Atlantic Wind Lease Sale 7 (ATLW-7) for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore North Carolina (Kitty Hawk)-Proposed Sale Notice and Request for Interest; MMAA104000, 54591-54598 [2016-19552]
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Federal Register / Vol. 81, No. 158 / Tuesday, August 16, 2016 / Notices
are available on the Internet at https://
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filed on time, and the lessee paid the
required rentals accruing from the date
of termination. No leases that affect
these lands were issued before the
petition was filed.
FOR FURTHER INFORMATION CONTACT:
Chris Hite, Chief of Fluid Minerals
Adjudication, Bureau of Land
Management, Wyoming State Office,
5353 Yellowstone Road, Cheyenne,
Wyoming 82009; phone 307–775–6176;
email chite@blm.gov. Persons who use a
telecommunications device for the deaf
may call the Federal Information Relay
Service (FIRS) at 1–800–877–8339 to
contact Mr. Hite during normal business
hours. The FIRS is available 24 hours a
day, 7 days a week, to leave a message
or question with the above individual.
You will receive a reply during normal
business hours.
SUPPLEMENTARY INFORMATION: Consistent
with applicable requirements the lessee
has agreed to the amended lease terms
for rentals and royalties at rates of $10
per acre, or fraction thereof, per year
and 162⁄3 percent, respectively, as part
of the lease reinstatement. The lessee
has also agreed to the amended lease
stipulations for the lease described in
the associated Reinstatement
Certification.
The lessee has paid the required $500
administrative fee and the $159 cost for
publishing this notice. The lessee met
the requirements for reinstatement of
the lease per Sec. 31(d) and (e) of the
Mineral Leasing Act of 1920. The BLM
proposes to reinstate the lease effective
January 1, 2013, under the original
terms and conditions of the lease, the
amended lease stipulations, and the
increased rental and royalty rates cited
above.
This is the Proposed Sale
Notice (PSN) for the sale of one
commercial wind energy lease on the
Outer Continental Shelf (OCS) offshore
Kitty Hawk, North Carolina, pursuant to
30 CFR 585.216. BOEM proposes to
offer Lease OCS–A 0508 for sale using
an ascending-bid auction. In this PSN,
you will find information pertaining to
the area available for leasing, proposed
lease provisions and conditions, auction
details, the lease form, criteria for
evaluating competing bids, award
procedures, appeal procedures, and
lease execution. BOEM invites public
comment during a 60-day comment
period following publication of this
notice. The issuance of the proposed
lease resulting from this sale would not
constitute an approval of projectspecific plans to develop offshore wind
energy. Such plans, expected to be
submitted by the auction winner, would
be subject to subsequent environmental
and technical reviews prior to a
decision to proceed with development.
This document is also a Request for
Interest (RFI), pursuant to 30 CFR
585.212, to assess if there has been a
change in competitive interest in the
area encompassing proposed lease OCS–
A 0508 since the publication of the
North Carolina Call for Information and
Nominations (Call) (77 FR 74204) on
December 13, 2012. If BOEM determines
that competitive interest in the
proposed lease area (OCS–A 0508) still
exists, BOEM will proceed with the
competitive process set forth in 30 CFR
585.211 through 585.225. If BOEM
determines competitive interest in the
proposed lease area (OCS–A 0508) no
longer exists because only one potential
lessee is interested in the area, BOEM
may proceed with the non-competitive
process set forth in 30 CFR 585.231(d)(i) following the receipt of the
acquisition fee specified in 30 CFR
585.502(a).
Bureau of Ocean Energy Management
DATES:
[FR Doc. 2016–19428 Filed 8–15–16; 8:45 am]
Chris Hite,
Chief, Branch of Fluid Minerals Adjudication.
BILLING CODE 4310–40–P
[FR Doc. 2016–19429 Filed 8–15–16; 8:45 am]
BILLING CODE 4310–22–P
DEPARTMENT OF THE INTERIOR
Bureau of Land Management
[LLWY920000. 16XL5017AR.
L57000000.RB0000]
[Docket No. BOEM–2016–0045]
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Notice of Proposed Reinstatement of
Terminated Oil and Gas Lease
WYW178492, Wyoming
Bureau of Land Management,
Interior
ACTION: Notice.
AGENCY:
18:36 Aug 15, 2016
Jkt 238001
Atlantic Wind Lease Sale 7 (ATLW–7)
for Commercial Leasing for Wind
Power on the Outer Continental Shelf
Offshore North Carolina (Kitty Hawk)—
Proposed Sale Notice and Request for
Interest; MMAA104000
Bureau of Ocean Energy
Management (BOEM or ‘‘the Bureau’’),
Interior.
ACTION: Proposed sale notice and
request for interest for commercial
leasing for Wind Power on the outer
AGENCY:
Per the Mineral Leasing Act of
1920, Hilcorp Energy I, L.P. filed a
petition for reinstatement of competitive
oil and gas lease WYW178492, in Crook
County, Wyoming. The petition was
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continental shelf offshore North
Carolina (Kitty Hawk).
DEPARTMENT OF THE INTERIOR
Authority: 43 CFR 1784.4–1.
Dereck Wilson,
Acting Central California District Manager.
SUMMARY:
54591
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SUMMARY:
Comments should be submitted
electronically or postmarked no later
than October 17, 2016. All comments
received or postmarked during the
comment period will be made available
to the public and considered prior to
publication of the Final Sale Notice
(FSN).
Everyone wishing to participate as a
bidder in the proposed Kitty Hawk lease
sale must respond to this notice by the
end of the 60-day comment period.
Prospective bidders whom BOEM has
already determined are qualified to hold
an OCS lease for commercial wind
energy development offshore North
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Carolina must submit a response to this
notice affirming their continued interest
in the proposed lease area. Those who
are not yet qualified, but wish to
participate as bidders in the proposed
lease sale, must submit qualification
materials by the end of the 60-day
comment period. All qualification
materials must be postmarked no later
than October 17, 2016.
ADDRESSES: Potential auction
participants, Federal, state, and local
government agencies, tribal
governments, and other interested
parties are requested to submit their
written comments on the PSN in one of
the following ways:
1. Electronically: https://
www.regulations.gov. In the entry
entitled, ‘‘Enter Keyword or ID,’’ enter
BOEM–2016–0045 then click ‘‘search.’’
Follow the instructions to submit public
comments.
2. Written Comments: In written form,
delivered by hand or by mail, enclosed
in an envelope labeled, ‘‘Comments on
North Carolina PSN’’ to: BOEM Office of
Renewable Energy Programs, 45600
Woodland Road, VAM–OREP, Sterling,
Virginia 20166, (703) 787–1320.
3. Qualifications Materials: Those
submitting qualifications materials
should contact William Waskes, BOEM
Office of Renewable Energy Programs,
45600 Woodland Road, VAM–OREP,
Sterling, Virginia 20166, (703) 787–
1320, or Will.Waskes@boem.gov. If you
wish to protect the confidentiality of
your 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 enclosure. Treatment of
confidential information is addressed in
the section of this PSN entitled
‘‘Protection of Privileged or Confidential
Information.’’ Information that is not
labeled as privileged or confidential will
be regarded by BOEM as suitable for
public release.
4. Interest Affirmation Materials:
Potential bidders who submitted
nominations in the response to the Call,
have been qualified for this sale, and
wish to participate in the sale should
contact William Waskes, BOEM Office
of Renewable Energy Programs, 45600
Woodland Road, VAM–OREP, Sterling,
Virginia 20166, (703) 787–1320, or
Will.Waskes@boem.gov. If you wish to
protect the confidentiality of your
materials, clearly mark the relevant
sections and request that BOEM treat
them as confidential. Please label
privileged or confidential information
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with the caption ‘‘Contains Confidential
Information’’ and consider submitting
such information as a separate
enclosure. Treatment of confidential
information is addressed in the section
of this PSN entitled ‘‘Protection of
Privileged or Confidential Information.’’
Information that is not labeled as
privileged or confidential will be
regarded by BOEM as suitable for public
release.
FOR FURTHER INFORMATION CONTACT: Will
Waskes, BOEM Office of Renewable
Energy Programs, 45600 Woodland
Road, VAM–OREP, Sterling, Virginia
20166, (703) 787–1320 or
Will.Waskes@boem.gov.
Authority: This PSN and RFI is published
pursuant to subsection 8(p) of the OCS Lands
Act (43 U.S.C. 1337(p)) (OCSLA), as amended
by section 388 of the Energy Policy Act of
2005 (EPAct), and the implementing
regulations at 30 CFR part 585, including 30
CFR 585.211, 585.212, and 585.216.
Background
Area for Proposed Leasing
The area described for leasing in this
PSN, the Kitty Hawk Leasing Area (LA),
is the same as the Kitty Hawk Wind
Energy Area (WEA) that BOEM
announced on August 11, 2014. The
Area Identification announcement is
available at: https://www.boem.gov/
North-Carolina/.
The Wilmington East and Wilmington
West WEAs, which were also
announced on August 11, 2014, have
been realigned with the planning and
leasing process for the South Carolina
Call Areas. BOEM believes that by
realigning the leasing process for these
areas, a number of existing issues can be
addressed in a holistic manner. For
example, the entire Wilmington West
WEA, a portion of the Wilmington East
WEA, and the South Carolina Grand
Strand Call Area (80 FR 73818) are all
located within the newly expanded
North Atlantic right whale (NARW)
critical habitat (81 FR 4838). Further,
the State of North Carolina and a
number of coastal localities in southern
North Carolina have expressed concerns
regarding potential visual impacts that
could result from wind development
offshore North Carolina. Many of these
communities have requested that BOEM
remove from leasing consideration all
areas within 24 nautical miles (nm) of
their respective locations, which would
include all of Wilmington West, a
portion of Wilmington East, and a
portion of the Grand Strand Call Area.
This is in contrast to South Carolina,
where coastal localities such as the City
of North Myrtle Beach have indicated
that they are in favor of offshore wind
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development even if it would be located
close to shore. Finally, because the
Wilmington West WEA is contiguous
with the Grand Strand Call Area, wake
effects could impact the productivity
and viability of multiple offshore wind
developments within these areas.
Environmental Reviews
On January 23, 2015, BOEM
published a Notice of Availability
(NOA) of an Environmental Assessment
(EA) for commercial wind lease
issuance and site assessment activities
on the Atlantic OCS offshore North
Carolina with a 30-day public comment
period (80 FR 3621). In response to the
NOA, BOEM received 195 comments,
which are available at https://
www.regulations.gov, Docket No.
BOEM–2015–0001. Many of the
comments focused on mitigation
measures to protect wildlife, specifically
marine mammals. Based on the
comments received in response to the
EA, public outreach, information
meetings, and new information
received, BOEM decided to make
revisions to the EA originally published
in January 2015. As a result of the
analysis in the revised EA, BOEM
issued a Finding of No Significant
Impact (FONSI) on September 18, 2015
(80 FR 56494). The revised EA and
FONSI can be found at: https://
www.boem.gov/North-Carolina/.
