor ascending-bid auction. The PSN contains information 
pertaining to the areas available for leasing, certain provisions and 
conditions of the leases, auction details, lease forms, criteria for 
evaluating competing bids, award procedures, appeal procedures, and 
lease execution. The issuance of any lease resulting from this sale 
would not constitute an approval of project-specific plans to develop 
offshore wind energy. Such plans, if submitted by the lessee, would be 
subject to subsequent environmental, technical, and public reviews 
prior to a decision on whether the proposed development should be 
authorized.

DATES: Comments are due by August 13, 2021. For prospective bidders who 
want to participate in this lease sale: Unless you have received 
confirmation from BOEM that you are qualified to participate in a lease 
sale in the New York Bight, your qualification materials must be 
submitted during the comment

[[Page 31525]]

period and must be postmarked no later than August 13, 2021.

ADDRESSES: You may send written comments on the PSN in one of the 
following ways:
     Electronically: http://www.regulations.gov. In the search 
box near the top of the web page, enter ``BOEM-2021-0033'' and click 
``search.'' Follow the instructions to submit public comments.
     Mail or other delivery service: Enclose your comments in 
an envelope addressed to ``Comments on New York Bight PSN,'' Office of 
Renewable Energy Programs, Bureau of Ocean Energy Management, 45600 
Woodland Road, VAM-OREP, Sterling, Virginia 20166.
    Qualification Materials: For prospective bidders who have not been 
qualified by BOEM to participate in a New York Bight lease sale, submit 
qualification materials, with due regard to the guidance provided at 
https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/, to 
Luke Feinberg, BOEM Office of Renewable Energy Programs, 45600 Woodland 
Road, VAM-OREP, Sterling, Virginia 20166, (703) 787-1705, or 
[email protected].
    Instructions: All comments and qualification submissions must 
include the agency name (i.e., BOEM) and docket number (i.e., BOEM-
2021-0033) for this PSN. All comments received will be posted without 
change to http://www.regulations.gov, including any personal 
information provided in the comment or submission. For detailed 
instructions on sending comments, see ``Public Participation'' at 
section XX of the SUPPLEMENTARY INFORMATION. For treatment of 
confidential information, see ``Protection of Privileged or 
Confidential Information'' at section XXI of the

FOR FURTHER INFORMATION CONTACT: Luke Feinberg, BOEM Office of 
Renewable Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, 
Virginia 20166, (703) 787-1705, or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    a. Call for Information and Nominations: On April 11, 2018, BOEM 
published a Call for Commercial Leasing for Wind Power on the OCS in 
the New York (NY) Bight (Call). The Call contained four proposed areas 
for development entitled ``Fairways North,'' ``Fairways South,'' 
``Hudson North,'' and ``Hudson South'' (the Call Areas). BOEM received 
over 130 comments from the general public, Federal agencies, State and 
local agencies, the fishing industry, industry groups, offshore wind 
developers, non-governmental organizations, universities, and other 
stakeholders. The subjects receiving the most comments were commercial 
fisheries and navigation. Nine offshore wind developers submitted 
nominations in response to the Call. While each of the Call Areas 
received at least one nomination, the majority of nominations were 
concentrated in Hudson South.
    b. Area Identification: After the close of the Call comment period 
on July 30, 2018, BOEM initiated the area identification (Area ID) 
process by reviewing the inputs received. Through the Area ID process, 
BOEM considered the following non-exclusive list of information: 
Comments and nominations received on the Call; information from the NY 
Bight Intergovernmental Task Force; input from New York, New Jersey, 
Rhode Island, and Massachusetts State agencies; input from Federal 
agencies; comments from relevant stakeholders, including the maritime 
community, offshore wind developers, and commercial fishing industry; 
state and local renewable energy goals; and domestic and global 
offshore wind market and technological trends.
    BOEM also considered multiple existing uses of the NY Bight in 
developing the Call Areas and subsequent Wind Energy Areas (WEAs). BOEM 
found that the uses that have the highest potential to interact with 
offshore wind development in the Call Areas are (i) commercial and 
recreational fishing; (ii) maritime navigation; and (iii) Department of 
Defense (DoD) activities. BOEM completed the Area ID on March 29, 2021, 
by identifying the following five WEAs within the Call Areas: Fairways 
North, Fairways South, Hudson North, Central Bight, and Hudson South. 
The Area ID announcement and map of the WEAs are available at: https://www.boem.gov/NY-Bight/
    c. Environmental Reviews: On March 29, 2021, BOEM published a 
notice to stakeholders (NTS) regarding its intent to prepare an 
environmental assessment (EA) to consider potential environmental 
consequences of site characterization activities (i.e., biological, 
archeological, geological, and geophysical surveys and core samples) 
and site assessment activities (i.e., installation of meteorological 
(met) buoys) associated with issuing wind energy leases in the WEAs. 
The EA also considers project easements associated with each potential 
lease issued and grants for subsea cable corridors in the NY Bight. As 
part of the EA process, BOEM sought comments on the issues and 
alternatives to be considered in the EA and received approximately 
3,000 comments, which can be found at http://www.regulations.gov, under 
Docket No. BOEM-2021-0021.
    Concurrently with its preparation of the EA, BOEM is conducting 
consultations under the Coastal Zone Management Act (CZMA). BOEM will 
initiate consultations under the Endangered Species Act (ESA) for ESA-
listed species under the jurisdiction of the U.S. Fish and Wildlife 
Service and under the Magnuson-Stevens Fishery Conservation and 
Management Act for lease issuance, site assessment, and site 
characterization activities concurrently with the EA. BOEM has 
initiated consultation for site assessment and site characterization 
activities for ESA-listed species under National Marine Fisheries 
Service (NMFS) jurisdiction. These consultation documents will be 
available at: https://www.boem.gov/environmental-consultations.
    BOEM prepared and executed a programmatic agreement (PA) to guide 
its consultations under section 106 of the National Historic 
Preservation Act. The PA provides for consultations to continue through 
BOEM's decision-making process regarding the issuance of leases, 
rights-of-way grants, and rights-of-use and easements on the OCS. The 
PA also includes BOEM's phased identification and evaluation of 
historic properties.
    The EA and associated consultations will be concluded before and 
inform BOEM's decision whether to proceed with the final sale notice 
(FSN). BOEM will solicit comments on the EA before it is finalized.

II. Area Proposed for Leasing:

    The areas available for sale are proposed to be auctioned as eight 
leases, Lease OCS-A 0537 through Lease OCS-A 0544:

------------------------------------------------------------------------
             Lease area name               Lease area ID       Acres
------------------------------------------------------------------------
Central Bight...........................      OCS-A 0537          84,688
Hudson South--B.........................      OCS-A 0538          84,332
Hudson South--C.........................      OCS-A 0539          80,062

[[Page 31526]]

 
Hudson South--D.........................      OCS-A 0540          76,148
Hudson South--E.........................      OCS-A 0541          84,688
Hudson South--F.........................      OCS-A 0542          87,890
Hudson South--A.........................      OCS-A 0543          85,755
Hudson North............................      OCS-A 0544          43,056
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total...............................  ..............         627,331
------------------------------------------------------------------------

