BOEMRE Slows Down; Maryland Picks Up the Pace

Although there is still one last installment of my "What's Next: 2011 Edition" series yet to be published, I had no choice but to interrupt myself with two new developments related to two of my earlier predictions:

• First, BOEMRE's announcement regarding its revised offshore renewable project permitting rules will directly impact my predictions regarding BOEMRE's anticipated Requests for Interest. In short, the revised shortened timeline for these Requests for Interest is, for the moment, extended.
• Second, as I predicted here, Maryland Governor Martin O'Malley has issued a more concrete summary of the legislation he plans to pursue in support of offshore wind projects off of Maryland's coast.
  

A Speedier Permitting Process? Not So Fast, Thanks to Rulemaking Mandates.

Ah, the absurdity that can result from bureaucratic efforts to facilitate efficiency: BOEMRE's announcement that it must now proceed through the rulemaking process twice in order to promulgate a rule designed to eliminate regulatory redundancy in the federal permitting process for offshore wind projects may just take the prize.

BOEMRE originally unveiled the Rule, part of the "Smart from the Start program" on November 26, 2010. On Monday, January 21, 2011, BOEMRE announced that it now plans to republish the November 26, 2010 Rule within the next 30 days as a Proposed Rule. This accouncement indicates that (1) BOEMRE will be shepherding the revised rule through standard informal notice and comment rulemaking procedures; and (2) BOEMRE received at least one adverse comment or notice during the 30 day comment period following the November 26, 2010 direct final rule publication. BOEMRE has not released any information regarding the basis of the adverse comments or notices. The need to proceed through a second round of rulemaking procedures means that the November 26, 2010 Rule will not go into effect until - at the earliest - May 2011.

The November 26, 2011 Rule, which amends the 2009 MMS Final Rule governing offshore renewable energy project permitting, was designed to eliminate a redundant step in the noncompetitive leasing process for commercial renewable energy development on the Outer Continental Shelf. Under the 2009 MMS Final Rule, BOEMRE must issue a second Request for Interest with regard to leasing specific areas of interest on the Outer Continental Shelf even if only one entity responds to BOEMRE's first request. The November 26, 2011 Rule eliminates BOEMRE's obligation to issue a second request for interest in the event that there is only one interested entity -- resulting in a time savings of up to six to twelve months in the leasing process. If time is money in the project development arena- and it is- the elimination of pointless bureaucratic delay seems like a no-brainer.

In an attempt to codify the 2009 Rule as quickly as possible, BOEMRE decided to employ the little-used "direct final rulemaking" process. The direct final rulemaking process is an accelerated version of the standard notice-and-comment method of informal rulemaking set forth under the Administrative Procedure Act that negates the requirement that an agency proceed through rounds of deliberation at both the proposal and final promulgation stages. See 5 U.S.C. 553. Typically, an agency will use the direct final rulemaking process when it believes that a rule is so uncontroversial that the standard notice-and-comment method would be superfluous and impose needless delay.

Under the direct final rulemaking process, BOEMRE published the Rule in the Federal Register accompanied by the following statement:

This rule becomes effective on January 25, 2011 unless BOEMRE publishes a notice withdrawing this rule before that date.

See November 26 Rule. If no adverse comments had been received before January 25, 2011, the Rule would have been effective as of January 25, 2011. However, under the APA, BOEMRE was compelled to withdraw the Rule upon receipt of even one adverse comments or notices during the comment period compelled.

Nothing in the APA, however, prevents BOEMRE from republishing the November 26, 2010 Rule and initiating the standard informal notice and comment rulemaking process. Under the standard rulemaking process, BOEMRE must first publish a "proposed rule" in the Federal Register. BOEMRE has stated that it intends to issue a proposed rule within the next 30 days. The proposed rule will include a notice setting forth a period of time during which the public and interested parties may submit comments in support of or adverse to the Rule-- typically, between 30 and 180 days. After reviewing all comments and notices, BOEMRE will then be required to publish a "final rule" in the Federal Register. The "final rule" must include BOEMRE's written responses to the substance of each and every comment or notice recieved during the comment period. Subject to any further challenges or comments, the Rule may then be codified into the Code of Federal Regulations ("CFR"). See 5 U.S.C. 553.

