Atlantic Wind Lease Sale 4A (ATLW-4A) for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore Massachusetts-Final Sale Notice, 53089-53096 [2018-22878]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Ocean Energy Management

[Federal Register Volume 83, Number 203 (Friday, October 19, 2018)]
[Notices]
[Pages 53089-53096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22878]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2018-0043]


Atlantic Wind Lease Sale 4A (ATLW-4A) for Commercial Leasing for 
Wind Power on the Outer Continental Shelf Offshore Massachusetts--Final 
Sale Notice

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Final Sale Notice for Commercial Leasing for Wind Power on the 
Outer Continental Shelf Offshore Massachusetts.

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SUMMARY: This document is the Final Sale Notice (FSN) for the sale of 
commercial wind energy leases on the Outer Continental Shelf (OCS) 
offshore Massachusetts. The Bureau of Ocean Energy Management (BOEM) 
will offer three leases: Lease OCS-A 0520, Lease OCS-A 0521, and Lease 
OCS-A 0522 (Lease Areas), which are located within the former Leases 
OCS-A 0502 and Lease OCS-A 0503 that were unsold during the Atlantic 
Wind Lease Sale-4 (ATLW-4) on January 29, 2015. BOEM will use an 
ascending bidding auction format. The FSN contains information 
pertaining to the areas available for leasing, certain provisions and 
conditions of the leases, auction details, the lease form, criteria for 
evaluating competing bids, award procedures, appeal procedures, and 
lease execution. The issuance of the lease(s) resulting from this sale 
would not constitute an approval of project-specific plans to develop 
offshore wind energy. Such plans, if submitted by the lessee, would be 
subject to subsequent environmental, technical, and public reviews 
prior to a decision on whether the proposed development should be 
authorized.

DATES: BOEM will hold a mock auction for the bidders starting at 9:00 
a.m. Eastern Standard Time (EST) on December 11, 2018. The monetary 
auction will be held online and will begin at 9:00 a.m. EST on December 
13, 2018. Additional details are provided in the section entitled 
``Deadlines and Milestones for Bidders.''

FOR FURTHER INFORMATION CONTACT: Jeff Browning, BOEM, Office of 
Renewable Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, 
Virginia 20166, (703) 787-1577 or [email protected].

SUPPLEMENTARY INFORMATION:
    Authority: This FSN is published pursuant to subsection 8(p) of the 
OCS Lands Act (43 U.S.C. 1337(p)), as amended by section 388 of the 
Energy Policy Act of 2005, and the implementing regulations at 30 CFR 
part 585, including sections 211 and 216.
    Background: BOEM proposed this lease sale on April 11, 2018, in the 
Atlantic Wind Lease Sale 4A (ATLW-4A) Commercial Leasing for Wind Power 
on the Outer Continental Shelf Offshore Massachusetts--Proposed Sale 
Notice (PSN), which was published in the Federal Register (83 FR 
15618). A 60-day comment period followed. BOEM received 21 comment 
submissions in response to the PSN, which are available on 
regulations.gov (Docket ID: BOEM-2018-0016) at: https://www.regulations.gov/docket?D=BOEM-2018-0016. BOEM has posted its 
responses to comments submitted during the PSN comment period. The 
document, entitled Response to Comments, can be found through BOEM's 
website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    In response to the PSN, BOEM received new qualification materials 
from thirteen entities that BOEM has determined to be qualified to 
participate in this sale, and four affirmations of interest from 
entities that were qualified to participate in the first Massachusetts 
Lease Sale (ATLW-4) in January of 2015. In addition, the two entities 
that submitted unsolicited lease requests for the Lease Areas have also 
qualified, resulting in a total of 19 qualified entities.
    BOEM made several changes from the description of the lease sale 
format and leases that were published in the PSN. The primary changes 
are: The lease sale no longer contains a non-monetary bidding credit, 
and will instead use a straight ascending bid format; the two proposed 
lease areas have been re-divided into three Lease Areas; each lease now 
contains conditions related to vessel transit corridors and setbacks 
between adjacent leases; and the operations term of each lease has been 
extended from 25 years to 33 years.
    List of Eligible Bidders: BOEM has determined that the following 
entities are legally, technically, and financially

[[Page 53090]]

qualified to hold a commercial wind lease offshore Massachusetts 
pursuant to 30 CFR 585.106 and 107, and therefore may participate in 
this lease sale as bidders subject to meeting the requirements outlined 
in this notice:

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                      Company name                          Company No.
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Avangrid Renewables, LLC................................           15019
Camellia Wind Energy LLC................................           15077
CI III Blue Cloud Wind Energy II LLC....................           15079
Cobra Industrial Services, Inc..........................           15073
Deepwater Wind New England, LLC.........................           15012
East Wind LLC...........................................           15076
EC&R Development, LLC...................................           15080
EDF Renewables Development, Inc.........................           15027
EDPR Offshore North America LLC.........................           15074
Enbridge Holdings (Green Energy) L.L.C..................           15065
Innogy US Renewable Projects LLC........................           15061
Mayflower Wind Energy LLC...............................           15082
Northeast Wind Energy LLC...............................           15078
Northland Power America Inc.............................           15068
PNE WIND USA, Inc.......................................           15056
Equinor Wind US LLC.....................................           15058
Vineyard Wind LLC.......................................           15010
Wind Future LLC.........................................           15067
wpd offshore Alpha LLC..................................           15060
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    Affiliated Entities: On the Bidder's Financial Form (BFF) discussed 
below, eligible bidders must list any eligible bidders with whom they 
are affiliated. Affiliated eligible bidders are not permitted to 
compete against each other in the lease sale, and must decide by the 
start of the auction which eligible bidder (if any) will participate. 
If two or more affiliated bidders participate in the auction, BOEM may 
disqualify some or all such bidders from the auction.
    BOEM considers two entities to be affiliated if (a) one entity (or 
its parent or subsidiary) has or retains any right, title, or interest 
in the other entity (or its parent or subsidiary), including any 
ability to control or direct actions with respect to such entity, 
either directly or indirectly, individually or through any other party; 
or (b) the entities are both direct or indirect subsidiaries of the 
same parent company.
    Deadlines and Milestones for Bidders: This section describes the 
major deadlines and milestones in the auction process from publication 
of this FSN to execution of the lease pursuant to this sale. These are 
organized into various stages: The FSN Waiting Period; Conducting the 
Auction; and From the Auction to Lease Execution.

 FSN Waiting Period

     Bidder's Financial Form: Each bidder must submit a BFF to 
BOEM in order to participate in the auction. BOEM must receive each 
bidder's BFF no later than November 2, 2018. BOEM will consider 
extensions to this deadline only if BOEM determines that the failure to 
timely submit a BFF was caused by events beyond the bidder's control. 
The BFF can be downloaded at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/. Once BOEM has processed a 
bidder's BFF, the bidder may log into pay.gov and submit a bid deposit. 
For purposes of this auction, BOEM will not consider any BFFs submitted 
by bidders for previous lease sales. BOEM will only accept an 
originally executed paper copy of the BFF. The BFF must be executed by 
an authorized representative listed 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 Deposit: Each bidder must provide a bid deposit of 
$450,000 no later than November 16, 2018 in order to participate in the 
mock auction and the monetary auction. 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. 
Further information about bid deposits can be found in the ``Bid 
Deposit'' section of this notice.

 Conduct the Auction

     Mock Auction: BOEM will hold a Mock Auction on December 
11, 2018 beginning at 9:00 a.m. EST. The Mock Auction will be held 
online. BOEM will contact each bidder that has timely filed a BFF and 
bid deposit and provide instructions for participation. Only bidders 
that have timely submitted BFFs and bid deposits will be permitted to 
participate in the Mock Auction.
     Monetary Auction: On December 13, 2018, BOEM, through its 
contractor, will hold the auction. The first round of the auction will 
start at 9:00 a.m. EST. The auction will proceed electronically 
according to a schedule to be distributed by the BOEM Auction Manager 
at the time of the auction. BOEM anticipates that the auction will last 
one business day, but it may continue on consecutive business days, as 
necessary, until the auction ends in accordance with the procedures 
described in the ``Auction Procedures'' section of this notice.
     Announce Provisional Winners: BOEM will announce the 
provisional winners of the lease sale after the auction ends.

