Energy Central Professional

 

California Offshore Wind Lease Sale Announced By Department Of The Interior


By Ms Elisabeth L. Esposito and Ryan Waterman  

 

    AUCTIONS HAVE POTENTIAL TO SUPPLY RENEWABLE WIND POWER TO OVER 1.5 MILLION HOMES

    On May 26, 2022, the U.S. Department of the Interior announced proposed auctions for offshore wind leases in two wind energy areas (WEAs) off California's north and central coasts: the Morro Bay Wind Energy Area and Humboldt Wind Energy Area. The "proposed sale notice" (PSN) proposes to offer multiple lease areas for sale in each wind energy area, with two proposed areas in the Humboldt WEA and three in the Morro Bay WEA.

    The PSN estimates that the Morro Bay WEA could support approximately 3 gigawatts (GW) of offshore wind energy, while the Humboldt WEA could support an additional 1.5 GW.

    The proposed lease sale will be conducted by the Bureau of Ocean Energy Management (BOEM), which is the federal agency responsible for offshore leasing in federal waters. As a widely anticipated action, the PSN is just one step in a wide range of developments undertaken by both the federal and state governments to facilitate the development of offshore wind in California, including but not limited to:

    • Preparation of Environmental Assessments under the National Environmental Policy Act (NEPA): an EA finding no significant impact for the Humboldt WEA was published May 6, 2022, while the Morro Bay EA's public comment period just closed on May 16, 2022;
    • Unanimous California Coastal Commission approval of a conditional consistency determination for the Humboldt WEA lease under the Coastal Zone Management Act;
    • California Energy Commission review of offshore wind energy potential; and
    • Ongoing work by the BOEM-California Intergovernmental Renewable Energy Task Force to coordinate federal and state efforts.

    The PSN was published in the Federal Register on May 30, 2022, which triggers the 60-day notice and comment period.

    Any entity wishing to participate in the lease sale must submit qualification materials to BOEM during the 60-day public comment period, unless the entity has already received BOEM confirmation that it is qualified to participate in the California lease sale. According to the PSN, 23 offshore wind developers have already qualified to bid in a California offshore wind lease sale.

    The PSN limits each offshore wind developer to one bid per WEA (i.e., so one developer can place one bid in the Morro Bay WEA and one bid in the Humboldt WEA). The PSN also limits qualified offshore wind developers from bidding against an affiliated developer (as that status is defined in the PSN) in either lease sale. Accordingly, one affiliate may participate in the Humboldt lease sale and one affiliate may participate in the Morro Bay lease sale.

    BOEM seeks public comment on the PSN with respect to "any matters related to this lease sale that are of interest or concern," including but not limited to number, size, orientation and location of the proposed lease areas, engaging underserved communities, bidding credits for supporting workforce training, entering into a community benefit agreement, and/or supporting the development of the offshore wind energy supply chain.

    In addition to soliciting comments from entities wishing to participate in the lease sale, BOEM also seeks comments from the many stakeholders that will play a role in California offshore wind, such as tribal governments, unions, commercial and recreational fisherman, underserved communities, agencies and many other stakeholders. To electronically submit public comments on the PSN, go here.

    After the public comment period closes, BOEM will review those comments and prepare a Final Sale Notice (FSN), which will also be published in the Federal Register. After publication of the FSN, there will be at least a 30-day period in which potential bidders will be required to submit bidding materials and place a bid.

    Looking ahead, the smart money appears to be on a lease sale in fall 2022, although there are plenty of potential issues that could push that date back.

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

    Ms Elisabeth L. Esposito

    Brownstein Hyatt Farber Schreck, LLP

    1155 F Street N.W., Suite 1200

    Washington

    DC 20004

    UNITED STATES

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