BOEM also considered the comments
received when developing mitigation
measures that will be enforced through
the terms, conditions, and stipulations
in Addendum C of the proposed lease
(OCS–A 0508). These mitigation
measures are designed to reduce or
eliminate impacts from survey
activities. They are based on the best
available science and BOEM’s
Endangered Species Act (ESA)
consultation with the National Marine
Fisheries Service (NMFS). Additional
mitigation measures related to the
installation and operation of
meteorological towers and/or buoys will
be included as terms and conditions of
the lessee’s Site Assessment Plan (SAP)
approval. BOEM will continue to work
with interested stakeholders and
reassess mitigation measures as research
and data become available.
In addition, BOEM has concluded
consultations under the ESA and the
Magnuson-Stevens Fishery
Conservation and Management Act
(MSFCMA) covering the proposed lease
sale, associated site characterization
surveys, and subsequent site assessment
activities. BOEM will initiate
consultations with the States of North
Carolina and Virginia under the Coastal
Zone Management Act (CZMA)
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asabaliauskas on DSK3SPTVN1PROD with NOTICES
concurrent with the publication of this
PSN.
In order to guide its consultation
under section 106 of the National
Historic Preservation Act (NHPA) for
renewable energy activities offshore
North Carolina, BOEM executed a
programmatic agreement (PA) with the
State Historic Preservation Officer of
North Carolina and the Advisory
Council on Historic Preservation. The
PA provides for consultation to
continue throughout BOEM’s
commercial leasing process and the
decisionmaking process regarding the
approval, approval with modification,
or disapproval of a lessees’ SAP,
Construction and Operations Plan
(COP), or other plan. In addition, the PA
allows for phased identification and
evaluation of historic properties. The
PA can be found at: https://
www.boem.gov/South-AtlanticRenewable-Energy-Activities/.
On May 7, 2015, BOEM completed its
section 106 review for the undertaking
of issuing commercial leases within the
North Carolina WEAs and published a
Finding of No Historic Properties
Affected For the Issuance of Commercial
Leases within the Kitty Hawk,
Wilmington East and Wilmington West
Wind Energy Areas For Wind Energy
Development on the Outer Continental
Shelf Offshore North Carolina. The
Finding can be found at: https://
www.boem.gov/NC-WEAs-LeaseIssuance/.
Additional environmental reviews
and consultations will be conducted
upon receipt of the Lessee’s SAP and
COP.
Additional Participation in the
Proposed Lease Sale
Any parties wishing to participate in
the proposed Kitty Hawk lease sale that
have not already been legally,
financially, and technically qualified to
hold a lease for commercial wind
development offshore North Carolina
must submit the required qualification
materials by the end of the 60-day
comment period for this notice.
Guidelines to prospective lessees on
BOEM’s requirements to qualify for and
hold a renewable energy lease on the
OCS and the type of information that
should be submitted to demonstrate
your legal, technical, and financial
qualifications can be found at: https://
www.boem.gov/Renewable-EnergyProgram/Regulatory-Information/
QualificationGuidelines-pdf.aspx.
Documentation you submit must be
provided to BOEM in both paper and
electronic formats. BOEM considers an
Adobe PDF file stored on a storage
media device to be an acceptable format
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for submitting an electronic copy. Please
note that it may take a number of weeks
for BOEM to assess a potential bidder’s
legal, technical, and financial
qualifications. BOEM advises potential
bidders who plan to participate in a sale
to establish their qualifications
promptly. It is not uncommon for BOEM
to request additional materials
establishing qualifications following an
initial review of the qualifications
package. BOEM cannot determine a
potential bidder to be qualified without
a complete qualification package.
Potential bidders who BOEM has not
determined to be qualified before the
FSN is published will not be allowed to
participate in the proposed sale.
Request for Interest
Affirmation of Interest Received in
Response to the North Carolina Call for
Information and Nominations of Interest
for the Kitty Hawk WEA
Legally, technically, and financially
qualified entities who submitted a
nomination in response to the North
Carolina Call must respond to this
notice and indicate whether: (1) They
wish to continue with their Call
nomination for the Kitty Hawk WEA; or
(2) they wish to withdraw their Call
nomination from further consideration.
If such entities do not respond by the
comment period deadline associated
with this notice, BOEM will deem their
nominations submitted in response to
the North Carolina Call to be
withdrawn, and they will not be able to
participate in the proposed lease sale.
BOEM is issuing this Request for
Interest due to the large amount of time
that has elapsed since its initial
solicitation of commercial interest
through its Call in December 2012 and
the experience of past lease sales, in
which a significant number of
companies that expressed competitive
interest in response to the Call choose
not to submit a Bidder’s Financial Form
(BFFs) or Bid Deposits.
Deadlines and Milestones for Bidders:
This section describes the major
deadlines and milestones in the auction
process from publication of this PSN to
execution of the lease pursuant to this
proposed sale. This process is organized
into five stages: (1) The PSN comment
period; (2) from the end of PSN
comment period to publication of the
FSN; (3) the FSN waiting period; (4)
conducting the auction; and (5) from the
auction to Lease Execution.
The PSN Comment Period
• Submit Comments: The public is
invited to submit comments during this
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54593
60-day period, which will expire on
October 17, 2016.
• Public Seminar: BOEM will host a
public seminar to discuss the lease sale
process and the auction format. The
time and place of the seminar will be
announced by BOEM and published on
the BOEM Web site at https://
www.boem.gov/North-Carolina/. No
registration or RSVP is required to
attend.
• Submit Qualifications Materials:
All qualifications materials must be
received by BOEM by the end of the 60day PSN comment period, October 17,
2016. This includes materials sufficient
to establish a company’s legal,
technical, and financial qualifications
pursuant to 30 CFR 585.106–107.
• Submit Interest Affirmation
Materials: In order to participate in the
proposed Kitty Hawk lease sale,
potential bidders whom BOEM has
determined to be legally, technically,
and financially qualified to hold an OCS
lease for commercial wind energy
development offshore North Carolina,
must submit a response to this notice
affirming their continued interest in
participating in the proposed lease sale
by the end of the 60-day comment
period, October 17, 2016.
End of PSN Comment Period to FSN
Publication
• Review Comments: BOEM will
review all comments submitted in
response to the PSN during the
comment period.
• Finalize Qualifications Reviews:
BOEM will complete any outstanding
reviews of bidder qualifications
materials submitted during the PSN
comment period and requested by
BOEM prior to the publication of the
FSN. The final list of eligible bidders
will be published in the FSN.
• Prepare the FSN: Should BOEM
determine that competitive interest still
exists in leasing the Kitty Hawk WEA,
and BOEM decides to move forward
with a lease sale, BOEM will prepare the
FSN by updating information contained
in the PSN where appropriate.
• Publish FSN: If BOEM decides to
move forward with a lease sale, BOEM
will publish the FSN in the Federal
Register.
FSN Waiting Period. During this
period, qualified bidders must take
several steps before participating in the
auction.
• Bidder’s Financial Form (BFF):
BOEM must receive each qualified
bidder’s completed and signed BFF no
later than the date listed in the FSN.
Typically, this deadline is
approximately 14 calendar days after
publication of the FSN in the Federal
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Register. BOEM will consider
extensions to this deadline only if
BOEM determines that the failure to
timely submit the BFF was caused by
events beyond the bidder’s control.
Blank BFFs can be found at: https://
www.boem.gov/North-Carolina/. Once
the BFF has been processed, bidders
may log into pay.gov and submit bid
deposits. BOEM will only accept an
originally executed paper copy of the
BFF, and will not consider for this
auction BFFs submitted for previous
lease sales. The BFF must be executed
by an authorized representative as
shown on the bidder’s legal
qualifications. Each bidder is required
to sign the self-certification in the BFF,
in accordance with 18 U.S.C. 1001
(Fraud and False Statements).
• Bid Deposits: Each qualified bidder
must submit a bid deposit of $450,000
no later than the date listed in the FSN.
Typically, this deadline is
approximately 30 calendar days after
the publication of the FSN. BOEM will
consider extensions to this deadline
only if BOEM determines that the
failure to timely submit the bid deposit
was caused by events beyond the
bidder’s control.
• Mock Auction: BOEM will hold an
online 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.
Conduct of the Auction. BOEM,
through its contractor, will hold an
auction as described in the FSN. The
auction will take place no sooner than
30 days following publication of the
FSN in Federal Register. The estimated
timeframes described in this PSN
assume the auction will take place
approximately 45 days after publication
of the FSN.
From Auction to Lease Execution.
There are several steps between the
conclusion of the auction and execution
of the lease.
• Bid Deposit Refund: BOEM will
refund the bid deposit of any bidder that
did not win the lease. BOEM will
provide a written explanation of why
the bidder did not win.
• Department of Justice (DOJ) Review:
The DOJ has 30 days in which to
conduct an antitrust review of the
auction in consultation with the Federal
Trade Commission, pursuant to 43
U.S.C § 1337(c).
• Delivery of the Lease: BOEM will
send three lease copies to the winner,
with instructions on how to sign the
lease. The first year’s rent is due 45 days
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after the winner receives the lease
copies for execution.
• Return the Lease: Within 10
business days of receiving the lease
copies, the auction winner must post
financial assurance, pay any
outstanding balance of their bonus bid
(i.e., winning monetary bid minus bid
deposit), and sign and return the three
signed lease copies.
• Execution of the Lease: Once BOEM
has received the lease copies and
verified that it has received all other
required materials, BOEM will execute
the lease if appropriate.
Area Proposed for Leasing: The area
available for sale will be auctioned as
one lease, Lease OCS–A 0508 (Kitty
Hawk LA). The Kitty Hawk LA consists
of 122,405 acres. A description of the
proposed lease area can be found in
Addendum A of the proposed lease,
which BOEM has made available with
this notice on its Web site at: https://
www.boem.gov/North-Carolina/.
Map of the Area Proposed for Leasing
A map of the proposed Kitty Hawk
LA, GIS spatial files, and a table of the
boundary coordinates in X, Y (eastings,
northings) UTM Zone 18, NAD83
Datum, and geographic X, Y (longitude,
latitude), NAD83 Datum can be found
on BOEM’s Web site at: https://
www.boem.gov/North-Carolina/.
A large scale map of the area, showing
boundaries of the area with numbered
blocks, is available from BOEM upon
request at the following address: Bureau
of Ocean Energy Management, Office of
Renewable Energy Programs, 45600
Woodland Road, VAM–OREP, Sterling,
Virginia 20166, Phone: (703) 787–1300,
Fax: (703) 787–1708.
Withdrawal of Blocks: BOEM reserves
the right to withdraw portions of the
proposed lease area prior to its
execution of the lease based upon
relevant information provided to the
Bureau.