 From the Auction to Lease Execution

     Refund Non-Winners: Once the provisional winners have been 
announced, BOEM will provide the non-winners a written explanation of 
why they did not win and return their bid deposits.
     Department of Justice (DOJ) Review: DOJ will have 30 days 
in which to conduct an antitrust review of the auction, pursuant to 43 
U.S.C. 1337(c).
     Delivery of the Lease: BOEM will send three lease copies 
to each winner, with instructions on how to execute the lease. The 
first year's rent is due 45 calendar days after the winners receive the 
lease copies for execution.
     Return the Lease: Within 10 business days of receiving the 
lease copies, the auction winners must post financial assurance, pay 
any outstanding balance of their bonus bids (i.e., winning monetary bid 
minus applicable bid deposit), and sign and return the three executed 
lease copies. The winners may request extensions to the 10-day 
deadline, and BOEM may grant such extensions if BOEM determines the 
delay to be caused by events beyond the requesting winner's control, 
pursuant to 30 CFR 585.224(e).
     Execution of Lease: Once BOEM has received the signed 
lease copies and verified that all other required materials have been 
received, BOEM will make a final determination regarding its issuance 
of the leases and will execute the leases, if appropriate.
    Area Offered for Leasing: The area available for sale will be 
auctioned as three leases: Lease OCS-A 0520, Lease OCS-A 0521, and 
Lease OCS-A 0522. Lease OCS-A 0520 consists of 128,811 acres, Lease 
OCS-A 0521 consists of 127,388 acres, and Lease OCS-A 0522 consists of 
132,370 acres. These Lease Areas lie within the same area that BOEM 
announced on April 11, 2018 and published in the PSN. In response to 
comments received on the PSN, however, BOEM re-divided the available 
area into three leases.
    Map of the Area Offered for Leasing: A map of the Lease Areas, and 
GIS spatial files X, Y (eastings, northings) UTM Zone 18, NAD83 Datum, 
and geographic X, Y (longitude, latitude), NAD83 Datum can be found on 
BOEM's website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    A large scale map of the Lease Areas, 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

[[Page 53091]]

