[Federal Register Volume 87, Number 104 (Tuesday, May 31, 2022)]
[Notices]
[Pages 32443-32458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11537]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2022-0017]


Pacific Wind Lease Sale 1 (PACW-1) for Commercial Leasing for 
Wind Power on the Outer Continental Shelf in California--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 Humboldt Wind Energy Area (WEA) and Morro Bay WEA offshore 
California. The Bureau of Ocean Energy Management (BOEM) proposes to 
offer multiple lease areas (Lease Areas) for sale in each WEA and to 
conduct simultaneous auctions for Lease Areas within each WEA using a 
multiple-factor bidding auction format. The PSN contains information 
pertaining to the areas available for leasing, certain provisions and 
conditions of the lease, auction details, lease forms, criteria for 
evaluating competing bids, award procedures, appeal procedures, and 
lease execution procedures. The issuance of any lease resulting from 
this sale would not constitute approval of project-specific plans to 
develop offshore wind energy. Such plans, if submitted by the Lessee, 
would be subject to subsequent environmental, technical, and public 
reviews prior to a BOEM decision on whether the proposed development 
should be authorized.

DATES: Comments should be submitted electronically or postmarked no 
later than August 1, 2022.
    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 California lease sale, your qualification materials 
must be submitted during the comment period and must be submitted 
electronically or postmarked no later than August 1, 2022.

ADDRESSES: Submit comments on the PSN in one of the following ways:
     Federal eRulemaking Portal: https://www.regulations.gov/. 
In the search box on web page, enter BOEM-2022-0017 and click 
``search.'' Follow the instructions to submit public comments.
     Mail or other delivery service: Enclose your comments in 
an envelope

[[Page 32444]]

labeled ``Comments on California PSN,'' and addressed to: Bureau of 
Ocean Energy Management, Pacific Regional Office, Mail Stop CM 102, 760 
Paseo Camarillo (Suite 102), Camarillo, California 93010-6002.
    Qualifications Materials: Prospective bidders who have not yet met 
the qualifications to participate in a California lease sale should 
follow the guidance provided at https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/.
    For more information regarding the submission of public comments 
and qualification materials, see section V under the caption 
SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Sara Guiltinan, Bureau of Ocean Energy 
Management, Pacific Regional Office, Mail Stop CM 102, 760 Paseo 
Camarillo (Suite 102), Camarillo, California 93010-6002, (805) 384-
6345, or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    a. Call for Information and Nominations: On October 19, 2018, BOEM 
published a call for information and nominations in the Federal 
Register (83 FR 53096) (``2018 Call'') that identified three 
geographically distinct Call Areas on the OCS offshore California, 
delineated as the Humboldt Call Area offshore the north coast and the 
Morro Bay Call Area and the Diablo Canyon Call Area offshore the 
central coast. Following the 2018 Call, the Morro Bay and Diablo Canyon 
Call Areas were initially assessed as incompatible for wind energy 
development by the U.S. Department of Defense (DoD). However, after the 
initial assessment, BOEM, the State of California, various California 
elected officials, the National Oceanic and Atmospheric 
Administration's (NOAA's) Office of National Marine Sanctuaries (ONMS), 
and DoD continued to have discussions and conduct stakeholder outreach 
in efforts to accommodate offshore wind development within and adjacent 
to the Morro Bay Call Area and DoD's mission requirements. More 
information and results of these meetings and outreach can be viewed 
at: https://www.boem.gov/renewable-energy/state-activities/public-information-meetings-and-outreach-efforts.
    In May 2021, the White House, the Department of the Interior, DoD, 
and the State of California announced an agreement to advance an area, 
known as the ``Morro Bay 399 Area,'' that could support approximately 
three gigawatts of offshore wind on roughly 399 square miles (255,487 
acres) off California's central coast within and adjacent to the 
initial 2018 Morro Bay Call Area (https://www.doi.gov/pressreleases/biden-harris-administration-advances-offshore-wind-pacific).
    On July 29, 2021, BOEM delineated the two extensions in the 
identified Morro Bay 399Area, known as the East and West Extensions, in 
a published Call for Information and Nominations in the Federal 
Register (86 FR 40869) (``2021 Call'') to solicit public input and 
industry interest in the extensions.
    In response to the 2018 Call and 2021 Call, BOEM received over 180 
comments from the general public, representatives of fishing 
organizations and interests, offshore wind developers, other ocean 
industry groups, non-governmental organizations, universities, Tribal 
governments, local governments, Federal and State agencies, and other 
stakeholders. In addition to the comments received in response to the 
2018 Call and 2021 Call, BOEM received input during outreach and 
engagement with Tribal governments, the State of California, and public 
stakeholders in over 80 meetings. The outreach effort and input 
received are documented in a California Offshore Wind Energy Planning 
Outreach Summary Report published in September 2018 (https://www.boem.gov/renewable-energy/california-outreach-summary-report) and 
an Outreach Summary Report Addendum published in June 2021 (https://www.boem.gov/renewable-energy/state-activities/offshore-wind-outreach-addendum).
    A total of 23 offshore wind developers submitted nominations in 
response to the 2018 Call and 2021 Call with 10 nominations for the 
Humboldt Call Area and 17 nominations for the Morro Bay Call Area.
    b. Area Identification: After the close of the 2018 Call and the 
2021 Call comment periods, BOEM initiated the Area identification (Area 
ID) process. Through the Area ID process, BOEM considered information 
sources, such as: Comments and nominations received on the 2018 Call 
and 2021 Call; information from the BOEM California Intergovernmental 
Renewable Energy Task Force; input from California State and Federal 
agencies; input received via consultation meetings and written comment 
from federally recognized Tribes; input received via Tribal outreach 
meetings with federally and non-federally recognized Tribes; the 
California Offshore Wind Energy Planning Outreach Summary Report and 
Addendum; California Offshore Wind Energy Gateway data and information 
(https://caoffshorewind.databasin.org/); outreach meetings and comments 
received under the California Energy Commission Notice of Availability 
of Outreach on Additional Considerations for Offshore Wind Energy off 
the Central Coast; comments from relevant stakeholders and ocean users, 
including the maritime community, environmental non-governmental 
organizations, offshore wind developers, and the 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 California coast 
in developing the Call Areas and WEAs. BOEM found that existing uses 
and resources with the highest potential to be affected by offshore 
wind energy development activities in the Call Areas, relative to other 
uses and resources, include: (i) Commercial and recreational fishing; 
(ii) avian species; (iii) marine mammals; (iv) maritime navigation; (v) 
historic properties; (vi) visual impacts; (vii) DoD activities; (viii) 
places and resources of importance to Tribes; and (ix) other 
infrastructure. BOEM announced the Area ID by identifying within the 
Call Areas the Humboldt WEA on July 28, 2021, and the Morro Bay WEA on 
November 12, 2021. The Area ID announcements and maps of the WEAs are 
available at: https://www.boem.gov/renewable-energy/state-activities/california.
    c. Environmental Reviews: On July 28, 2021, BOEM announced its 
intent to prepare an environmental assessment (EA) to consider 
potential environmental impacts from site characterization activities 
(i.e., biological, archaeological, geological, and geophysical surveys 
and core samples) and site assessment activities (i.e., installation of 
meteorological buoys) associated with issuing any wind energy leases in 
the Humboldt WEA. As part of the EA process, BOEM sought comments on 
the issues and alternatives that should inform the EA and received 52 
comments. The written comments, comment summaries, and public meeting 
recordings and transcripts are available at: https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area. BOEM 
announced the availability of the draft Humboldt EA on January 11, 
2022, and initiated a 30-day public comment period. BOEM received 43 
comments on the draft Humboldt EA. Written comments are available at 
http://www.regulations.gov/, under Docket No. BOEM-2021-0085. Public 
meeting recordings and summaries are available

[[Page 32445]]

at: https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-area. The EA was subsequently revised based on comments 
received during the comment period and public meetings. The revised EA 
and the finding of no significant impact were published on May 5, 2022, 
and are available at: https://www.boem.gov/renewable-energy/state-activities/humboldt-wind-energy-final-ea.
    Concurrently with its preparation of the Humboldt EA, BOEM 
conducted a consistency review under the Coastal Zone Management Act. 
The California Coastal Commission implements the Coastal Zone 
Management Act in California. BOEM submitted a consistency 
determination to the California Coastal Commission on January 24, 2022; 
Commission staff filed a Staff Report recommending conditional 
concurrence with BOEM's consistency determination on March 17, 2022 
(see Staff Report at https://documents.coastal.ca.gov/reports/2022/4/Th8a/Th8a-4-2022%20staffreport.pdf); and, on April 7, 2022, the 
Commission unanimously concurred with the staff's conditional 
consistency recommendation. BOEM will update lease conditions to ensure 
that the activities authorized under the lease are consistent with the 
conditional concurrence of the Commission.
    On November 12, 2021, BOEM announced its intent to prepare an EA to 
consider potential environmental impacts from site characterization 
activities (i.e., biological, archaeological, geological, and 
geophysical surveys and core samples) and site assessment activities 
(i.e., installation of meteorological buoys) associated with issuing 
any wind energy leases in the Morro Bay WEA. As part of the EA process, 
BOEM sought comments on the issues and alternatives that should inform 
the EA and received 88 unique comments. Written comments are available 
at http://www.regulations.gov/ gov/, under Docket No. BOEM-2021-0044. 
Public meeting recordings and summaries are available at: https://www.boem.gov/renewable-energy/state-activities/morro-bay-wind-energy-area. BOEM announced the availability of the draft Morro Bay EA on 
April 6, 2022, and initiated a 30-day public comment period. On May 4, 
2022, BOEM announced the extension of the comment period by 10 days in 
response to stakeholder request.
    Concurrently with its preparation of the Morro Bay EA, BOEM 
conducted a consistency review under the Coastal Zone Management Act. 
BOEM submitted a consistency determination to the California Coastal 
Commission on April 15, 2022.
    The Morro Bay EA will be concluded before and inform BOEM's 
decision whether to proceed with the final sale notice (FSN).
    BOEM prepared and executed a programmatic agreement (PA) to guide 
its consultations under section 106 of the National Historic 
Preservation Act. The PA provides for consultations to continue through 
BOEM's decision-making process regarding the issuance of leases, right-
of-way grants, and right-of-use and easement grants on the OCS offshore 
California. The PA also includes BOEM's phased identification and 
evaluation of historic properties. BOEM is conducting consultations 
under the Endangered Species Act and the Magnuson-Stevens Fishery 
Conservation and Management Act regarding potential impacts to listed 
species, designated critical habitat, and essential fish habitat. BOEM 
will continue to engage as required with Tribal governments throughout 
the wind energy authorization process, including through Government-to-
Government consultation with federally recognized Tribes.

II. Area Proposed for Leasing

    The areas available for sale are proposed to be auctioned as 
multiple leases within two California regions as listed in the table 
below.