Lease Terms and Conditions: BOEM
has made available proposed terms,
conditions, and stipulations for the OCS
commercial wind lease to be offered
through this proposed sale. If and when
the lease is issued, BOEM reserves the
right to require compliance with
additional terms and conditions
associated with approval of a SAP or
COP. The proposed lease is on BOEM’s
Web site at: https://www.boem.gov/
North-Carolina/. The lease includes the
following seven attachments:
• Addendum A (Description of Leased
Area and Lease Activities)
• Addendum B (Lease Term and
Financial Schedule)
• Addendum C (Lease Specific Terms,
Conditions, and Stipulations)
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• Addendum D (Project Easement)
• Addendum E (Rent Schedule post
COP approval)
• Appendix A to Addendum C
(Incident Report: Protected Species
Injury or Mortality)
• Appendix B to Addendum C
(Required Data Elements for Protected
Species Observer Reports)
Addenda A, B, and C provide detailed
descriptions of lease terms and
conditions. Addendum D will be
completed at the time of COP approval
or approval with modifications.
Addendum E will be completed after
COP approval or approval with
conditions.
BOEM is soliciting comments on the
provisions of Addendum C that require
the submission of SAP and COP survey
plans. Specifically, BOEM is interested
in whether potential lessees and other
stakeholders find the timeframes
associated with those requirements to be
reasonable, and whether those
provisions could be written in a manner
that better describes the realities
associated with offshore wind survey
efforts (e.g., referring to ‘‘survey
mobilizations’’ instead of ‘‘SAP
surveys’’ and ‘‘COP surveys’’
specifically).
Plans. Pursuant to 30 CFR 585.601,
the leaseholder must submit a SAP
within 12 months of lease issuance and
a COP at least 6 months before the end
of the site assessment term of the lease.
Financial Terms and Conditions: This
section provides an overview of the
annual payments required of a lessee
that are described in the proposed lease,
and the financial assurance
requirements that will be associated
with the lease if it is awarded.
Rent. Pursuant to 30 CFR 585.224(b)
and 585.503, the first year’s rent
payment of $3 per acre is due within 45
days of the date the lessee receives the
lease for execution. Thereafter, annual
rent payments are due on the
anniversary of the Effective Date of the
lease (the ‘‘Lease Anniversary’’). Once
commercial operations under the lease
begin, BOEM will charge rent only for
the portions of the lease not authorized
for commercial operations, i.e., not
generating electricity. However, instead
of geographically dividing the lease area
into acreage that is ‘‘generating’’ and
‘‘non-generating,’’ the fraction of the
lease accruing rent will be based on the
fraction of the total nameplate capacity
of the project that is not yet in
operation. This fraction is calculated by
dividing the nameplate capacity not yet
authorized for commercial operations at
the time payment is due by the
anticipated nameplate capacity after full
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rent payment will be due on that
relinquished portion of the lease area.
Later relinquishments of any portion of
the lease area will reduce the lessee’s
rent payments starting in the year
following BOEM’s approval of the
relinquishment.
The lessee also must pay rent for any
project easement associated with the
lease, commencing on the date that
BOEM approves the COP (or
modification thereof) that describes the
project easement. Annual rent for a
project easement that is 200 feet wide
and centered on the transmission cable
is $70 per statute mile. For any
additional acreage required, the lessee
must also pay the greater of $5 per acre
per year or $450 per year.
Operating Fee Rate. The operating fee
rate is the share of imputed wholesale
market value of the projected annual
electric power production due to BOEM
as an annual operating fee. For the
proposed Kitty Hawk LA, BOEM will set
the fee rate at 0.02 (i.e., 2 percent) for
the entire life of commercial operations.
Nameplate Capacity. Nameplate
capacity is 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. The lessee
will specify in its COP the nameplate
capacity available at the start of each
year of commercial operations on the
lease. For example, if the lessee
specifies 20 turbines in its COP, and
each is rated by the design manufacturer
at 5 MW, the nameplate capacity of the
wind facility would be 100 MW.
Capacity Factor. The capacity factor
compares the amount of energy
delivered to the grid during a period of
time to the amount of energy the wind
facility would have produced at full
capacity. The amount of power
delivered will always be less than the
theoretical 100 percent capacity, largely
because of the variability of wind
speeds, transmission line loss, and
down time for maintenance or other
purposes.
The capacity factor is expressed as a
decimal between zero and one, and
represents the share of anticipated
generation of the wind facility that is
delivered to the interconnection grid
(i.e., where the lessee’s facility
interconnects with the electric grid)
relative to the wind facility’s generation
at continuous full power operation at
nameplate capacity. For the proposed
lease area, BOEM has set the capacity
factor for the year in which commercial
operations commence and the six full
years thereafter at 0.4 (i.e., 40 percent).
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. The maximum change in the
capacity factor from one period to the
next will be limited to plus or minus 10
percent of the previous period’s value.
Wholesale Power Price Index.
Pursuant to 30 CFR 585.506(c)(2)(i), the
wholesale power price, expressed in
dollars per MW-hour, is determined at
the time each annual operating fee
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Operating Fee
For purposes of calculating the initial
annual operating fee payment and
pursuant to 30 CFR 585.506, an
operating fee rate is applied to a proxy
for the wholesale market value of the
electricity expected to be generated from
the project during its first twelve
months of operations. This initial
payment will be prorated to reflect the
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period between the commencement of
commercial operations and the Lease
Anniversary. The initial annual
operating fee payment is due within 45
days of the commencement of
commercial operations. Thereafter,
subsequent annual operating fee
payments are due on or before each
Lease Anniversary.
The subsequent annual operating fee
payments are calculated by multiplying
the operating fee rate by the imputed
wholesale market value of the projected
annual electric power production for the
project. For the purposes of this
calculation, the imputed market value is
the product of the project’s annual
nameplate capacity, the total number of
hours in the year (8,760), the capacity
factor, and the annual average price of
electricity derived from a historical
regional wholesale power price index.
For example, the annual operating fee
for a 100 MW wind facility operating at
a 40% capacity (i.e., capacity factor of
0.4) with a regional wholesale power
price of $40/MWh and an operating fee
rate of 0.02 would be calculated as
follows:
payment is due, based on the weighted
average of the inflation-adjusted peak
and off-peak spot price indices for the
PJM Dominion zone for the most recent
year of spot price data available. The
wholesale power price is adjusted for
inflation from the year associated with
the published spot price indices to the
year in which the operating fee is to be
due, based on the Lease Anniversary
and using annual implicit price
deflators as reported by the U.S.
Department of Commerce Bureau of
Economic Analysis. BOEM proposes to
use the PJM Dominion power price as
the price in its operating fee formula.
BOEM is soliciting further comments on
the merits of other electric power prices,
including prices from other hubs within
the PJM Virginia Power Company
electric region that may be used in lieu
of or in combination with the current
proposed power price.
Financial Assurance
Within 10 business days after
receiving the lease copies and pursuant
to 30 CFR 585.515–516, the provisional
winner of the Kitty Hawk LA must
provide an initial lease-specific bond or
other approved means of meeting the
lessor’s initial financial assurance
requirements. The provisionally
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installation of the project (as described
in the COP). The annual rent due for a
given year is then derived by
multiplying this fraction by the amount
of rent that would have been due for the
lessee’s entire lease area at the rental
rate of $3 per acre.
For example, a 122,405 acre lease (the
size of the entire Kitty Hawk LA); will
have a rent payment of $367,215 per
year if no portion of the leased area is
authorized for commercial operations. If
300 megawatts (MW) of a project’s
nameplate capacity is operating (or
authorized for operation), and the
approved COP specifies a maximum
project size of 500 MW, the rent
payment will be $146,886. This
payment is based on the 200 MW of
nameplate capacity BOEM has not yet
authorized for commercial operations.
For the above example, this would be
calculated as follows: 200MW/500MW ×
($3/acre × 122,405 acres) = $146,886.
If the lessee submits an application
for relinquishment of a portion of its
lease area within the first 45 calendar
days following the date that the lease is
received by the lessee for execution, and
BOEM approves that application, no
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winning bidder may meet financial
assurance requirements by posting a
surety bond or by setting up an escrow
account with a trust agreement giving
BOEM the right to withdraw the money
held in the account on demand. BOEM
encourages the provisionally winning
bidder to discuss the financial assurance
requirement with BOEM as soon as
possible after the auction has
concluded.
BOEM will base the amount of all
SAP, COP, and decommissioning
financial assurance requirements on
cost estimates for meeting all accrued
lease obligations at the respective stages
of development. The required amount of
supplemental and decommissioning
financial assurance will be determined
on a case-by-case basis.
The financial terms described above
can be found in Addendum B of the
proposed lease, which BOEM has made
available with this notice on its Web site
at: https://www.boem.gov/NorthCarolina/.
Bid Deposit: A bid deposit is an
advance cash payment submitted to
BOEM in order to participate in the
auction. Each qualified bidder must
submit a bid deposit of $450,000 no
later than the deadline provided in the
FSN. Any qualified bidder who fails to
submit the bid deposit by this deadline
may be disqualified from participating
in the auction. Bid deposits will be
accepted online via pay.gov.
Following the auction, bid deposits
will be applied against bonus bids or
other obligations owed to BOEM. If the
bid deposit exceeds a bidder’s total
financial obligation, the balance of the
bid deposit will be refunded to the
bidder. BOEM will refund bid deposits
to non-winners.
Bidder Financial Form: Each bidder
must fill out the BFF referenced in this
PSN. BOEM has also made a copy of the
form available with this notice on its
Web site at: https://www.boem.gov/
North-Carolina/. BOEM recommends
that each bidder designate an email
address in its BFF that the bidder will
then use to create an account in pay.gov
(if it has not already done so). Bidders
may then use the Bid Deposit Form on
the pay.gov Web site to leave a deposit.
BOEM will not consider BFFs
submitted by qualified bidders for
previous lease sales to satisfy the
requirements of the proposed Kitty
Hawk lease sale. BOEM will also only
consider BFFs submitted after the
deadline if BOEM determines that the
failure to timely submit the BFF was
caused by events beyond the bidder’s
control. BOEM will only accept an
original, executed paper copy of the
BFF. The BFF must be executed by an
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authorized representative who has been
identified in the qualifications package
on file with BOEM as authorized to bind
the company.
Minimum Bid: The minimum bid is
the lowest price BOEM will accept as a
winning bid. BOEM has established a
minimum bid per acre of $2.00 or
$244,810 for the proposed lease sale.
Auction Procedures: The following is
a summary of the auction procedures
that BOEM proposes to use if it
proceeds with the proposed Kitty Hawk
lease sale.
Summary of Auction Format
As authorized under 30 CFR
585.220(a)(2) and 585.221(a)(1), BOEM
intends to conduct the proposed lease
sale using an ascending bidding auction
with cash as the bid variable. Using an
online bidding system to host the
auction, BOEM sets an initial asking
price for Lease OCS–A 0508 and
increases that price incrementally until
no more than one active bidder remains
in the auction. A bid submitted at the
full asking price for the lease in a
particular round is referred to as a live
bid. During each round, active bidders
may: (1) Submit a live bid indicating
that they are interested in acquiring the
lease at the current round’s stated
asking price, or (2) submit an exit bid
(see below for discussion of exit bids).
All bids are considered binding until
BOEM has determined the winning bid.
A bidder remains active in the auction
as long as it continues to meet BOEM’s
asking price in each round. If more than
one live bid is received in a round,
BOEM increases the asking price
incrementally and conducts another
auction round. BOEM would raise the
asking price following any round in
which two or more bidders submitted
live bids. The auction concludes at the
end of the round in which the number
of live bids received falls to one or zero.
