Atlantic Wind Lease Sale 9 (ATLW-9) for Commercial Leasing for Wind Power on the Outer Continental Shelf (OCS) in the Carolina Long Bay Area (CLBA)-Final Sale Notice (FSN), 17324-17336 [2022-06507]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Ocean Energy Management

[Federal Register Volume 87, Number 59 (Monday, March 28, 2022)]
[Notices]
[Pages 17324-17336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06507]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2022-0015]


Atlantic Wind Lease Sale 9 (ATLW-9) for Commercial Leasing for 
Wind Power on the Outer Continental Shelf (OCS) in the Carolina Long 
Bay Area (CLBA)--Final Sale Notice (FSN)

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Final sale notice.

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SUMMARY: This FSN contains information pertaining to the areas

[[Page 17325]]

available for commercial wind energy leasing on the OCS in the Carolina 
Long Bay Area. Specifically, this FSN details 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 Bureau of Ocean Energy Management (BOEM) will 
offer two leases: Lease OCS-A 0545 and Lease OCS-A 0546. The issuance 
of any lease 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 an online mock auction for potential bidders 
starting at 9:00 a.m. Eastern Daylight Time (EDT) on May 6, 2022. The 
monetary auction will be held online and will begin at 9:00 a.m. EDT on 
May 11, 2022. Additional details are provided in the section entitled 
``Deadlines and Milestones for Bidders.''

FOR FURTHER INFORMATION CONTACT: Casey Reeves, BOEM Office of Renewable 
Energy Programs, 45600 Woodland Road, VAM-OREP, Sterling, Virginia 
20166, (703) 787-1671 or [email protected].

SUPPLEMENTARY INFORMATION: 
    Authority: 43 U.S.C. 1337(p); 30 CFR 585.211 and 585.216.
    I. BACKGROUND: The Outer Continental Shelf Lands Act authorizes 
BOEM to offer renewable energy leases for sale on the OCS 
competitively, unless BOEM determines there is no competitive interest. 
On December 13, 2012, BOEM published a Call for Information and 
Nominations (or ``Call'') in the Federal Register (under Docket ID: 
BOEM-2012-0088) for a 45-day public comment period to gauge the 
offshore wind industry's interest in acquiring commercial wind leases 
in three areas offshore North Carolina and to request comments 
regarding site conditions, resources and other uses within the Call 
areas. On February 5, 2013, BOEM reopened the comment period for the 
Call to allow for additional public input (Docket ID: BOEM-2012-0088); 
the comment period closed on March 7, 2013. BOEM then published a 
Proposed Sale Notice (PSN) in the Federal Register on November 1, 2021, 
which initiated a 60-day comment period ending on January 3, 2022. Any 
prospective bidders wishing to participate in a Carolina Long Bay lease 
sale were requested to submit qualification materials postmarked no 
later than January 3, 2022. BOEM also hosted an auction seminar for 
prospective bidders on November 16, 2021, to discuss the proposed 
auction format. BOEM received 60 comment submissions in response to the 
PSN, which are available on regulations.gov (Docket ID: BOEM-2021-0078) 
at: https://www.regulations.gov/document/BOEM-2021-0078-0001.
    In response to the comments received, BOEM made several changes to 
the description of the Wilmington East Lease Area that was published in 
the PSN. The primary change is a reorientation of lease area boundaries 
resulting in 110,091 acres being offered for sale, which is further 
explained in Section IV--Areas Offered for Leasing. In addition, 
several lease stipulations were developed, or refined, based on 
feedback solicited in the PSN, including provisions to advance 
engagement and coordination with federally recognized Tribal Nations, 
ocean users, other agencies, underserved communities, and other 
interested stakeholders; advance flexibility in transmission planning; 
advance the domestic supply chain; and promote the use of project labor 
agreements (PLAs).
    II. LIST OF ELIGIBLE BIDDERS: BOEM has determined that the 
following 16 entities are legally, technically, and financially 
qualified to hold a commercial wind lease in the Wilmington East Lease 
Area pursuant to 30 CFR 585.106 and 107 and may participate in this 
lease sale as bidders subject to meeting the requirements outlined in 
this notice:

------------------------------------------------------------------------
                                                                 Company
                         Company name                              No.
------------------------------------------------------------------------
547 Energy LLC................................................     15123
Arevia Power LLC..............................................     15129
Avangrid Renewables, LLC......................................     15019
BP US Offshore Wind Energy LLC................................     15122
Invenergy Long Bay Offshore LLC...............................     15137
Carolina Offshore Wind LLC....................................     15135
Duke Energy Renewables Wind, LLC..............................     15134
EDF Renewables Development, Inc...............................     15027
JERA Renewables NA, LLC.......................................     15131
Masdar Offshore Wind Americas LLC.............................     15139
MRP Offshore Wind Farm LLC....................................     15141
Orsted North America Inc......................................     15059
OW North America Ventures LLC.................................     15133
RWE Offshore Wind Holdings, LLC...............................     15061
Shell New Energies US LLC.....................................     15140
TotalEnergies Renewables USA, LLC.............................     15136
------------------------------------------------------------------------

    a. 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 they meet the 
definition of affiliate in 30 CFR 1206.20, as applicable, or if they 
are both direct, or indirect, subsidiaries of the same parent company.
    III. 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.
    a. FSN Waiting Period
    i. BFF: Each bidder must submit a BFF to BOEM to participate in the 
auction. BOEM must receive each BFF no later than April 11, 2022. If a 
bidder does not submit a BFF by this deadline, BOEM, in its sole 
discretion, may grant an extension to that bidder only if BOEM 
determines the bidder's failure to timely submit a BFF was caused by 
events beyond the bidder's control. The BFF can be downloaded at: 
boem.gov/renewable-energy/state-activities/carolina-long-bay. Once BOEM 
has processed a 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).
    ii. Bid Deposit: Each bidder must provide a bid deposit of 
$2,000,000 no later than April 25, 2022, to participate in the mock 
auction and the monetary auction. If a bidder would like to qualify to 
win two lease areas, the bidder must provide a bid deposit of 
$4,000,000. BOEM will consider extensions to this deadline only if 
BOEM, in its sole discretion, 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.
    b. Conducting the Auction
    i. Mock Auction: BOEM will hold a Mock Auction on May 6, 2022, 
beginning at 9:00 a.m. EDT. The Mock Auction will be held online. BOEM 
will contact each bidder that has timely submitted a BFF and bid 
deposit and provide instructions for participation.

[[Page 17326]]

Only bidders that have timely submitted BFFs and bid deposits may 
participate in the Mock Auction.
    ii. Multiple-factor Auction: On May 11, 2022, BOEM, through its 
contractor, will start the auction. The first round of the auction will 
start at 9:00 a.m. EDT. The auction will proceed electronically 
according to a schedule to be distributed by the BOEM Auction Manager 
at the beginning of the auction, subject to revisions that will be 
communicated to bidders during the auction. BOEM anticipates that the 
auction will last 1-business day, but it may continue for as many 
consecutive business days, as necessary, until the auction ends in 
accordance with the procedures described in the ``Auction Procedures'' 
section of this notice.
    iii. Announce Provisional Winners: BOEM will announce the 
provisional winners of the lease sale after the auction ends.
    c. From the Auction to Lease Execution
    i. Refund Non-Winners: Once the provisional winners have been 
announced, BOEM will return the non-winners' bid deposits.
    ii. 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).
    iii. Delivery of the Lease: BOEM will send three lease copies to 
each provisional winner, with instructions for executing the lease. The 
first year's rent is due 45-calendar days after the winners receive the 
lease copies for execution.
    iv. 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. In the event of a delay, BOEM may extend the 10 business 
day time period for executing and returning the lease if we determine 
the delay to be caused by events beyond your control, pursuant to 30 
CFR 585.224(e).
    v. 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.
    IV. AREAS OFFERED FOR LEASING: In deciding whether to remove areas 
from leasing consideration, BOEM's charge is to balance all the factors 
in 43 U.S.C. 1337(p)(4). No single factor or comment led to BOEM's 
designation of the final two sale areas; rather, BOEM altered the areas 
in certain locations where: (1) Multiple factors weighed in favor of a 
change; (2) there was evidence supporting the application of those 
factors; and (3) the changes were supported by the comments. BOEM's 
designation of the two lease areas offered in the FSN were informed by 
its coordination with BOEM's intergovernmental task force members for 
multiple years, stakeholder engagement, and consideration of the 60 
comments that BOEM received in response to the PSN. BOEM is offering 
two lease areas totaling 110,091 acres for sale through this notice 
(Figure 1). The size of the two lease areas have been reduced by 
approximately 14 percent from the size of the areas proposed in the PSN 
to address issues and concerns expressed in the comments submitted on 
the PSN and through consultation with Federal agencies. Approximately 
17,774 acres were removed from Leases OCS-A 0545 and OCS-A 0546 in the 
FSN. BOEM decided to remove from leasing consideration all lease blocks 
within 20 statute miles of the shoreline, thereby eliminating 13,474 
acres in the northern portion of the proposed lease area. In addition, 
4,300 acres were removed from the southeast portion of the proposed 
lease area to eliminate overlap between the lease area and the 
navigational fairway proposed by the U.S. Coast Guard (USCG). Following 
these removals, BOEM divided the remaining lease area into two nearly 
equal lease areas. BOEM designated the two lease areas to ensure that 
each has a similar acreage, distance to shore, wind resource potential, 
and in response to comments received on the PSN.
    The area available for sale will be auctioned as two leases:

             Table 1 to Section IV--ATLW-9 Final Lease Areas
------------------------------------------------------------------------
                          Lease                             Total acres
------------------------------------------------------------------------
OCS-A 0545..............................................          54,937
OCS-A 0546..............................................          55,154
------------------------------------------------------------------------


[[Page 17327]]

[GRAPHIC] [TIFF OMITTED] TN28MR22.243

    V. ENVIRONMENTAL REVIEW: On December 13, 2012, BOEM published a 
notice of intent to prepare an environmental assessment (EA) to 
consider potential environmental consequences of site characterization 
activities (e.g., biological, archeological, geological, and 
geophysical surveys and core samples) and site assessment activities 
(e.g., installation of meteorological towers or buoys) expected to be 
conducted after lease issuance. The EA also considered surveys along 
project easements associated with the potential leases and grants for 
subsea cable corridors. As part of the EA process, BOEM sought comments 
on the issues and alternatives that should inform the EA and received 
approximately 47 comments, which can be found at https://www.regulations.gov under Docket No. BOEM-2012-0090. A notice of 
availability of the EA was published on January 23, 2015, to initiate a 
30-day public comment period (80 FR 3621) and comments received can be 
found at https://www.regulations.gov under Docket No. BOEM-2015-0001. 
The EA was subsequently revised based on comments received during the 
comment period and public information meetings. The revised EA and the 
finding of no significant impact were published on September 17, 2015 
and are available at: https://www.boem.gov/sites/default/files/renewable-energy-program/State-Activities/NC/NC-EA-Camera-FONSI.pdf. 
Concurrently with its preparation of the EA, BOEM conducted 
consultations under the Endangered Species Act (ESA), the Magnuson-
Stevens Fishery Conservation and Management Act, and the Coastal Zone 
Management Act. BOEM prepared and executed a programmatic agreement 
(PA) to guide its consultations under Section 106 of the National 
Historic Preservation Act. The PA provides for consultations to 
continue through BOEM's decision-making process regarding the issuance 
of leases on the OCS. Also included in the PA is BOEM's phased 
identification and evaluation of historic properties. On August 13, 
2021, BOEM announced its intent to prepare a Supplemental EA (SEA) to 
the 2015 Commercial Wind Lease Issuance and Site Assessment Activities 
on the Atlantic Outer Continental Shelf Offshore North Carolina--
Revised Environmental Assessment. This announcement opened a 30-day 
comment period that closed on September 13, 2021. The SEA evaluated 
current science, studies, circumstances, and other information relevant 
to reasonably foreseeable environmental impacts from site 
characterization activities and site assessment activities associated 
with issuing wind energy leases in the Wilmington East WEA. Some of 
this new information includes a recent marine cultural resources 
survey, changes in the status of some ESA-listed species, the listing 
of new endangered species, and the designation of the North Atlantic 
right whale critical habitat. On December 8, 2021, BOEM announced the 
availability of the Draft SEA. This announcement opened a 30-day 
comment period that closed on January 7, 2022. BOEM received 11

[[Page 17328]]