------------------------------------------------------------------------
             Lease area name               Lease area ID       Acres
------------------------------------------------------------------------
North Coast Region:
    Humboldt NE.........................      OCS-P 0561          63,338
    Humboldt SW.........................      OCS-P 0562          69,031
Central Coast Region:
    Morro Bay NW........................      OCS-P 0563          80,062
    Morro Bay C.........................      OCS-P 0564          80,418
    Morro Bay E.........................      OCS-P 0565          80,418
                                         -------------------------------
        Total...........................  ..............         373,268
------------------------------------------------------------------------

    The proposed Lease Areas include the entirety of the Humboldt and 
Morro Bay WEAs. The WEAs were subdivided so that each proposed Lease 
Area:
     Is of roughly equal power generation potential and 
geographical size;
     is delineated in a manner to maximize energy generation; 
and
     facilitates fair return to the Federal Government pursuant 
to the OCS Lands Act through competition for commercially viable Lease 
Areas.
    The Morro Bay WEA has been divided into three Lease Areas and the 
Humboldt WEA has been divided into two Lease Areas. The Lease Area 
delineations are based on findings of a National Renewable Energy 
Laboratory (NREL) study called ``Assessment of Offshore Wind Energy 
Leasing Areas for Humboldt and Morro Bay Wind Energy Areas, 
California,'' available at: https://www.nrel.gov/docs/fy22osti/82341.pdf. The designation of final Lease Areas in the FSN will be 
informed by comments received in this PSN and other relevant data.
    BOEM is aware of the proposed designation of the Chumash Heritage 
National Marine Sanctuary, an area comprising approximately 7,000 
square miles off the central coast of California adjacent to the Morro 
Bay WEA. BOEM does not have authority under the OCS Lands Act to issue 
leases, right-of-way grants, or right-of-use and easement grants within 
any unit of the National Marine Sanctuary System. Potential bidders 
should note that future designation of a National Marine Sanctuary 
adjacent to a Lease Area may have implications for development of OCS 
leases for commercial wind energy. BOEM is coordinating closely with 
the NOAA Office of National Marine Sanctuaries to advance offshore wind 
energy projects and conservation and restoration of ocean and coastal 
habitats. More information on the proposed designation of Chumash 
Heritage National Marine Sanctuary is available at: https://sanctuaries.noaa.gov/chumash-heritage/.
    BOEM is also aware that the U.S. Coast Guard (USCG) is conducting a 
Port Access Route Study on the Pacific Coast from Washington to 
California (PACPARS) to evaluate safe access routes for the movement of 
vessel traffic

[[Page 32446]]

proceeding to or from ports along the western seaboard, and, 
specifically, to determine whether a Shipping Safety Fairway and/or 
routing measures should be established, adjusted, or modified. BOEM is 
coordinating closely with the USCG to address potential maritime 
impacts from any future offshore wind development in the Lease Areas. 
More information on the PACPARS is available at http://www.regulations.gov/ gov/, under Docket No. USCG-2021-0345.
    BOEM is aware of two planned submarine cable systems that are 
scheduled for installation in cable corridors that overlap the proposed 
Lease Areas. A planned submarine telecommunications cable system, known 
as BIFROST, is expected to be installed in 2023 in a cable corridor 
that would overlap with the southern portion of the proposed Morro Bay 
E Lease Area. A planned telecommunications cable, known as ECHO, is 
expected to be installed in Eureka, California, in 2023 and would 
overlap with both proposed Humboldt Lease Areas.
    A description of the proposed Lease Areas can be found in Addendum 
``A'' of the proposed lease, which BOEM has made available with this 
notice on its website at: https://www.boem.gov/renewable-energy/state-activities/california.
    a. Map of the Areas 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/renewable-energy/state-activities/california.
    b. Potential Future Restrictions to Ensure Navigational Safety:
    i. USCG Navigational Safety Measures: Potential bidders should note 
that the USCG is conducting a PACPARS to evaluate safe access routes 
for the movement of vessel traffic proceeding to or from ports or 
places along the western seaboard of the United States and to determine 
whether a Shipping Safety Fairway and/or routing measures should be 
established, adjusted, or modified. The PACPARS will evaluate the 
continued applicability of, and the need for modifications to, current 
vessel routing measures. The data gathered during the PACPARS may 
result in the establishment of one or more new vessel routing measures, 
modification of existing routing measures, or disestablishment of 
existing routing measures off the Pacific Coast between Washington and 
California. BOEM may require mitigation measures in the construction 
and operations plan (COP) once the Lessee's site-specific navigational 
safety risk assessment is available to inform BOEM's decision-making. 
The PACPARS may result in additional navigational mitigation measures 
at the COP review stage.
    ii. Measures for Vessel Transit: The information currently 
available does not indicate that vessel routing mitigation measures are 
warranted, but BOEM may nonetheless consider designating portions of 
the proposed Lease Areas as areas of no surface occupancy to facilitate 
vessel transit and continuance of existing uses. Vessels cross the 
Morro Bay WEA to enter the USCG Recommended Tracks within the Monterey 
Bay National Marine Sanctuary and traffic lanes outside the San 
Francisco Bay. Bidders should be aware that a lease stipulation may be 
included in the FSN that addresses vessel routing measures, depending 
on the outcome of additional discussions with the USCG, ocean users, 
and stakeholders, and consideration of comments submitted in response 
to this PSN.
    c. Potential Future Restrictions to Mitigate Potential Conflicts 
with Department of Defense Activities: In 2018, DoD reviewed the 
Humboldt and Morro Bay Call Areas (83 FR 53096) in support of BOEM's 
efforts to deconflict potential wind energy development in the areas in 
northern and central California, respectively. DoD provided its 
assessment of the California Offshore Planning Areas, and the 2018 DoD 
assessment indicated that its mission activities along most of the 
central coast, including the Morro Bay Call Area, are incompatible with 
wind energy development. DoD determined that the Humboldt Call Area, 
located off the coast of northern California, was DoD-mission 
compatible, with site-specific stipulations.
    On May 25, 2021, the Departments of the Interior and Defense and 
the State of California announced an agreement to accelerate wind 
energy offshore the central and northern coasts of California. The 
Department of the Interior, in cooperation with DoD and the State of 
California, identified the Morro Bay 399 Area that could support 
approximately three gigawatts of offshore wind on roughly 399 square 
miles off California's central coast, northwest of Morro Bay. The 
announcement also acknowledged the critical nature of current and 
future military testing, training, and operations in the central coast 
and noted the parties' commitment to ensuring long-term protection of 
military testing, training, and operations in the area while pursuing 
new domestic clean energy resources. This announcement came after years 
of collaboration between the Departments of the Interior and Defense to 
find areas offshore the central coast of California that are compatible 
with DoD's training and testing operations. The proposed Lease Areas 
offshore Morro Bay are all located within the Morro Bay 399 Area and 
have been determined by DoD to be suitable for development, with site-
specific stipulations.
    Prospective bidders should be aware that site specific stipulations 
may be required in consultation with DoD for development within the 
Lease Areas. For example, the North American Aerospace Defense Command 
mission may be affected by the development of the Lease Areas. BOEM 
will coordinate with DoD and the Lessee to deconflict these potential 
impacts throughout the project review stage. Mitigation measures or 
terms and conditions of a plan approval may result from this 
coordination effort.

III. Participation in the Proposed Lease Sale

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

------------------------------------------------------------------------
                                                                Company
                        Company name                              No.
------------------------------------------------------------------------
547 Energy LLC..............................................       15123
Algonquin Power Fund (America) Inc..........................       15090
Arevia Power LLC............................................       15129
Avangrid Renewables, LLC....................................       15019
Castle Wind LLC.............................................       15085
Central California Offshore Wind LLC........................       15110
Cademo Corporation..........................................       15093
Clearway Renew LLC..........................................       15109
EDF Renewables Development, Inc.............................       15027
EDPR Offshore North America LLC.............................       15074
Equinor Wind US LLC.........................................       15058
JERA Renewables NA, LLC.....................................       15131
Marubeni Power International, Inc...........................       15128
Mission Floating Wind LLC...................................       15087
Northcoast Floating Wind LLC................................       15088
Northland Power America Inc.................................       15068
Orsted North America Inc....................................       15059
Redwood Coast Energy Authority (RCEA).......................       15084
Redwood Coast Offshore Wind LLC.............................       15106
RWE Renewables Development, LLC.............................       15080
Shell New Energies US LLC...................................       15140
US Mainstream Offshore, Inc.................................       15120
wpd offshore Alpha, LLC.....................................       15060
------------------------------------------------------------------------

    All other entities who would like to participate in the proposed 
lease sale must submit the required qualification materials by the end 
of the 60-day comment period for this PSN.
    b. Affiliated Entities: On the Bidder's Financial Form (BFF), 
discussed in section V.(c)(i), below, eligible bidders

[[Page 32447]]

must list any other eligible bidders with whom they are affiliated. 
BOEM considers two entities to be affiliated if (a) one entity (or its 
parent or subsidiary) has or retains a right, title, or interest in the 
other entity (or its parent or subsidiary), including the 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. BOEM further considers the following regarding affiliated 
entities:
    i. BOEM considers two entities to be affiliated if ownership or 
common ownership of more than 50 percent of the voting securities, or 
instruments of ownership or other forms of ownership, of another person 
constitutes control (person means any individual, firm, corporation, 
association, partnership, consortium, or joint venture (when 
established as a separate entity)). Ownership of less than 10 percent 
constitutes a presumption of non-control that BOEM may rebut.
    ii. If there is ownership or common ownership of 10 through 50 
percent of the voting securities or instruments of ownership, or other 
forms of ownership, of another person, BOEM will consider each of the 
following factors to determine if there is control under the 
circumstances of a particular case:
    a. The extent to which there are common officers or directors.
    b. With respect to the voting securities, or instruments of 
ownership or other forms of ownership: The percentage of ownership or 
common ownership, the relative percentage of ownership or common 
ownership compared to the percentage(s) of ownership by other persons, 
if a person is the greatest single owner, or if there is an opposing 
voting bloc of greater ownership.
    c. Operation of a lease, plant, or other facility.
    d. The extent of other owners' participation in operations and day-
to-day management of a lease, plant, or other facility.
    e. Other evidence of power to exercise control over or common 
control with another person.
    BOEM solicits comments from stakeholders on this definition. See 
Section 4 below.
    c. Affiliated eligible bidders are not permitted to compete against 
each other in either the North Coast or Central Coast auctions. 
However, one affiliate may participate in the North Coast and one in 
the Central Coast because they would not be bidding against each other. 
Where multiple affiliated bidders have qualified to bid in the same 
lease sale, bidders must decide prior to the auction which one eligible 
affiliated bidder (if any) will participate in each of the two 
simultaneous auctions. If two or more affiliated bidders seek to 
participate in the auction for the same Region, BOEM will disqualify 
such bidders from the auction.