    The proposed lease areas include the entirety of the Hudson North 
and Central Bight WEAs, as well as subdivided portions of Hudson South 
(A, B, C, D, E & F). Hudson South was subdivided so that each proposed 
lease area:
     Is of roughly equal commercial viability and size;
     includes transit corridors to account for vessel traffic 
patterns, fisheries, and DoD concerns;
     is laid out in a manner to reduce wake effect; and
     facilitates fair return to the Federal Government pursuant 
to the OCS Lands Act through robust competition for commercially viable 
lease areas.
    The proposed transit corridor locations were informed by a report 
based on a workshop convened by New York State Energy Research and 
Development Authority (NYSERDA), New York State Department of 
Environmental Conservation, and the Responsible Offshore Development 
Alliance (RODA). The workshop focused on an analysis of fishing vessels 
transit and traffic patterns. The width of the proposed corridors would 
be 2.44 nautical miles.\1\ There are some locations where portions of a 
lease area overlap with a proposed transit corridor. No surface 
occupancy will be allowed within the areas of overlap.
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    \1\ The proposed width was calculated using the Permanent 
International Association of Navigation Congresses (PIANC) report 
(2018, March). Interaction Between Offshore Wind Farms and Maritime 
Navigation (MarCom WG Report No. 161-2918). ISBN: 978-2-87223-250-5. 
Pg. 24.
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    BOEM is aware of potential conflicts with the U.S. Coast Guard 
(USCG) and DoD regarding Hudson North (OCS-A 0544) and Lease Area A of 
Hudson South (OCS-A 0543). BOEM is working closely with USCG and DoD to 
ensure final lease areas are deconflicted and suitable for offshore 
wind development. For more information regarding the DoD's evaluation, 
please see the December 15, 2020, letter from the DoD Military Aviation 
and Installation Assurance Siting Clearinghouse to BOEM posted on our 
website: https://www.boem.gov/renewable-energy/state-activities/dod-response-new-york-bight-offshore-call-areas.
    The Fairways North and South WEAs are not being considered for 
leasing at this time due, in part, to conflicts with the proposed USCG 
fairway, maritime traffic concerns, commercial fisheries, State 
preferences, marine protected species, and commercial viability. 
Additional detail on our analysis of these WEAs and potential conflicts 
can be found in the New York Bight Area Identification Memorandum 
Pursuant to 30 CFR 585.211(b) (see pages 28-32). Fairways North and 
South may, however, be considered for a future sale and will be 
analyzed in the EA.
    A description of the proposed Lease Areas can be found in addendum 
``A'' of each proposed lease, which BOEM has made available with this 
notice on its website at: https://www.boem.gov/NY-Bight/.
    a. Map of the Area Proposed for Leasing: A map of the Lease Areas 
and GIS spatial files X, Y (eastings, northings) UTM Zone 18, NAD83 
Datum, and geographic X, Y (longitude, latitude), NAD83 Datum can be 
found on BOEM's website at: https://www.boem.gov/NY-Bight/.
    b. Potential Future Restrictions for Navigational Safety:
    i. USCG Navigational Safety Measures: Potential bidders should note 
that portions of the Hudson North Lease Area may not be available for 
future development (i.e., installation of wind facilities) because of 
navigational safety concerns. In accordance with the Ports and 
Waterways Safety Act, the USCG has published an Advanced Notice of 
Proposed Rulemaking (ANPRM), which includes traffic lanes in the 
vicinity of the New York Bight. This ANPRM included a shipping safety 
fairway to accommodate vessel traffic traveling across the Bight from 
the Delaware Bay area to east of Montauk. The shipping safety fairway 
overlaps with the proposed Hudson North Lease Area. The size and 
boundaries of the Hudson North Lease Area could change between now and 
the FSN, depending on the outcome of additional discussions between 
BOEM and USCG. BOEM may require additional mitigation measures upon 
review of a Construction and Operations Plan (COP) when the lessee's 
site-specific navigational safety risk assessment is available to 
inform BOEM's decision-making.
    In addition, in 2020, the USCG announced that it would conduct a 
Supplemental Port Access Route Study (PARS) for both the seacoast of 
New Jersey (study conducted by the Fifth USCG District) and the 
northern NY Bight (study conducted by the First USCG District) that, 
combined, would include the entirety of the NY Bight. These two PARS 
may result in additional east/west mitigation measures at the COP 
review stage.
    ii. Vessel Transit Corridors: Representatives of the fishing 
industry have requested that offshore wind facilities be designed in a 
manner that, among other things, provides for safe transit through 
facilities to fishing grounds, where relevant. BOEM has identified 
initial vessel transit corridors within the Hudson South WEAs and seeks 
comment on those corridors in response to this PSN. BOEM currently does 
not know if additional transit corridors will be necessary in the 
remaining Lease Areas, Hudson North and Central Bight. Bidders should 
be aware that a lease stipulation may be included in the FSN that 
addresses transit corridors, pending the outcome of additional 
discussions with stakeholders, including comments submitted in response 
to this PSN.
    c. Potential Future Restrictions Regarding Department of Defense 
Activities: Prospective bidders should be aware of potential conflicts 
with existing uses of the OCS by the DoD. BOEM coordinates with the DoD 
throughout our leasing process. A December 2020 letter from the DoD 
summarizes our most recent consultations and is available at: https://www.boem.gov/renewable-energy/state-activities/dod-response-new-york-bight-offshore-call-areas.
    i. Height Restrictions: Development of Lease Areas in the Hudson 
South WEA could adversely affect U.S Air Force Weather Divisions NEXRAD 
weather radar by limiting the ability to track tropical storms moving 
towards the region if turbine heights exceed 1,000 feet. Mitigation may 
include restricting turbines in the Hudson South WEA to less than 1,000 
ft. above sea level. The

[[Page 31527]]

exact restrictions could depend on site specific information, and BOEM 
is currently working with DoD to refine this evaluation based on the 
Lease Areas proposed in this PSN.
    ii. Air Surveillance and Radar: The North American Aerospace 
Defense Command (NORAD) mission may be affected by the development of 
the Lease Areas. BOEM will coordinate with DoD and the lessee to de-
conflict these potential impacts through the COP review stage. 
Mitigation measures or terms and conditions of a plan approval may 
result.
    iii. Hudson South--A (OCS-A 0543): The Department of the Navy 
identified impacts to current and future training activities should the 
entirety of Lease Area Hudson South--A (OCS-A 0543) be developed. BOEM 
is continuing to work with DoD to evaluate the impacts and identify 
potential mitigation measures. However, bidders should be aware that 
portions of this Lease Area may not be available for development. 
Additional information will likely be published in the FSN.

III. Participation in the Proposed Lease Sale

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

------------------------------------------------------------------------
                        Company name                         Company No.
------------------------------------------------------------------------
Avangrid Renewables, LLC...................................        15019
East Wind LLC..............................................        15076
EDF Renewables Development, Inc............................        15027
Equinor Wind US LLC........................................        15058
Horizon Wind Power LLC.....................................        15081
North River Wind, LLC......................................        15096
RWE Offshore Wind Holdings, LLC............................        15061
PNE USA, Inc...............................................        15056
US Mainstream Renewable Power Inc..........................        15089
US Wind Inc................................................        15023
Invenergy Wind Offshore LLC................................        15091
------------------------------------------------------------------------

    All other entities wishing to participate in the proposed ATLW-8 
lease sale must submit the required qualification materials by the end 
of the 60-day comment period for this notice.
    b. Affiliated Entities: On the Bidder's Financial Form (BFF) 
discussed below, eligible bidders must list any other eligible bidders 
with whom they are affiliated. Affiliated eligible bidders are not 
permitted to compete against each other in the lease sale and must 
decide by the start of the auction which eligible bidder (if any) will 
participate. If two or more affiliated bidders participate in the 
auction, BOEM may disqualify some or all such bidders from the auction.
    BOEM considers two entities to be affiliated if (a) one entity (or 
its parent or subsidiary) has or retains any right, title, or interest 
in the other entity (or its parent or subsidiary), including any 
ability to control or direct actions with respect to such entity, 
either directly or indirectly, individually or through any other party; 
or (b) the entities are both direct or indirect subsidiaries of the 
same parent company.