Road, VAM-OREP, Sterling, Virginia 20166, Phone: (703) 787-1300, Fax: 
(703) 787-1708.
    Environmental Reviews and Lease Stipulations: The PSN explains that 
the existing June 2014 Revised Massachusetts Environmental Assessment 
(EA) and associated consultations adequately assess the reasonably 
foreseeable environmental effects of the issuance of commercial leases 
and associated site characterization activity in the Massachusetts Wind 
Energy Area (WEA), which includes the areas that BOEM will lease 
pursuant to this FSN. Although this FSN represents a change in the 
number and size of the leases to be sold compared to the PSN, the scope 
of activities anticipated as a result of the lease sale still falls 
within the range analyzed in the EA because, among other things, those 
leases still fall within the boundaries of former Leases OCS-A 0502 and 
OCS-A 0503.
    BOEM will conduct additional environmental reviews upon receipt of 
a lessee's proposed project-specific plans, such as a Site Assessment 
Plan (SAP) or Construction and Operations Plan (COP). As conditions of 
plan approval, Lessees may be required to contribute to regional 
environmental monitoring programs that are presently being developed 
jointly between state and Federal authorities and stakeholder groups. 
For Lease OCS-A 0522, BOEM may require terms and conditions of project 
approval aimed at mitigating, minimizing, or avoiding impacts to sea 
ducks. During the development of the Massachusetts WEA, BOEM took steps 
to protect sea ducks (among other species) by removing lease blocks. 
Recent information suggests that high concentrations of sea ducks may 
forage in the easternmost lease blocks (6251, 6252, & 6302) during the 
winter months.
    BOEM is also adding additional lease stipulations that were not 
contained in the leases offered in ATLW-4.
    Fisheries Communication Plan: In order to facilitate interactions 
between lessees and commercial fisheries and maintain consistency with 
its most recent lease sale, BOEM is once again including a lease 
stipulation to ensure the Lessee coordinates and communicates with 
commercial and recreational fishermen. BOEM has determined that this 
stipulation is prudent for the leases in this sale, given the 
importance of fishing to the economies of Southern New England states. 
The lease stipulation states as follows:
    Fisheries Communications Plan (FCP) and Fisheries Liaison. The 
Lessee must develop a publicly available FCP that describes the 
strategies that the Lessee intends to use for communicating with 
fisheries stakeholders prior to and during activities in support of the 
submission of a plan. The FCP must include the contact information for 
an individual retained by the Lessee as its primary point of contact 
with fisheries stakeholders (i.e., Fisheries Liaison). If the Lessee 
does not develop a project website, the FCP must be made available to 
the Lessor and the public upon request.
    Best Available Technologies for Meteorological Buoys: BOEM has 
included a lease stipulation aimed at requiring the Lessee to use best 
available technologies in designs for meteorological buoys and other 
similar floating devices to ensure entanglement risks to marine 
protected species are minimized to discountable levels. Although this 
is a new lease stipulation, it is intended to provide clarification for 
existing buoy requirements contained in the 2013 Biological Opinion 
issued to BOEM by NOAA for Commercial Wind Lease Issuance and Site 
Assessment Activities on the Atlantic Outer Continental Shelf in 
Massachusetts, Rhode Island, New York and New Jersey Wind Energy and 
discussed in the 2014 EA. The lease stipulation states as follows:
    The Lessee must ensure that any structures or devices attached to 
the seafloor for continuous periods greater than 24 hours use the best 
available mooring systems for minimizing the risk of entanglement or 
entrainment of marine mammals, manta rays and sea turtles, while still 
ensuring the safety and integrity of the structure or device. The best 
available mooring system may include, but is not limited to, vertical 
and float lines (chains, cables, or coated rope systems), swivels, 
shackles, and anchor designs.
    All mooring lines and ancillary attachment lines must use one or 
more of the following measures to reduce entanglement risk: shortest 
practicable line length, rubber sleeves, weak-links, chains, cables or 
similar equipment types that prevent lines from looping or wrapping 
around animals, or entrapping protected species.
    Any equipment must be attached by a line within a rubber sleeve for 
rigidity. The length of the line must be as short as necessary to meet 
its intended purpose. If an entangled live or dead marine protected 
species is reported, the Lessee must provide any assistance to 
authorized stranding response personnel as requested by BOEM or NMFS.
    Vessel Transit Corridors: Fishermen have requested that offshore 
wind facilities be designed in a manner that, among other things, 
provides for safe transit through the facility to fishing grounds. 
Current BOEM leaseholders offshore Rhode Island and Massachusetts 
(Leases OCS-A 0486, OCS-A 0487, OCS-A 0500, and OCS-A 0501) are 
presently working with stakeholders, and the United States Coast Guard 
to identify those transit routes and establish corridors in their plan 
submittals. BOEM has determined that such corridors are only effective 
if they continue, as appropriate, through the Lease Areas. As such, 
BOEM has added the following lease term:
    In its COP project design, Lessee must extend any BOEM-approved 
vessel transit corridors in adjacent lease areas, unless BOEM 
determines that such corridors are not necessary or can be modified. 
Lessee may not construct any surface structures in such vessel transit 
corridors.
    Surface Structure Setback: In response to comments received on the 
PSN, BOEM will require lessees to incorporate a setback of 750 meters 
(m) from any shared lease boundary into future COP submittals, unless 
both adjacent lessees agree to a decreased setback. The 750 m setback 
for each lease results in a minimum distance of 1,500 m between turbine 
locations of adjacent leases. BOEM has added a term setting forth this 
obligation in Addendum A of Leases OCS-A 0520, OCS-A 0521, and OCS-A 
0522 which reads as follows:
    In its COP project design, the Lessee must incorporate a 750 m 
setback from any shared lease boundary within which the Lessee may not 
construct any surface structures, unless the Lessee and the adjacent 
lessee agree to a smaller setback, the Lessee submits such agreement to 
BOEM, and BOEM approves it.
    Withdrawal of Blocks: BOEM reserves the right to withdraw all or 
portions of the Lease Areas prior to executing the leases with the 
winning bidders.
    Lease Terms and Conditions: BOEM has included terms, conditions, 
and stipulations for the OCS commercial wind leases to be offered 
through this sale. After the leases are issued, BOEM reserves the right 
to require compliance with additional terms and conditions associated 
with approval of a SAP or COP. The leases are available on BOEM's 
website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/. The leases include the following seven attachments:
     Addendum ``A'' (Description of Leased Area and Lease 
Activities);

[[Page 53092]]