IV. Questions for Stakeholders

    Stakeholders are encouraged to comment on any matters related to 
this lease sale that are of interest or concern. However, BOEM has 
identified certain issues as particularly important in developing this 
lease sale and encourages commenters to address these issues 
specifically.
    a. Number, Size, Orientation, and Location of the Proposed Lease 
Areas: In this PSN, BOEM proposes five Lease Areas in California. BOEM 
is seeking feedback on the proposed number, size, orientation, and 
location of the Lease Areas and welcomes comments on which Lease Areas, 
if any, should be prioritized for inclusion, or exclusion, from this 
lease sale or future lease sales.
    Considerations for the delineation of Lease Area may include: Equal 
commercial viability and size; prevailing wind direction and minimal 
wake effects; maximized energy generating potential; mooring system 
anchor footprints and extents; possible setbacks at Lease Area 
boundaries; distance to shore, port infrastructure, and electrical grid 
interconnections; and fair return to the Federal Government pursuant to 
the OCS Lands Act through competition for commercially viable lease 
areas. Additional comments are welcome regarding other considerations 
for delineating Lease Areas.
    b. Engaging Underserved Communities: Executive Order 13985, 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government,'' directs advancement of equity for 
all, including people of color and others who have been historically 
underserved, marginalized, and adversely affected by persistent poverty 
and inequality. Executive Order 14008, ``Tackling the Climate Crisis at 
Home and Abroad,'' establishes a policy to secure environmental justice 
and spur economic opportunity for disadvantaged communities through 
investing in and building a clean energy economy and making 
environmental justice part of every agency's mission.
    Consistent with its statutory and regulatory authorities, BOEM is 
considering lease stipulations to ensure that communities, particularly 
underserved communities, are considered and engaged throughout the 
offshore wind energy development process, that potential impacts and 
benefits from Lessees' projects are documented, and Lessees' project 
proposals are informed by or altered to address those impacts and 
benefits.
    BOEM invites comments on the appropriate mechanisms and evaluation 
metrics for lease stipulations to benefit underserved communities, 
including how the stipulations would further development of the 
proposed Lease Areas and the purposes of OCS Lands Act. BOEM requests 
that commenters provide references to any studies that support their 
recommendations.
    c. Bidding Credits: As authorized under 30 CFR 585.220(a)(4) and 
585.221(a)(6), BOEM proposes to use a multiple-factor auction format, 
with a multiple-factor bidding system, for this lease sale. The bidding 
system for this lease sale is proposed as a multiple-factor combination 
of a monetary bid and up to two non-monetary factors.
    BOEM is proposing to grant bidding credits to potential bidders for 
commitments to:
    (1) Support workforce training programs for the offshore wind 
industry and/or development of a U.S. domestic supply chain for the 
offshore wind industry, and
    (2) establish a community benefit agreement (CBA) with a community 
or stakeholder group whose use of the geographic space of the Lease 
Area, or whose use of resources harvested from that geographic space, 
is directly impacted by the Lessee's potential offshore wind 
development.
    In previous commercial lease sales, BOEM has proposed non-monetary 
auction factors to enhance, through training, the offshore wind 
workforce or to stand up the domestic supply chain for offshore wind 
manufacturing, assembly, or services. For this sale, BOEM is also 
considering non-monetary auction factors to foster development of the 
Lease Area through cooperation with communities affected by activities 
on the OCS, as described in section V.(c)(iii) below. BOEM is also 
exploring an additional bidding credit, targeting other effects from 
OCS development, as described in section V.(c)(iv) below.
    In a multi-factor auction, BOEM appoints a panel to review the 
requirements and restrictions of the non-monetary component(s) and the 
bidder's conceptual strategy, submitted with the BFF. Following the 
panel's review of the bidding credit conceptual strategy, BOEM would 
notify the bidder if it qualifies for a credit(s) prior to the mock 
auction. The bid made by a particular bidder in each round would

[[Page 32448]]

represent the sum of a monetary (cash) amount and non-monetary factors 
(bidding credit(s)). The structure of the proposed bidding credits is 
explained in the subsection below. BOEM would start the auction using 
the minimum bid price for each Lease Area and would increase those 
prices incrementally until no more than one active bidder per Lease 
Area remains in the auction. A bidder would be eligible to elect to 
qualify for one or both of the bidding credits. A work force training 
credit or supply chain development credit would be worth 20 percent of 
the cash bid. A bidder could commit to both workforce training and 
supply chain development, but the total amount of the credit would 
still be 20 percent. The proposed CBA bidding credit would be worth 2.5 
percent of the cash bid. If a bidder qualifies for all proposed bidding 
credits, the credits would be additive, for a total potential credit of 
maximum 22.5 percent of the cash bid. Bidders are encouraged to review 
the proposed BFF Addendum if they are interested in qualifying for 
these bidding credits.
    i. Bidding credit calculation: Bidders interested in a bidding 
credit would have the option to qualify for:
    1. Both proposed bidding credits described below for a cumulative 
22.5 percent credit;
    2. A workforce training and/or supply chain development credit 
(with the opportunity to target either workforce training, supply chain 
development, or a combination thereof) for a 20 percent credit; or
    3. The CBA credit for a 2.5 percent credit.
    BOEM provides the following example. For a cumulative 22.5 percent 
bidding credit with a $50 million Asking Price, the bidding credit 
would be calculated within the auction software as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.221

    As proposed, only the 20 percent workforce training and/or supply 
chain development credit would require an explicit financial 
commitment. Under BOEM's proposal, bidders seeking a CBA credit would 
retain the flexibility to determine the optimal benefits (both monetary 
and non-monetary) on which the parties can agree. Thus, per the example 
above, the required financial commitment for the workforce training 
and/or supply chain development credit would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.222

    BOEM has prepared a table demonstrating the financial commitment 
calculations if a $50 million asking price is paid for in part with 
various bidding credits. Any financial commitment is calculated solely 
from the value of the 20 percent workforce training and/or supply chain 
development bidding credit, with no financial commitment required for a 
CBA credit.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                        Commitment  (80%
         Bidding credits qualified for                    Asking price                Cash bid       Percent credit     Credit value       of the 20%
                                                                                                                                             credit)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Workforce Training/Supply Chain Development;    $50 million.....................    $40,816,326.53              22.5     $9,183,673.47     $6,530,612.24
 Lease Area Use CBA (22.5%).
Workforce Training/Supply Chain Development     50 million......................     41,666,666.67              20.0      8,333,333.33      6,666,666.67
 (20%).
Lease Area Use CBA Credit (2.5%)..............  50 million......................     48,780,487.80               2.5      1,219,512.20               N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------

    ii. 20 Percent Bidding Credit Either for Workforce Training or 
Supply Chain Development or a Combination of Both: The proposed bidding 
credit would allow a bidder to receive a credit of 20 percent of its 
cash bid in exchange for committing to make a qualifying monetary 
contribution (``Contribution'') to programs or initiatives, as 
described in the BFF Addendum and lease, that either support workforce 
training programs for the offshore wind industry, support development 
of a U.S. domestic supply chain for the offshore wind industry, or 
support a combination of both. To qualify for the credit, the winning 
bidder would be required to commit to make a financial Contribution of 
at least 80 percent of the bidding credit cash value toward a workforce 
training program and/or the development of a domestic supply chain, as 
described in the BFF Addendum and lease. The 80 percent Contribution of 
the bid credit value is designed to incentivize bidders to commit funds 
to workforce training and to develop the domestic offshore wind supply 
chain. The discount to the bid credit value recognizes the Lessee's 
administrative burden associated with fulfilling bidding credit 
requirements. A mathematical example is shown in section IV.(c)(i) 
above. If a bidder qualifies to bid for a Lease Area in both regions 
and seeks to qualify for a credit in both regions, the bidder must 
submit one bidding credit conceptual strategy, but identify any 
differences in the strategy for each region.
    1. As proposed, the Contribution to workforce training must result 
in a better trained and/or larger domestic offshore wind work force 
that would provide for more efficient operations via

[[Page 32449]]

an increase in the supply of fully trained personnel.
    2. The Contribution to domestic supply chain development must 
result in a more stable domestic supply chain by reducing the upfront 
capital or certification cost for manufacturing offshore wind 
components, including the building of facilities, the purchasing of 
capital equipment, and the certifying of existing manufacturing 
facilities.
    3. Bidders interested in obtaining the bidding credit could choose 
to commit to workforce training programs, domestic supply chain 
initiatives, or a combination of both. Bidders would be required to 
note, on the BFF, their commitment to earn the bidding credit. A bidder 
interested in using a bidding credit would be required to submit its 
bidding credit conceptual strategy with its BFF. The strategy would be 
required to describe the verifiable actions the Lessee would take and 
that would allow BOEM to confirm compliance when the Lessee submits its 
documentation. Bidders are encouraged to review the proposed BFF 
Addendum if they are considering qualifying for the bidding credit.
    4. BOEM proposes to permit a Lessee to defer its payment fulfilling 
the commitment, with 25 percent due prior to the first COP submittal 
for the Lease Area, and the remainder due prior to the first Facility 
Design Report (FDR) submittal to BOEM. Lessees would be required to 
provide documentation showing that they had met the commitment and 
complied with the applicable bidding credit requirements no later than 
the submission to BOEM of the first COP (25 percent) and first FDR 
(remainder) for the Lease, as described below. Deferring the payment 
until the COP and FDR would enable the Lessee to identify programs or 
recipients best suited to meet the bidding credit purpose and goals, as 
described in the BFF Addendum.
    5. As proposed, contributions to workforce training must consist of 
one or more of the following: (i) Contributions in support of union 
apprenticeships, labor management training partnerships, stipends for 
workforce training, or other technical training programs or 
institutions focused on providing skills necessary for the planning, 
design, construction, operation, maintenance, or decommissioning of 
offshore wind energy projects in the United States; (ii) Contributions 
toward maritime training necessary for the crewing of vessels to be 
used for the construction, servicing, and/or decommissioning of wind 
energy projects in the United States; (iii) Contributions toward 
training workers in skills or techniques necessary to manufacture or 
assemble offshore wind components, subcomponents or subassemblies. 
Examples of these skills and techniques include welding; wind energy 
technology; hydraulic maintenance; braking systems; mechanical systems, 
including blade inspection and maintenance; or computers and 
programmable logic control systems; (iv) Contributions toward training 
in any other job skills that the Lessee can demonstrate are necessary 
for the planning, design, construction, operation, maintenance, or 
decommissioning of offshore wind energy projects in the United States.
    6. As proposed, contributions to domestic supply chain development 
must consist of one or more of the following: (i) Contributions 
supporting the development of a domestic supply chain for the offshore 
wind industry, including manufacturing of components and sub-assemblies 
and the expansion of related services; (ii) Contributions to domestic 
tier-2 and tier-3 offshore wind component suppliers, including 
suppliers of components specifically needed to develop floating wind 
technology, and domestic tier-1 supply chain efforts, including quay-
side fabrication; (iii) Contributions for technical assistance grants 
to help U.S. manufacturers re-tool or certify (e.g., ISO-9001) for 
offshore wind manufacturing; (iv) Contributions for the development of 
Jones Act-compliant vessels for the construction, servicing, and/or 
decommissioning of wind energy projects in the United States; (v) 
Contributions to establish a new or existing bonding support reserve or 
revolving fund available to all businesses providing goods and services 
to offshore wind energy companies, including disadvantaged businesses; 
(vi) Other Contributions to supply chain development efforts that the 
Lessee can demonstrate further the manufacture of offshore wind 
components or subassemblies, or the provision of offshore wind 
services, in the United States.
    7. Documentation: Under the proposed sale, if a lease is awarded 
pursuant to a winning bid that includes a bidding credit for workforce 
training and/or supply chain development, the Lessee must provide 
documentation to BOEM showing that the Lessee has met at least 25 
percent of the commitment and complied with the applicable bidding 
credit requirements by no later than the submission of the Lessee's 
first COP, and must provide documentation that it has met the remainder 
of the commitment no later than the submission of the first FDR. As 
proposed, the documentation must enable BOEM to objectively verify the 
amount of the Contribution and the beneficiary(ies) of the 
Contribution. At a minimum, the documentation submitted with the first 
COP, and that submitted with the first FDR, must include: All written 
agreements between the Lessee and beneficiary(ies) of the Contribution; 
all receipts documenting the amount, date, financial institution, and 
the account and owner of account to which the Contribution was made; 
and sworn statements by the entity that made the Contribution and the 
beneficiary(ies) of the Contribution, attesting: The amount and date(s) 
of the Contribution; that the Contribution is being (or will be) used 
in accordance with the bidding credit requirements in the lease; and 
that all information provided is true and accurate. The documentation 
would need to describe how the funded initiative or program has 
advanced, or is expected to advance, U.S. offshore wind workforce 
training and/or supply chain development. The documentation should also 
provide qualitative and/or quantitative information that includes the 
estimated number of trainees or jobs supported, or the estimated 
leveraged supply chain investment resulting or expected to result from 
the Contribution. The documentation must contain any information 
specified in the conceptual strategy that the Lessee submitted with its 
BFF. If the Lessee's implementation strategy has changed due to market 
needs or other factors, the Lessee must explain this change. As 
proposed, BOEM would reserve all rights to determine that the bidding 
credit has not been satisfied if changes relative to the Lessee's 
conceptual strategy, submitted with its BFF, do not meet the criteria 
for the bidding credit described in the lease.
    8. Enforcement: The commitment for the bidding credit would be made 
in the BFF and would be included in a lease addendum that would bind 
the Lessee and all future assignees of the lease. If BOEM were to 
determine that a Lessee or assignee had failed to satisfy the 
requirements of the bidding credit, or if a Lessee were to relinquish 
or otherwise fail to develop the lease by the tenth anniversary date of 
lease issuance, the amount corresponding to the bidding credit awarded 
would be immediately due and payable to the Office of Natural Resources 
Revenue (ONRR) with interest from the date of lease execution. The 
interest rate would be the underpayment interest rate identified by 
ONRR. BOEM could, at its sole discretion, extend the documentation