IV. Questions for Stakeholders

    Stakeholders are encouraged to comment on any matters related to 
this lease sale that are of interest or concern to them. BOEM has 
identified certain issues as particularly important in developing this 
lease sale and encourages comments on how to address these issues 
through lease terms or stipulations.
    a. Number, size, orientation, and location of the proposed lease 
areas. In this PSN, BOEM proposes eight Lease Areas in the NY Bight. 
BOEM is seeking feedback on the proposed number, size, orientation, and 
location and welcomes comments on which Lease Areas, if any, should be 
prioritized for inclusion, or exclusion, from this lease sale or future 
lease sales.
    i. Lease area size: During the April 2021 NY Bight 
Intergovernmental Task Force meeting, BOEM received a comment 
suggesting that the proposed Lease Areas should be combined to create 
larger (~160,000 acres) Lease Areas which would capture greater 
economies of scale. BOEM seeks comments regarding the preferred lease 
area size and if additional acreage beyond what is proposed is needed 
for commercial viability.
    b. Transit corridors: BOEM has proposed an orientation of Lease 
Areas in the Hudson South WEA that includes vessel transit corridors. 
BOEM welcomes comments on transit corridor attributes and the degree to 
which they meet potential users' needs. Specifically, does the proposed 
orientation (length, width, etc.) facilitate continuance of existing 
uses? If not, (a) what are the additional costs of utilizing the 
proposed transit corridors, and (b) what orientation would better 
balance any competing needs of renewable energy developers and existing 
users? BOEM asks commenters to submit technical and scientific data in 
support of their comments.
    c. Benefits to Underserved Communities: The January 20, 2021, 
Executive Order 13985 ``Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government'' directs 
advancement of equity for all, including people of color and others who 
have been historically underserved, marginalized, and adversely 
affected by persistent poverty and inequality. The January 27, 2021, 
Executive Order 14008 ``Tackling the Climate Crisis at Home and 
Abroad'' includes the goal of doubling offshore wind by 2030 while 
creating good jobs and ensuring robust protection for our lands, 
waters, and biodiversity.
    To the extent that it is consistent and allowable within BOEM's 
statutory authority and applicable laws, BOEM is considering lease 
stipulations to direct benefits to underserved communities and to 
better develop the workforce needed to design, construct, operate, and 
maintain offshore wind farms. BOEM is soliciting information to develop 
lease stipulations concerning, but not be limited to:
    i. Workforce training and development.
    ii. contracting with and supporting the development minority- and 
women-owned businesses.
    iii. programs that promote and deliver environmental justice. The 
stipulations could, for example, mandate or encourage the use of 
instruments, with plan reporting requirements to show compliance. 
Alternatively, BOEM may offer incentives in the form of auction credits 
or credits towards rent and operating fee obligations for investment in 
the aforementioned categories where appropriate. These incentives could 
be in the form of a credit for the amount invested in existing State-
run programs with similar goals or the establishment of new programs 
where appropriate. BOEM invites comment on the appropriate mechanisms, 
evaluation metrics, and valuation of these additional lease 
requirements.
    Commenters are encouraged to describe how these or similar measures 
would further development of the proposed Lease Areas and the purposes 
of OCS Lands Act, and provide references to any studies that support 
their recommendations.
    d. Creating a Domestic Supply Chain: To the extent that it is 
consistent and allowable within BOEM's statutory authority and 
applicable laws, BOEM is also considering mechanisms such as lease 
stipulations, auction credits or credits towards rent and operating fee 
obligations that would incentivize a durable, domestic supply chain 
conducive to prompt and orderly development of the Lease Area and 
renewable energy development on the OCS. Commenters are encouraged to

[[Page 31528]]

describe how these or similar measures would further development of the 
proposed Lease Areas and the purposes of OCS Lands Act, and provide 
references to any studies that support their recommendations.
    e. Native American Tribes, Ocean User, and Stakeholder Engagement: 
In an effort to require early and regular lessee engagement with 
affected stakeholders, BOEM is proposing a lease stipulation that would 
require lessees to provide a semi-annual (i.e., every six months) 
progress report that summarizes engagement with ocean users potentially 
affected by proposed activities on the lease or proposed project 
easement. The progress report would identify and describe: All of the 
existing users; the lessee's engagement with those users; efforts to 
avoid, minimize or mitigate any conflict between the existing users and 
the lessee; and any planned next steps to engage those users and 
address identified conflicts. The lease stipulation specifically would 
require coordination with the fishing industry and consideration of 
potential conflicts prior to proposing a wind turbine layout in the 
COP. BOEM seeks comment on this concept generally, as well as comment 
on the contents and timing of such reports.
    f. Limits on number of lease areas per bidder: BOEM recognizes the 
dramatic increase in market demand for offshore renewable energy 
development opportunities and the associated potential for higher lease 
sale prices. BOEM is proposing to allow each qualified entity to bid 
for only one lease in any given round and to ultimately acquire only 
one lease area from the auction. To the extent it reduces competition 
for individual leases, this would tend to decrease the overall bonus 
bids. However, a larger number of lessees would tend to increase 
competition for future energy procurements and drive down the cost of 
electricity to ratepayers. Additionally, BOEM sees value in increasing 
the pool of lessees to potentially have more diverse representation of 
developers. However, BOEM has also contemplated allowing an entity to 
bid for (and win) up to two lease areas. BOEM is seeking feedback on 
the proposed one-lease-area per bidder scheme and how different leasing 
scenarios may influence the advisability of such a limitation (e.g., 
number of lease areas offered, size of lease areas, etc.).
    g. Coordinated Engagement: BOEM has received feedback that the 
potential addition of eight new OCS wind lessees burdens stakeholders 
that have limited resources and that are already seeking to engage with 
existing lessees. BOEM seeks comment on methods to improve coordination 
and engagement among lessees, Federally recognized Tribes, ocean users, 
and stakeholders. Specifically, BOEM is soliciting input on how to 
improve the frequency, duration, sustainability, and collaborative 
engagement among these parties, as well as the preferred form it should 
take (in-person, webinar, facilitated meeting, etc.).
    BOEM recognizes its responsibility under Executive Order 13175 to 
conduct Government-to-Government consultations with Tribal governments. 
Any coordinated engagement between Federally recognized Tribes and 
lessees that may be required in a future lease would be in addition to 
BOEM's responsibilities. To illustrate the intent of this question, one 
possible lease term to facilitate coordinated engagement could be to 
require lessees to hold coordination meetings at regular intervals 
throughout the year (i.e., quarterly, bi-annually, annually, etc.). 
These meetings would not substitute for Government-to-Government 
meetings between Tribes and Federal agencies. During these meetings, 
lessees would share information and updates about their activities with 
Federally recognized Tribes and stakeholders and solicit feedback/input 
from the Tribes about the lessee activities.
    h. Prescribed Layouts: Should BOEM consider prescribing uniform and 
aligned turbine layouts for Lease Areas, especially in the Hudson South 
WEA? Does the establishment of uniform turbine layouts negate the need 
for established transit corridors?
    i. Rent: BOEM is seeking feedback on a proposal to simplify the 
calculation for rental fees--specifically, rental fees for portions of 
the lease area not yet authorized for commercial operations. For leases 
issued in previous sales, rent is computed using a fraction of the 
total nameplate capacity of the project that is not yet in operation. 
The simplification would divide the area authorized for commercial 
operations into acreage that is ``generating'' and ``non-generating'' 
and use the ``non-generating'' acreage as the basis for the rental 
calculation.
    j. Industry Standards for Environmental Protection: Are there new 
industry standards (e.g., technology standards, vessel standards, 
etc.,) for environmental protection for any phase of development that 
BOEM should consider?

V. Deadlines and Milestones

    This section describes the major deadlines and milestones in the 
auction process from publication of this PSN to execution of the lease 
pursuant to this sale.
    a. The PSN Comment Period:
    i. Submit Comments: The public is invited to submit comments during 
this 60-day period, which will expire on August 13, 2021.
    ii. Public Auction Seminar: BOEM will host a public seminar to 
discuss the lease sale process and the auction format. The time and 
place of the seminar will be announced by BOEM and published on the 
BOEM website at https://www.boem.gov/NY-Bight/. No registration or RSVP 
is required to attend.
    iii. Submit Qualifications Materials: All qualification materials 
must be received by BOEM by the end of the 60-day PSN comment period 
August 13, 2021. This includes materials sufficient to establish a 
company's legal, technical, and financial qualifications pursuant to 30 
CFR 585.106-.107.
    b. End of PSN Comment Period to FSN Publication:
    i. Review Comments: BOEM will review all comments submitted in 
response to the PSN during the comment period.
    ii. Finalize Qualifications Reviews: Prior to the publication of 
the FSN, BOEM will complete any outstanding reviews of bidder 
qualifications materials submitted during the PSN comment period. The 
final list of eligible bidders will be published in the FSN.
    iii. Prepare the FSN: BOEM will prepare the FSN by updating 
information contained in the PSN where appropriate.
    iv. Publish FSN: BOEM will publish the FSN in the Federal Register.
    c. FSN Waiting Period: During this period, qualified bidders must 
take several steps to remain eligible to participate in the auction.
    i. Bidder's Financial Form: Each bidder must submit a BFF to BOEM 
in order to participate in the auction. BOEM must receive each bidder's 
BFF no later than the date listed in the FSN. BOEM will consider 
extensions to this deadline only if BOEM determines that the failure to 
timely submit a BFF was caused by events beyond the bidder's control. 
The BFF can be downloaded at: https://www.boem.gov/NY-Bight/. Once BOEM 
has processed a bidder's BFF, the bidder may log into pay.gov and 
submit a bid deposit. For purposes of this auction, you must submit new 
BFFs rather than rely on any BFFs submitted for previous lease sales. 
Until further notice, you may submit your BFF electronically in PDF 
format to the OREP mailbox at [email protected]. Digital 
signatures, affixed to