So what are the immediate impacts? You may recall that BOEMRE issued an RFI for specially identified submerged lands off of the Maryland coast on April 26, 2010. By way of a letter dated November 8, 2010, BOEMRE notified Bluewater Wind, LLC that it has submitted the only eligible submission. Under the November 26, 2010 Rule, BOEMRE would not be required to issue a second RFI and Bluewater Wind, LLC would be permitted to proceed to the next step in the permitting process immediately. However, because the Rule has not gone into effect, BOEMRE has now issued a second RFI in accordance with the 2009 MMS Final Rule.

Maryland: Proposed Offshore Wind Legislation

Governor Martin O'Malley revealed further details about the legislation he intends to sponsor this year in support of a Maryland-based offshore wind industry. According to the summary, O'Malley's proposed legislation will:

direct the Public Service Commission to require Maryland’s five distribution utilities to award long-term contracts to procure between 400 to 600 megawatts of offshore wind energy. The Commission will oversee the procurement process and approve the final contracts which must be for a period of not less than 20 years. Any additional costs of electricity from offshore wind, and ultimately the additional savings, will be shared by all ratepayers and customer classes in the State.

O'Malley's proposed legislation appears to track similar legislation adopted last year in New Jersey.

What's Next: 2011 Edition, Part 2.

Part 2 of my Top 10 Predictions for Offshore Wind in 2011 examines new technology developmens and new legislative incentives for Offshore Wind.

(4) State Legislation In Support of Offshore Wind Projects

In the wake of New Jersey’s 2010 OWEDA legislation and following the failure of the 111th Congress to pass a national renewable energy standard, many coastal states with offshore wind potential are considering adopting state legislation to provide incentives for developing offshore wind projects in state and state-adjacent federal waters. This type of legislation provides critical support for offshore wind projects by ensuring lenders and financiers that the energy produced by these projects will be purchased and distributed to end-users.

Other coastal states where Power Purchase Agreements ("PPA"s) for offshore wind projects have not yet been signed (fn1) are likely to follow suit and attempt to enact legislation to encourage offshore wind development. In fact, last week, Maryland Governor O’Malley announced that he plans to propose legislation which will require utilities to purchase a certain amount of wattage from offshore renewable energy projects. Other states that are likely to enact laws which include financial or other incentives for offshore wind development are New York (for both Atlantic and Great Lakes-based development opportunities), Texas (for developments in state waters in the Gulf of Mexico), Michigan (for Great Lakes development) and the Carolinas.


(5) Development of "Floating" Turbines

I admit that I follow the development progress of the various engineering teams working to produce a scaleable floating wind turbine the way that some people follow “American Idol.” In my opinion, a fully tested and engineered scaleable model of a floating wind turbine will transform the offshore wind industry globally and create worldwide opportunity for the production of energy without sacrificing environmental integrity or land in the periphery of already over-burdened demand centers.

BOEMRE provides the following description of the turbine technology that is currently in use at foreign installed offshore wind projects and which will be used for the projects currently proposed in the United States:

Offshore wind facilities today are generally developed and operated as follows. Once a suitable place for the wind facility is located, piles are driven into the seabed. For each turbine, a support structure and a tower to support the turbine assembly, to house the remaining plant components, and to provide sheltered access for personnel are attached to the piles. After the turbine (generally a three-bladed rotor connected through the drive train to the generator) is assembled, wind direction sensors turn the nacelle (a shell that encloses the gearbox, generator, and blade hub) to face into the wind and maximize the amount of energy collected. Wind moving over the blades makes them rotate around a horizontal hub connected to a shaft inside the nacelle. This shaft, via a gearbox, powers a generator to convert the energy into electricity.

See: BOEMRE website.

Because the current generation of turbines must be secured via piles driven into the seabed floor, locations for offshore wind farms have been limited to areas where the water depth does not exceed 30 meters. As a result, most coastal areas in the United States have been deemed unsuitable for offshore energy development including nearly all of the western seaboard-- regardless of the bounty of the wind resources located there. Instead, offshore wind development proposals have been limited to areas with appropriate oceanic bathymetry (i.e. ocean depth) such as the shallower areas of the Outer Continental Shelf extending from Maine down to the southern reaches of the mid-Atlantic region, the Gulf of Mexico, and the Great Lakes.