     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); and
     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. Addenda ``D'' and ``E'' will be completed 
at the time of COP approval or approval with modifications.
    The most recent version of BOEM's renewable energy commercial lease 
form (BOEM-0008) is available on BOEM's website at: https://www.boem.gov/BOEM-OCS-Operation-Forms/.
    Plans: Pursuant to 30 CFR 585.601, a leaseholder wishing to submit 
a SAP must do so within 12 months of lease issuance. If the lessee 
intends to continue to hold the lease into its operations term, the 
lessee must submit a COP at least 6 months before the end of the site 
assessment term.
    Financial Terms and Conditions: This section provides an overview 
of the annual payments required of the lessee that will be fully 
described in the lease, and the financial assurance requirements that 
will be associated with the lease.
    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 calendar 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. 
Instead of geographically dividing the leased area into acreage that is 
``generating'' and ``non-generating,'' however, 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 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 a 128,811 acre lease (the size of OCS-A 0520), the rent payment 
will be $386,433 per year if no portion of the lease area is authorized 
for commercial operations. If 500 megawatts (MW) of a project's 
nameplate capacity is operating (or authorized for operation), and the 
approved COP specifies a maximum project size of 800 MW, the rent 
payment will be $144,912. This payment is based on the 300 MW of 
nameplate capacity BOEM has not yet authorized for commercial 
operations. For the above example, this would be calculated as follows: 
300MW/800MW x ($3/acre x 128,811 acres) = $144,912.
    If the lessee submits an application for relinquishment of a 
portion of its leased 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 the 
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 must also 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 pursuant to 30 CFR 585.506, BOEM applies an 
operating fee rate to a proxy for the wholesale market value of the 
electricity expected to be generated from the project during its first 
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 
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 an 800 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] TN19OC18.000

    Operating Fee Rate: The operating fee rate is the share of imputed 
wholesale market value of the projected annual electric power 
production due to the Office of Natural Resources Revenue as an annual 
operating fee. For the Lease Areas, BOEM will set the fee rate at 0.02 
(i.e., 2%) for the entire life of commercial operations.
    Nameplate Capacity: Nameplate capacity is the maximum rated 
electric output, expressed in MW, which 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 100 turbines in its COP, and each is rated by the 
manufacturer at 8 MW, the nameplate capacity of the wind facility is 
800 MW.
    Capacity Factor: The capacity factor relates to the amount of 
energy delivered to the grid during a period of time compared to the 
amount of energy the wind facility would have produced at full capacity 
during that same period of time. This factor is represented as a 
decimal between zero and one. There are several reasons why the amount 
of power delivered is less than the theoretical 100% of capacity. For a 
wind facility, the capacity factor is mostly

[[Page 53093]]

determined by the availability of wind. Transmission line loss and down 
time for maintenance or other purposes also affect the capacity factor.
    The capacity factor for the year in which the Commercial Operation 
Date occurs, and for the first six full years of commercial operations 
on the lease, is set to 0.4 (i.e., 40%). At the end of the sixth year, 
the capacity factor may be adjusted to reflect the performance over the 
previous five years based upon the actual metered electricity 
generation at the delivery point to the electrical grid. Similar 
adjustments to the capacity factor may be made 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% 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 Northeast--Massachusetts Hub 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 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.
    Financial Assurance: Within 10 business days after receiving the 
lease copies and pursuant to 30 CFR 585.515-516, the provisional 
winners of the leases must provide an initial lease-specific bond or 
other approved means of meeting the lessor's initial financial 
assurance requirements, in the amount of $100,000. The provisional 
winners 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 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 leases, which BOEM has made available with this notice on its 
website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    Bidder's Financial Form: Each bidder must fill out the BFF 
referenced in this FSN. BOEM has also made a copy of the form available 
with this notice on its website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/. 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).
    BOEM will not consider BFFs submitted by bidders for previous lease 
sales to satisfy the requirements of this auction. BOEM will also only 
consider BFFs submitted after the deadline (November 2, 2018) 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 listed in the qualifications package on file 
with BOEM as authorized to bind the company.
    Bid Deposit: A bid deposit is an advance cash payment submitted to 
BOEM in order to participate in the auction. After creating an account 
in pay.gov (if necessary), bidders may use the Bid Deposit Form on the 
pay.gov website to leave a deposit. Each bidder must submit a bid 
deposit of $450,000 no later than November 16, 2018. Any bidder who 
fails to submit the bid deposit by this deadline may be disqualified 
from participating in the auction.
    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, BOEM will refund the balance of 
the bid deposit to the bidder. BOEM will refund bid deposits to non-
winners once BOEM has announced the provisional winner.
    If BOEM offers a lease pursuant to a provisionally winning bid, and 
that bidder fails to timely return the signed lease form, establish 
financial assurance, and/or pay the balance of its bid, BOEM will 
retain the bidder's $450,000 bid deposit. In such a circumstance, BOEM 
reserves the right to determine which bid would have won in the absence 
of the bid previously-determined to be the winning bid, and to offer a 
lease pursuant to this next highest bid.
    Minimum Bid: The minimum bid is the lowest bid BOEM will accept as 
a winning bid, and it is where BOEM will start the bidding in the 
auction. BOEM has established a minimum bid of $2.00 per acre for this 
lease sale.