comments on the Draft SEA, which can be found at https://www.regulations.gov under Docket No. BOEM-2021-0090. The SEA was 
subsequently revised based on comments received during the comment 
period and public information meetings. The availability of the Final 
SEA and Finding of No Significant Impact was announced on March 21, 
2022. BOEM determined that the Proposed Action would not cause any 
significant impacts and that implementing the Proposed Action does not 
constitute a major Federal action significantly affecting the quality 
of the human environment within the meaning of section 102(2)(c) of the 
National Environmental Policy Act of 1969. 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).
    VI. NEW AND MODIFIED LEASE STIPULATIONS: Based on feedback 
provided, BOEM is adding lease stipulations that were discussed 
conceptually in the PSN. BOEM is also refining some stipulations 
identified in the PSN and previous lease packages.
    a. Reporting requirements: In an effort to require early and 
regular engagement with Tribal Nations, ocean users, underserved 
communities, agencies and other stakeholders that may be potentially 
affected by activities on the OCS (collectively ``Tribal Nations and 
parties''), BOEM is building upon an existing lease stipulation to 
require a semi-annual progress report. Within the progress report, 
Lessees will identify Tribal Nations and parties potentially affected 
by proposed activities and provide updates on engagement activities, 
impacts on or benefits to the Tribal Nations and parties due to the 
proposed activities, and how, if at all, a project proposal has been 
informed or altered to address those impacts or benefits, as well as 
any planned engagement activities during the next reporting period. In 
acknowledgment of the existing and growing consultation burden placed 
on many of the Tribal Nations and parties, the stipulation also 
requires, to the maximum extent practicable, that Lessees coordinate 
with one another on engagement activities. It is BOEM's intention that 
this requirement to coordinate engagement apply not only to meetings 
proposed by Lessees, but also to reasonable requests to coordinate 
engagement made by Tribal Nations and parties. In addition, the 
stipulation requires that the progress report incorporate separate 
lease requirements for the development of communication plans for 
fisheries (Fisheries Communication Plan (FCP)), Tribal Nations (Native 
American Tribes Communication Plan), and agencies (Agency Communication 
Plan), which serve to guide engagement activities with those groups. 
Lastly, the progress report must also include an update on activities 
executed under any survey plan.
    b. Transmission Planning: BOEM is continuing a planned approach to 
siting submarine electrical transmission cables on the OCS and is 
evaluating options, including the use of cable corridors, regional 
transmission systems, meshed systems, and other mechanisms. Therefore, 
BOEM may condition COP approval on the incorporation of such methods 
where appropriate. BOEM encourages those who obtain a lease(s) from 
this sale to engage in early coordination with adjacent lessees, 
states, Tribal Nations, and other ocean users to identify ways to 
minimize impacts from transmission. In addition, BOEM has modified the 
lease stipulations concerning lessee communication with Tribal Nations 
and parties to explicitly require the lessee to seek input and 
discussion surrounding transmission easements prior to proposing such 
easements.
    c. Birds and Bats: As a result of BOEM's ESA consultation efforts, 
the U.S. Fish and Wildlife Service issued a letter on October 15, 2021, 
recommending the installation of automated Motus telemetry tracking 
stations on meteorological buoys to help address information gaps on 
offshore movements of birds and bats, including ESA-listed species. 
Therefore, BOEM is including a stipulation requiring the use of such 
tracking stations.
    d. Project Labor Agreements and Supply Chain: BOEM is committed to 
a clean energy future, workforce development and safety, and the 
establishment of a durable domestic supply chain that can sustain the 
U.S. offshore wind energy industry. To advance this vision, BOEM has 
included two lease stipulations that will encourage construction 
efficiency for projects and contribute towards establishing a domestic 
supply chain:
    i. The first stipulation requires lessees to make every reasonable 
effort to enter a project labor agreement covering the construction 
stage of any project proposed for the lease areas. The PLA provisions 
for the construction of an offshore wind project will apply to all 
contractors.
    ii. The second stipulation requires lessees to establish a 
statement of goals in which the lessee will describe its plans for 
contributing to the creation of a robust and resilient U.S.-based 
offshore wind industry supply chain. The lessee must provide regular 
progress updates on the achievement of those goals to BOEM, and BOEM 
will make those updates publicly available.
    e. Surface Structure Layout and Orientation: In the PSN, BOEM 
solicited comments on proposed transit corridors. The USCG has informed 
BOEM that the term ``transit corridor'' is not defined or recognized in 
law, regulation, or international convention. As such, the use of the 
term will likely add confusion. BOEM will not use the term in this sale 
or future lease sales or other actions. The final lease area 
delineations do not include a buffer of non-leased area between the two 
lease boundaries. However, where each lease abuts the neighboring lease 
area, each lessee must endeavor to implement a layout of surface 
structures that facilitates activities on the lease and allows for a 
structure layout that contains two common lines of orientation across 
the adjacent leases (as described in Navigation and Vessel Inspection 
Circular 01-19). Where such a design cannot be agreed upon among 
adjacent lessees, each lessee will be required to incorporate a 1-nmi 
setback from the boundary of the neighboring lease where no surface 
structures will be permitted.
    f. Endangered Species Act Programmatic Consultation: BOEM has 
completed a programmatic informal consultation with the National Marine 
Fisheries Service (NMFS) under section 7 of the ESA. Federal partners 
that were co-action agencies on the programmatic informal consultation 
include the Bureau of Safety and Environmental Enforcement, U.S. Army 
Corp of Engineers, and the U.S. Environmental Protection Agency. On 
June 29, 2021, NMFS issued a Letter of Concurrence under the ESA 
(https://www.boem.gov/renewable-energy/final-nlaa-osw-programmatic) 
that covers site characterization (high resolution geophysical (HRG) 
and geotechnical avian, and marine mammal surveys) and site assessment 
and data collection (deployment, operation, and retrieval of 
meteorological and oceanographic data buoys) activities associated with 
Atlantic OCS leases. As a result of this consultation, project design 
criteria (PDCs) and best management practices (BMPs) associated with 
the mitigation, monitoring, and reporting conditions have been 
developed for those data collection activities covered in the 
consultation. The PDCs and BMPs pertain to mitigation, monitoring, and 
reporting conditions for reducing noise exposure to protected species 
from HRG surveys, avoiding vessel interactions