Asking price increments are in
BOEM’s sole discretion. They will be
determined round-by-round and based
on a number of factors, including, but
not necessarily limited to, the number of
bidders remaining in the lease sale, the
expected time needed to conduct the
auction, and the number of rounds that
have already occurred. BOEM reserves
the right to increase or decrease bidding
increments as necessary.
Between rounds, BOEM will disclose
to all bidders eligible to bid in the next
round: (1) The number of live bids in
the previous round of the auction (i.e.,
the level of demand); and (2) the asking
price in the upcoming round of the
auction.
If a bidder is not willing to meet the
asking price in the upcoming round, the
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bidder may submit an exit bid and then
exit the auction. Bidders exiting the
auction are allowed to submit one exit
bid at an offer price greater than the
asking price in the previous round, but
less than the asking price in the current
round. Exit bids allow bidders to
express precisely the maximum price
they are willing to offer while also
minimizing the chance of ties. If a
bidder does not submit any bid at all in
the current round, BOEM will treat the
bidder as having submitted an exit bid
in the current round at the previous
round’s asking price. If a bidder exits
the auction by placing an exit bid (or by
not submitting any bid at all) in the
current round, it will not be allowed to
submit bids in any subsequent round.
BOEM will not consider exit bids for the
purpose of determining whether to
increase the asking price or to end the
auction.
After the final round of the auction,
BOEM will determine the provisionally
winning bidder to be the bidder with
the highest bid, whether the bid was a
live bid or an exit bid. If there is a tie,
BOEM will resolve the tie by
randomized means. The provisionally
winning bidder may be disqualified if it
is subsequently found to have violated
auction rules or otherwise engaged in
conduct detrimental to the integrity of
the competitive auction.
The auction winner for the proposed
lease sale will have 10 business days
from receiving the lease to post financial
assurance, pay any outstanding balance
of its bonus bid, and sign and return
three copies of the lease. BOEM reserves
the right not to issue the lease to the
provisionally winning bidder if that
bidder fails to timely sign and pay for
the lease or otherwise fails to comply
with applicable regulations or terms of
the FSN. In that case, that bidder will
forfeit its bid deposit. If a bidder fails to
timely pay the full amount due, BOEM
may consider this to be an indication
that the bidder is no longer financially
qualified to participate in other lease
sales under BOEM’s regulations at 30
CFR 585.106—107. If a winning bidder
does not sign the lease pursuant to the
proposed lease sale, BOEM reserves the
right to identify the next highest bid
submitted during the proposed lease
sale and offer the lease pursuant to this
bid.
Additional Information Regarding the
Auction Format
Bidder Authentication
For the proposed online auction,
BOEM will require two-factor
authentication. Prior to the auction,
BOEM will send several bidder
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authentication packages to the bidders
shortly after BOEM has processed the
BFFs. One package will contain digital
authentication tokens for each
authorized individual. The tokens will
be sent to the primary point of contact
indicated on the BFF. This individual is
responsible for distributing the tokens to
the individuals authorized to bid for
that company. Bidders are to ensure that
each token is returned within three
business days following the auction. An
addressed, stamped envelope will be
provided to facilitate this process. In the
event that a bidder fails to submit a bid
deposit or does not participate in the
proposed auction, BOEM will deactivate that bidder’s token and login
information, and the bidder will
likewise be asked to return its tokens
within three business days following the
auction.
The second package contains login
credentials for authorized bidders. The
login credentials will be sent to the
address provided in the BFF for each
authorized individual. Bidders can
confirm these addresses by calling 703–
787–1320. This package will contain
user login information and instructions
for accessing the Auction System
Technical Supplement and Alternative
Bidding Form. The login information,
along with the tokens, will be tested
during the Mock Auction.
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Timing of Auction
The FSN will provide specific
information regarding when bidders can
enter the auction system and when the
proposed auction will start. Once
bidders have logged in, they should
review the auction schedule, which lists
the start, end, and recess times of each
round in the auction. Each round is
structured as follows:
• Bidding round begins;
• Bidders enter their bids;
• Bidding round ends and the recess
begins;
• During the recess, the number of
live bids received in the previous round
and the next round’s asking price are
posted;
• Bidders review the previous round
results and prepare their next round’s
bids; and
• Next bidding round begins.
The first round will last about 30
minutes, though subsequent rounds may
be shorter. Recesses are anticipated to
last approximately 10 minutes. The
descriptions of the auction schedule and
asking price increments included in the
PSN and FSN are tentative. Bidders
should consult the auction schedule on
the bidding Web site just before and
during the auction for updated times.
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BOEM anticipates the proposed auction
will last one or two business days, but
bidders are advised to prepare to
continue bidding for additional business
days if necessary, to resolve the auction.
BOEM and the auction contractor will
use the auction platform messaging
service to keep bidders informed on
issues of interest during the proposed
auction. BOEM will use the messaging
system for auction schedule changes
and other updates during the auction.
Bidders may place bids at any time
during the round. At the top of the
bidding page, a countdown clock will
show how much time remains in the
round. Bidders have until the scheduled
ending time to place bids. Bidders
should bid according to the procedures
described in both the FSN and the
Auction System Technical Supplement.
No information about bidding during a
given round is available until the round
has closed and results have been posted,
so there is no tactical advantage to
placing bids early or late in the round.
The timing of the auction will be
elaborated on and clarified in the
Auction System Technical Supplement
which is available on BOEM’s Web site
at: https://www.boem.gov/NorthCarolina/ if and when the FSN is
published in the Federal Register. The
Auction System Technical Supplement
will describe auction procedures that
are incorporated by reference into the
FSN, except in the unexpected
circumstance that any of the
information in the Auction System
Technical Supplement is inconsistent
with the FSN, in which case the
provisions of the FSN will take
precedence.
Alternate Bidding Procedures
Alternate Bidding Procedures enable a
bidder who is having difficulties
accessing the Internet to submit its bid
via fax using an Alternate Bidding Form
available on BOEM’s Web site at: https://
www.boem.gov/North-Carolina/.
In order to be authorized to use an
Alternative Bidding Form, a bidder
must call the help desk number listed in
the Auction Manual before the end of
the round. BOEM will authenticate the
caller to ensure he/she is authorized to
bid on behalf of the company. The
bidder must explain the reasons for
which he/she cannot place a bid using
the online bidding platform. BOEM
may, in its sole discretion, permit or
refuse to accept a request for the
placement of a bid using the Alternate
Bidding Procedures.
If bidders need to submit an Alternate
Bidding Form, they are strongly
encouraged to do so before the round
ends.
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54597
Rejection or Non-Acceptance of Bids:
BOEM reserves the right and authority
to reject any and all bids that do not
satisfy the requirements and rules of the
proposed auction, the FSN, or
applicable regulations and statutes.
Anti-Competitive Review
This sale is subject to Federal
antitrust laws. Accordingly, following
the auction, but before the acceptance of
the bid and the issuance of the lease,
BOEM will ‘‘allow the Attorney General,
in consultation with the Federal Trade
Commission, 30 days to review the
results of the lease sale.’’ 43 U.S.C.
1337(c). If a provisionally winning
bidder is found to have engaged in anticompetitive practices in connection
with this sale, BOEM may reject its bid.
Anti-competitive practices may
include, but are not limited to:
• An express or tacit agreement among
bidders not to bid in an auction, or to
bid at a particular price;
• An agreement among bidders not to
bid against each other; and
• Other agreements among bidders that
have the potential to affect the final
auction price.
BOEM will decline to award the lease
if the Attorney General, in consultation
with the Federal Trade Commission,
determines that doing so would be
inconsistent with the antitrust laws. See
43 U.S.C. 1337(c).
For more information on whether
specific communications or agreements
could constitute a violation of Federal
antitrust law, please see https://
www.justice.gov/atr/public/businessresources.html, or consult legal counsel.
Process for Issuing the Lease: Once all
post-auction reviews have been
completed to BOEM’s satisfaction,
BOEM will issue three unsigned copies
of the lease to the provisionally winning
bidder. Within 10 business days after
receiving the lease copies, the
provisionally winning bidder must:
1. Sign and return the lease copies on
the bidder’s behalf;
2. File financial assurance, as required
under 30 CFR 585.515–537; and
3. Pay by electronic funds transfer
(EFT) the balance (if any) of the bonus
bid (winning bid less the bid deposit).
BOEM requires bidders to use EFT
procedures (not pay.gov, the Web site
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 Web site at: https://
www.boem.gov/North-Carolina/.
BOEM will not execute a lease until
the three requirements above have been
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satisfied, the provisionally winning
bidder’s financial assurance has been
accepted pursuant to 30 CFR 585.515,
and the provisionally winning bidder’s
payment has been processed.
BOEM may extend the 10 business
day deadline for executing the lease on
the bidder’s behalf, filing the required
financial assurance, and/or paying the
balance of the bonus bid, but only if
BOEM determines the delay was caused
by events beyond the provisionally
winning bidder’s control.
If the provisionally winning bidder
does not meet these requirements or
otherwise fails to comply with
applicable regulations or the terms of
the FSN, BOEM reserves the right not to
issue the lease to that bidder. In such a
case, the provisionally winning bidder
will forfeit its bid deposit.
Within 45 days of the date that the
provisionally winning bidder receives
copies of the lease, it must pay the first
year’s rent using the pay.gov Renewable
Energy Initial Rental Payment form
available at: https://pay.gov/paygov/
forms/formInstance.html?agency
FormId=27797604.
Subsequent annual rent payments
must be made following the detailed
instructions contained in the
‘‘Instructions for Making Electronic
Payments,’’ available on BOEM’s Web
site at: https://www.boem.gov/NorthCarolina/.
Non-Procurement Debarment and
Suspension Regulations: Pursuant to
regulations at 43 CFR part 42, subpart C,
an OCS renewable energy lessee must
comply with the Department of the
Interior’s non-procurement debarment
and suspension regulations at 2 CFR 180
and 1400. The lessee must also
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.
Force Majeure: The Program Manager
of BOEM’s Office of Renewable Energy
Programs has the discretion to change
any auction details specified in the FSN,
including the date and time, in case of
a force majeure event that the Program
Manager deems may interfere with a fair
and proper lease sale process. Such
events may include, but are not limited
to: Natural disasters (e.g., earthquakes,
hurricanes, floods, blizzards), wars,
riots, acts of terrorism, fire, strikes, civil
disorder or other events of a similar
nature. In case of such events, BOEM
will notify all qualified bidders via
email, phone, or through the BOEM
Web site at: https://www.boem.gov/
Renewable-Energy-Program/index.aspx.
Bidders should call 703–787–1320 if
they have concerns.
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Appeals: The appeals procedures are
provided in BOEM’s regulations at 30
CFR 585.225 and 585.118(c). Pursuant
to 30 CFR 585.225:
(a) If BOEM rejects your bid, BOEM
will provide a written statement of the
reasons and refund any money
deposited with your bid, without
interest.