[[Page 31529]]

paper and digital copies, are also acceptable until further notice.
    a. Please accompany your submission with a transmittal letter on 
company letterhead.
    b. BOEM would prefer that bidders use a company email address on 
their BFF. (See instructions below for more details.)
    c. The BFF must be executed by an authorized representative listed 
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).
    d. BOEM will consider the date an emailed submission was sent to 
OREP's [email protected] mailbox as the official receipt (filed) 
date.
    ii. Bid Deposit: Each bidder must provide a bid deposit of 
$5,000,000. Should the FSN allow bidders to win up to two lease areas, 
a bid deposit of $10,000,000 would be required to bid on two leases. 
Bid deposits would be due no later than the date listed in the FSN to 
participate in the mock auction and the monetary auction. 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. Further information about bid deposits can be 
found in the ``Bid Deposit'' section of this notice.
    d. Mock Auction: BOEM will hold a mock auction that is open only to 
qualified bidders who have met the requirements and deadlines for 
auction participation, including submission of the bid deposit. Final 
details of the mock auction will be provided in the FSN.
    e. Conduct the Auction: BOEM, through its contractor, will hold a 
monetary auction as described in the FSN. The auction will take place 
no sooner than 30 days following publication of the FSN in the Federal 
Register. The estimated timeframes described in this PSN assume the 
auction will take place approximately 45 days after publication of the 
FSN. Final dates will be included in the FSN. BOEM will announce the 
provisional winners of the lease sale after the auction ends.
    f. From the Auction to Lease Execution:
    i. Refund Non-Winners: Once the provisional winners have been 
announced, BOEM will provide the non-winners with a written explanation 
of why they did not win and return their bid deposits.
    ii. Department of Justice (DOJ) Review: DOJ will have 30 days in 
which to conduct an antitrust review of the auction, pursuant to 43 
U.S.C. 1337(c).
    iii. Delivery of the Lease(s): BOEM will send three copies of the 
relevant lease to each winner, with instructions on how to execute the 
lease. The first year's rent is due 45-calendar days after the winner's 
receipt of the lease copies for execution.
    iv. Return the Lease: Within 10-business days of receiving the 
lease copies, the auction winners must post financial assurance, pay 
any outstanding balance of their bonus bids (i.e., winning monetary bid 
minus applicable bid deposit), and sign and return the three lease 
copies. The winners may request extensions to the 10-day deadline, and 
BOEM may grant such extensions if BOEM determines the delay to be 
caused by events beyond the requesting winner's control, pursuant to 30 
CFR 585.224(e).
    v. Execution of Lease: Once BOEM has received the signed lease 
copies and verified that all other required materials have been 
received, BOEM will make a final determination regarding its issuance 
of each lease and will execute each lease, if appropriate.

VI. Withdrawal of Blocks

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

VII. Lease Terms and Conditions

    BOEM has made available the proposed terms, conditions, and 
stipulations for the OCS commercial wind leases to be offered through 
this proposed sale. If and when a lease is issued, BOEM reserves the 
right to require compliance with additional terms and conditions 
associated with approval of a Site Assessment Plan (SAP) or COP. The 
proposed lease is on BOEM's website at: https://www.boem.gov/NY-Bight/. 
The lease includes the following seven attachments:
    1. Addendum ``A'' (Description of Leased Area and Lease 
Activities);
    2. Addendum ``B'' (Lease Term and Financial Schedule);
    3. Addendum ``C'' (Lease Specific Terms, Conditions, and 
Stipulations);
    4. Addendum ``D'' (Project Easement);
    5. Addendum ``E'' (Rent Schedule Post COP Approval);
    6. Appendix A to Addendum ``C'' (Incident Report: Protected Species 
Injury or Mortality); and
    7. 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 conditions. 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. After 
considering comments on the PSN and proposed leases, BOEM will publish 
final lease terms and conditions in the FSN.
    a. Required Plans for Potential Development of Executed Leases: 
Pursuant to 30 CFR 585.601, if site assessment activities will be 
conducted, the lessee must submit a SAP within 12 months of lease 
issuance. If the leaseholder intends to continue its commercial lease 
with an operations term, the lessee must submit a COP at least 6 months 
before the end of the site assessment term.
    b. Revised Lease Stipulations: BOEM is proposing to add or revise 
the following lease stipulations or provisions as compared with 
previous commercial leases:
    i. Fisheries Communication Plan: The requirement for the Fisheries 
Communication Plan (FCP) has been amended to specify that the FCP must 
include discussions with fisheries stakeholders regarding any planned 
facilities within 120 days of lease execution.
    ii. Native American Tribes Communication Plan: BOEM has added a 
lease stipulation requiring the lessee to develop a Native American 
Tribes Communication Plan (NATCP). The NATCP would include a 
requirement for the lessee to designate a Tribal Liaison responsible 
for communicating with Federally recognized Tribes, to provide BOEM and 
Federally recognized Tribes with a draft NATCP, and to meet with 
Federally recognized Tribes to discuss the NATCP within 120 days of 
lease execution.
    iii. Protected Species: In October 2018, BOEM initiated ESA section 
7 formal consultation with the NMFS to update the project design 
criteria (PDCs) and best management practices (BMPs) to be more 
consistent with recent incidental harassment authorizations (IHAs) 
issued by NMFS under the Marine Mammal Protection Act for site survey 
and data collection activities. In January 2020, BOEM and NMFS agreed 
to convert the formal consultation to a programmatic informal 
consultation with NMFS limited to surveys and installation of met buoys 
associated with leases. Activities include geophysical and geotechnical 
surveys and the installation and decommissioning of met buoys in 
support of offshore wind energy projects.

[[Page 31530]]

    Mitigation measures adopted during the consultation rely upon the 
most up-to-date science and mirror those included in recent IHAs. 
Adopting these measures would reduce the number of requests by the 
lessee to modify its lease stipulations to be consistent with their 
respective NMFS-issued IHAs, which in turn reduces compliance burdens 
on the lessee and BOEM. Thus, BOEM proposes that the lease stipulations 
no longer specify exclusion zones for sound propagation from 
geophysical survey equipment, vessel strike avoidance measures, or 
protected species observer procedures. BOEM intends to finalize the 
programmatic informal consultation with NMFS before the FSN.
    iv. Site Characterization: BOEM has updated language regarding 
survey plans and pre-survey meetings (Section 2.1 of addendum C to the 
proposed lease). BOEM recommends changing the requirement for a pre-
survey meeting with the lessor to be at the discretion of BOEM. BOEM 
also recommends removing the requirement for the lessee to meet with 
BOEM prior to holding Tribal pre-survey meetings, which would allow 
more flexibility in scheduling Tribal pre-survey meetings, possibly 
holding them earlier and allowing for greater opportunity for Tribal 
input.
    v. Siting Conditions: BOEM has included lease stipulations that 
outline those situations where the lessee may not construct surface 
facilities.
    vi. Operating Fee: BOEM is proposing several simplifications to the 
operating fee. The changes include eliminating the inflation 
adjustment, moving from a weighted peak/off-peak power price to a 
simple hourly average, and eliminating the 10 percent limit to the 
capacity adjustment every five years. These changes are designed to 
simplify the operating fee calculation and will have minimal impact on 
the amount of operating fee revenues paid by developers. BOEM is also 
proposing to simplify the capacity formulation by utilizing the 
nameplate capacity in the Fabrication and Installation Report (FIR) 
rather than the COP for the operating fee calculation.
    vii. Project Labor Agreements: BOEM is proposing the addition of a 
lease stipulation which would require the lessee to make every 
reasonable effort to enter into a project labor agreement (PLA) 
covering the construction stage of any project proposed for the leased 
area. The proposed stipulation is responsive to Executive Order 14008, 
``Executive Order on Tackling the Climate Crisis at Home and Abroad,'' 
and would support BOEM's achievement of the following OCS Lands Act 
factors:
    i. Expeditious and orderly development (43 U.S.C. 1332 (3)).
    ii. Safe operations conducted by well-trained personnel (43 U.S.C. 
1332 (6)).
    iii. Any activity is carried out in a manner that provides for 
safety (43 U.S.C. 1337(p)(4)(A)).
    iv. Fair return (43 U.S.C. 1337(p)(2)(A)).
    PLAs may support the achievement of these goals--including 
expeditious development and potentially more years of receipt of 
operating fees--by assuring labor stability.
    viii. Stakeholder and Ocean User Engagement Summary: BOEM is 
proposing to require the lessee to include a stakeholder and ocean user 
engagement summary as part of its progress reporting requirements (see 
section 2.2 of addendum C of the lease). This summary would include a 
description of all existing users, engagement activities with those 
users during the reporting period, and a description of efforts to 
minimize any conflict between the existing users and the lessee.