However, if engineers can overcome the technology issues that preclude the development of offshore energy projects in waters deeper than 30 meters, large swathes of ocean territory located near demand centers could open up for offshore wind development.

Over the last eighteen months, a development team at the AEWC Advanced Structures and Composites Center at the University of Maine, in collaboration with the DeepCwind Consortium has been working to develop a “floating” wind turbine that could be installed in waters significantly deeper than 30 meters. The program, if it is able to stay on track with its funding requirements (nearly $20 million per year over the next four years) expects to design, build, deploy, and test 1:3 scale floating turbine prototypes at a designated (and state approved) test site in Maine's coastal waters over the next 3 years. The program expects to have its first full-scale floating turbine designed, built and deployed at a deep water test site by 2015. See: HERE at page 2.

The University of Maine team is not the only engineering team seeking to develop a scaleable floating wind turbine. In August 2009, Statoil, a Norwegian company with extensive offshore oil drilling experience, installed the first full scale test model of a floating wind turbine, known as the Hywind Project. The Hywind project has less than a year left in its two year testing period, and was designed to be installed at depths of 120-700 meters below sea level.

In addition, a collaboration of European companies including, among others, Converteam, EDF Energies Nouvelles, Institut des Sciences de l'Ingenieur Toulon-Var, IFP Energies Nouvelles, Oceanide, and the engineering company that installed the Hywind Project, Technip, have announced plans to install their own prototype floating offshore wind turbine called the Vertiwind project. The Vertiwind project is a vertical-axis offshore floating wind turbine which will be located in French waters in an area identified as the Sea Cluster of the Provence Alpes Côte d’Azur region. The project is backed and sponsored by the French Prime Minister through the French Environment and Energy Management Agency.

Although we should not expect a fully tested scaleable floating turbine to be production ready in 2011, the enormous market potential of this technology makes any significant engineering progress worth watching.

__________________________________________________
Footnotes:

1. Although I would laud the effort, I do not believe that Delaware legislators will prioritize enactment of legislation mandating inclusion of offshore wind generated energy in Delaware’s renewable energy portfolio. The primary purpose of legislation that requires utilities to purchase offshore wind generated electrons is to facilitate investment in offshore wind projects by mandating a back-end market – i.e., requiring utilities to enter into PPAs with offshore wind energy generators. Delmarva Energy has already signed a PPA with Bluewater Wind, an offshore wind project developer, for a project that is slated to be built in waters adjacent to the Delaware coast. Therefore, in my opinion, it is less critical for Delaware to adopt incentive based legislation.

What's Next: 2011 Edition, Part 1.

We are one week-- a mere seven days -- into 2011, and the U.S. offshore wind sector is already in full swing! I started drafting this post, which was intended to be a "Top 10" list of predictions for 2011, just before New Years. However, at least one of my predictions was so uncanny that it has already come to fruition!

In an effort to make these posts a little less lengthy, I am breaking the Top 10 into three parts. This post includes the first three predictions-- stay tuned for the next seven!

(1) Army Corps of Engineers Issues Final Permit and ROD for Cape Wind

After years of inaction, delay, and litigation challenges, the United States Army Corps of Engineers has issued a final permit for the Cape Wind Offshore Wind Farm. Cape Wind is set to be located in an area known as Horseshoe Shoals off the coast of Nantucket Island in federal waters off the coast of Massachusetts. The Army Corps permit was issued pursuant to the Corps' regulatory authority under Section 404 of the Clean Water Act (33 U.S.C. 1344), and under Section 10 of the Rivers and Harbors Act of 1899 (33 U.S.C. 403). The permit, which was issued concurrently with the Army Corps' Record of Decision, was granted in consideration of the Final Environmental Impact Statement approved by Mineral Management Services (now the Bureau of Ocean Energy Management, Regulation and Enforcement) and subsequent to the issuance of the first-ever submerged land lease granted for an offshore renewable energy project. Under the Permit, Cape Wind must complete construction of the 130 turbine installation by 2020.

(2) BOEMRE Requests for Interest and Calls for Information

In 2009, BOEMRE issued Requests for Interest with regard to potential offshore renewable energy developments in Delaware, Maryland, and Massachusetts (in cooperation with Rhode Island). Under the Department of the Interior's new "Smart from the Start" program, I believe that we should expect to see BOEMRE RFI's issued for the waters off of Maine, New Jersey, New York, and North Carolina.