Auction Procedures

Ascending Bidding With Cash Bid Variable

    As authorized under 30 CFR 585.220(a)(2) and 585.221(a)(1), BOEM 
will use an ascending bidding auction with cash as the bid variable for 
this lease sale. BOEM will start the auction using the minimum bid 
prices for each lease area, and increase those prices incrementally 
until no more than one active bidder per lease area remains in the 
auction.

The Auction

    Using an online bidding system to host the auction, BOEM will start 
the bidding for Lease OCS-A 0520 at $257,622, Lease OCS-A 0521 at 
$254,776, and for Lease OCS-A 0522 at $264,740. Each bidder may bid on 
only one lease area at a time, and can win at most one of the three 
Lease Areas offered in this sale.
    The auction will be conducted in a series of rounds. At the start 
of each round, BOEM will state an asking price for each lease area. If 
a bidder is willing to meet the asking price for one of the lease 
areas, it will indicate its intent by submitting a bid equal to the 
asking price. A bid at the full asking price is referred to as a ``live 
bid.'' To participate in the next round of the auction, a bidder must 
submit a live bid for one of the lease areas in each previous round. As 
long as there are two or more live bids for at least one lease area, 
the auction moves to the next round. BOEM will raise the asking price 
for each lease area that has received two or more live bids in the 
previous round. Asking price increments will be determined based on 
several factors, including (but not necessarily limited to) the 
expected time needed to conduct the auction, and the number of rounds 
that have already occurred. BOEM reserves the right to increase or 
decrease bidding increments as appropriate.
    Generally, a bidder that submitted a live bid in the previous round 
is free to bid on any of the three areas in the current round. However, 
there is an exception. A bidder may switch its live bid from one lease 
area to another in the current round only if its bid from the previous 
round was contested--e.g., a bidder cannot switch from OCS-A 0520 to 
OCS-A 0521 unless there was at least one other live bid for OCS-A 0520 
in

[[Page 53094]]

the last round. If the bid was not contested in the previous round, the 
bidder cannot switch lease areas, and its previous round bid will be 
carried forward to the next round. If another bidder places a live bid 
on OCS-A 0520 later in the auction, BOEM will stop automatically 
carrying forward the previously uncontested bid on that lease area. The 
bidder that placed the previously carried forward bid is then free to 
bid on that lease area or either of the other two lease areas in the 
next round at the new asking prices. A bidder remains eligible to 
participate in the auction if it submitted a live bid in the prior 
round, or had a previously uncontested live bid carried forward by BOEM 
to the current round. If a bidder decides to stop bidding further when 
its bid is contested, there are still circumstances in which the bidder 
could win (e.g., if the winning bid is disqualified at the award stage 
of the auction). If this happens, the bidder may be bound by its bid 
and thus obligated to pay the full bid amount. Bidders may be bound by 
any of their bids until the auction results are finalized.
    Between rounds, BOEM will disclose to all bidders that submitted 
bids in the first round of the auction: (1) The number of live bids 
(including bids carried forward) for each lease area in the previous 
round of the auction (i.e., the level of demand); and (2) the asking 
price for each lease area in the upcoming round of the auction.
    A bidder is only eligible to continue bidding in the auction if it 
has submitted a live bid (or had a bid carried forward) in the previous 
round. In any round after the first round, however, a bidder may submit 
an ``exit bid'' (also known as an ``intra-round bid''). An exit bid is 
a bid that is higher than the previous round's asking price, submitted 
for the same lease area as the bidder's contested live bid in the 
previous round, but less than the current round's asking price. An exit 
bid is not a live bid, and it represents the final bid that a bidder 
may submit in the auction. During the auction, the exit bid can only be 
seen by BOEM, and not by other bidders.
    A lease area with only exit bids in a given round will not have its 
asking price raised in the next round, since BOEM only raises asking 
prices when a lease area receives multiple live bids. As soon as all 
three Lease Areas have one or zero live bids (including bids carried 
forward), the auction is over, regardless of the number of exit bids on 
each area.
    After the bidding ends, BOEM will determine the provisionally 
winning bids for each lease area. The provisionally winning bid for a 
lease area will be the highest bid (live bid or exit bid) received for 
that lease area, except that no bidder may win more than one lease 
area. The award procedures described here could result in a tie, for 
example if two bidders submit identical high exit bids. In such cases, 
BOEM would resolve the tie by randomized means subject to the 
constraint of no bidder winning more than one lease area. After the 
last round of the auction, there will be a listing of all scenarios 
that would generate the same maximum revenue. This can include multiple 
ties. Each of those scenarios is given an equal probability of winning. 
The selection of the winning scenario is determined by pseudorandom 
numbers.
    Provisional winners may be disqualified if they are subsequently 
found to have violated auction rules or BOEM regulations, or otherwise 
engaged in conduct detrimental to the integrity of the competitive 
auction. If a bidder submits a bid that BOEM determines to be a 
provisionally winning bid, the bidder will be expected to sign the 
applicable lease documents, establish financial assurance, and submit 
the cash balance of its bid (i.e., winning bid amount minus the bid 
deposit) within 10 business days of receiving the lease copies, 
pursuant to 30 CFR 585.224. 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 comply with applicable 
regulations or the terms of the FSN. In that case, the bidder would 
forfeit its bid deposit. BOEM may consider failure of a bidder to 
timely pay the full amount due to be an indication that the bidder may 
no longer be financially qualified to participate in other lease sales 
under 30 CFR 585.106 and 585.107.