[[Page 32450]]

deadline beyond the COP, FDR or the 10-year timeframe.
    iii. Questions Regarding Bidding Credit for Workforce Training and/
or Supply Chain Development:
    1. Is the proposed maximum 20 percent bidding credit for workforce 
training and/or supply chain development the optimal percentage to 
support workforce training and supply chain development? If not, please 
propose percentage(s) that may be optimal and explain why that level is 
most appropriate to drive the benefits intended by the credit while 
simultaneously supporting a competitive lease sale. Please also explain 
how your proposal better supports workforce training programs and/or 
development of a U.S. domestic supply chain for the offshore wind 
industry, and how it is consistent with the requirement that the 
government receive a fair return from the lease auction.
    2. As proposed, the winning bidder would be required to commit to 
make a financial Contribution of at least 80 percent of the bidding 
credit cash value toward a workforce training program and/or the 
development of the domestic supply chain. BOEM solicits any views as to 
whether it should choose a Contribution threshold other than 80 
percent, or should eliminate this Contribution discount on the bid 
credit value.
    3. What other activities should qualify for this bidding credit to 
best support a sustained and robust U.S. offshore wind supply chain, 
particularly a floating wind supply chain? For example, are there 
activities related to manufacturing, sourcing of raw materials and 
components, or other offshore wind-related industries that BOEM should 
consider as possibly qualifying for this credit? Please explain how the 
proposed qualifying activity supports the development of a domestic 
supply chain and how that support can best be documented.
    4. Should the sale encompass a bidding credit for a bidder who 
proposes that its financial commitment include entering into a long-
term contract for components needed to build or maintain its project 
that will also benefit the offshore wind industry as a whole, such as 
the construction of new manufacturing capacity or investment in 
expanding or re-tooling existing capacity? Are other effects of such 
contracts conducive to development of renewable energy on the OCS? How 
might the bidder document that its contract facilitated such 
development? Should BOEM require the manufacturer or bidder to 
demonstrate that the new or expanded capacity also will be used to 
fulfill contracts with other developers? How much of the value of such 
a contract should count toward any potential credit, and why?
    iv. Lease Area Use Bidding Credit: The second bidding credit 
proposed would allow a bidder to receive a credit of 2.5 percent of its 
cash bid in exchange for an existing CBA or a commitment to enter into 
a new CBA with a community or stakeholder group whose use of the 
geographic space of the Lease Area, or whose use of resources harvested 
from that geographic space, is directly impacted by the Lessee's 
potential offshore wind development. The CBA is intended to mitigate 
potential impacts to the community or stakeholder group from renewable 
energy activity or structures on the Lease Area, and particularly to 
assist fishing and related industries to manage transitions, gear 
changes, or other similar impacts which may arise from the development 
of the Lease Area. To qualify for the credit, the bidder would be 
required to commit to the bidding credit requirements in the BFF and 
submit a strategy as described in the BFF Addendum. If a bidder were to 
qualify to bid for a Lease Area in both regions, and would like to 
qualify for a CBA credit in each of those regions, bidders need only 
submit a single Lease Area Use Bidding Credit conceptual strategy, 
including any measures tailored to the individual regions. The CBA(s) 
must be between the Lessee (or affiliated entity) and a qualifying 
community or stakeholder group in each region for which the bidder 
wishes to receive a credit. A mathematical example showing how this 
bidding credit would be calculated is available in section V.(c)(i) 
above.
    1. As proposed, bidders interested in pursuing a bidding credit for 
this CBA must note on the BFF whether they have an existing CBA that 
conforms with BOEM's requirements or are instead making a commitment to 
enter into a CBA. Bidders seeking the bidding credit must submit their 
conceptual strategy with their BFF, further described below and in the 
BFF Addendum. The conceptual strategy would need to describe the 
verifiable actions that the Lessee intends to take that would enable 
BOEM to confirm compliance when the Lessee submits its documentation 
showing how it is satisfying the requirements for the bidding credit. A 
Lessee would be required to provide documentation showing that the 
Lessee has met the commitment and complied with the applicable bidding 
credit requirements no later than the submission to BOEM of the first 
FDR for the lease. Deferring the fulfillment of the commitment until 
the first FDR would enable the Lessee to identify stakeholders with 
impacts in need of mitigation or the greatest potential to expedite or 
facilitate orderly OCS renewable energy development.
    2. As proposed, a qualifying CBA must meet the following 
requirements: (i) The CBA must be an agreement between (a) the Lessee 
or its affiliated entity, or, if appropriate, its assignee(s), and (b) 
a community or stakeholder group whose use of the geographic space of 
the Lease Area, or whose use of resources harvested from that 
geographic space, is directly impacted by the Lessee's potential 
offshore wind development; (ii) Specify the monetary, material, or 
other benefits provided, or to be provided, by the Lessee to the 
directly impacted community or stakeholder group; (iii) Indicate 
commitment of parties to collaboration and resolution of issues, 
communication methods, engagement methods, or educational opportunities 
for the impacted community or stakeholder group; (iv) Specify plans (or 
strategies) to mitigate potential impacts from the proposed development 
of the Lease Area on the community or stakeholder group.
    3. No part of any CBA otherwise eligible for this credit may 
include exclusivity or preferential clauses that prevent or 
disincentivize an entity, community, or stakeholder from entering into 
similar agreements with other OCS lessees or potential lessees.
    4. As proposed, a Lessee may enter into a CBA with a single 
counterparty or with multiple counterparties and may enter into more 
than one CBA.
    5. Documentation: As proposed, if a lease is awarded pursuant to a 
winning bid that includes a CBA credit, the Lessee must provide written 
documentation to BOEM demonstrating execution of the CBA commitment no 
later than submission of the Lessee's first FDR. The documentation must 
enable BOEM to objectively verify the CBA has met all applicable 
requirements as outlined in the BFF Addendum and Lease. At a minimum, 
this documentation must include: All written agreements between the 
Lessee and beneficiary(ies), including the executed CBA; any receipts 
proving monetary contributions as required by the CBA, documenting the 
amount, date, financial institution, and the account and owner of the 
account to which the contribution was made; and sworn statements by the 
CBA signatories or their assignees attesting to: The date the CBA was 
entered; explaining how the CBA addresses (or

[[Page 32451]]