[[Page 17329]]

with protected species, and requiring mooring design and marine debris 
practices to avoid entanglement of listed species. BOEM requires 
mitigation, monitoring, and reporting conditions for all marine 
mammals. As applicable, these PDCs and BMPs will be lease requirements 
for the lease areas and are found in the document Project Design 
Criteria and Best Management Practices for Data Collection Associated 
with Atlantic Offshore Wind Leases located at: https://www.boem.gov/renewable-energy/nmfs-esa-consultations.
    VII. POTENTIAL FUTURE RESTRICTIONS: Prospective bidders should be 
aware of potential conflicts with existing uses of the OCS by the 
Department of Defense (DOD) and USCG, among others. BOEM coordinates 
with the DOD and USCG throughout our leasing process. A February 2021 
letter from the DOD summarizes our most recent consultations and is 
available at: https://www.boem.gov/renewable-energy/state-activities/carolina-long-bay. Once BOEM receives a SAP or COP, we will further 
review the proposed project's potential impacts on other ocean uses as 
part of BOEM's environmental and project review process. This analysis 
could result in the identification of potential mitigation measures 
and/or terms and conditions as part of any potential project approval.
    VIII. 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/renewable-energy/state-activities/carolina-long-bay. The leases include the following five 
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); and
     Addendum ``E'' (Rent Schedule).
    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/.
    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.
    IX. 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.
    a. 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 as defined in 30 CFR 585.237 (the ``Lease Anniversary''). 
Once commercial operations under the lease begin, BOEM will charge rent 
only for the portions of the lease remaining undeveloped (i.e., non-
operating acreage). The rent that would be due should no portion of 
each lease area be authorized for commercial operations is shown below.

------------------------------------------------------------------------
                                                                Rent due
                       Lease                           Total      (per
                                                       acres     year)
------------------------------------------------------------------------
OCS-A 0545.........................................    54,937   $164,811
OCS-A 0546.........................................    55,154    165,462
                                                    --------------------
  Total............................................   110,091    330,273
------------------------------------------------------------------------

    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 lease year following BOEM's approval of the 
relinquishment. A lease issued under this part confers on the lessee 
the right to one or more project easements without further competition 
for the purpose of installing gathering, transmission, and distribution 
cables; pipelines; and appurtenances on the OCS as necessary for the 
full enjoyment of the lease. A lessee must apply for the project 
easement as part of your COP or GAP, as provided under subpart F of 30 
CFR part 585. 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 
and when the operations term begins as outlined in 30 CFR 585.500(a)(5) 
and 585.507(b). Annual rent for a project easement is $5 per acre, 
subject to a minimum of $450 per year.
    b. 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 
12 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 the 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 would be 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 regional wholesale power price 
index. For example, the annual operating fee for a 1,028-megawatt (MW) 
wind facility operating at a 40 percent capacity (i.e., capacity factor 
of 0.4) with an annual average regional wholesale power price of $40/
megawatt hour (MWh) and an operating fee rate of 0.02 will be 
calculated as follows:
[GRAPHIC] [TIFF OMITTED] TN28MR22.244


[[Page 17330]]


    i. 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 percent) for the entire life of commercial operations.
    ii. 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 nameplate 
capacity available at the start of each year of commercial operations 
on the lease will be the capacity provided in the Fabrication and 
Installation Report (FIR). For example, if the lessee installed 100 
turbines as documented in its FIR, and each is rated by the 
manufacturer at 12 MW, the nameplate capacity of the wind facility is 
1,200 MW.
    iii. 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 percent of 
capacity. For a wind facility, the capacity factor is mostly determined 
by the availability of wind. Transmission line loss and downtime 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 6 years of commercial operations on the 
lease, is set to 0.4 (i.e., 40 percent). 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.
    iv. 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. For the leases offered in this sale, BOEM will use the index for 
VACAR average price per MW from the Enerfax power prices dataset within 
Hitachi's ABB Velocity Suite or similar. VACAR is a subregion of the 
Southeastern Electric Reliability Council and comprises the Carolinas 
and parts of Virginia. The VACAR average price per megawatt represents 
prices from Duke, Progress Energy's Carolina Power and Light, Santee 
Cooper, South Carolina Electric and Gas, Southeastern Power 
Administration, and APGI Yadkin Division.
    c. 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 financial assurance instrument or alternative detailed in 30 
CFR 585.526-529. 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. BOEM will 
determine the required amount of supplemental and decommissioning 
financial assurance on a case-by-case basis.
    d. Payments: The annual lease payments and financial assurance 
requirements 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/renewable-energy/state-activities/carolina-long-bay.
    X. BFF: 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/renewable-energy/state-activities/carolina-long-bay.
    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 who elect to qualify for the 
bidding credit will check the paragraph affirming their interest on 
their BFF and include a conceptual strategy at the time of the bid 
deposit. Bidders committing to the bidding credit must meet the bidding 
credit requirements before submission of the FDR. Bidders who do not 
elect to qualify may indicate by a check mark next to the paragraph 
declining the bidding credit. If a BFF does not indicate a selection, 
BOEM will assume no bidding credit is desired. BOEM will not consider 
BFFs submitted by bidders for previous lease sales as satisfying the 
requirements of this auction. If a bidder does not submit a BFF for 
this sale by April 11, 2022, BOEM, in its sole discretion, may grant an 
extension to that bidder only if BOEM determines the bidder's failure 
to timely submit a 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.
    XI. BID DEPOSIT: A bid deposit is an advance cash payment submitted 
to BOEM 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 $2,000,000 or $4,000,000 to be eligible to bid for one or 
two lease areas, respectively, no later than April 25, 2022. 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. Once BOEM has announced the provisional 
winner(s), BOEM will refund bid deposits to the other bidders.
    If BOEM offers a lease pursuant to a provisionally winning bidder 
and that bidder fails to timely return the signed lease form, establish 
financial assurance, or pay the balance of its bid, BOEM will retain 
the bidder's $2,000,000 (or $4,000,000) bid deposit. In such a 
circumstance, BOEM may 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 if it has not won one 
the other Lease Area.
    XII. MINIMUM BID: The minimum bid is the lowest bid that BOEM will 
accept as a winning bid, and it is where BOEM will start the bidding in 
the auction. 30 CFR 585.221. BOEM has established a minimum bid of 
$50.00 per acre for this lease sale.
    XIII. AUCTION PROCEDURES: As authorized under 30 CFR 585.220(a)(4) 
and 585.221(a)(6), BOEM will use a multiple-factor auction format, with 
a multiple-factor bidding system for this lease sale. The bidding 
system for this lease sale will be a multiple-factor combination of a 
monetary bid and a non-monetary factor. This auction format was 
selected to enhance, through training, the offshore wind workforce or