Joan Bondareff, Vice Chair of Virginia's Offshore Wind Development Authority (and of counsel in Blank Rome's Washington, DC office) offers the following prediction related to offshore wind development in Virginia:

In VA, we expect DoI to issue an RFI in January for leasing areas on the OCS off the coast of Virginia. At the newly-constituted VA Offshore Wind Development Authority, established in legislation last year and promoted by Gov. McDonnell, we are looking forward to working with companies interested in offshore wind development and building public-private partnerships to facilitate bringing these projects on-line in the future at what we hope can be competitive rates. We also welcome the DoI's Smart from the Start Initiative.

(3) Action Under 2010 New Jersey OWEDA Legislation: New BPU Regulations for OREC Program; Bids Expected Shortly Thereafter

Under the recently enacted New Jersey Offshore Wind Economic Development Act ("OWEDA"), the New Jersey Board of Public Utilities (BPU) has been directed to develop and establish an offshore wind renewable energy certificate (OREC) program that calls for a percentage of electricity sold in the state-- a minimum of 1,100 megawatts-- to be from offshore wind energy. The OWEDA also offers financial incentives, including both tax credits and direct funding through the New Jersey Economic Development Authority, to businesses that build manufacturing, assemblage, and water access facilities for qualified offshore wind projects.

Under the legislation, New Jersey BPU is required to issue regulations governing the OREC program within 180 days of the legislation's enactment date-- i.e., by February 15, 2011.

Once the OREC program has been established, we should expect to see applications submitted by a number of developer entities including the Garden State Offshore Energy, Fishermen's Energy, LLC and Bluewater Wind, LLC.

What Happened? 2010 Edition.

2010 has been a big year for offshore wind energy. We have seen regulatory revolutions and revelations, lingering litigations, project progress, legislative luminaries, and capital commitments-- not to mention these annoying alliterations! Here are my top 10 news items for 2010:

1. Salazar Signs Approves Cape Wind and Signs Submerged Land Lease

In April, Interior Secretary Ken Salazar granted federal approval to Cape Wind’s long-suffering offshore wind project slotted for construction in Nantucket Sound off the coast of Massachusetts. In October, Salazar took the stage at AWEA’s Offshore Wind Conference in Atlantic City and signed the first ever submerged land lease for an offshore renewable energy project. As a conference attendee and witness, I admit that I may have teared up—but just a little!

2. Google Invests in Atlantic Wind Connection Backbone Transmission Cable

In October, internet giant and financial juggernaut Google announced its intentions to invest undisclosed, but potentially enormous sums of money to build an undersea cable to connect and transmit energy from offshore wind projects to distribution centers between New Jersey and Virginia. The project, known as the Atlantic Wind Connection, filed a plan with the FERC on December 21.

3. New Jersey Enacts Offshore Wind Economic Development Act
Speaking of transmission and infrastructure, New Jersey enacted legislation that not only calls for the production of at lease 1,100 megawatts of offshore wind generation, but also offers direct financial incentives to businesses that build manufacturing, assemblage, and water access facilities for qualified offshore wind projects. These incentives include tax credits and funding from the New Jersey Economic Development Authority (NJEDA).

4. MMS becomes BOEMRE in the wake of the Gulf Spill; BOEMRE to Handle Offshore Wind Regulation

Following the tragic and unfathomably destructive BP oil spill in the Gulf of Mexico, the Obama administration restructured and renamed the former Mineral Management Services and created the new Bureau of Ocean Energy Management, Regulation and Enforcement. Although some un-named (and snarky) industry insiders have been known to pronounce the new DOI bureau acronym as “bummer”, there is nothing depressing about the new “Smart from the Start” initiative that BOEMRE will be overseeing in the New Year!

5. Salazar Introduces Streamlined Permitting Process: “Smart from the Start”

In response to resounding complaints from project developers, financiers, and just about everyone else with an interest in offshore renewables, DOI Secretary Salazar announced a revised permitting process designed to eliminate regulatory redundancies and “needless red tape.” The new program, which Secretary Salazar's office has titled "Smart from the Start", and which began with BOEMRE’s immediate identification of several designated Wind Energy Areas in November, hopes to diminish the length of the permitting process by two to five years.