Additional Information Regarding the Auction Format

Bidder Authentication

    For the online auction, BOEM will require two-factor 
authentication. After BOEM has processed the bid deposits, the auction 
contractor sends several bidder authentication packages to the bidders. 
One package will contain digital authentication tokens needed to allow 
access to the auction website. As a general practice, tokens are mailed 
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 auction, BOEM will de-activate that 
bidder's tokens and login information, and the bidder will be asked to 
return its tokens. Under certain circumstances (for example, if the 
authorized bidders are geographically dispersed and the ability for the 
Primary Point of Contact to timely distribute the materials is in 
question), BOEM may send all materials directly to the authorized 
bidders instead of sending to the Primary Point of Contact.
    The second package contains login credentials for authorized 
bidders. The login credentials are mailed 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 Bidder Manual for the 
auction system, the Auction System Technical Supplement (ASTS) and the 
Alternative Bidding Form, all of which are available on BOEM's website 
at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/. The login information, along with the tokens, will be tested 
during the Mock Auction.

Timing of Auction

    The auction will begin at 9:00 a.m. EST on December 13, 2018. 
Bidders may log in as early as 8:30 a.m. on that day. We recommend that 
bidders log in earlier than 9:00 a.m. on that day to ensure that any 
login issues are resolved prior to the start of the auction. Once 
bidders have logged in, they should review the auction schedule, which 
lists the anticipated start times, end times, and recess times of each 
round in the auction. Each round is structured as follows:
     Round bidding begins;
     Bidders enter their bids;
     Round bidding ends and the Recess begins;
     During the Recess, previous Round results and next round 
asking prices are posted;
     Bidders review the previous Round results and prepare 
their next Round bids; and
     Next Round bidding begins.
    The first round will last about 30 minutes, though subsequent 
rounds may be shorter. Recesses are anticipated to last approximately 
10 minutes. The description of the auction schedule included with this 
FSN is tentative. Bidders should consult the auction schedule on the 
bidding website during the auction for updated times. Bidding will 
continue until about 6:00 p.m. EST

[[Page 53095]]

each day. BOEM anticipates that the auction will last one business day, 
but may be extended for additional business days as necessary until the 
auction is complete.
    BOEM and the auction contractors will use the auction platform 
messaging service to keep bidders informed on issues of interest during 
the auction. For example, BOEM may change the schedule at any time, 
including during the auction. If BOEM changes the schedule during an 
auction, it will use the messaging feature to notify bidders that a 
revision has been made, and will direct bidders to the relevant page. 
BOEM will also use the messaging system for 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 shows how much time remains in the 
round. Bidders have until the scheduled time to place bids. Bidders 
should do so according to the procedures described in this notice, and 
the ASTS. Information about the round results will only be made 
available after the round has closed, so there is no strategic 
advantage to placing bids early or late in the round.
    The ASTS will elaborate on the auction procedures described in this 
FSN. In the event of an inconsistency between the ASTS and the FSN, the 
FSN is controlling.