VIII. Lease Financial Terms and Conditions

    This section provides an overview of the annual payments required 
of the lessee that are fully described in the proposed leases and of 
the financial assurance requirements that would be associated with 
those leases.
    a. Rent: Pursuant to 30 CFR 585.224(b) and 585.503, the first 
year's rent payment of $3 per acre is due within 45-calendar days 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 (Lease Anniversary). Once commercial operations under the 
lease begin, BOEM will charge rent only for the portions of the leased 
area not authorized for commercial operations, i.e., not generating 
electricity. The fraction of the leased area 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 maximum capacity of project approved 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: For an 84,688 acre lease (the size of OCS-A 0537), the 
rent payment will be $254,064 per year if no portion of the leased area 
is authorized for commercial operations. If 514 megawatts (MW) of a 
project's nameplate capacity is operating (or authorized for operation) 
and if the approved COP specifies a maximum project capacity of 1,028 
MW, the rent payment will be $127,032. This payment is based on the 514 
MW of nameplate capacity BOEM has not yet authorized for commercial 
operations. For the above example, this would be calculated as follows: 
514 MW/1,028 MW x ($3/acre x 84,688 acres) = $127,032. If a COP does 
not propose commercial activities for the entirety of the leased area, 
rent for the portions of the leased area not included in the COP will 
be calculated at the rental rate of $3 per acre.
    If BOEM approves the lessee's application for relinquishment of a 
portion of its leased area, submitted within 45-calendar days following 
the date that the lessee receives the lease for signature, the lessee 
owes no rent payment on the relinquished portion of the lease area. 
Later relinquishments of any portion of the lease area will reduce the 
lessee's rent payments starting in the year following BOEM's approval 
of the relinquishment.
    The lessee must also pay rent for any project easement associated 
with the lease, commencing on the date that BOEM approves the COP (or 
modification thereof) that describes the project easement. 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.
    b. Operating Fee: For purposes of calculating the initial annual 
operating fee payment pursuant to 30 CFR 585.506, BOEM applies an 
operating fee rate to a proxy for the wholesale market value of the 
electricity expected to be generated from the project during its first 
12 months of operations. This initial payment will be prorated to 
reflect the period between the commencement of commercial operations 
and the Lease Anniversary. The initial annual operating fee payment 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 
purposes of this calculation, the

[[Page 31531]]

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 
regional wholesale power price index. For example, the annual operating 
fee for a 1,028 MW wind facility operating at a 40% capacity (i.e., 
capacity factor of 0.4) with a regional wholesale power price of $40/
MWh and an operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN14JN21.000

    i. Operating Fee Rate: The operating fee rate is the share of 
imputed wholesale market value of the projected annual electric power 
production due to the Office of Natural Resources Revenue as an annual 
operating fee. For the Lease Areas, BOEM will set the fee rate at 0.02 
(i.e., 2%) for the entire life of commercial operations.
    ii. Nameplate Capacity: Nameplate capacity is the maximum rated 
electric output, expressed in MW, which the turbines of the wind 
facility under commercial operations can produce at their rated wind 
speed as designated by the turbine's manufacturer. The nameplate 
capacity available at the start of each year of commercial operations 
on the lease will be the capacity provided in the FIR. For example, if 
the lessee installed 100 turbines as documented in its FIR, and each is 
rated by the manufacturer at 12 MW, the nameplate capacity of the wind 
facility is 1,200 MW.
    iii. Capacity Factor: The capacity factor relates to the amount of 
energy delivered to the grid during a period of time compared to the 
amount of energy the wind facility would have produced at full capacity 
during that same period of time. This factor is represented as a 
decimal between zero and one. There are several reasons why the amount 
of power delivered is less than the theoretical 100% of capacity. For a 
wind facility, the capacity factor is mostly determined by the 
availability of wind. Transmission line loss and down time for 
maintenance or other purposes also affect the capacity factor.
    The capacity factor for the year in which the commercial operation 
date occurs, and for the first six full years of commercial operations 
on the lease, is set to 0.4 (i.e., 40%). At the end of the sixth year, 
the capacity factor may 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 may be made once every five years 
thereafter.
    iv. 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. For the leases offered in this sale, BOEM is proposing to use the 
simple average of the spot price indices for NYISO New York City (Zone 
J).
    c. Financial Assurance: Within 10-business days after receiving the 
lease copies and pursuant to 30 CFR 585.515-.516, the provisional 
winners of the leases must provide an initial, lease-specific bond or 
other approved means of meeting the initial financial assurance 
requirements in the amount of $100,000. The provisional winners 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 winners 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 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 leases, which BOEM has made available with this notice on its 
website at: https://www.boem.gov/NY-Bight/.

IX. Bidder's 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 website 
at: https://www.boem.gov/NY-Bight/. 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). BOEM will 
not consider BFFs submitted by bidders for previous lease sales to 
satisfy this requirement for this auction. BOEM will only consider BFFs 
submitted after the deadline set in the FSN if BOEM determines that the 
failure to timely submit the BFF was caused by events beyond the 
bidder's control. BOEM will only accept an original, executed paper 
copy of the BFF. The BFF must be executed by an authorized 
representative listed in the qualifications package on file with BOEM 
as authorized to bind the company.

X. Bid Deposit

    Each qualified bidder must submit a bid deposit no later than the 
date listed in the FSN. Typically, this deadline is approximately 30-
calendar days after the publication of the FSN. BOEM 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.
    Following the auction, bid deposits will be applied against the 
high bonus bid obligation. If the bid deposit exceeds a bidder's total 
financial obligation, BOEM will refund the balance of the bid deposit 
to the bidder. BOEM will refund bid deposits to non-winners once BOEM 
has announced the provisional winners.
    If BOEM offers a lease to a provisional winner who fails to timely 
return the signed lease, to establish financial assurance, or to pay 
the balance of its bid, BOEM will retain the provisional winner's bid 
deposit. In such a circumstance, BOEM reserves the right to determine 
which bid would have won in the absence of the bid previously 
determined to be the winning bid and to offer a lease pursuant to this 
next highest bid.

XI. Minimum Bid

    The minimum bid is the lowest bid BOEM will accept as a winning 
bid, and it is where BOEM will start the bidding in the auction. BOEM 
proposes a minimum bid of $100.00 per acre for this lease sale.