[[Page 17331]]

stand-up the domestic supply chain for offshore wind manufacturing, 
assembly, or services, and is designed to lead to expeditious and 
orderly development of offshore wind resources on the OCS. BOEM will 
appoint a panel to review the non-monetary component after the BFFs and 
bid deposits have been received but before the auction, and the panel 
will verify the results of the lease sale. Following review of the 
strategy to support workforce training programs for the offshore wind 
industry, development of a U.S. domestic supply chain for the offshore 
wind energy industry, or both, BOEM will notify bidders if they qualify 
for the credit prior to the mock auction. BOEM reserves the right to 
change the composition of this panel at any time. The bid made by a 
particular bidder in each round will represent the sum of a monetary 
(cash) amount and a non-monetary factor (bidding credit). The structure 
of this bidding credit is explained in the subsection below. BOEM will 
start the auction using the minimum bid price for each Lease Area and 
will increase those prices incrementally until no more than one active 
bidder per Lease Area remains in the auction.

20 Percent Non-Monetary (Bidding) Credit for Workforce Training or 
Supply Chain Development

    The bidding credit allows a bidder to receive a credit of 20 
percent of its cash bid in exchange for committing to make a qualifying 
monetary contribution (``Contribution'') to programs or initiatives, as 
described in the BFF Addendum and lease, that support workforce 
training programs for the offshore wind industry, development of a U.S. 
domestic supply chain for the offshore wind energy industry, or both. 
To qualify for the credit, the winning bidder is required to 
financially contribute at least 80 percent of the bidding credit value 
toward a workforce training program or the development of a domestic 
supply chain, as described in the BFF Addendum and lease. For example, 
a winning bidder qualified for the bidding credit and meeting the 
asking price of $31.32 million would receive a credit of $5.22 million 
toward its winning bid in exchange for a $4.176 million (80 percent of 
$5.22 million) commitment to workforce training or development of the 
domestic supply chain. The bidding credit would be calculated as 
follows:
[GRAPHIC] [TIFF OMITTED] TN28MR22.245