6. Deepwater Wind Announces a 1,000 MW Project for the Rhode Island Sound

In early December, Deepwater Wind announced that it has revised its original plan for a 100 turbine, 350 megawatt wind farm and has instead submitted plans for federal approval for a 1,000 megawatt wind farm in the Rhode Island Sound. The plan also includes a transmission line that would distribute electricity produced by the project to distribution centers between Massachusetts and New York.

7. 1603 Renewable Energy Tax Credit Extended for Another Year

In late December, Congress passed a one-year extension of the 1603 renewable energy investment tax credit as part of a multi-billion dollar tax cut package. The tax credit could provide a financial boost to offshore wind projects if construction begins before December 31, 2012.

8. Various Utility Commissions Reject, Approve, Reconsider and Litigate Various PPA Agreements for Proposed Projects

In March, the Rhode Island Public Utilities Commission rejected a power purchase agreement for Deepwater Wind’s Block Island project (starting at 24.4 cents per kilowatt hour) as “commercially unreasonable.” Rhode Island legislators then directed the commission to reconsider and the contract was approved. The PPA has been challenged yet again though, and the RI Supreme Court is expected to address the issue in 2011.

Likewise, the Massachusetts Department of Public Utilities approved National Grid’s PPA with Cape Wind. This PPA has also been challenged.

9. Maine Takes The Lead In Deep Water Floating Turbine Technology

Following a 2009 DOE Grant, Dr. Habib Dagher and his team at the University of Maine Advanced Structures & Composite Center have taken the lead in the U.S. market with regard to developing floating turbines designed for deep water wind farms. Maine has identified and approved three test areas in state waters where the team plans to test its floating turbines.

10. Steelworkers Union Files Trade Case Against China

In early September, the Steelworkers Union filed a 5,800 page petition with the office of the US Trade Representative to the WTO alleging that China has made unfair use of billions of doallars of subsidies, and has instituted performance requirements preferential practices and other "trade-illegal activities to advance its domination of the [renewable energy] sector." The focus of the USW's latest petition is the export to the US of Chinese-made equipment for alternative energy projects like land based and offshore wind turbines and solar-energy projects. The Union's petition identifies five major areas of "protectionist and predatory practices used by the Chinese to develop their green sector at the expense of production and job creation here in the US." These five areas include:

a. Restrictions of access to critical materials;

b. Prohibited subsidies contingent on export performance or domestic content;

c. Discrimination against imported goods and foreign firms;

d. Technology transfer requirements for foreign investors; and,

e. Trade-distorting domestic subsidies.

On Oct. 15, the U.S. Trade Representative announced its intention to proceed with further investigation of the case. On December 22, the US Trade Representative announced that it will be seeking World Trade Organziation dispute resolution with regard to China’s Subsidies for Wind Power Equipment Manufacturers.

Largest U.S. Offshore Wind Farm Proposed for Rhode Island

Rhode Island-based offshore wind developer Deepwater Wind submitted an application to the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to build the largest offshore wind project in the United States: a 200 turbine, 1,000-megawatt offshore wind project in Rhode Island Sound. The project, called the Deepwater Wind Energy Center, also includes a proposal for an undersea transmission network designed to stretch from Massachusetts to New York. The turbines and installation would cost an estimated $4.5 billion to $5 billion, and the transmission system will cost an additional $500 million to $1 billion.

If approved, the Deepwater Wind Energy Center will be installed in four phases, with construction starting in 2014. The first 50-turbine phase will go on line in 2015 with additional construction phases to follow.

The Deepwater Wind Energy Center proposal replaces Deepwater Wind’s 2008 proposal to construct a 350-megawatt, 100-turbine project. Deepwater Wind reports that the aggressive new proposal was motivated by technological innovations that increase energy generation potential while diminishing costs, as well as DOI’s recently announced "Smart from the Start” regulatory initiative.

Diminished timelines for regulatory approvals may help to overcome investor reluctance. Regulators previously predicted time frames of 7 to 9 years before an offshore wind project could be brought online. Investors typically shy away from projects with start-up timelines longer than (at the most) 5-6 years. Deepwater Wind, along with most U.S. offshore wind developers, has lauded the proposed revisions to the regulatory process under the Smart from the Start program which among other things, promises expedite permitting for qualifying offshore renewable energy projects and may enable regulators to issue the first submerged land leases to developers by late 2011 or early 2012. See also here.


