The statements and views expressed in the postings on the Ocean & Offshore Energy Projects and Policy Blog are my own and do not reflect those of Nixon Peabody LLP. This Blog does not provide specific legal advice. Reading or visiting this Blog does not create an attorney client relationship. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Wednesday, June 5, 2013

Massachusetts/ Rhode Island Wind Energy Area Lease Auction Slated for July 29 and 31, 2013!

On Tuesday June 4, 2013, the Department of the Interior's Bureau of Ocean Energy Management (BOEM) announced that the first lease auction for commercial offshore wind energy projects will be held on July 29 and July 31, 2013.  The final sale notice was published in the Federal Register on Tuesday June 5, 2013.

The sale will auction an area previously designated by BOEM as the Rhode Island/ Massachusetts Wind Energy Area (MA/RI WEA) located 9.2 nautical miles south of the Rhode Island coastline.  BOEM will divide the area into two lease areas, referred to as the North Lease Area (Lease OCS-A0486) and the South Lease Area (Lease OCS-A0487).  The North Lease Area consists of about 97,500 acres and the South Lease Area covers about 67,250 acres.  The National Renewable Energy Laboratory has stated that the North Lease Area has the potential for installed capacity of 1,955 megawatts (MW), and the South Lease Area has the potential to support 1,440 MW of installed capacity-- together, more than 3 gigawatts of electricity, enough to power more than 1 million homes.  For a map of the MA/RI WEA, click here.  

The North and South Lease Areas will be auctioned simultaneously.  BOEM will consider nonmonetary (i.e., whether a bidder holds a Joint Development Agreement or a Power Purchase Agreement) and monetary (cash bid) factors. The nonmonetary phase of the auction will begin on July 29, 2013, and the monetary phase on July 31, 2013. According to the Notice, the July 29/31 lease auction will be limited to nine bidders who previously responded to a BOEM Request for Interest in the MA/RI WEA and established technical, legal and financial eligibility with BOEM. These bidders include:

In addition to the list of eligible bidders, the notice contains specific information pertaining to the areas available for leasing, lease provisions and conditions, auction details, criteria for evaluating bids, award procedures, lease execution and other information. 

Department of Interior Secretary Sally Jewell, the recently appointed successor to Ken Salazar, indicated that a successful lease sale for the MA/RI WEA would accelerate offshore wind leasing for other designated WEAs along the eastern seaboard of the United States: “If there is good interest in this one, then I think you will have this happening on a consistent basis,” she said.

Although the auction of subsea leases is an encouraging step for U.S. offshore wind developers, Secretary Jewell noted that development of the commercial offshore wind industry is in the hands of the private sector.  “I can’t promise that they will be in production in four years, but we don’t want to be a roadblock,” Jewell said. “The market will dictate, but we certainly don’t want to get in the way.”

BOEM also issued a revised environmental assessment (EA) for commercial wind lease issuance and related activities within the MA/RI WEA.  As a result of the analysis in the revised EA, BOEM issued a Finding of No Significant Impact, which concludes that reasonably foreseeable environmental effects associated with the commercial wind lease issuance and related activities will not impose a significant impact on the environment.  The revised EA and Finding of No Significant Impact are available here

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