(b) You will then be able to ask the
BOEM Director for reconsideration, in
writing, within 15 business days of bid
rejection, under 30 CFR 585.118(c)(1).
We will send you a written response
either affirming or reversing the
rejection.
The procedures for appealing final
decisions with respect to lease sales are
described in 30 CFR 585.118(c).
Protection of Privileged or Confidential
Information
BOEM will protect privileged or
confidential information that you
submit as required by the Freedom of
Information Act (FOIA). Exemption 4 of
FOIA applies to ‘‘trade secrets and
commercial or financial information
that you submit that is privileged or
confidential.’’ 5 U.S.C. 552(b)(4). If you
wish to protect the confidentiality of
such information, clearly mark it
‘‘Contains Privileged or Confidential
Information’’ and consider submitting
such information as a separate
attachment. BOEM will not disclose
such information, except as required by
FOIA. Information that is not labeled as
privileged or confidential will be
regarded by BOEM as suitable for public
release.
BOEM will not treat as confidential
aggregate summaries of otherwise
confidential information or comments
not containing such information.
Additionally, BOEM will not treat as
confidential the legal title of the
commenting entity (e.g., the name of
your company).
Dated: August 9, 2016.
Abigail Ross Hopper,
Director, Bureau of Ocean Energy
Management.
[FR Doc. 2016–19552 Filed 8–15–16; 8:45 am]
BILLING CODE 4310–MR–P
DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
[RR83550000, 167R5065C6,
RX.59389832.1009676]
Quarterly Status Report of Water
Service, Repayment, and Other WaterRelated Contract Actions
AGENCY:
Bureau of Reclamation,
Interior.
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ACTION:
Notice.
Notice is hereby given of
contractual actions that have been
proposed to the Bureau of Reclamation
(Reclamation) and are new,
discontinued, or completed since the
last publication of this notice. This
notice is one of a variety of means used
to inform the public about proposed
contractual actions for capital recovery
and management of project resources
and facilities consistent with section 9(f)
of the Reclamation Project Act of 1939.
Additional announcements of
individual contract actions may be
published in the Federal Register and in
newspapers of general circulation in the
areas determined by Reclamation to be
affected by the proposed action.
ADDRESSES: The identity of the
approving officer and other information
pertaining to a specific contract
proposal may be obtained by calling or
writing the appropriate regional office at
the address and telephone number given
for each region in the SUPPLEMENTARY
INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Michelle Kelly, Reclamation Law
Administration Division, Bureau of
Reclamation, P.O. Box 25007, Denver,
Colorado 80225–0007; telephone 303–
445–2888.
SUPPLEMENTARY INFORMATION: Consistent
with section 9(f) of the Reclamation
Project Act of 1939, and the rules and
regulations published in 52 FR 11954,
April 13, 1987 (43 CFR 426.22),
Reclamation will publish notice of
proposed or amendatory contract
actions for any contract for the delivery
of project water for authorized uses in
newspapers of general circulation in the
affected area at least 60 days prior to
contract execution. Announcements
may be in the form of news releases,
legal notices, official letters,
memorandums, or other forms of
written material. Meetings, workshops,
and/or hearings may also be used, as
appropriate, to provide local publicity.
The public participation procedures do
not apply to proposed contracts for the
sale of surplus or interim irrigation
water for a term of 1 year or less. Either
of the contracting parties may invite the
public to observe contract proceedings.
All public participation procedures will
be coordinated with those involved in
complying with the National
Environmental Policy Act. Pursuant to
the ‘‘Final Revised Public Participation
Procedures’’ for water resource-related
contract negotiations, published in 47
FR 7763, February 22, 1982, a tabulation
is provided of all proposed contractual
actions in each of the five Reclamation
SUMMARY:
E:\FR\FM\16AUN1.SGM
16AUN1
]]>Agencies
[Federal Register Volume 81, Number 158 (Tuesday, August 16, 2016)]
[Notices]
[Pages 54591-54598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19552]
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DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management
[Docket No. BOEM-2016-0045]
Atlantic Wind Lease Sale 7 (ATLW-7) for Commercial Leasing for
Wind Power on the Outer Continental Shelf Offshore North Carolina
(Kitty Hawk)--Proposed Sale Notice and Request for Interest; MMAA104000
AGENCY: Bureau of Ocean Energy Management (BOEM or ``the Bureau''),
Interior.
ACTION: Proposed sale notice and request for interest for commercial
leasing for Wind Power on the outer continental shelf offshore North
Carolina (Kitty Hawk).
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SUMMARY: This is the Proposed Sale Notice (PSN) for the sale of one
commercial wind energy lease on the Outer Continental Shelf (OCS)
offshore Kitty Hawk, North Carolina, pursuant to 30 CFR 585.216. BOEM
proposes to offer Lease OCS-A 0508 for sale using an ascending-bid
auction. In this PSN, you will find information pertaining to the area
available for leasing, proposed lease provisions and conditions,
auction details, the lease form, criteria for evaluating competing
bids, award procedures, appeal procedures, and lease execution. BOEM
invites public comment during a 60-day comment period following
publication of this notice. The issuance of the proposed lease
resulting from this sale would not constitute an approval of project-
specific plans to develop offshore wind energy. Such plans, expected to
be submitted by the auction winner, would be subject to subsequent
environmental and technical reviews prior to a decision to proceed with
development. This document is also a Request for Interest (RFI),
pursuant to 30 CFR 585.212, to assess if there has been a change in
competitive interest in the area encompassing proposed lease OCS-A 0508
since the publication of the North Carolina Call for Information and
Nominations (Call) (77 FR 74204) on December 13, 2012. If BOEM
determines that competitive interest in the proposed lease area (OCS-A
0508) still exists, BOEM will proceed with the competitive process set
forth in 30 CFR 585.211 through 585.225. If BOEM determines competitive
interest in the proposed lease area (OCS-A 0508) no longer exists
because only one potential lessee is interested in the area, BOEM may
proceed with the non-competitive process set forth in 30 CFR
585.231(d)-(i) following the receipt of the acquisition fee specified
in 30 CFR 585.502(a).
DATES: Comments should be submitted electronically or postmarked no
later than October 17, 2016. All comments received or postmarked during
the comment period will be made available to the public and considered
prior to publication of the Final Sale Notice (FSN).
Everyone wishing to participate as a bidder in the proposed Kitty
Hawk lease sale must respond to this notice by the end of the 60-day
comment period. Prospective bidders whom BOEM has already determined
are qualified to hold an OCS lease for commercial wind energy
development offshore North
[[Page 54592]]
Carolina must submit a response to this notice affirming their
continued interest in the proposed lease area. Those who are not yet
qualified, but wish to participate as bidders in the proposed lease
sale, must submit qualification materials by the end of the 60-day
comment period. All qualification materials must be postmarked no later
than October 17, 2016.
ADDRESSES: Potential auction participants, Federal, state, and local
government agencies, tribal governments, and other interested parties
are requested to submit their written comments on the PSN in one of the
following ways:
1. Electronically: https://www.regulations.gov. In the entry
entitled, ``Enter Keyword or ID,'' enter BOEM-2016-0045 then click
``search.'' Follow the instructions to submit public comments.
2. Written Comments: In written form, delivered by hand or by mail,
enclosed in an envelope labeled, ``Comments on North Carolina PSN'' to:
BOEM Office of Renewable Energy Programs, 45600 Woodland Road, VAM-
OREP, Sterling, Virginia 20166, (703) 787-1320.
3. Qualifications Materials: Those submitting qualifications
materials should contact William Waskes, BOEM Office of Renewable
Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia
20166, (703) 787-1320, or Will.Waskes@boem.gov. If you wish to protect
the confidentiality of your 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 enclosure. Treatment of confidential
information is addressed in the section of this PSN entitled
``Protection of Privileged or Confidential Information.'' Information
that is not labeled as privileged or confidential will be regarded by
BOEM as suitable for public release.
4. Interest Affirmation Materials: Potential bidders who submitted
nominations in the response to the Call, have been qualified for this
sale, and wish to participate in the sale should contact William
Waskes, BOEM Office of Renewable Energy Programs, 45600 Woodland Road,
VAM-OREP, Sterling, Virginia 20166, (703) 787-1320, or
Will.Waskes@boem.gov. If you wish to protect the confidentiality of
your 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
enclosure. Treatment of confidential information is addressed in the
section of this PSN entitled ``Protection of Privileged or Confidential
Information.'' Information that is not labeled as privileged or
confidential will be regarded by BOEM as suitable for public release.
FOR FURTHER INFORMATION CONTACT: Will Waskes, BOEM Office of Renewable
Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia
20166, (703) 787-1320 or Will.Waskes@boem.gov.
Authority: This PSN and RFI is published pursuant to subsection
8(p) of the OCS Lands Act (43 U.S.C. 1337(p)) (OCSLA), as amended by
section 388 of the Energy Policy Act of 2005 (EPAct), and the
implementing regulations at 30 CFR part 585, including 30 CFR
585.211, 585.212, and 585.216.
Background
Area for Proposed Leasing
The area described for leasing in this PSN, the Kitty Hawk Leasing
Area (LA), is the same as the Kitty Hawk Wind Energy Area (WEA) that
BOEM announced on August 11, 2014. The Area Identification announcement
is available at: https://www.boem.gov/North-Carolina/.
The Wilmington East and Wilmington West WEAs, which were also
announced on August 11, 2014, have been realigned with the planning and
leasing process for the South Carolina Call Areas. BOEM believes that
by realigning the leasing process for these areas, a number of existing
issues can be addressed in a holistic manner. For example, the entire
Wilmington West WEA, a portion of the Wilmington East WEA, and the
South Carolina Grand Strand Call Area (80 FR 73818) are all located
within the newly expanded North Atlantic right whale (NARW) critical
habitat (81 FR 4838). Further, the State of North Carolina and a number
of coastal localities in southern North Carolina have expressed
concerns regarding potential visual impacts that could result from wind
development offshore North Carolina. Many of these communities have
requested that BOEM remove from leasing consideration all areas within
24 nautical miles (nm) of their respective locations, which would
include all of Wilmington West, a portion of Wilmington East, and a
portion of the Grand Strand Call Area. This is in contrast to South
Carolina, where coastal localities such as the City of North Myrtle
Beach have indicated that they are in favor of offshore wind
development even if it would be located close to shore. Finally,
because the Wilmington West WEA is contiguous with the Grand Strand
Call Area, wake effects could impact the productivity and viability of
multiple offshore wind developments within these areas.
Environmental Reviews
On January 23, 2015, BOEM published a Notice of Availability (NOA)
of an Environmental Assessment (EA) for commercial wind lease issuance
and site assessment activities on the Atlantic OCS offshore North
Carolina with a 30-day public comment period (80 FR 3621). In response
to the NOA, BOEM received 195 comments, which are available at https://www.regulations.gov, Docket No. BOEM-2015-0001. Many of the comments
focused on mitigation measures to protect wildlife, specifically marine
mammals. Based on the comments received in response to the EA, public
outreach, information meetings, and new information received, BOEM
decided to make revisions to the EA originally published in January
2015. As a result of the analysis in the revised EA, BOEM issued a
Finding of No Significant Impact (FONSI) on September 18, 2015 (80 FR
56494). The revised EA and FONSI can be found at: https://www.boem.gov/North-Carolina/.