will address) the potential impacts to the use of the geographic space 
of the Lease Area, or resources harvested from that geographic space, 
arising from the potential development of the Lease Area; and the truth 
and accuracy of all the information provided. The documentation must 
contain any information specified in the conceptual strategy that was 
submitted with the BFF. If the Lessee's conceptual strategy has changed 
due to market needs or other factors, the Lessee must explain this 
change.
    6. Enforcement: The commitment for the Lease Area Use Bidding 
Credit will be made in the BFF and will be included in a lease addendum 
that binds the Lessee and all assignees of the lease. If BOEM were to 
determine that a Lessee or assignee had failed to satisfy the 
commitment at the FDR stage, or if a Lessee were to relinquish or 
otherwise fail to develop the lease by the tenth anniversary date of 
lease issuance, the amount corresponding to the bidding credit awarded 
would be immediately due and payable to ONRR with interest from the 
date of lease execution. The interest rate would be the underpayment 
interest rate identified by ONRR. BOEM could, at its sole discretion, 
extend the documentation deadline beyond the FDR or the 10-year 
timeframe.
    v. Potential Additional Credit: BOEM is exploring whether it has 
the authority to pursue an additional bidding credit for a CBA 
addressing impacts attributable to potential offshore wind development 
not covered under the contemplated Lease Area Use Bidding Credit. BOEM 
is seeking comments on all aspects of this potential CBA and 
specifically on how it can be justified under the OCS Lands Act), for 
example:
    1. What goals of the OCS Lands Act would be furthered by such a 
CBA? What restrictions, if any, does OCS Lands Act impose on such a 
CBA?
    2. What benefits could be promoted by a more general CBA? Would a 
CBA be effective in promoting benefits, such as job creation, education 
opportunities, or increased engagement, that mitigate the potential 
impacts of the development of the Lease Areas?
    3. What potential impacts should be addressed? What quantifiable 
impacts will be felt by local communities associated with cultural and 
visual resources, the human environment, or other resources? How might 
a CBA lead to expeditious and orderly development of offshore wind 
resources in the Lease Areas?
    4. What types of groups or legally recognized entities should be 
eligible to enter into a CBA?
    5. What are the key elements of a CBA that BOEM should consider? 
Should the requirements for eligibility for bidding credits for a CBA 
include transparency, coalition building, inclusiveness, or enhanced 
communication?
    6. How can BOEM use this potential type of credit to encourage 
early community engagement, mutual benefits, and a long-lasting 
dialogue between a potential developer and community or stakeholder 
group? What types of agreements could BOEM promote that result in 
mutually beneficial outcomes to both the Lessee and community or 
stakeholder groups, or lead to expeditious and orderly development of 
offshore wind resources in the Lease Areas?
    vi. General Questions Regarding CBA credits: BOEM is interested in 
comments answering the following questions in this section relevant to 
CBAs and the associated bidding credits as described in sections 
IV.(c)(iv) and IV.(c)(v) above.
    1. How should BOEM evaluate the agreements? On what metrics can 
BOEM evaluate CBAs? How can BOEM verify actions to be undertaken 
pursuant to the CBA?
    2. How and when should BOEM enforce and monitor CBA commitments?
    3. What level of credit should BOEM offer in exchange for bidders 
entering into a CBA, and how does that level affect receipt of fair 
return to the United States?
    4. If BOEM grants a bidding credit for a CBA, at what point in 
BOEM's renewable energy leasing process must the CBA be executed?
    5. Should the two CBA credits BOEM discussed above be combined?
    6. Should executed CBAs be posted publicly?
    7. What disclosures/certifications should be required to be part of 
any CBA? Anything else BOEM should take into consideration when 
evaluating the use of CBAs?
    8. Should BOEM explicitly allow a Lessee's CBA to include payments 
into a mitigation or innovation fund? For example, funds established or 
created to address fishermen's gear changes, technology improvements 
that minimize impacts, lost revenue, or other various impacts 
potentially resulting from the development of the Lease Area. If so, 
what metrics should BOEM use to evaluate whether the use of the fund is 
acceptable in meeting OCS Lands Act goals such as leading to 
expeditious and orderly development of the OCS?
    9. Is offering a bidding credit to enter into a CBA the most 
effective method to encourage similar types of agreements between 
developers and stakeholders or community groups, or is there a more 
effective format BOEM should consider? Commenters should consider that 
bidding credits must be consistent with BOEM's authority under the OCS 
Lands Act.
    d. Limits on the Number of Lease Areas per Bidder: BOEM recognizes 
that the offering for sale of two regions (i.e., Humboldt WEA and Morro 
Bay WEA), hundreds of miles apart, is novel. BOEM is proposing to allow 
each qualified entity to bid for one lease per region (North Coast 
Region and Central Coast Regions) and ultimately acquire one Lease Area 
per region via simultaneous auctions occurring at the same time, as 
described in section XII.(b)(i) below. BOEM is seeking feedback on this 
proposal, including feedback on how different leasing scenarios (e.g., 
number of Lease Areas offered, size of Lease Areas, etc.) may influence 
the advisability of such a limitation.
    e. The Definition of ``Affiliated Entities'': BOEM is prohibiting 
``affiliated entities'' from bidding against each other in an auction. 
This measure limits a single entity to bidding on and winning a single 
lease. BOEM seeks comments on the definition and concepts of 
affiliation contained in Section 3 of the Proposed Sale Notice. 
Furthermore, in past lease sales, BOEM's definition of ``affiliated 
entities'' was tied to direct or indirect ownership or control of one 
entity over another. This effectively prevented a bidder and several 
subsidiaries from bidding in the same lease sale. This definition, 
however, does not explicitly preclude bidding by multiple entities that 
have formed agreements with the effect of circumventing the spirit of a 
one-per-customer sale. For example, BOEM's prior auctions arguably did 
not cover a situation in which a bidder had obtained development rights 
in other bidders' projects. Accordingly, BOEM requests comment on 
revising the definition of ``affiliated entities'' for this sale to 
include bidders that have, prior to the auction, entered into agreement 
with each other that is related to the disposition of leases offered in 
either of the auctions. This change would likely be accompanied by a 
new requirement to disclose any agreements with affiliated bidders 
regarding the disposition of leases that may be acquired in the 
auction. BOEM invites comment on whether this adjustment to the 
definition of ``affiliated'' sufficiently promotes the objectives of a 
``one-per-customer'' sale.
    f. Tribal Governments, Ocean Users, Underserved Communities, 
Agencies, and Other Stakeholders Engagement

[[Page 32452]]

and Reporting: In an effort to require early and regular engagement 
with Tribal governments, ocean users, underserved communities, 
agencies, and other stakeholders that may be potentially affected by 
activities on the OCS (collectively ``Tribes and parties''), BOEM is 
proposing to require a semi-annual progress report and minimum 
engagement requirements. Within the progress report, Lessees would be 
required to identify Tribes and parties potentially affected by 
proposed activities and provide updates on engagement activities, 
impacts on or benefits to the Tribes and parties from proposed 
activities, and how, if at all, a project proposal has been informed or 
altered to address those impacts or benefits, as well as any planned 
engagement activities during the next reporting period.
    In acknowledgment of the existing and growing consultation burden 
placed on many Tribes and parties, the stipulation would also require, 
to the maximum extent practicable, that Lessees coordinate with one 
another on engagement activities. It is BOEM's intention that this 
requirement to coordinate engagement apply not only to meetings 
proposed by Lessees, but also to reasonable requests to coordinate 
engagement made by Tribes and parties. For example, one possible lease 
stipulation to facilitate coordinated Tribal engagement could require 
Lessees to offer coordination meetings at regular intervals throughout 
the year (i.e., quarterly, biannually, annually, etc.). Coordinated 
engagement among Tribal Nations and Lessees that may be required would 
not excuse BOEM from meeting its responsibilities to federally 
recognized Tribes under Executive Order 13175.
    In addition, the proposed stipulation would require that the 
progress report incorporate separate lease requirements for the 
development of communication plans for fisheries, Tribes, and agencies, 
that would serve to guide engagement activities with those groups. 
Lastly, the progress report would be required to include an update on 
activities executed under any survey plan.
    BOEM seeks comment on this progress report and engagement concept 
generally. BOEM also seeks specific comments on how to improve the 
frequency, duration, and sustainability of collaborative engagement 
among these parties; and on the contents, timing, and review of 
progress reports.
    g. Uniform Layouts: BOEM seeks comment on whether BOEM should 
consider uniform and aligned turbine layouts in the Lease Areas. Would 
the establishment of uniform turbine layouts negate the need for vessel 
transit measures and/or areas of no surface occupancy?
    h. 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?
    i. Vessel Transit: BOEM welcomes comments on measures to facilitate 
vessel transit and continuance of existing uses within the Lease Areas. 
Such measures may include areas of no surface occupancy where surface 
structures will not be permitted. If areas of no surface occupancy are 
warranted, BOEM welcomes comment on the preferred placement and 
orientation (e.g., length, width, etc.) that would facilitate 
continuance of existing uses. BOEM asks commenters to submit technical 
and scientific data in support of their comments.

V. Proposed Lease Sale Deadlines and Milestones

    This section describes the major deadlines and milestones in the 
auction process from publication of this PSN to potential 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 1, 2022. All comments 
received or postmarked during the comment period will be made available 
to the public and considered by BOEM prior to publication of the FSN.
    ii. Public Auction Seminar: BOEM will host a public seminar to 
discuss the lease sale process and the auction format. The time and 
place of the seminar will be announced by BOEM. The announcement will 
also be posted on the BOEM website at https://www.boem.gov/renewable-energy/state-activities/california.
    Neither registration nor RSVP is required to attend the auction 
seminar.
    iii. Submit Qualifications Materials: All qualification materials 
must be received by BOEM by August 1, 2022. This includes materials 
sufficient to establish a company's legal, technical, and financial 
qualifications pursuant to 30 CFR 585.106-.107. To qualify to 
participate in this lease sale, qualification materials would need to 
be developed in accordance with the guidelines available at https://www.boem.gov/Renewable-Energy-Qualification-Guidelines/. If you wish to 
protect the confidentiality of your comments or qualification 
materials, clearly mark the relevant sections and request that BOEM 
treat them as confidential. Please label privileged or confidential 
information with the caption ``Contains Confidential Information'' and 
consider submitting such information as a separate attachment. 
Treatment of confidential information is addressed in section XX 
entitled, ``Protection of Privileged or Confidential Information.'' 
Information that is not labeled as privileged or confidential would be 
regarded by BOEM as suitable for public release.
    b. End of PSN Comment Period to FSN Publication:
    i. Review Comments: BOEM will review all comments submitted in 
response to the PSN during the comment period.
    ii. Finalize Qualifications Reviews: Prior to the publication of 
the FSN, BOEM will complete its review of bidder qualification 
materials submitted during the PSN comment period. The final list of 
eligible bidders will be published in the FSN.
    iii. Prepare the FSN: BOEM will prepare the FSN by updating 
information contained in the PSN where appropriate.
    iv. Publish FSN: BOEM will publish the FSN in the Federal Register.
    c. FSN Waiting Period: During the period between FSN publication 
and the lease auction (i.e., minimum 30 days), qualified bidders would 
be required to take several steps to remain eligible to participate in 
the auction.
    i. Bidder's Financial Form: Each bidder would be required to submit 
a BFF to BOEM to participate in the auction. The BFF would be required 
to contain each bidder's conceptual strategy for each non-monetary 
credit for which the bidder wishes to be considered, or qualifying 
Lease Area Use CBA if applicable. Each bidder would be required to 
submit to BOEM its BFF no later than the date listed in the FSN. BOEM 
may consider extensions to this deadline if BOEM determines that the 
failure to timely submit a BFF was caused by events beyond the bidder's 
control. The BFF will be available for download at: https://www.boem.gov/renewable-energy/state-activities/california.
    As proposed, once BOEM has processed a BFF, the bidder would log 
into pay.gov to submit a bid deposit. For purposes of this auction, 
BOEM will not consider BFFs submitted by bidders for previous lease 
sales. Bidders must submit an original BFF signed by an authorized 
signatory by mail to BOEM's Pacific Regional Office for certification. 
Digital signatures affixed to the paper copy would be acceptable until 
further notice.