    i. If a bidder qualified for the bidding credit wins both lease 
areas, this calculation would be applied to its bid for both lease 
areas.
    ii. The Contribution to workforce training must result in a better 
trained and/or larger domestic offshore wind work force that would 
provide for more efficient operations via increasing the supply of 
fully trained personnel, pursuant to congressional policy under 43 
U.S.C. 1332(6), which states that operations on the OCS should be 
conducted in a safe manner by well-trained personnel.
    iii. The Contribution to domestic supply chain development must 
result in a more robust domestic supply chain by reducing the upfront 
capital or certification cost for manufacturing offshore wind 
components including the building of facilities, the purchasing of 
capital equipment, and the certifying of existing manufacturing 
facilities in the United States, which would facilitate congressional 
policy set forth in 43 U.S.C. 1332(3) to promote expeditious and 
orderly development on the OCS.
    iv. Bidders interested in pursuing bidding credits can choose to 
commit to workforce training programs, domestic supply chain 
initiatives, or a combination of both. Bidders must note, on the BFF, 
whether they are making the commitment to earn the bidding credit. 
Bidders seeking to utilize the bidding credit must submit their 
strategy, further described below and in the BFF Addendum, prior to the 
deadline for the submission of the bid deposit. Bidders are strongly 
encouraged to review the BFF Addendum if they are considering 
qualifying for the bidding credit. The strategy must describe the 
verifiable actions to be taken by the lessee that would allow BOEM to 
confirm compliance when your documentation for satisfying the bidding 
credit is submitted. Payment fulfilling the commitment can be deferred 
until submission of the facility design report (FDR) to BOEM. Lessees 
must provide documentation showing that the lessee has met the 
commitment and complied with the applicable bidding credit requirements 
no later than the submission to BOEM of the first Facility Design 
Report (FDR) for the Lease. Deferring the payment until the FDR will 
enable the lessee to identify programs or recipients with the greatest 
potential to expedite or facilitate orderly OCS renewable energy 
development.
    v. Contributions to workforce training must be to one of the 
following: (i) Contributions in support of union apprenticeships, labor 
management training partnerships, stipends for workforce training, or 
other technical training programs or institutions focused on providing 
skills necessary for the planning, design, construction, operation, 
maintenance, or decommissioning of offshore wind energy projects in the 
United States; (ii) Contributions toward maritime training necessary 
for the crewing of vessels to be used for the construction, servicing, 
and/or decommissioning of wind energy projects in the United States; 
(iii) Contributions toward training workers in skills or techniques 
necessary to manufacture or assemble offshore wind components, 
subcomponents or subassemblies. Examples of these skills and techniques 
include welding; wind energy technology; hydraulic maintenance; braking 
systems; mechanical systems, including blade inspection and 
maintenance; or computers and programmable logic control systems; (iv) 
Contributions toward training in any other job skills that the Lessee 
can demonstrate are necessary for the planning, design, construction, 
operation, maintenance, or decommissioning of offshore wind energy 
projects in the United States.
    vi. Contributions to domestic supply chain development must be one 
of the

[[Page 17332]]

following: (i) Contributions supporting the development of a domestic 
supply chain for the offshore wind industry, including manufacturing of 
components and sub-assemblies and the expansion of related services; 
(ii) Contributions to domestic tier-2 and tier-3 offshore wind 
component suppliers and domestic tier-1 supply chain efforts, including 
quay-side fabrication; (iii) Contributions for technical assistance 
grants to help U.S. manufacturers re-tool or certify (e.g., ISO-9001) 
for offshore wind manufacturing; (iv) Contributions for the development 
of Jones Act-compliant vessels for the construction, servicing, and/or 
decommissioning of wind energy projects in the United States; (v) 
Contributions to establish a new or existing bonding support reserve or 
revolving fund available to all businesses providing goods and services 
to offshore wind energy companies, including disadvantaged businesses; 
(vi) Other Contributions to supply chain development efforts that the 
Lessee can demonstrate further the manufacture of offshore wind 
components or subassemblies, or the provision of offshore wind 
services, in the United States.
    vii. Documentation: If a lease is awarded pursuant to a winning bid 
that includes the bidding credit, the lessee will be required to 
provide documentation showing that the lessee has met the commitment 
and complied with the applicable bidding credit requirements no later 
than the submission to BOEM of the first Facility Design Report (FDR) 
for the Lease. The documentation must allow BOEM to objectively verify 
the amount of the Contribution and the beneficiary(ies) of the 
Contribution. At a minimum, this documentation must include: All 
written agreements between the Lessee and beneficiary(ies) of the 
Contribution; all receipts documenting the amount, date, financial 
institution, and the account and owner of account to which the 
Contribution was made; and sworn statements by the entity that made the 
Contribution and the beneficiary(ies) of the Contribution, attesting: 
The amount and date(s) of the Contribution; that the Contribution is 
being (or will be) used in accordance with the bidding credit 
requirements in the Lease; and that all information provided is true 
and accurate. The documentation must describe how the funded initiative 
or program has advanced, or is expected to advance, U.S. offshore wind 
workforce training or supply chain development. The documentation must 
also provide qualitative and/or quantitative information that includes 
the estimated number of trainees or jobs supported, or the estimated 
leveraged supply chain investment resulting or expected to result from 
the Contribution. The documentation must contain any information called 
for in the conceptual strategy submitted with the bid deposit. If the 
Lessee's implementation strategy has changed due to market needs or 
other factors, the Lessee must explain this change. BOEM reserves all 
rights to determine that the bidding credit has not been satisfied if 
changes to the lessee's conceptual strategy do not meet the criteria 
for the bidding credit described herein.
    viii. Enforcement: The commitment for the bidding credit will be 
made in the BFF and will be included in a lease addendum that will bind 
the lessee and all future assignees of the lease. If BOEM determines 
that a Lessee or assignee has failed to satisfy the commitment at the 
FDR stage, or if a Lessee or assignee relinquishes or otherwise fails 
to develop the Lease by the tenth anniversary date of Lease issuance, 
the amount corresponding to the bidding credit awarded shall be 
immediately due and payable to the Office of Natural Resources Revenue 
with interest from the date of lease execution. The interest rate will 
be the underpayment interest rate identified by ONRR. BOEM may, at its 
sole discretion, extend the documentation deadline beyond the FDR or 
the 10-year timeframe.
    The Auction: Using an online bidding system to host the auction, 
BOEM will start the bidding for Lease Area OCS-A 0545 and OCS-A 0546. 
Bidders may bid for one or both lease areas offered and could 
ultimately win one or both areas.