BOEM also considered the comments received when developing
mitigation measures that will be enforced through the terms,
conditions, and stipulations in Addendum C of the proposed lease (OCS-A
0508). These mitigation measures are designed to reduce or eliminate
impacts from survey activities. They are based on the best available
science and BOEM's Endangered Species Act (ESA) consultation with the
National Marine Fisheries Service (NMFS). Additional mitigation
measures related to the installation and operation of meteorological
towers and/or buoys will be included as terms and conditions of the
lessee's Site Assessment Plan (SAP) approval. BOEM will continue to
work with interested stakeholders and reassess mitigation measures as
research and data become available.
In addition, BOEM has concluded consultations under the ESA and the
Magnuson-Stevens Fishery Conservation and Management Act (MSFCMA)
covering the proposed lease sale, associated site characterization
surveys, and subsequent site assessment activities. BOEM will initiate
consultations with the States of North Carolina and Virginia under the
Coastal Zone Management Act (CZMA)
[[Page 54593]]
concurrent with the publication of this PSN.
In order to guide its consultation under section 106 of the
National Historic Preservation Act (NHPA) for renewable energy
activities offshore North Carolina, BOEM executed a programmatic
agreement (PA) with the State Historic Preservation Officer of North
Carolina and the Advisory Council on Historic Preservation. The PA
provides for consultation to continue throughout BOEM's commercial
leasing process and the decisionmaking process regarding the approval,
approval with modification, or disapproval of a lessees' SAP,
Construction and Operations Plan (COP), or other plan. In addition, the
PA allows for phased identification and evaluation of historic
properties. The PA can be found at: https://www.boem.gov/South-Atlantic-Renewable-Energy-Activities/.
On May 7, 2015, BOEM completed its section 106 review for the
undertaking of issuing commercial leases within the North Carolina WEAs
and published a Finding of No Historic Properties Affected For the
Issuance of Commercial Leases within the Kitty Hawk, Wilmington East
and Wilmington West Wind Energy Areas For Wind Energy Development on
the Outer Continental Shelf Offshore North Carolina. The Finding can be
found at: https://www.boem.gov/NC-WEAs-Lease-Issuance/.
Additional environmental reviews and consultations will be
conducted upon receipt of the Lessee's SAP and COP.
Additional Participation in the Proposed Lease Sale
Any parties wishing to participate in the proposed Kitty Hawk lease
sale that have not already been legally, financially, and technically
qualified to hold a lease for commercial wind development offshore
North Carolina must submit the required qualification materials by the
end of the 60-day comment period for this notice. Guidelines to
prospective lessees on BOEM's requirements to qualify for and hold a
renewable energy lease on the OCS and the type of information that
should be submitted to demonstrate your legal, technical, and financial
qualifications can be found at: https://www.boem.gov/Renewable-Energy-Program/Regulatory-Information/QualificationGuidelines-pdf.aspx.
Documentation you submit must be provided to BOEM in both paper and
electronic formats. BOEM considers an Adobe PDF file stored on a
storage media device to be an acceptable format for submitting an
electronic copy. Please note that it may take a number of weeks for
BOEM to assess a potential bidder's legal, technical, and financial
qualifications. BOEM advises potential bidders who plan to participate
in a sale to establish their qualifications promptly. It is not
uncommon for BOEM to request additional materials establishing
qualifications following an initial review of the qualifications
package. BOEM cannot determine a potential bidder to be qualified
without a complete qualification package. Potential bidders who BOEM
has not determined to be qualified before the FSN is published will not
be allowed to participate in the proposed sale.
Request for Interest
Affirmation of Interest Received in Response to the North Carolina Call
for Information and Nominations of Interest for the Kitty Hawk WEA
Legally, technically, and financially qualified entities who
submitted a nomination in response to the North Carolina Call must
respond to this notice and indicate whether: (1) They wish to continue
with their Call nomination for the Kitty Hawk WEA; or (2) they wish to
withdraw their Call nomination from further consideration. If such
entities do not respond by the comment period deadline associated with
this notice, BOEM will deem their nominations submitted in response to
the North Carolina Call to be withdrawn, and they will not be able to
participate in the proposed lease sale. BOEM is issuing this Request
for Interest due to the large amount of time that has elapsed since its
initial solicitation of commercial interest through its Call in
December 2012 and the experience of past lease sales, in which a
significant number of companies that expressed competitive interest in
response to the Call choose not to submit a Bidder's Financial Form
(BFFs) or Bid Deposits.
Deadlines and Milestones for Bidders: This section describes the
major deadlines and milestones in the auction process from publication
of this PSN to execution of the lease pursuant to this proposed sale.
This process is organized into five stages: (1) The PSN comment period;
(2) from the end of PSN comment period to publication of the FSN; (3)
the FSN waiting period; (4) conducting the auction; and (5) from the
auction to Lease Execution.
The PSN Comment Period
Submit Comments: The public is invited to submit comments
during this 60-day period, which will expire on October 17, 2016.
Public Seminar: BOEM will host a public seminar to discuss
the lease sale process and the auction format. The time and place of
the seminar will be announced by BOEM and published on the BOEM Web
site at https://www.boem.gov/North-Carolina/. No registration or RSVP is
required to attend.
Submit Qualifications Materials: All qualifications
materials must be received by BOEM by the end of the 60-day PSN comment
period, October 17, 2016. This includes materials sufficient to
establish a company's legal, technical, and financial qualifications
pursuant to 30 CFR 585.106-107.
Submit Interest Affirmation Materials: In order to
participate in the proposed Kitty Hawk lease sale, potential bidders
whom BOEM has determined to be legally, technically, and financially
qualified to hold an OCS lease for commercial wind energy development
offshore North Carolina, must submit a response to this notice
affirming their continued interest in participating in the proposed
lease sale by the end of the 60-day comment period, October 17, 2016.
End of PSN Comment Period to FSN Publication
Review Comments: BOEM will review all comments submitted
in response to the PSN during the comment period.
Finalize Qualifications Reviews: BOEM will complete any
outstanding reviews of bidder qualifications materials submitted during
the PSN comment period and requested by BOEM prior to the publication
of the FSN. The final list of eligible bidders will be published in the
FSN.
Prepare the FSN: Should BOEM determine that competitive
interest still exists in leasing the Kitty Hawk WEA, and BOEM decides
to move forward with a lease sale, BOEM will prepare the FSN by
updating information contained in the PSN where appropriate.
Publish FSN: If BOEM decides to move forward with a lease
sale, BOEM will publish the FSN in the Federal Register.
FSN Waiting Period. During this period, qualified bidders must take
several steps before participating in the auction.
Bidder's Financial Form (BFF): BOEM must receive each
qualified bidder's completed and signed BFF no later than the date
listed in the FSN. Typically, this deadline is approximately 14
calendar days after publication of the FSN in the Federal
[[Page 54594]]
Register. BOEM will consider extensions to this deadline only if BOEM
determines that the failure to timely submit the BFF was caused by
events beyond the bidder's control. Blank BFFs can be found at: https://www.boem.gov/North-Carolina/. Once the BFF has been processed, bidders
may log into pay.gov and submit bid deposits. BOEM will only accept an
originally executed paper copy of the BFF, and will not consider for
this auction BFFs submitted for previous lease sales. The BFF must be
executed by an authorized representative as shown on the bidder's legal
qualifications. Each bidder is required to sign the self-certification
in the BFF, in accordance with 18 U.S.C. 1001 (Fraud and False
Statements).
Bid Deposits: Each qualified bidder must submit a bid
deposit of $450,000 no later than the date listed in the FSN.
Typically, this deadline is approximately 30 calendar days after the
publication of the FSN. BOEM will consider extensions to this deadline
only if BOEM determines that the failure to timely submit the bid
deposit was caused by events beyond the bidder's control.
Mock Auction: BOEM will hold an online 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.
Conduct of the Auction. BOEM, through its contractor, will hold an
auction as described in the FSN. The auction will take place no sooner
than 30 days following publication of the FSN in Federal Register. The
estimated timeframes described in this PSN assume the auction will take
place approximately 45 days after publication of the FSN.
From Auction to Lease Execution. There are several steps between
the conclusion of the auction and execution of the lease.
Bid Deposit Refund: BOEM will refund the bid deposit of
any bidder that did not win the lease. BOEM will provide a written
explanation of why the bidder did not win.
Department of Justice (DOJ) Review: The DOJ has 30 days in
which to conduct an antitrust review of the auction in consultation
with the Federal Trade Commission, pursuant to 43 U.S.C Sec. 1337(c).
Delivery of the Lease: BOEM will send three lease copies
to the winner, with instructions on how to sign the lease. The first
year's rent is due 45 days after the winner receives the lease copies
for execution.
Return the Lease: Within 10 business days of receiving the
lease copies, the auction winner must post financial assurance, pay any
outstanding balance of their bonus bid (i.e., winning monetary bid
minus bid deposit), and sign and return the three signed lease copies.
Execution of the Lease: Once BOEM has received the lease
copies and verified that it has received all other required materials,
BOEM will execute the lease if appropriate.
Area Proposed for Leasing: The area available for sale will be
auctioned as one lease, Lease OCS-A 0508 (Kitty Hawk LA). The Kitty
Hawk LA consists of 122,405 acres. A description of the proposed lease
area can be found in Addendum A of the proposed lease, which BOEM has
made available with this notice on its Web site at: https://www.boem.gov/North-Carolina/.
Map of the Area Proposed for Leasing
A map of the proposed Kitty Hawk LA, GIS spatial files, and a table
of the boundary coordinates in X, Y (eastings, northings) UTM Zone 18,
NAD83 Datum, and geographic X, Y (longitude, latitude), NAD83 Datum can
be found on BOEM's Web site at: https://www.boem.gov/North-Carolina/.
A large scale map of the area, showing boundaries of the area with
numbered blocks, is available from BOEM upon request at the following
address: Bureau of Ocean Energy Management, Office of Renewable Energy
Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia 20166,
Phone: (703) 787-1300, Fax: (703) 787-1708.
Withdrawal of Blocks: BOEM reserves the right to withdraw portions
of the proposed lease area prior to its execution of the lease based
upon relevant information provided to the Bureau.
Lease Terms and Conditions: BOEM has made available proposed terms,
conditions, and stipulations for the OCS commercial wind lease to be
offered through this proposed sale. If and when the lease is issued,
BOEM reserves the right to require compliance with additional terms and
conditions associated with approval of a SAP or COP. The proposed lease
is on BOEM's Web site at: https://www.boem.gov/North-Carolina/. The
lease includes the following seven attachments:
Addendum A (Description of Leased Area and Lease Activities)
Addendum B (Lease Term and Financial Schedule)
Addendum C (Lease Specific Terms, Conditions, and
Stipulations)
Addendum D (Project Easement)
Addendum E (Rent Schedule post COP approval)
Appendix A to Addendum C (Incident Report: Protected Species
Injury or Mortality)
Appendix B to Addendum C (Required Data Elements for Protected
Species Observer Reports)
Addenda A, B, and C provide detailed descriptions of lease terms
and conditions. Addendum D will be completed at the time of COP
approval or approval with modifications. Addendum E will be completed
after COP approval or approval with conditions.