[[Page 32453]]

    1. Your submission should be accompanied with a transmittal letter 
on company letterhead.
    2. The BFF would be required to be executed by an authorized 
representative listed in the bidder's legal qualifications. Each bidder 
would be required to sign the self-certification in the BFF truthfully, 
under threat of criminal penalty for false statements in accordance 
with 18 U.S.C. 1001 (fraud and false statements).
    3. Additional information regarding the BFF may be found below in 
section IX entitled, ``Bidder's Financial Form.''
    ii. Bid Deposit: Each qualified bidder would be required to submit 
a bid deposit of $5,000,000 in order to bid for one Lease Area. If the 
FSN allows bidders to win up to two Lease Areas (one per region), a bid 
deposit of $10,000,000 would be required to bid on two Lease Areas (one 
per region). Bid deposits would be due no later than the date specified 
in the FSN. Further information about bid deposits can be found below 
in section X entitled, ``Bid Deposit.''
    d. Notification of Eligibility for Non-Monetary Credits: BOEM will 
determine bidder eligibility for bid credits in each auction in which 
the bidder participates and will notify each bidder of the agency's 
determination prior to the mock auction.
    e. Mock Auction: BOEM proposes to hold a mock auction that is open 
only to qualified bidders who have met the requirements and deadlines 
for auction participation, including submission of the bid deposit. 
Final details of the mock auction will be provided in the FSN.
    f. The Auction: BOEM, through its contractor, would conduct the 
auction as described in the FSN. The auction would occur no sooner than 
30 days following publication of the FSN in the Federal Register. The 
estimated timeframes described in this PSN assume the auction would 
occur approximately 45 days after FSN publication. Final dates would be 
included in the FSN. BOEM would announce the provisional winners of the 
lease sale after the auction ends.
    g. From the Auction to Lease Execution:
    i. Notice and Refunds to Non-Winners: Once the provisional winners 
have been announced, BOEM would notify the other bidders, include a 
written explanation of why they did not win, and return their bid 
deposits.
    ii. Department of Justice (DOJ) Review: DOJ would have 30 days in 
which to conduct an antitrust review of the auction, pursuant to 43 
U.S.C 1337(c).
    iii. Delivery of the Lease: BOEM would send three copies of the 
lease to each winning bidder, with instructions on how to sign the 
lease. Each winning bidder would be required to pay the first year's 
rent within 45 calendar days after receiving the lease copies.
    iv. Return the Lease: Within 10 business days of receiving the 
lease copies, each winning bidder would be required to file financial 
assurance, pay any outstanding balance of its bonus bids (i.e., winning 
monetary bid less the applicable non-monetary bidding credit and bid 
deposit), and sign and return the three lease copies. A winning bidder 
would be allowed to request a deadline extension. BOEM could grant the 
request if BOEM determines the cause of the delay was beyond the 
winning bidder's control pursuant to 30 CFR 585.224(e).
    v. Execution of Lease: Once BOEM has received the signed lease 
copies and verified that all other required obligations have been met, 
BOEM would determine, in its discretion, whether to sign and execute 
the lease.

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 and conditions for the 
commercial leases that might be offered through this proposed sale. 
BOEM reserves the right to require compliance with additional terms and 
conditions associated with approval of a site assessment plan (SAP) and 
COP. The proposed leases are on BOEM's website at: https://www.boem.gov/renewable-energy/state-activities/california. Each lease 
would include the following attachments:
    1. Addendum A (``Description of Leased Area and Lease 
Activities'');
    2. Addendum B (``Lease Term and Financial Schedule'');
    3. Addendum C (``Lease-Specific Terms, Conditions, and 
Stipulations'');
    4. Addendum D (``Project Easement''); and
    5. Addendum E (``Rent Schedule'').
    Addenda A, B, and C provide detailed descriptions of proposed lease 
terms and conditions. Addenda D and E would be completed at the time of 
COP approval or approval with modifications. After considering comments 
on the PSN and proposed lease, BOEM would publish final lease terms and 
conditions in the FSN.
    a. Required Plans for Potential Development of Executed Leases: 
Under 30 CFR 585.601, if site assessment activities will be conducted, 
the leaseholder would be required to submit a SAP within 12 months of 
lease issuance. Approval of the SAP will initiate the Lessee's five-
year site assessment term. If the Lessee intends to continue its 
commercial lease with an operations term, the leaseholder would be 
required to submit a COP at least six months before the end of the site 
assessment term.
    b. Proposed New or Revised Lease Stipulations: BOEM proposes to 
include or revise the following lease stipulations or provisions from 
previous commercial leases as follows:
    i. Commercial Fisheries: BOEM proposes to include a stipulation in 
the lease entitled ``Commercial Fisheries,'' which would contain 
components of stipulations in prior commercial leases issued by BOEM, 
including a requirement for a Fisheries Communications Plan (FCP). BOEM 
is proposing to add elements to this stipulation in response to its 
extensive engagement with Tribal governments, the fishing industry, and 
governmental agencies. Major proposed revisions include: (i) 
Identifying dock space and transit routes that would minimize space use 
conflicts and potential impacts to protected species; (ii) minimizing 
both congestion and the creation of obstacles that could result in an 
increased risk of entanglement; (iii) to the extent practicable, 
prioritizing Federal and State climate change adaptation strategies for 
fisheries; and (iv) requirement that the Lessee contact potentially 
affected commercial fishing communities prior to submitting its COP to 
discuss potential conflicts between seasonal fishing operations and the 
Lessee's survey and development activities.
    ii. Protected Species: In May 2022, BOEM published a Final Humboldt 
Wind Energy Area EA, that included the most current Measures to 
Minimize Potential Adverse Impacts to Birds and Typical Mitigation 
Measures for Protected Marine Species. BOEM proposes to include in the 
leases these measures, or the most current version of these measures 
from either the Final Morro Bay Wind Energy EA, or from consultation 
processes undertaken for/applicable to this lease sale, as appropriate. 
These measures for protecting birds and marine species are based upon 
the most up-to-date information. Any additional protective measures 
arising from consultation processes undertaken for/applicable to this 
lease sale would be incorporated into the leases.

[[Page 32454]]

    iii. Native American Tribes Communications Plan (NATCP): BOEM 
proposes to revise the NATCP requirements in previous commercial leases 
to require the Lessee to work with BOEM and the California Native 
American Heritage Commission to identify Tribes with cultural and/or 
historical ties to the Lease Areas and invite those Tribes to 
participate in the development of the NATCP. The NATCP would also 
include protocols for unanticipated discovery of any potential pre-
contact archaeological resource(s).
    iv. Project Labor Agreements (PLAs) and Supply Chain: BOEM is 
committed to a clean energy future, workforce development and safety, 
and the establishment of a durable domestic supply chain that can 
sustain the U.S. offshore wind energy industry. To advance this vision, 
BOEM is proposing two lease stipulations, one that would encourage 
construction efficiency for projects and the other that would 
contribute towards establishing a domestic supply chain:
    1. The first stipulation would require Lessees to make every 
reasonable effort to enter into a PLA covering the construction stage 
of any project proposed for the Lease Areas. The PLA provisions for the 
construction of an offshore wind project would apply to all 
contractors.
    2. The second stipulation would require Lessees to establish a 
Statement of Goals in which the Lessee would describe its plans for 
contributing to the creation of a robust and resilient U.S.-based 
offshore wind industry supply chain. The Lessee would be required to 
provide regular progress updates on the achievement of those goals to 
BOEM, and BOEM would make those updates publicly available.
    v. Research Access: This stipulation would make explicit BOEM's 
reservation of the right to access the lease area for purposes of 
future research and other activities.
    vi. Archaeological Survey Requirements: BOEM proposes a 
modification of BOEM's prior lease stipulations regarding 
archaeological survey requirements. The revised stipulation would 
require that the Lessee provide a description of the methods it uses to 
conduct archaeological surveys in support of Plans (i.e., SAP and/or 
COP), in addition to survey results. The Lessee would be required to 
coordinate a Tribal pre-survey meeting with Tribes identified by BOEM 
and in the NATCP. In the post-review discovery clauses, the revised 
stipulation would require that, in the event of unanticipated discovery 
of a potential archaeological resource, the Lessee would immediately 
halt bottom-disturbing activities within the area of discovery by a 
minimum of 50 meters (164 feet), and the avoidance distance must be 
calculated from the maximum discernible extent of the archaeological 
resource. The revised stipulation would also add a requirement in the 
post-review discovery clauses that the Lessee refer to the NATCP for 
additional guidance on notifications.

VIII. Lease Financial Terms and Conditions

    This section provides an overview of the required annual payments 
and financial assurances under the leases. Please see the proposed 
leases for more information.
    a. Rent: Pursuant to 30 CFR 585.224(b) and 585.503, the first 
year's rent payment of $3 per acre would be due within 45 calendar days 
after the Lessee receives the lease copies from BOEM. For example, for 
a 69,031-acre lease (the size of OCS-P 0562), the rent payment will be 
$207,093 per year until commercial operations begin. Thereafter, annual 
rent payments would be due on the anniversary of the effective date of 
the lease (the ``Lease Anniversary''). Once commercial operations under 
the lease begin, BOEM would charge rent only for the portions of the 
Lease Area remaining undeveloped (i.e., non-generating acreage).
    If the Lessee submits an application for relinquishment of a 
portion of its leased area within the first 45 calendar days after 
receiving the lease copies from BOEM and BOEM approves that 
application, no rent payment would be due on the relinquished portion 
of the Lease Area. Later relinquishments of any portion of the Lease 
Area would reduce the Lessee's rent payments starting in the year 
following BOEM's approval of the relinquishment.
    The Lessee also would be required to pay rent for any project 
easement associated with the lease. Rent would commence on the date 
that BOEM approves the COP (or modification thereof) that describes the 
project easement as outlined in 30 CFR 585.500(a)(5) and 585.507(b). 
Annual rent for a project easement is $5 per acre, subject to a minimum 
of $450 per year.
    b. Operating Fee: For purposes of calculating the initial annual 
operating fee payment under 30 CFR 585.506, BOEM would apply an 
operating fee rate to a proxy for the wholesale market value of the 
electricity expected to be generated from the project during its first 
12 months of operations. This initial payment would be prorated to 
reflect the period between the commencement of commercial operations 
and the Lease Anniversary. The initial annual operating fee payment 
would be due within 45 days of the commencement of commercial 
operations. Thereafter, subsequent annual operating fee payments would 
be due on or before the Lease Anniversary.
    The subsequent annual operating fee payments would be calculated by 
multiplying the operating fee rate by the imputed wholesale market 
value of the projected annual electric power production. For the 
purposes of this calculation, the imputed market value would be the 
product of the project's annual nameplate capacity, the total number of 
hours in the year (8,760), the capacity factor, and the annual average 
price of electricity derived from a regional wholesale power price 
index. For example, the annual operating fee for a 976 megawatt (MW) 
wind facility operating at a 40 percent capacity (i.e., capacity factor 
of 0.4) with a regional wholesale power price of $40 per megawatt hour 
(MWh) and an operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN31MY22.223

    i. Operating Fee Rate: The operating fee rate would be the share of 
imputed wholesale market value of the projected annual electric power 
production due to ONRR as an annual operating fee. For the Lease Areas, 
BOEM proposes to set the fee rate at 0.02 (i.e., 2 percent) for the 
entire life of commercial operations.
    ii. Nameplate Capacity: Nameplate capacity would be 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. For