[[Page 31532]]

XII. Auction Procedures

    a. Ascending Bidding With Cash Bid Variable: As authorized under 30 
CFR 585.220(a)(2) and 585.221(a)(1), BOEM proposes to use an ascending 
bidding auction with cash as the bid variable for this lease sale. BOEM 
proposes to start the auction using the minimum bid prices for each of 
the Lease Areas and increase those prices incrementally until no more 
than one active bidder per Lease Area remains in the auction.
    During the April 2021 NY Bight Intergovernmental Task Force 
meeting, BOEM learned of interest in a sequential auction format. A 
sequential auction format would feature separate auctions for each of 
the Lease Areas, with one area's auction completed before the next one 
begins. This auction method would introduce a random and opaque 
valuation for each area auctioned. Sequential auctions are 
strategically very complex for bidders because bidders need to make 
final bidding decisions for ``early'' lease areas without knowledge of 
``later'' lease areas' values. As a result, bidders are likely to 
overbid or underbid, and the relative prices for different lease areas 
will not reflect bidders' relative valuations. Furthermore, sequential 
auctions do not accommodate substitutes or complements. Sequential 
auctions are also more likely to lead to gamesmanship and inefficient 
outcomes.
    In contrast, the simultaneous ascending clock auction, which BOEM 
has used in the past, allows the bidder to monitor bidding activity in 
real time, to adjust its bid and choice of lease areas, and to stop 
bidding in the auction accordingly. If the price for one area becomes 
too high, the bidder has the option to focus on a different lease area 
with a lower price. Simultaneous auctions allow for a rational and 
beneficial outcome for all parties involved. This method is highly 
regarded in the academic literature and serves as the best practice for 
optimal outcomes.
    b. The Auction: Using an online bidding system to host the auction, 
BOEM will start the bidding for Leases OCS-A 0537 through 0544, as 
described below. BOEM is proposing that bidders will be able to bid for 
one of the offered Lease Areas in each round of the auction, and 
ultimately acquire only one of the Lease Areas from the auction. 
However, BOEM is seeking input on this decision, and the auction format 
in which a bidder can bid on one or two Lease Areas is described below.
    i. If bidders are allowed to bid for and win only one lease area: 
The auction will be conducted in a series of rounds. At the start of 
each round, BOEM will state an asking price for each lease area. If a 
bidder is willing to meet the asking price for one of the Lease Areas, 
it will indicate its intent by submitting a bid equal to the asking 
price. A bid at the full asking price is referred to as a ``live bid.'' 
To participate in the next round of the auction, a bidder must have 
submitted a live bid for one of the Lease Areas (or have a carried-
forward bid) in each previous round.
    As long as there are two or more live bids (including bids carried 
forward) for at least one of the Lease Areas, the auction moves to the 
next round. BOEM will raise the asking price for each of the Lease 
Areas that has received two or more live bids in the previous round. 
Asking price increments will be determined based on several factors, 
including (but not necessarily limited to) the expected time needed to 
conduct the auction and the number of rounds that have already 
occurred. BOEM reserves the right to increase or decrease bidding 
increments as appropriate.
    Generally, a bidder that submitted a live bid in the previous round 
is free to bid on one of the eight Lease Areas in the current round. 
However, an exception exists. A bidder may switch its live bid from one 
of the Lease Areas to another in the current round only if its bid from 
the previous round was contested--e.g., a bidder cannot switch from 
OCS-A 0537 to OCS-A 0538 unless there was at least one other live bid 
for OCS-A 0537 in the last round. If the bid was uncontested in the 
previous round, the bidder cannot switch Lease Areas, and its previous 
round bid will be carried forward to the next round. If another bidder 
places a live bid on OCS-A 0537 later in the auction, BOEM will stop 
automatically carrying forward the previously uncontested bid on that 
lease area. The bidder that placed the previously carried forward bid 
is then free to bid on any of the Lease Areas in the next round at the 
new asking prices.
    A bidder remains eligible to participate in the auction if it 
submitted a live bid in the prior round or had a previously uncontested 
live bid carried forward by BOEM to the previous round. If a bidder 
decides to stop bidding further when its bid is contested, there remain 
circumstances in which the bidder could win (e.g., if the bid is 
ultimately selected in the winner determination that is described in 
detail below, or if the winning bid is disqualified at the award stage 
of the auction). If this happens, the bidder may be bound by its bid 
and thus obligated to pay the full bid amount. Bidders may be bound by 
any of their bids until the auction results are finalized.
    Between rounds, BOEM will disclose to all bidders that submitted 
bids: (1) The number of live bids (including bids carried forward) for 
each of the Lease Areas in the previous round of the auction (i.e., the 
level of demand at the asking price); and (2) the asking price for each 
of the Lease Areas in the upcoming round of the auction.
    A bidder is only eligible to continue bidding in the auction if it 
has submitted a live bid (or had a bid carried forward) in the previous 
round. In any round after the first round, however, a bidder may submit 
an ``exit bid'' (also known as an ``intra-round bid''). An exit bid can 
only be submitted for the same lease area as the bidder's contested 
live bid in the previous round. An exit bid is a bid that is higher 
than the previous round's asking price, but less than the current 
round's asking price for that lease area. An exit bid is not a live 
bid, and it represents the final bid that a bidder may submit in the 
auction. A bidder may not submit both an exit bid on one of the Lease 
Areas and a live bid on a different one. During the auction, the exit 
bid can only be seen by BOEM, and not by other bidders.
    A lease area with only exit bids in a given round will not have its 
asking price raised in the next round because BOEM only raises asking 
prices when a lease area receives multiple live bids. As soon as each 
of the Lease Areas has one or zero live bids (including bids carried 
forward), the auction is over, regardless of the number of exit bids on 
each area.
    After the bidding ends, BOEM will determine the provisionally-
winning bids for each lease area by a two-stage procedure. In Stage 1, 
the highest bid (live bid or exit bid) received for each lease area in 
the final round will be designated the provisionally-winning bid, if 
there is a single highest bid. In the event of a tie (i.e., if two or 
more bidders submitted identical highest exit bids for the same lease 
area), the selection of one of the highest exit bids will be deferred 
until Stage 2.
    In stage 2, BOEM will consider bids from all bidding rounds for 
Lease Areas that were not assigned in stage 1 by bidders who were not 
assigned one of the Lease Areas in stage 1. BOEM will select the 
combination of such bids that maximizes the sum of the bid amounts of 
the selected bids, subject to the following constraints: (1) Each lease 
area that received multiple highest exit bids in the final round (but 
no live bid) is assigned to one of the bidders that submitted the 
highest exit bid; (2) at most one bid from each bidder can be

[[Page 31533]]