BOEM is soliciting comments on the provisions of Addendum C that
require the submission of SAP and COP survey plans. Specifically, BOEM
is interested in whether potential lessees and other stakeholders find
the timeframes associated with those requirements to be reasonable, and
whether those provisions could be written in a manner that better
describes the realities associated with offshore wind survey efforts
(e.g., referring to ``survey mobilizations'' instead of ``SAP surveys''
and ``COP surveys'' specifically).
Plans. Pursuant to 30 CFR 585.601, the leaseholder must submit a
SAP within 12 months of lease issuance and a COP at least 6 months
before the end of the site assessment term of the lease.
Financial Terms and Conditions: This section provides an overview
of the annual payments required of a lessee that are described in the
proposed lease, and the financial assurance requirements that will be
associated with the lease if it is awarded.
Rent. Pursuant to 30 CFR 585.224(b) and 585.503, the first year's
rent payment of $3 per acre is due within 45 days of the date the
lessee receives the lease for execution. Thereafter, annual rent
payments are due on the anniversary of the Effective Date of the lease
(the ``Lease Anniversary''). Once commercial operations under the lease
begin, BOEM will charge rent only for the portions of the lease not
authorized for commercial operations, i.e., not generating electricity.
However, instead of geographically dividing the lease area into acreage
that is ``generating'' and ``non-generating,'' the fraction of the
lease accruing rent will be based on the fraction of the total
nameplate capacity of the project that is not yet in operation. This
fraction is calculated by dividing the nameplate capacity not yet
authorized for commercial operations at the time payment is due by the
anticipated nameplate capacity after full
[[Page 54595]]
installation of the project (as described in the COP). The annual rent
due for a given year is then derived by multiplying this fraction by
the amount of rent that would have been due for the lessee's entire
lease area at the rental rate of $3 per acre.
For example, a 122,405 acre lease (the size of the entire Kitty
Hawk LA); will have a rent payment of $367,215 per year if no portion
of the leased area is authorized for commercial operations. If 300
megawatts (MW) of a project's nameplate capacity is operating (or
authorized for operation), and the approved COP specifies a maximum
project size of 500 MW, the rent payment will be $146,886. This payment
is based on the 200 MW of nameplate capacity BOEM has not yet
authorized for commercial operations. For the above example, this would
be calculated as follows: 200MW/500MW x ($3/acre x 122,405 acres) =
$146,886.
If the lessee submits an application for relinquishment of a
portion of its lease area within the first 45 calendar days following
the date that the lease is received by the lessee for execution, and
BOEM approves that application, no rent payment will be due on that
relinquished portion of the lease area. Later relinquishments of any
portion of the lease area will reduce the lessee's rent payments
starting in the year following BOEM's approval of the relinquishment.
The lessee also must pay rent for any project easement associated
with the lease, commencing on the date that BOEM approves the COP (or
modification thereof) that describes the project easement. Annual rent
for a project easement that is 200 feet wide and centered on the
transmission cable is $70 per statute mile. For any additional acreage
required, the lessee must also pay the greater of $5 per acre per year
or $450 per year.
Operating Fee
For purposes of calculating the initial annual operating fee
payment and pursuant to 30 CFR 585.506, an operating fee rate is
applied to a proxy for the wholesale market value of the electricity
expected to be generated from the project during its first twelve
months of operations. This initial payment will be prorated to reflect
the period between the commencement of commercial operations and the
Lease Anniversary. The initial annual operating fee payment is due
within 45 days of the commencement of commercial operations.
Thereafter, subsequent annual operating fee payments are due on or
before each Lease Anniversary.
The subsequent annual operating fee payments are calculated by
multiplying the operating fee rate by the imputed wholesale market
value of the projected annual electric power production for the
project. For the purposes of this calculation, the imputed market value
is the product of the project's annual nameplate capacity, the total
number of hours in the year (8,760), the capacity factor, and the
annual average price of electricity derived from a historical regional
wholesale power price index. For example, the annual operating fee for
a 100 MW wind facility operating at a 40% capacity (i.e., capacity
factor of 0.4) with a regional wholesale power price of $40/MWh and an
operating fee rate of 0.02 would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN16AU16.000
Operating Fee Rate. The operating fee rate is the share of imputed
wholesale market value of the projected annual electric power
production due to BOEM as an annual operating fee. For the proposed
Kitty Hawk LA, BOEM will set the fee rate at 0.02 (i.e., 2 percent) for
the entire life of commercial operations.
Nameplate Capacity. Nameplate capacity is 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. The lessee will
specify in its COP the nameplate capacity available at the start of
each year of commercial operations on the lease. For example, if the
lessee specifies 20 turbines in its COP, and each is rated by the
design manufacturer at 5 MW, the nameplate capacity of the wind
facility would be 100 MW.
Capacity Factor. The capacity factor compares the amount of energy
delivered to the grid during a period of time to the amount of energy
the wind facility would have produced at full capacity. The amount of
power delivered will always be less than the theoretical 100 percent
capacity, largely because of the variability of wind speeds,
transmission line loss, and down time for maintenance or other
purposes.
The capacity factor is expressed as a decimal between zero and one,
and represents the share of anticipated generation of the wind facility
that is delivered to the interconnection grid (i.e., where the lessee's
facility interconnects with the electric grid) relative to the wind
facility's generation at continuous full power operation at nameplate
capacity. For the proposed lease area, BOEM has set the capacity factor
for the year in which commercial operations commence and the six full
years thereafter at 0.4 (i.e., 40 percent). 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. The maximum change in the capacity factor from one period
to the next will be limited to plus or minus 10 percent of the previous
period's value.
Wholesale Power Price Index. Pursuant to 30 CFR 585.506(c)(2)(i),
the wholesale power price, expressed in dollars per MW-hour, is
determined at the time each annual operating fee payment is due, based
on the weighted average of the inflation-adjusted peak and off-peak
spot price indices for the PJM Dominion zone for the most recent year
of spot price data available. The wholesale power price is adjusted for
inflation from the year associated with the published spot price
indices to the year in which the operating fee is to be due, based on
the Lease Anniversary and using annual implicit price deflators as
reported by the U.S. Department of Commerce Bureau of Economic
Analysis. BOEM proposes to use the PJM Dominion power price as the
price in its operating fee formula. BOEM is soliciting further comments
on the merits of other electric power prices, including prices from
other hubs within the PJM Virginia Power Company electric region that
may be used in lieu of or in combination with the current proposed
power price.
Financial Assurance
Within 10 business days after receiving the lease copies and
pursuant to 30 CFR 585.515-516, the provisional winner of the Kitty
Hawk LA must provide an initial lease-specific bond or other approved
means of meeting the lessor's initial financial assurance requirements.
The provisionally
[[Page 54596]]
winning bidder may meet financial assurance requirements by posting a
surety bond or by setting up an escrow account with a trust agreement
giving BOEM the right to withdraw the money held in the account on
demand. BOEM encourages the provisionally winning bidder to discuss the
financial assurance requirement with BOEM as soon as possible after the
auction has concluded.
BOEM will base the amount of all SAP, COP, and decommissioning
financial assurance requirements on cost estimates for meeting all
accrued lease obligations at the respective stages of development. The
required amount of supplemental and decommissioning financial assurance
will be determined on a case-by-case basis.
The financial terms described above can be found in Addendum B of
the proposed lease, which BOEM has made available with this notice on
its Web site at: https://www.boem.gov/North-Carolina/.
Bid Deposit: A bid deposit is an advance cash payment submitted to
BOEM in order to participate in the auction. Each qualified bidder must
submit a bid deposit of $450,000 no later than the deadline provided in
the FSN. Any qualified bidder who fails to submit the bid deposit by
this deadline may be disqualified from participating in the auction.
Bid deposits will be accepted online via pay.gov.
Following the auction, bid deposits will be applied against bonus
bids or other obligations owed to BOEM. If the bid deposit exceeds a
bidder's total financial obligation, the balance of the bid deposit
will be refunded to the bidder. BOEM will refund bid deposits to non-
winners.
Bidder Financial Form: Each bidder must fill out the BFF referenced
in this PSN. BOEM has also made a copy of the form available with this
notice on its Web site at: https://www.boem.gov/North-Carolina/. BOEM
recommends that each bidder designate an email address in its BFF that
the bidder will then use to create an account in pay.gov (if it has not
already done so). Bidders may then use the Bid Deposit Form on the
pay.gov Web site to leave a deposit.
BOEM will not consider BFFs submitted by qualified bidders for
previous lease sales to satisfy the requirements of the proposed Kitty
Hawk lease sale. BOEM will also only consider BFFs submitted after the
deadline if BOEM determines that the failure to timely submit the BFF
was caused by events beyond the bidder's control. BOEM will only accept
an original, executed paper copy of the BFF. The BFF must be executed
by an authorized representative who has been identified in the
qualifications package on file with BOEM as authorized to bind the
company.
Minimum Bid: The minimum bid is the lowest price BOEM will accept
as a winning bid. BOEM has established a minimum bid per acre of $2.00
or $244,810 for the proposed lease sale.
Auction Procedures: The following is a summary of the auction
procedures that BOEM proposes to use if it proceeds with the proposed
Kitty Hawk lease sale.
Summary of Auction Format
As authorized under 30 CFR 585.220(a)(2) and 585.221(a)(1), BOEM
intends to conduct the proposed lease sale using an ascending bidding
auction with cash as the bid variable. Using an online bidding system
to host the auction, BOEM sets an initial asking price for Lease OCS-A
0508 and increases that price incrementally until no more than one
active bidder remains in the auction. A bid submitted at the full
asking price for the lease in a particular round is referred to as a
live bid. During each round, active bidders may: (1) Submit a live bid
indicating that they are interested in acquiring the lease at the
current round's stated asking price, or (2) submit an exit bid (see
below for discussion of exit bids). All bids are considered binding
until BOEM has determined the winning bid.
A bidder remains active in the auction as long as it continues to
meet BOEM's asking price in each round. If more than one live bid is
received in a round, BOEM increases the asking price incrementally and
conducts another auction round. BOEM would raise the asking price
following any round in which two or more bidders submitted live bids.
The auction concludes at the end of the round in which the number of
live bids received falls to one or zero.
Asking price increments are in BOEM's sole discretion. They will be
determined round-by-round and based on a number of factors, including,
but not necessarily limited to, the number of bidders remaining in the
lease sale, the expected time needed to conduct the auction, and the
number of rounds that have already occurred. BOEM reserves the right to
increase or decrease bidding increments as necessary.
Between rounds, BOEM will disclose to all bidders eligible to bid
in the next round: (1) The number of live bids in the previous round of
the auction (i.e., the level of demand); and (2) the asking price in
the upcoming round of the auction.
If a bidder is not willing to meet the asking price in the upcoming
round, the bidder may submit an exit bid and then exit the auction.