[[Page 32455]]

example, if the Lessee installed 100 turbines, and each is rated by the 
manufacturer at 12 MW, the nameplate capacity of the wind facility 
would be 1,200 MW.
    iii. Capacity Factor: The capacity factor relates to the amount of 
energy delivered to the grid during a period of time compared to the 
amount of energy the wind facility would have produced at full capacity 
during that same period of time. This factor is represented as a 
decimal between zero (0) and one (1). There are several reasons why the 
amount of power delivered is less than the theoretical 100 percent of 
capacity. For a wind facility, the capacity factor is mostly determined 
by the availability of wind. Transmission line loss and downtime for 
maintenance or other purposes also affect the capacity factor.
    BOEM proposes to set the capacity factor at 0.4 (i.e., 40 percent) 
for the year in which the commercial operation date occurs and for the 
first six full years of commercial operations on the lease. At the end 
of the sixth year, BOEM may adjust the capacity factor to reflect the 
performance over the previous five years based upon the actual metered 
electricity generation at the delivery point to the electrical grid. 
BOEM may make similar adjustments to the capacity factor once every 
five years thereafter.
    iv. Wholesale Power Price Index: Under 30 CFR 585.506(c)(2)(i), the 
wholesale power price, expressed in dollars per MWh, would be 
determined at the time each annual operating fee payment is due. For 
the leases offered in this sale, BOEM proposes to use the annual 
average of CAISO North of Path 15 (NP15) market hub price. Aggregated 
data from commercial subscription services such as S&P Global Market 
Intelligence Platform or Hitachi ABB Velocity Suite can also be used 
and may be posted by BOEM for reference.
    c. Financial Assurance: Within 10 business days after receiving the 
lease copies and pursuant to 30 CFR 585.515-.516, each provisional 
winner would be required to provide an initial lease-specific bond or 
other BOEM-approved financial assurance instrument in the amount of 
$100,000. BOEM encourages the provisionally winning bidders to discuss 
the financial assurance instrument requirements with BOEM as soon as 
possible after the auction has concluded.
    BOEM would base the amount of all SAP, COP, and decommissioning 
financial assurance on cost estimates for meeting all accrued lease 
obligations at the respective stages of development. The required 
amount of supplemental and decommissioning financial assurance would be 
determined on a case-by-case basis.
    The financial terms described above can be found in Addendum ``B'' 
of the lease, which is available at: https://www.boem.gov/renewable-energy/state-activities/california.

IX. Bidder's Financial Form

    Each bidder would be required to fill out the BFF referenced in 
this PSN. A copy of the proposed form is available at: https://www.boem.gov/renewable-energy/state-activities/california. BOEM 
recommends that each bidder designate an email address in its BFF that 
the bidder would then use to create an account in pay.gov (if it has 
not already done so). BOEM would not consider previously submitted BFFs 
for previous lease sales to satisfy the requirements of this auction. 
BOEM may consider BFFs submitted after the deadline set in the FSN if 
BOEM determines that the failure to timely submit the BFF was caused by 
events beyond the bidder's control. BOEM would only accept an original, 
executed paper copy of the BFF. The BFF would be required to be 
executed by an authorized representative listed in the qualification 
package on file with BOEM.

X. Bid Deposit

    Each qualified bidder would be required to 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 
may consider extensions to this deadline only if BOEM determines that 
the failure to timely submit the bid deposit was caused by events 
beyond the bidder's control.
    Following the auction, bid deposits would be applied against the 
winning bid and other obligations owed to BOEM. If a bid deposit 
exceeds that bidder's total financial obligation, BOEM would refund the 
balance of the bid deposit to the bidder. BOEM would refund bid 
deposits to the other bidders once BOEM has announced the provisional 
winner.
    If BOEM offers a lease to a provisionally winning bidder and that 
bidder fails to timely return the signed lease, establish financial 
assurance, or pay the balance of its bid, BOEM would retain the 
bidder's $5,000,000 bid deposit for one Lease Area or $10,000,000 bid 
deposit for two Lease Areas (one per region). In such a circumstance, 
BOEM would reserve the right to offer a lease to the next highest 
bidder as determined by BOEM.

XI. Minimum Bid

    The minimum bid is the lowest bid BOEM would accept as a winning 
bid, and it is where BOEM would start the bidding in the auction. BOEM 
proposes a minimum bid of $100.00 per acre for this lease sale. See 
chart in section XII.(b) below for total minimum bids for each lease to 
be offered in these sales.

XII. Auction Procedures

    a. Multiple-Factor Bidding Auction: As authorized under 30 CFR 
585.220(a)(4) and 585.221(a)(6), BOEM proposes to use a multiple-factor 
bidding auction for this lease sale. Under BOEM's proposal, the bidding 
system for this lease sale would be a multiple-factor combination of 
monetary and non-monetary factors. The bid made by a particular bidder 
in each round would represent the sum of a monetary (cash) amount and a 
non-monetary factor (bidding credit). BOEM proposes to start the 
auction using the minimum bid price for the Lease Areas and to increase 
that price incrementally until no more than one active bidder per Lease 
Area remains in the auction.
    b. The Auction: Using an online bidding system to host the auction, 
BOEM would start the bidding for Leases OCS-P 0561 through 0565, as 
described below.

----------------------------------------------------------------------------------------------------------------
                         Lease area name                           Lease area ID       Acres        Minimum bid
----------------------------------------------------------------------------------------------------------------
North Coast Region:
    Humboldt NE.................................................      OCS-P 0561          63,338      $6,333,800
    Humboldt SW.................................................      OCS-P 0562          69,031       6,903,100
Central Coast Region:
    Morro Bay NW................................................      OCS-P 0563          80,062       8,006,200
    Morro Bay C.................................................      OCS-P 0564          80,418       8,041,800
    Morro Bay E.................................................      OCS-P 0565          80,418       8,041,800
                                                                 -----------------------------------------------
        Total...................................................  ..............         373,268  ..............
----------------------------------------------------------------------------------------------------------------


[[Page 32456]]

    The precise auction process will depend on limitations, to be 
established in the FSN, on the number of Lease Areas a bidder can bid 
for and win. BOEM is proposing that bidders will be able to bid for at 
most one Lease Area in the offered Central Coast Region at a time and 
for at most one Lease Area in the offered North Coast Region at a time. 
Ultimately, a bidder could win a maximum of one Lease Area in the 
Central Coast Region and one Lease Area in the North Coast Region, as 
described in section XIII.(b)(i), below. BOEM also requests comments on 
an alternative limitation, whereby bidders would be permitted to bid 
for at most one Lease Area in total at a time, and ultimately win at 
most one Lease Area in total, as described in section XIII.(b)(ii), 
below.
    i. If bidders are allowed to bid for and win one Lease Area per 
region: The two regions (North Coast and Central Coast) would be 
offered in two separate auctions that would run simultaneously. A 
bidder would need to indicate in its BFF which region's auction it is 
entering (or select both) and it would need to submit a deposit for 
each region's auction that it is entering. Bidders eligible to bid in 
each auction must select the correct region's page from the auction 
homepage before placing a bid. A bidder's eligibility is region-
specific. There would be no switching between regions. Thus, if a 
bidder elects to bid in only one region, it may not bid in the other 
region at any time in the auction. Once a bidder places an exit bid in 
a region (or submits no bid in the region at all, in a round when the 
bidder is eligible to bid), it would become ineligible to continue to 
bid in that region.
    Alternatively, BOEM is considering administering the auction as 
described in section XIII.(b)(ii) below.
    ii. If bidders are allowed to bid for and win only one Lease Area: 
All of the Lease Areas would be offered in a single auction, and there 
would be no distinctions made between the North Coast and Central Coast 
Regions within the auction process. A bidder would not be required to 
select in its BFF the region in which it is bidding and would supply a 
single deposit. Under this proposal, a bidder could bid for at most one 
Lease Area at a time and ultimately win at most one Lease Area, but a 
bidder could switch its bids among Lease Areas between rounds.
    iii. Regardless of whether BOEM ultimately structures the lease 
sale as described in (i) or (ii), above, BOEM proposes to apply the 
following auction rules: Each auction would be conducted in a series of 
rounds. At the start of each round, BOEM would state an asking price 
for each Lease Area. If a bidder is willing to meet that asking price 
for one of the Lease Areas, it would 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 would be required to have submitted a live bid for 
one of the Lease Areas (or have a carried-forward bid) in each previous 
round.
    As long as there are two or more live bids (including carried-
forward bids) for at least one of the Lease Areas in the given auction, 
the auction would move to the next round. BOEM would raise the asking 
price for each Lease Area that received two or more live bids in the 
previous round. Asking price increments would 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 would reserve the right to increase or 
decrease bidding increments as it deems appropriate. If there was only 
one live bid (including carried-forward bids) or no live bids for a 
Lease Area in the previous round, the asking price would not be 
increased. A bid would automatically be carried forward if it was 
uncontested in the previous round, and the bidder who placed the 
uncontested bid would not be permitted to place any other bid in the 
current round of the auction.
    A bidder that submitted a contested live bid in the previous round 
would be free to bid on any Lease Area in the given auction in the next 
round, at the new asking prices.
    If a bidder decides to stop bidding before the final round of the 
auction, there could be circumstances in which the bidder could 
nonetheless win a lease. For example, that bidder could be ultimately 
selected in the winner determination that is described in detail below, 
or the winning bidder might be disqualified at the award stage of the 
auction. In these circumstances, the bidder would be bound by its bid 
and thus obligated to pay the full bid amount. Bidders therefore might 
be bound by any of their bids up to and until the point at which the 
auction results are finalized.
    Between rounds, BOEM would disclose to all bidders that submitted 
bids in the previous round: (1) The number of live bids (including 
carried-forward bids) for each Lease Area in the previous round of the 
auction (i.e., the level of demand at the asking price); and (2) the 
asking price for each Lease Area in the upcoming round of the auction.
    In any round after the first round, a bidder would be allowed to 
submit an ``exit bid'' only for the same Lease Area as the bidder's 
contested live bid in the previous round. An exit bid is a bid that is 
greater than the previous round's asking price, but less than the 
current round's asking price. An exit bid is not a live bid, and it 
represents the final bid that a bidder may submit in the given auction. 
A bidder would not be allowed to submit both an exit bid on one of the 
Lease Areas and a live bid on a different Lease Area in the given 
auction. During the auction, the exit bid would be seen only by BOEM 
and not by other bidders.
    An auction would end when a round occurs in which each of the Lease 
Areas in the auction receives one or zero live bids (including carried-
forward bids), regardless of the number of exit bids on any Lease Area. 
If the North Coast Region and Central Coast Region are offered in two 
separate auctions, then one of these separate auctions may end before 
the other. After the bidding ends, BOEM would determine the 
provisionally winning bid for each Lease Area in the given auction by 
the following two-stage procedure, applying the procedure separately to 
each auction if there are two separate auctions.
    In stage one, the highest bid (live bid or exit bid) received for 
each Lease Area in the final round would 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 would be deferred until stage two.
    In stage two, BOEM would assign to provisionally winning bidders 
all Lease Areas that were not so assigned to provisionally winning 
bidders in stage one (either because a Lease Area received two or more 
identical highest exit bids in the final round or because it received 
no bids in the final round). BOEM would, in stage two, consider bids 
from all bidding rounds for Lease Areas that were not assigned in stage 
one from bidders not assigned a Lease Area in stage one. BOEM would 
select the combination of such bids that maximizes the sum of the bid 
amounts of the selected bids, subject to the following constraints: (1) 
Each Lease Area that received multiple highest exit bids in the final 
round (but no live bid) must be assigned to one of the bidders that 
submitted the highest exit bid; (2) at most one bid from each bidder 
can be selected; and (3) at most one bid for each Lease Area can be 
selected. If there is a unique combination of bids that solves this 
maximization problem, then these bids would be deemed to be the