In addition, technological improvements to wind turbines have the potential to materially impact economy of scale analysis of offshore wind projects and make larger projects far more cost-effective. Here, Deepwater’s 200-turbine plan will produce more than triple the energy wattage than the 100-turbine plan. This is in part due to innovations in turbine design. While most existing European and Asian offshore wind installations have used 3 to 3.6 megawatt turbines, manufacturers (including Areva Renewables and REpower Systems) have now made 5 and 6-megawatt turbines available.

Using larger turbines improves the economies of scale for developers like Deepwater Wind and can translate into better pricing for rate-payers. Deepwater Wind CEO Bill Moore has predicted that the 200-turbine project will be more cost-effective than Deepwater’s much smaller Block Island wind farm (turbines, wattage) and could reduce prices a third lower than the 24.4 cents/kWh rate set under Deepwater Wind’s Block Island project power purchase agreement with National Grid. “This ‘second generation’ of offshore wind farms will be larger and farther from shore, and will produce lower priced power, using more advanced technology than the offshore projects announced to date. We expect the offshore wind industry in the United States to follow the European experience, where a more mature industry is building larger projects farther from shore,” Moore said in a press release.

Provided the project obtains a myriad of state and federal regulatory approvals, the Deepwater Wind Energy Center will be located in a 270 square-mile area between Rhode Island and Massachusetts in federal waters directly south of Sakonnet Point between Block Island to the west and Martha’s Vineyard to the northeast. This area is subject to a Memorandum of Understanding between the states of Massachusetts and Rhode Island, and is referred to as the “area of mutual interest.” The proposed project area is consistent with Rhode Island’s recently issued and approved Special Area Management Plan (SAMP)—essentially, an ocean-zoning plan designed to identify and protect fishing grounds, shipping lanes and glacial rock formations. Deepwater Wind submitted an application for a submerged land lease on the area of mutual interest in October 2010.

The multi-state transmission network, known as the New England-Long Island Interconnector (NELI) will extend from Massachusetts to New York and would enable Deepwater Wind to sell power to any of the states located along the seaboard where the network will be located including Connecticut, Massachusetts, New York and Rhode Island. The ability to distribute and sell energy to multiple states ensures that Deepwater will be able to sell all of the power produced by its project and also ensures that the investment cost of construction that is factored into power rates will not fall on ratepayers in Rhode Island alone.

As of this writing, it is not clear whether the NELI transmission system will ultimately interconnect with the planned Atlantic Wind Connection subsea transmission system which is planned to extend from New Jersey south to Virginia.

DOI and BOEMRE Announce 'Smart from the Start' Program Revisions to BOEMRE's 2009 Regulations

At 2pm EST, Secretary of the Department of Interior Ken Salazar announced the launch of a new offshore wind energy initiative for the Atlantic Outer Continental Shelf entitled ‘Smart from the Start’. Sec. Salazar explained that the new program will facilitate siting, leasing and construction of new projects to encourage the efficient (but prudent) development of offshore renewable resources. In summary, the 'Smart from the Start' program comprises two tracks of revised provisions to BOEMRE's May 2009 regulations. The first track concerns the leasing process, and the second track pertains to transmission system development.

The new program, which promises to significantly shorten the time projected to obtain a subsea lease under the current regulations (7-10 years), intends to simplify the leasing process for offshore wind projects where there is only one qualified and interested developer. The revised regulations call for BOEMRE to identify Wind Energy Areas ("WEAs")-- that is, offshore locations that appear most suitable for offshore wind energy projects-- off the coasts of a number of Atlantic states including Maryland, Delaware, New Jersey, Virginia, Rhode Island, and Massachusetts within the next 60 days.

By January 2011, Requests for Interest and Calls for Information ("RFI"s) will be issued for the initial WEAs to support environmental assessments for project based leases. An RFI has already been issued for coastal areas off of Maryland, and RFIs are currently in development for New Jersey, Virginia, Rhode Island, and Massachusetts.

Also in January 2011, BOEMRE will initiate and coordinate Environmental Assessments ("EA") pursuant to the National Environmental Policy Act ("NEPA") at the identified WEAs to evaluate potential impacts associated with site assessment activities. As part of the EA process, the revised regulations also require BOEMRE and DOI to coordinate closely with other federal agencies to compile existing site assessment data. If the EAs reveal a Finding of No Significant Impact ("FONSI"), BOEMRE could extend leases to prospective developers for the WEAs by the end of 2011/early 2012. Developers will still need appropriate and comprehensive site-specific NEPA review of individual projects.