selected; and (3) at most one bid for each lease area can be selected. 
If there is a unique combination of bids that solves this maximization 
problem, then these are deemed to be the remaining provisionally 
winning bids. If two or more combinations of bids tie by producing the 
same maximized sum of bid amounts, the auction system will select one 
of the combinations by generating pseudorandom numbers. The provisional 
winners will pay the amounts of their provisionally winning bids.
    ii. If bidders are allowed to bid for and win two lease areas: The 
auction will be conducted in a series of rounds. At the start of each 
round, BOEM will state an asking price for each of the Lease Areas. If 
a bidder is willing to meet the asking price for up to two of the Lease 
Areas (if eligible), it will indicate its intent by submitting a bid 
equal to the asking price for the selected Lease Areas. A bid for one 
or more of the Lease Areas at the sum of their full asking prices is 
referred to as a ``live bid.'' To participate in the next round of the 
auction, a bidder must have submitted a live bid for at least one of 
the Lease Areas (or have a carried-forward bid) in each previous round.
    As long as there are two or more live bids (including bids carried 
forward) for at least one of the Lease Areas, the auction moves to the 
next round. BOEM will raise the asking price for each of the Lease 
Areas that has received two or more live bids in the previous round. 
Asking price increments will be determined based on several factors, 
including (but not necessarily limited to) the expected time needed to 
conduct the auction and the number of rounds that have already 
occurred. BOEM reserves the right to increase or decrease bidding 
increments as appropriate.
    Each bidder is allowed to submit a live bid for up to two of the 
Lease Areas based on its ``eligibility'' at the opening of each round. 
A bidder's eligibility is either two, one, or zero Lease Areas, and it 
corresponds to the maximum number of Lease Areas that a bidder may 
include in a live bid during a single round of the auction. A bidder's 
initial eligibility is determined based on the amount of the bid 
deposit submitted by the bidder prior to the auction. To be eligible to 
offer a bid on one of the Lease Areas at the start of the auction, a 
bidder must submit a bid deposit of $5,000,000. To be eligible to offer 
a bid on two of the Lease Areas, a bidder must submit a bid deposit of 
$10,000,000. A bidder's bid deposit will be used by BOEM as a down 
payment on any monetary obligations incurred by the bidder should it be 
awarded a lease.
    As the auction proceeds, a bidder's eligibility is determined by 
the number of Lease Areas included in its live bid submitted in the 
round prior to the current round. That is, if a bidder submitted a live 
bid on one of the Lease Areas in the previous round, that bidder may 
submit a bid that includes at most one of the Lease Areas in the 
current round. If a bidder submitted a live bid that included two Lease 
Areas in the previous round, the bidder may submit a live bid that 
includes at most two of the Lease Areas in the current round. When a 
bidder authorized to submit two bids submits one live bid, the bidder's 
eligibility is permanently reduced. Thus, eligibility in successive 
rounds may stay the same or go down, but it can never go up.
    Generally, a bidder that submitted a live bid in the previous round 
is free to bid on one or two (depending on its eligibility) of the 
eight areas in the current round. However, an exception exists. A live 
bid in the previous round is deemed to be uncontested if there were no 
other live bids by other bidders that included any of the Lease Areas 
in the live bid. (For example, suppose that a bidder placed a live bid 
for OCS-A-0537 and OCS-A-0538. If no other bidder placed a live bid 
that included either OCS-A-0537 or OCS-A-0538, then the bid is deemed 
to be uncontested.) If a bid was uncontested in the previous round, the 
bid will be carried forward to the next round, and the bidder cannot 
place any other bids in that next round. (However, continuing the 
example, once another bidder places a live bid that includes either 
OCS-A 0537 or OCS-A 0538 later in the auction, BOEM will stop 
automatically carrying forward the previously uncontested bid. Starting 
in the next round, the bidder that placed the previously carried 
forward bid is then free to place any live bid or intra-round bid 
permitted by the rules, and the bidder is then not required to stay on 
either OCS-A-0537 or OCS-A-0538.)
    A bidder remains eligible to participate in the auction if it 
submitted a live bid in the prior round or had a previously uncontested 
live bid carried forward by BOEM to the current round. If a bidder 
decides to stop bidding further when its bid is contested, there are 
still circumstances in which the bidder could win (e.g., if the bid is 
ultimately selected in the winner determination that is described in 
detail below or if the winning bid is disqualified at the award stage 
of the auction). If this happens, the bidder may be bound by its bid 
and thus obligated to pay the full bid amount. Bidders may be bound by 
any of their bids until the auction results are finalized.
    Between rounds, BOEM will disclose to all bidders that submitted 
bids: (1) The number of live bids (including bids carried forward) for 
each of the Lease Areas in the previous round of the auction (i.e., the 
level of demand at the asking price); and (2) the asking price for each 
of the Lease Areas in the upcoming round of the auction.
    A bidder is eligible to continue bidding in the auction only if it 
has submitted a live bid (or had a bid carried forward) in the previous 
round. In any round after the first round, however, a bidder may submit 
an ``intra-round bid.'' An intra-round bid is similar to an ``exit 
bid.'' An intra-round bid consists of a single offer price for exactly 
the same Lease Areas on which the bidder placed a live bid in the 
previous round. The single offer price must be greater than the sum of 
the asking prices for the Lease Areas bid on in the previous round and 
less than the sum of the asking prices for these Lease Areas in the 
current round. A bidder may not submit an intra-round bid in the 
current round if its previous round bid was uncontested.
    A bidder that has submitted a live bid for two of the Lease Areas 
in the previous round may choose to submit an intra-round bid in the 
current round (consisting of those two Lease Areas) and may also submit 
a live bid at the current round's asking price on one of the Lease 
Areas in the bidder's intra-round bid or on another of the Lease Areas 
entirely. After a bidder submits an intra-round bid for two Lease 
Areas, all subsequent bids placed by the bidder can include at most one 
of the Lease Areas. A bidder that has submitted a live bid for one of 
the Lease Areas in the previous round may choose to submit an intra-
round bid in the current round (consisting of that one lease area). 
Placing an intra-round bid that includes one of the Lease Area 
terminates the bidder's ability to submit subsequent bids.
    Intra-round bids are not considered to be live bids for the purpose 
of determining whether to conclude the auction, for determining whether 
to increase the asking price for a particular lease area, or for 
disclosing the demand for a lease area. During the auction, an intra-
round bid can only be seen by BOEM, and not by other bidders.
    For example, consider the case of a bidder who has bid on two of 
the Lease Areas in previous rounds and hence is eligible to continue 
bidding on two areas in the current round. Suppose that the asking 
prices for Hudson South E and F were $750,000 and $600,000 in

[[Page 31534]]

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 Hudson South E (because the asking price 
was increased in the current round), but not for Hudson South F. The 
bidder may only enter a single, intra-round bid for both areas 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. If the bidder wishes to continue 
to place bids in the auction, the bidder must also place a live bid for 
a single lease area in the same round. 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 Hudson South E or a $600,000 bid 
for the Hudson South F area or a single live bid for any of the other 
Lease Areas. Alternatively, the bidder may choose not to submit any 
live bid, precluding the ability to place bids in future rounds.
    If the bidder had only bid on one of the Lease Areas 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 Hudson South E, 
the bidder could submit an intra-round bid for that area of more than 
$750,000 and less than $800,000, reducing its live bid eligibility to 
zero and precluding bids in subsequent rounds. Alternatively, if the 
bidder's previous round's bid was on Hudson South F, it cannot submit 
an intra-round bid (or any other bid), because the previous round's bid 
was uncontested. In this case, since the bidder had no competition for 
Hudson South F, 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.
    After the bidding ends, BOEM will determine the provisionally 
winning bids in accordance with the process described in this section. 
This process consists of two stages: Stage 1 and Stage 2, which are 
described herein. Once the auction ends, nothing further is required of 
bidders within or between stages 1 and 2. (In practice, the stages of 
the process will be determined by the auction software, which will 
analyze the bids, determine the provisional winners, and calculate the 
applicable prices.)

 Stage 1

    In stage 1, a bidder with a live bid in the final round is 
provisionally assured of winning the Lease Areas included in its final-
round live bid, regardless of any other bids. If all of the Lease Areas 
receive live bids in the final round, they are awarded to bidders with 
the live bid in stage 1, and the rest of this determination is not 
necessary. Otherwise, BOEM will select the combination of final-round 
bids that maximizes the sum of the bid amounts of the selected bids, 
subject to the following constraints: (1) A bidder must win all the 
Lease Areas included in its final-round live bid (if any); (2) either a 
bidder's live bid or intra-round bid, but not both, can be selected; 
and (3) the selected bids must be feasible, in that each of the Lease 
Areas cannot be included in more than one of the selected bids. If 
there is a unique combination of bids that solves the maximization 
problem of the previous sentence, then these are deemed to be the 
qualified bids. If two or more combinations of qualified bids tie by 
producing the same maximized sum of bid amounts, the tie is broken by: 
First, bringing each of these combinations forward into the stage 2 and 
selecting the combination that produces the largest value in the stage 
2; and second, if two or more of these combinations tie in producing 
the largest value, the auction system will select one of the 
combinations by generating pseudorandom numbers. If any of the Lease 
Areas is not assigned in stage 1, BOEM will proceed to stage 2 to 
attempt to assign the remaining Lease Areas.