Bidders exiting the auction are allowed to submit one exit bid at an
offer price greater than the asking price in the previous round, but
less than the asking price in the current round. Exit bids allow
bidders to express precisely the maximum price they are willing to
offer while also minimizing the chance of ties. If a bidder does not
submit any bid at all in the current round, BOEM will treat the bidder
as having submitted an exit bid in the current round at the previous
round's asking price. If a bidder exits the auction by placing an exit
bid (or by not submitting any bid at all) in the current round, it will
not be allowed to submit bids in any subsequent round. BOEM will not
consider exit bids for the purpose of determining whether to increase
the asking price or to end the auction.
After the final round of the auction, BOEM will determine the
provisionally winning bidder to be the bidder with the highest bid,
whether the bid was a live bid or an exit bid. If there is a tie, BOEM
will resolve the tie by randomized means. The provisionally winning
bidder may be disqualified if it is subsequently found to have violated
auction rules or otherwise engaged in conduct detrimental to the
integrity of the competitive auction.
The auction winner for the proposed lease sale will have 10
business days from receiving the lease to post financial assurance, pay
any outstanding balance of its bonus bid, and sign and return three
copies of the lease. BOEM reserves the right not to issue the lease to
the provisionally winning bidder if that bidder fails to timely sign
and pay for the lease or otherwise fails to comply with applicable
regulations or terms of the FSN. In that case, that bidder will forfeit
its bid deposit. If a bidder fails to timely pay the full amount due,
BOEM may consider this to be an indication that the bidder is no longer
financially qualified to participate in other lease sales under BOEM's
regulations at 30 CFR 585.106--107. If a winning bidder does not sign
the lease pursuant to the proposed lease sale, BOEM reserves the right
to identify the next highest bid submitted during the proposed lease
sale and offer the lease pursuant to this bid.
Additional Information Regarding the Auction Format
Bidder Authentication
For the proposed online auction, BOEM will require two-factor
authentication. Prior to the auction, BOEM will send several bidder
[[Page 54597]]
authentication packages to the bidders shortly after BOEM has processed
the BFFs. One package will contain digital authentication tokens for
each authorized individual. The tokens will be sent to the primary
point of contact indicated on the BFF. This individual is responsible
for distributing the tokens to the individuals authorized to bid for
that company. Bidders are to ensure that each token is returned within
three business days following the auction. An addressed, stamped
envelope will be provided to facilitate this process. In the event that
a bidder fails to submit a bid deposit or does not participate in the
proposed auction, BOEM will de-activate that bidder's token and login
information, and the bidder will likewise be asked to return its tokens
within three business days following the auction.
The second package contains login credentials for authorized
bidders. The login credentials will be sent to the address provided in
the BFF for each authorized individual. Bidders can confirm these
addresses by calling 703-787-1320. This package will contain user login
information and instructions for accessing the Auction System Technical
Supplement and Alternative Bidding Form. The login information, along
with the tokens, will be tested during the Mock Auction.
Timing of Auction
The FSN will provide specific information regarding when bidders
can enter the auction system and when the proposed auction will start.
Once bidders have logged in, they should review the auction schedule,
which lists the start, end, and recess times of each round in the
auction. Each round is structured as follows:
Bidding round begins;
Bidders enter their bids;
Bidding round ends and the recess begins;
During the recess, the number of live bids received in the
previous round and the next round's asking price are posted;
Bidders review the previous round results and prepare
their next round's bids; and
Next bidding round begins.
The first round will last about 30 minutes, though subsequent
rounds may be shorter. Recesses are anticipated to last approximately
10 minutes. The descriptions of the auction schedule and asking price
increments included in the PSN and FSN are tentative. Bidders should
consult the auction schedule on the bidding Web site just before and
during the auction for updated times. BOEM anticipates the proposed
auction will last one or two business days, but bidders are advised to
prepare to continue bidding for additional business days if necessary,
to resolve the auction.
BOEM and the auction contractor will use the auction platform
messaging service to keep bidders informed on issues of interest during
the proposed auction. BOEM will use the messaging system for auction
schedule changes and other updates during the auction.
Bidders may place bids at any time during the round. At the top of
the bidding page, a countdown clock will show how much time remains in
the round. Bidders have until the scheduled ending time to place bids.
Bidders should bid according to the procedures described in both the
FSN and the Auction System Technical Supplement. No information about
bidding during a given round is available until the round has closed
and results have been posted, so there is no tactical advantage to
placing bids early or late in the round.
The timing of the auction will be elaborated on and clarified in
the Auction System Technical Supplement which is available on BOEM's
Web site at: https://www.boem.gov/North-Carolina/ if and when the FSN is
published in the Federal Register. The Auction System Technical
Supplement will describe auction procedures that are incorporated by
reference into the FSN, except in the unexpected circumstance that any
of the information in the Auction System Technical Supplement is
inconsistent with the FSN, in which case the provisions of the FSN will
take precedence.
Alternate Bidding Procedures
Alternate Bidding Procedures enable a bidder who is having
difficulties accessing the Internet to submit its bid via fax using an
Alternate Bidding Form available on BOEM's Web site at: https://www.boem.gov/North-Carolina/.
In order to be authorized to use an Alternative Bidding Form, a
bidder must call the help desk number listed in the Auction Manual
before the end of the round. BOEM will authenticate the caller to
ensure he/she is authorized to bid on behalf of the company. The bidder
must explain the reasons for which he/she cannot place a bid using the
online bidding platform. BOEM may, in its sole discretion, permit or
refuse to accept a request for the placement of a bid using the
Alternate Bidding Procedures.
If bidders need to submit an Alternate Bidding Form, they are
strongly encouraged to do so before the round ends.
Rejection or Non-Acceptance of Bids: BOEM reserves the right and
authority to reject any and all bids that do not satisfy the
requirements and rules of the proposed auction, the FSN, or applicable
regulations and statutes.
Anti-Competitive Review
This sale is subject to Federal antitrust laws. Accordingly,
following the auction, but before the acceptance of the bid and the
issuance of the lease, BOEM will ``allow the Attorney General, in
consultation with the Federal Trade Commission, 30 days to review the
results of the lease sale.'' 43 U.S.C. 1337(c). If a provisionally
winning bidder is found to have engaged in anti-competitive practices
in connection with this sale, BOEM may reject its bid.
Anti-competitive practices may include, but are not limited to:
An express or tacit agreement among bidders not to bid in an
auction, or to bid at a particular price;
An agreement among bidders not to bid against each other; and
Other agreements among bidders that have the potential to
affect the final auction price.
BOEM will decline to award the lease if the Attorney General, in
consultation with the Federal Trade Commission, determines that doing
so would be inconsistent with the antitrust laws. See 43 U.S.C.
1337(c).
For more information on whether specific communications or
agreements could constitute a violation of Federal antitrust law,
please see https://www.justice.gov/atr/public/business-resources.html,
or consult legal counsel.
Process for Issuing the Lease: Once all post-auction reviews have
been completed to BOEM's satisfaction, BOEM will issue three unsigned
copies of the lease to the provisionally winning bidder. Within 10
business days after receiving the lease copies, the provisionally
winning bidder must:
1. Sign and return the lease copies on the bidder's behalf;
2. File financial assurance, as required under 30 CFR 585.515-537;
and
3. Pay by electronic funds transfer (EFT) the balance (if any) of
the bonus bid (winning bid less the bid deposit). BOEM requires bidders
to use EFT procedures (not pay.gov, the Web site 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 Web site at: https://www.boem.gov/North-Carolina/.
BOEM will not execute a lease until the three requirements above
have been
[[Page 54598]]
satisfied, the provisionally winning bidder's financial assurance has
been accepted pursuant to 30 CFR 585.515, and the provisionally winning
bidder's payment has been processed.
BOEM may extend the 10 business day deadline for executing the
lease on the bidder's behalf, filing the required financial assurance,
and/or paying the balance of the bonus bid, but only if BOEM determines
the delay was caused by events beyond the provisionally winning
bidder's control.
If the provisionally winning bidder does not meet these
requirements or otherwise fails to comply with applicable regulations
or the terms of the FSN, BOEM reserves the right not to issue the lease
to that bidder. In such a case, the provisionally winning bidder will
forfeit its bid deposit.
Within 45 days of the date that the provisionally winning bidder
receives copies of the lease, it must pay the first year's rent using
the pay.gov Renewable Energy Initial Rental Payment form available at:
https://pay.gov/paygov/forms/formInstance.html?agencyFormId=27797604.
Subsequent annual rent payments must be made following the detailed
instructions contained in the ``Instructions for Making Electronic
Payments,'' available on BOEM's Web site at: https://www.boem.gov/North-Carolina/.
Non-Procurement Debarment and Suspension Regulations: Pursuant to
regulations at 43 CFR part 42, subpart C, an OCS renewable energy
lessee must comply with the Department of the Interior's non-
procurement debarment and suspension regulations at 2 CFR 180 and 1400.
The lessee must also 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.
Force Majeure: The Program Manager of BOEM's Office of Renewable
Energy Programs has the discretion to change any auction details
specified in the FSN, including the date and time, in case of a force
majeure event that the Program Manager deems may interfere with a fair
and proper lease sale process. Such events may include, but are not
limited to: Natural disasters (e.g., earthquakes, hurricanes, floods,
blizzards), wars, riots, acts of terrorism, fire, strikes, civil
disorder or other events of a similar nature. In case of such events,
BOEM will notify all qualified bidders via email, phone, or through the
BOEM Web site at: https://www.boem.gov/Renewable-Energy-Program/index.aspx. Bidders should call 703-787-1320 if they have concerns.
Appeals: The appeals procedures are provided in BOEM's regulations
at 30 CFR 585.225 and 585.118(c). Pursuant to 30 CFR 585.225:
(a) If BOEM rejects your bid, BOEM will provide a written statement
of the reasons and refund any money deposited with your bid, without
interest.
(b) You will then be able to ask the BOEM Director for
reconsideration, in writing, within 15 business days of bid rejection,
under 30 CFR 585.118(c)(1). We will send you a written response either
affirming or reversing the rejection.
The procedures for appealing final decisions with respect to lease
sales are described in 30 CFR 585.118(c).
Protection of Privileged or Confidential Information
BOEM will protect privileged or confidential information that you
submit as required by the Freedom of Information Act (FOIA). Exemption
4 of FOIA applies to ``trade secrets and commercial or financial
information that you submit that is privileged or confidential.'' 5
U.S.C. 552(b)(4). If you wish to protect the confidentiality of such
information, clearly mark it ``Contains Privileged or Confidential
Information'' and consider submitting such information as a separate
attachment. BOEM will not disclose such information, except as required
by FOIA. Information that is not labeled as privileged or confidential
will be regarded by BOEM as suitable for public release.
BOEM will not treat as confidential aggregate summaries of
otherwise confidential information or comments not containing such
information. Additionally, BOEM will not treat as confidential the
legal title of the commenting entity (e.g., the name of your company).
Dated: August 9, 2016.
Abigail Ross Hopper,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2016-19552 Filed 8-15-16; 8:45 am]
BILLING CODE 4310-MR-P