Later in 2011, BOEMRE will work to identify additional WEAs in other Atlantic States, possibly including New York, Maine, North Carolina, South Carolina, and Georgia.

On the transmission side, the 'Smart from the Start' program requires BOEMRE to move aggressively to process applications to build offshore transmission lines. The identification of wind energy areas should assist the siting and feasibility reviews associated with potential offshore transmission lines.

The Department of the Interior posted a press release quoting statements made by the Secretary and the Director of BOEMRE at today's announcement:

“The Cape Wind lease is an historic milestone in America’s renewable energy future, but to fully harness the economic and energy benefits of our nation’s vast Atlantic wind potential we need to implement a smart permitting process that is efficient, thorough, and unburdened by needless red tape,” said Secretary of the Interior Ken Salazar.

“Our ‘Smart from the Start’ Initiative for Atlantic wind will allow us to identify priority Wind Energy Areas for potential development, improve our coordination with local, state, and federal partners, and accelerate the leasing process,” Salazar noted. “If we are wise with our planning, we can help build a robust and environmentally responsible offshore renewable energy program that creates jobs here at home.”

“This coordinated initiative will help to capture the great potential that offshore wind power offers our country and our economy,” said Deputy Secretary David J. Hayes. “Smart planning and early environmental reviews will pay great dividends in spurring responsible renewable wind energy development.”

“This accelerated and focused approach to developing the nation’s Atlantic wind resources will encourage investment while ensuring projects are built in the right way and in the right places,” said Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich.

“We believe the regulatory change we are proposing, along with our efforts to identify priority Wind Energy Areas offshore, will result in a more efficient and coordinated permitting process for offshore wind,” said Bromwich.

DOI posted a factsheet on the Smart from the Start program HERE and a factsheet on the Direct Final Rule HERE.

Big News Day for Offshore Wind: Cape Wind and Major Federal Announcement!

Stay Tuned for a Major Federal Announcement Regarding Offshore Wind Regulation and Permitting!!

US Department of the Interior ("DOI") Secretary Ken Salazar is slated to announce “a major new initiative to accelerate the responsible siting and development of wind energy projects along the Atlantic coast” at 2pm today at the Ft. McHenry National Monument in Baltimore, Maryland. Although the DOI and the Bureau of Ocean Energy Management ("BOEMRE") have not released official details on the substance of the announcement, there is speculation that the DOI will be authorizing a new, more streamlined permitting process for offshore wind and hydrokinetic energy projects that could eliminate some of the duplicative requirements that are presently mandated.

Deputy Interior Secretary David Hayes, Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael Bromwich, Delaware Senator Tom Carper, Maryland Gov. Martin O’Malley and Jim Lanard, president of the Offshore Wind Development Coalition are also expected to be in attendance during the announcement today.

Check back here after the announcement for more specifics!


More Progress for Cape Wind!

On Monday November 22, 2010, the Massachusetts Department of Public Utilities announced that it has issued a final approval for the 15-year Power Purchase Agreement ("PPA") between National Grid and Cape Wind. This approval signifies another hard-won victory for the proposed Cape Wind offshore wind project.

Under the PPA, National Grid, one of the main electricity providers in Massachusetts, will purchase 50 percent of the power generated by the Cape Wind project. The Massachusetts Department of Public Utilities has approved rates starting at 18.7 cents per kilowatt hour beginning in 2013, with a planned gradual increase of 3.5% to be introduced over the next 15 years. This will results in an average increase of one to two percent for most consumers' electric bills.

In its press release, Massachusetts Department of Public Utilities Massachusetts Department of Public Utilities chair Ann Berwick stated: "It is abundantly clear that the Cape Wind facility offers significant benefits that are not currently available from any other renewable resource. These benefits outweigh the costs of the project."

The Cape Wind Offshore Wind project, which will involve the installation of 130 wind turbines in the waters of Nantucket Sound, still must obtain additional federal permits from the U.S. Army Corps of Engineers, as well as from the U.S. Environmental Protection Agency before construction can begin.