 Stage 2

    In stage 2, BOEM will consider bids from all bidding rounds to 
determine if the Lease Areas not awarded in stage 1 can be awarded in 
stage 2. The combination of bids selected in stage 1 are qualified 
bids. BOEM will select the combination of bids from all bidding rounds 
that maximizes the sum of the bid amounts of the selected bids, subject 
to the following constraints: (1) A bidder must win all Lease Areas 
included in its qualified bid (if any); (2) either a bidder's live bid 
or intra-round bid from a single bidding round, but not both, can be 
selected; and (3) the selected bids must be feasible, in that each of 
the Lease Areas cannot be included in more than one of the selected 
bids. If there is a unique combination of bids that solves the 
maximization problem of the previous sentence, then these are deemed to 
be the provisionally winning bids. If two or more combinations of bids 
tie by producing the same maximized sum of bid amounts, the auction 
system will select one of the combinations by generating pseudorandom 
numbers. The provisional winners will pay the amounts of their 
provisionally winning bids.
    iii. Provisional winners: Provisional winners may be disqualified 
if they are subsequently found to have violated auction rules or BOEM 
regulations, or otherwise engaged in conduct detrimental to the 
integrity of the competitive auction. If a bidder submits a bid that 
BOEM determines to be a provisionally winning bid, the bidder will be 
expected to sign the applicable lease documents, establish financial 
assurance, and submit the cash balance of its bid (i.e., winning bid 
amount minus the bid deposit) within 10-business days of receiving the 
lease copies, pursuant to 30 CFR 585.224. BOEM reserves the right not 
to issue the lease to the provisionally winning bidder if that bidder 
fails to timely sign and pay for the lease or otherwise comply with 
applicable regulations or the terms of the FSN. In that case, the 
bidder would forfeit its bid deposit. BOEM may consider failure of a 
bidder to timely pay the full amount due to be an indication that the 
bidder may no longer be financially qualified to participate in other 
lease sales under 30 CFR 585.106 and 585.107.
    BOEM will publish the provisionally winning bids and provisional 
winners. The bid results, including exit bids, will be published on 
BOEM's website after review of the results and announcement of the 
provisional winners.
    c. Additional Information Regarding the Auction Format:
    i. Bidder Authentication: For the online auction, BOEM will require 
two-factor authentication. After BOEM has processed the bid deposits, 
the auction contractor will send several bidder authentication packages 
to the bidders. One package will contain the digital authentication 
tokens needed to allow access to the auction website. (Note: BOEM may 
decide to use software tokens instead of hardware tokens, in which case 
they will not be mailed or included in packages.) As a general 
practice, tokens are 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. Up to three 
individuals can be selected to bid for each bidder.
    ii. Bidder Tokens: 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. If a bidder fails to submit a bid deposit or does not 
participate in the auction, BOEM will de-activate that bidder's tokens 
and login information, and the bidder will be asked to return its 
tokens. Under certain circumstances (for example, if the authorized 
bidders are geographically dispersed and the ability for the primary 
point of contact

[[Page 31535]]

to timely distribute the materials is in question), BOEM may send all 
materials directly to the authorized bidders instead of the primary 
point of contact.
    The second package contains login credentials for authorized 
bidders. The login credentials are mailed to the address provided in 
the BFF for each authorized individual. Bidders can confirm these 
addresses by calling 703-787-1121. BOEM may also utilize separate email 
to provide login credentials. This package will contain user login 
information and instructions for accessing the Bidder Manual for the 
auction system and the Auction System Technical Supplement (ASTS). The 
login information, along with the tokens, will be tested during the 
mock auction.
    iii. Timing of Auction: The FSN will provide specific information 
regarding when bidders can enter the auction system and when the 
proposed auction will start.
    iv. Messaging service: BOEM and the auction contractors will use 
the auction platform messaging service to keep bidders informed on 
issues of interest during the auction. For example, BOEM may change the 
schedule at any time, including during the auction. If BOEM changes the 
schedule during an auction, it will use the messaging feature to notify 
bidders that a revision has been made and will direct bidders to the 
relevant page. BOEM will also use the messaging system for other 
updates during the auction.
    Bidders may place bids at any time during the round. At the top of 
the bidding page, a countdown clock shows how much time remains in the 
round. Bidders have until the scheduled time to place bids. Bidders 
should do so according to the procedures described in this notice and 
the ASTS. Information about the round results will be made available 
only after the round has closed; there is no strategic advantage to 
placing bids early or late in the round.
    The ASTS will elaborate on the auction procedures described in the 
FSN. In the event of an inconsistency between the Bidder Manual, ASTS, 
and the FSN, the FSN is controlling.
    v. Alternate Bidding Procedures: It is the responsibility of the 
bidder to ensure it has a working internet connection and backup 
procedures in place in case its internet connection goes down during 
the auction. Such backup procedures can include having redundant 
internet connections, having more than one individual authorized to 
place bids on behalf of the company, having one individual who is 
authorized to bid on behalf of the company located in a different site 
(with a different internet connection), and placing bids using a 4G 
mobile data connection as a backup. It is the responsibility of the 
bidder to test its backup procedures ahead of time. This can be done 
during the mock auction, for example.

XIII. Rejection or Non[dash]Acceptance of Bids

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

XIV. Anti[dash]Competitive Review

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

XV. Process for Issuing the Lease

    Once all post-auction reviews have been completed to BOEM's 
satisfaction, BOEM will issue three unsigned copies of the lease to 
each provisionally winning bidder. Within 10-business days after 
receiving the copies, the provisionally winning bidders must:
    1. Sign and return the lease copies on the bidder's behalf;
    2. File financial assurance as required under 30 CFR 585.515-537; 
and
    3. Pay by electronic funds transfer (EFT) the balance (if any) of 
the bonus bid (winning bid less the bid deposit). BOEM requires bidders 
to use EFT procedures (not pay.gov, the website bidders used to submit 
bid deposits) for payment of the balance of the bonus bid, following 
the detailed instructions contained in the ``Instructions for Making 
Electronic Payments'' available on BOEM's website at: https://www.boem.gov/NY-Bight/.
    BOEM will not execute a lease until the three requirements above 
have been satisfied. BOEM may extend the 10-business-day deadline for 
signing the copies of the lease, filing the required financial 
assurance, and paying the balance of the bonus bid if BOEM determines 
the delay was caused by events beyond the provisionally winning 
bidder's control.
    If a provisionally winning bidder does not meet these requirements 
or otherwise fails to comply with applicable regulations or the terms 
of the FSN, BOEM reserves the right not to issue the lease to that 
bidder. In such a case, the provisionally winning bidder will forfeit 
its bid deposit. Also in such a case, BOEM reserves the right to 
identify the next highest bidder who has not won one of the other Lease 
Areas and to offer the lease to that bidder pursuant to its bid.
    Within 45-calendar days of the date that a provisionally winning 
bidder receives 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://www.pay.gov/public/form/start/27797604/.
    Subsequent annual rent payments must be made following the detailed 
instructions contained in the ``Instructions for Making Electronic 
Payments,'' available on BOEM's website at: https://www.boem.gov/NY-Bight/.

XVI. 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 parts 180 and 1400. The lessee must also communicate this

[[Page 31536]]

requirement to persons with whom the lessee does business relating to 
this lease by including this term as a condition in their contracts and 
other transactions.

XVII. Final Sale Notice

    The development of the FSN will be informed the EA, related 
consultations and comments received during the PSN comment period. The 
FSN will provide the final details concerning the offering and issuance 
of OCS commercial wind energy leases in the New York Bight. The FSN 
will be published in the Federal Register at least 30 days before the 
lease sale is conducted and will provide the date and time of the 
auction.

XVIII. Changes to Auction Details

    The Program Manager of BOEM's Office of Renewable Energy Programs 
has the discretion to change any auction detail specified in the FSN, 
including the date and time, if the Program Manager deems that events 
outside BOEM's control 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, and blizzards), wars, 
riots, act of terrorism, fire, strikes, civil disorder, Federal 
Government shutdowns, cyberattacks against relevant information 
systems, or other events of a similar nature. In case of such events, 
BOEM will notify all qualified bidders via email, phone, and BOEM's 
website at: https://www.boem.gov/NY-Bight/. Bidders should call 703-
787-1121 if they have concerns.

XIX. Appeals

    The appeals and reconsideration procedures are provided in BOEM's 
regulations at 30 CFR 585.225 and 585.118(c). 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). The Director 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).

XX. Public Participation

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

XXI. Protection of Privileged or Confidential Information

    BOEM will protect privileged or confidential information that you 
submit, as required by the Freedom of Information Act (FOIA) and 30 CFR 
585.113. 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 may be regarded by BOEM as 
suitable for public release. Further, BOEM will not treat as 
confidential aggregate summaries of otherwise non-confidential 
information.
    a. Access to Information (54 U.S.C. 307103): BOEM is required, 
after consultation with the Secretary of the Interior, to withhold the 
location, character, or ownership of historic resources if it 
determines that disclosure may, among other things, cause a significant 
invasion of privacy, risk harm to the historic resources or impede the 
use of a traditional religious site by practitioners. Tribal entities 
and other interested parties should designate information that they 
wish to be held as confidential and provide the reasons why BOEM should 
do so.

    Authority: This PSN is published pursuant to section 8(p) of the 
OCS Lands Act (43 U.S.C. 1337(p)) and the implementing regulations 
at 30 CFR part 585, including sections 585.211 and 585.216.

Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2021-12442 Filed 6-11-21; 8:45 am]
BILLING CODE 4310-MR-P