Prohibition on Communications Between Bidders During Auction

    During the auction, bidders are prohibited from communicating with 
each other regarding their participation in the auction. Also during 
the auction, bidders are prohibited from communicating to the general 
public regarding any aspect of their participation or lack thereof in 
the auction, including, but not limited to, through social media, 
updated websites, or press releases.

Alternate Bidding Procedures

    Alternate Bidding Procedures enable a bidder who is having 
difficulty accessing the internet to submit its bid via fax using an 
Alternate Bidding Form available on BOEM's website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    In order to be authorized to use an Alternate 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 bidder. The bidder 
must explain the reasons for which he/she is forced to place a bid 
using the Alternate Bidding Procedures. BOEM may, in its sole 
discretion, permit or refuse to accept a request for the placement of a 
bid using the Alternate Bidding Procedures.
    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 auction, the FSN, or applicable 
regulations and statutes.
    Anti-Competitive Review: Bidding behavior in this sale is subject 
to Federal antitrust laws. Accordingly, following the auction, but 
before the acceptance of bids and the issuance of leases, 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 behavior in connection with its 
participation in the competitive bidding process, BOEM may reject its 
provisionally winning bid. Compliance with BOEM's auction procedures 
and regulations is not an absolute defense to violations of antitrust 
laws.
    Anti-competitive behavior determinations are fact-specific. 
However, such behavior may manifest itself in several different ways, 
including, but not limited to:
     An express or tacit agreement among bidders not to bid in 
an auction, or to bid a particular price;
     An agreement among bidders not to bid;
     An agreement among bidders not to bid against each other; 
or
     Other agreements among bidders that have the potential to 
affect the final auction price.
    BOEM will decline to award a lease pursuant to 43 U.S.C. 1337(c) if 
the Attorney General, in consultation with the Federal Trade 
Commission, determines that awarding the lease would be inconsistent 
with the antitrust laws.
    For more information on whether specific communications or 
agreements could constitute a violation of Federal antitrust law, 
please see https://www.justice.gov/atr/business-resources 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 each provisionally winning bidder. Within 10 
business days after receiving the lease copies, the provisionally 
winning bidders 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 website bidders used to submit 
bid deposits) for payment of the balance of the bonus bid, following 
the detailed instructions contained in the ``Instructions for Making 
Electronic Payments'' available on BOEM's website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    BOEM will not execute a lease until the three requirements above 
have been satisfied, BOEM has accepted the provisionally winning 
bidder's financial assurance pursuant to 30 CFR 585.515, and BOEM has 
processed the provisionally winning bidder's payment.
    BOEM may extend the 10 business day deadline for signing a lease, 
filing the required financial assurance, and/or paying the balance of 
the bonus bid if BOEM determines the delay was caused by events beyond 
the provisionally winning bidder's control.
    If a provisionally winning bidder does not meet these requirements 
or otherwise fails to comply with applicable regulations or the terms 
of the FSN, BOEM reserves the right not to issue the lease to that 
bidder. In such a case, the provisionally winning bidder will forfeit 
its bid deposit. Also in such a case, BOEM reserves the right to 
identify the next highest bid for that lease area submitted during the 
lease sale by a bidder who has not won one of the other lease areas, 
and to offer the lease to that bidder pursuant to its bid.
    Within 45 calendar days of the date that a 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://www.pay.gov/public/form/start/27797604/.
    Subsequent annual rent payments must be made following the detailed 
instructions contained in the ``Instructions for Making Electronic 
Payments,'' available on BOEM's website at: https://www.boem.gov/Commercial-Wind-Leasing/Massachusetts/Lease-Sale-4A/.
    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

[[Page 53096]]

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 website 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 may be 
regarded by BOEM as suitable for public release. Further, BOEM will not 
treat as confidential aggregate summaries of otherwise confidential 
information.

    Dated: October 15, 2018.
Walter D. Cruickshank,
Acting Director, Bureau of Ocean Energy Management.
[FR Doc. 2018-22878 Filed 10-18-18; 8:45 am]
 BILLING CODE 4310-MR-P