[[Page 32457]]

remaining provisionally winning bids. If two or more combinations of 
bids tie by producing the same maximized sum of bid amounts, the 
auction system would select one of the combinations by use of 
pseudorandom numbers. The provisional winners would pay the amounts of 
their provisionally winning bids, or risk forfeiting their bid 
deposits. A provisional winner will be disqualified if it is 
subsequently found to have violated auction rules or BOEM regulations, 
or otherwise engaged in conduct detrimental to the integrity of the 
competitive auction. If a bidder submits a bid that BOEM determines to 
be a provisionally winning bid, the bidder must sign the applicable 
lease documents, establish financial assurance, and submit the balance 
(if any) of its bonus bid (i.e., winning monetary bid less the 
applicable non-monetary bidding credit and bid deposit) within 10 
business days of receiving the lease copies, pursuant to 30 CFR 
585.224. BOEM would reserve the right not to issue the lease to a 
provisionally winning bidder if that bidder fails to: Timely return the 
signed lease form, establish adequate financial assurance, pay the 
balance of its winning bid, or otherwise fail to comply with applicable 
regulations or the terms of the FSN. In that case, the bidder would 
forfeit its bid deposit.
    BOEM would publish the provisional winners and the provisionally 
winning bid amounts shortly after the conclusion of the sale. Full bid 
results, including round-by-round results of the entire sale, including 
exit bids, would 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. Authorized Individuals and Bidder Authentication: A company that 
is eligible to participate in the auction would identify on its BFF up 
to three individuals who would be authorized to bid on behalf of the 
company, including their names, business telephone numbers, and email 
addresses. After BOEM processes the bid deposits, the auction 
contractor would send several emails to the authorized individuals. The 
emails would contain user login information and instructions for 
accessing the bidder manual for the auction system and the auction 
system technical supplement (ASTS).
    The auction system would require software tokens for two-factor 
authentication. To set up the tokens, authorized individuals would 
download an app onto their smartphone or tablet with a recent operating 
system. One of the emails sent to authorized individuals would contain 
instructions for installing the app and the credentials needed to 
activate the software token. A short telephone conversation with the 
auction contractor could also be needed to use the credentials. The 
login information, along with the tokens, would be tested during the 
mock auction. If an eligible bidder failed to submit a bid deposit or 
did not participate in the auction, BOEM would de-activate that 
bidder's tokens and login information.
    ii. Timing of Auction: The FSN will provide specific information 
regarding when bidders can enter the auction system and when the 
auction will start.
    iii. Messaging service: BOEM and the auction contractors would use 
the auction platform messaging service to keep bidders informed on 
issues of interest during the auction. For example, BOEM could change 
the schedule at any time, including during the auction. If BOEM changes 
the schedule during an auction, it would use the messaging feature to 
notify bidders that a revision has been made and will direct bidders to 
the relevant page. BOEM would also use the messaging system for other 
updates during the auction.
    Bidders could place bids at any time during the round. At the top 
of the bidding page, a countdown clock shows how much time remains in 
the round. Bidders would have until the scheduled time to place bids. 
Bidders should do so according to the procedures described in the FSN 
and the ASTS. Information about the round results would be made 
available only after the round has closed, so there would be no 
strategic advantage to placing bids early or late in the round.
    The ASTS elaborates on the auction procedures described in this 
PSN. In the event of any inconsistency between the Bidder Manual, the 
ASTS, and the FSN, the FSN would be controlling.
    iv. Alternate Bidding Procedures: It would be the responsibility of 
the bidder to ensure it has a working internet connection and backup 
procedures in place in case its internet connection is disrupted during 
the auction. Such backup procedures may include redundant internet 
connections, multiple individuals authorized to place bids on behalf of 
the company, geographically dispersing individuals who are authorized 
to bid (with different internet connections), or placing bids using a 
mobile data connection. The bidder would be responsible for testing its 
backup procedures ahead of time. This could be done during the mock 
auction, for example.

XIII. Rejection or Non-Acceptance of Bids

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

XIV. Anti-Competitive Review

    Bidding behavior in this sale would be subject to Federal antitrust 
laws. Following the auction, but before the acceptance of bids and the 
issuance of the lease, BOEM would ``allow the Attorney General, in 
consultation with the Federal Trade Commission, thirty days to review 
the results of [the] lease sale.'' 43 U.S.C. 1337(c)(1). If a 
provisionally winning bidder is found to have engaged in anti-
competitive behavior in connection with this lease sale, BOEM will 
reject its provisionally winning bid. Compliance with BOEM's auction 
procedures and regulations would not be an absolute defense to 
violations of antitrust laws.
    Anti-competitive behavior determinations would be fact-specific. 
However, such behavior could manifest itself in several different ways, 
including, but not limited to:
    1. An express or tacit agreement among potential bidders not to bid 
in an auction, or to bid a particular price;
    2. An agreement among potential bidders not to bid;
    3. An agreement among bidders not to bid against each other; or
    4. Other agreements among bidders that have the potential to affect 
the final auction price.
    Pursuant to 43 U.S.C. 1337(c)(3), BOEM will decline to award a 
lease if the Attorney General, in consultation with the Federal Trade 
Commission, determines that awarding the lease could be inconsistent 
with 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 and consult 
legal counsel.

XV. Process for Issuing the Lease

    Once all post-auction reviews have been completed to BOEM's 
satisfaction, BOEM would issue three unsigned copies of the lease to 
each provisionally winning bidder. Within 10 business days after 
receiving the lease copies, the provisionally winning bidders would be 
required to:
    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

[[Page 32458]]

    3. Pay by electronic funds transfer (EFT) the balance (if any) of 
the bonus bid (winning monetary bid less the applicable non-monetary 
bidding credit and bid deposit). BOEM would require 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/renewable-energy/state-activities/eft-payment-instructions-ca.
    BOEM would not execute the lease until the three requirements above 
have been satisfied. BOEM could extend the 10 business-day deadline 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 would forfeit 
its bid deposit. Also, in such a case, BOEM reserves the right to 
identify the next highest bid for that Lease Area submitted during the 
lease sale by a bidder who has not won one of the other Lease Areas and 
to offer the lease to that bidder pursuant to its bid.
    Within 45 calendar days after receiving the lease copies, each 
provisionally winning bidder would be required to pay the first year's 
rent using the ``ONRR Renewable Energy Initial Rental Payments'' form 
available at: https://www.pay.gov/public/form/start/27797604/.
    Subsequent annual rent payments would be required to be made 
following the detailed instructions contained in the ``Instructions for 
Making Electronic Payments,'' available on BOEM's website at: https://www.boem.gov/renewable-energy/state-activities/california.

XVI. Non-Procurement Debarment and Suspension Regulations

    Pursuant to 43 CFR part 42, subpart C, an OCS renewable energy 
Lessee would be required to comply with the Department of the 
Interior's non-procurement debarment and suspension regulations at 2 
CFR parts 180 and 1400. The Lessee would also be required to 
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.

XVII. Final Sale Notice

    The development of the FSN would be informed through the EAs, 
related consultations, and comments received during the PSN comment 
period. The FSN will provide the final details concerning the offering 
and issuance of an OCS commercial wind energy lease in the Lease Areas 
offshore California. 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 Regional Director of BOEM's Pacific Regional Office has the 
discretion to change any auction detail specified in the FSN, including 
the date and time, if s/he deems that events outside BOEM's control may 
interfere with a fair and proper lease sale. Such events may include, 
but are not limited to, natural disasters (e.g., earthquakes, 
hurricanes, floods, and blizzards), wars, riots, act of terrorism, 
fire, strikes, civil disorder, Federal Government shutdowns, 
cyberattacks against relevant information systems, or other events of a 
similar nature. In case of such events, BOEM would notify all qualified 
bidders via email, phone, and BOEM's website at: https://www.boem.gov/renewable-energy/state-activities/california. Bidders should call (703) 
787-1121 if they have concerns.

XIX. Appeals

    The bid rejection procedures are provided in BOEM's regulations at 
30 CFR 585.225 and 585.118(c). Under 30 CFR 585.225:
    (a) If BOEM rejects your bid, BOEM will provide a written statement 
of the reasons and will refund any money deposited with your bid, 
without interest.
    (b) You may ask the BOEM Director for reconsideration, in writing, 
within 15 business days of bid rejection, under 30 CFR 585.118(c)(1). 
The Director will send you a written response either affirming or 
reversing the rejection.
    The procedures for requesting reconsideration of a bid rejection 
are described in 30 CFR 585.118(c).

XX. Public Participation

    BOEM does not consider anonymous comments; please include your name 
and address as part of your comment. You should be aware that your 
entire comment, including your name, address, and any other personal 
identifiable information (PII) included in your comment, may be made 
publicly available. All submissions from identified individuals, 
businesses, and organizations may 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 your comment that, if released, 
would constitute a clearly unwarranted invasion of your personal 
privacy. You must also briefly describe any possible harmful 
consequences of the PII disclosure, 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 consistent with the Freedom of Information Act (FOIA) and 30 CFR 
585.113. Exemption 4 of FOIA applies to ``trade secrets and commercial 
or financial information obtained from a person'' that is privileged or 
confidential (5 U.S.C. 552(b)(4)). If you wish to protect the 
confidentiality of such information, clearly mark it ``Contains 
Privileged or Confidential Information'' and consider submitting such 
information as a separate attachment. BOEM will not disclose such 
information, except as required by FOIA. Information that is not 
labeled as privileged or confidential may be regarded by BOEM as 
suitable for public release. Further, BOEM will not treat as 
confidential aggregate summaries of otherwise non-confidential 
information.
    a. Access to Information (54 U.S.C. 307103): BOEM 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: 43 U.S.C. 1337(p)); 30 CFR 585.211 and 585.216)

Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2022-11537 Filed 5-27-22; 8:45 am]
BILLING CODE 4310-MR-P