------------------------------------------------------------------------
                                                               Minimum
                    Lease area                       Acres       bid
------------------------------------------------------------------------
OCS-A 0545........................................   54,937   $2,746,850
OCS-A 0546........................................   55,154    2,757,700
------------------------------------------------------------------------

    a. Live Bids: 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 up to 
two of the Lease Areas (if eligible), it will indicate its intent by 
submitting a bid equal to the asking price for the selected lease 
area(s). A bid for one or both lease areas at the sum of the full 
asking price is referred to as a ``live bid.'' If the bidder has 
qualified for a non-monetary credit, it will meet the asking price by 
submitting a multiple-factor bid--that is, a live bid that consists of 
a monetary (cash) element and a non-monetary credit (20 percent of the 
cash element), the sum of which equals the asking price. Bidders 
without a non-monetary credit will submit a cash bid equal to the 
asking price. To participate in the next round of the auction, a bidder 
must have submitted a live bid for at least one of the Lease Areas in 
each previous round, or BOEM must have carried forward a bidder's bid 
from a previous round.
    As long as there are two or more live bids (including bids carried 
forward) for at least one of the Lease Areas, the auction moves to the 
next round. If a bid is uncontested, it is automatically carried 
forward to the next round. BOEM will raise the asking price for each of 
the Lease Areas 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 it deems appropriate.
    Each bidder is allowed to submit a live bid for up to two lease 
areas based on its ``eligibility'' at the opening of each round. A 
bidder's eligibility is for either two, one, or zero lease areas, and 
corresponds to the maximum number of lease areas that a bidder may 
include in a live bid during a single round of the auction. A bidder's 
initial eligibility is determined based on the amount of the bid 
deposit submitted by the bidder prior to the auction. To be eligible to 
offer a bid on one lease area at the start of the auction, a bidder 
must submit a bid deposit of $2,000,000. To be eligible to offer a bid 
on two lease areas, a bidder must submit a bid deposit of $4,000,000. A 
bidder's bid deposit will be used by BOEM as a down payment on any 
monetary obligations incurred by the bidder should it be awarded a 
lease.
    As the auction proceeds, a bidder's eligibility is determined by 
the number of lease areas included in its live bid submitted in the 
round prior to the current round. That is, if a bidder submitted a live 
bid on one lease area in the previous round, that bidder may submit a 
bid that includes at most one lease area in the current round. If a 
bidder submitted a live bid that included two lease areas in the 
previous round, the bidder may submit a live bid that includes at most 
two lease areas in the current round. When a bidder chooses to submit a 
live bid with fewer lease areas than the maximum number it is eligible 
to include in its bid, the bidder's eligibility is permanently reduced. 
Thus, eligibility in successive rounds may stay the same or go down, 
but it can never go up.

[[Page 17333]]

    If a bidder decides to stop bidding when its bid is contested, that 
bidder could still win the auction, if, for example, the bidder is 
ultimately selected as the provisional winner in the winner 
determination that is described in detail below, or if someone else's 
winning bid is disqualified at the award stage of the auction. In these 
circumstances, the bidder will be bound by its bid and thus obligated 
to pay the full bid amount. A bidder is bound to each of its bids at 
all times prior to the finalization of the auction results.
    Between rounds, BOEM will disclose to all bidders that submitted 
bids: (1) The number of live bids in the previous round of the auction 
(i.e., the level of demand at the asking price) for each Lease Area; 
and (2) the asking price for each Lease Area in the upcoming round of 
the auction.
    b. Intra-round Bids: 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, an 
eligible bidder may submit an ``intra-round'' bid. An intra-round bid 
is similar to an ``exit bid.''
    An intra-round bid consists of a single offer price for exactly the 
same lease areas on which the bidder placed a live bid in the previous 
round. The single offer price must be greater than the sum of the 
previous round's asking prices for the same lease areas bid on in the 
previous round and less than the sum of the current round's asking 
prices for the same lease areas. A bidder may not submit an intra-round 
bid in the current round if its previous round bid was uncontested or 
if its eligibility had previously dropped to zero lease areas.
    A bidder that has submitted a live bid for two leases in the 
previous round may choose to submit a single intra-round bid in the 
current round for the two lease areas. A bidder submitting an intra-
round bid for two lease areas can either:
    (1) Choose to also submit a live bid for either one of the two 
lease areas. Doing this sets the bidder's eligibility to one lease area 
and allows the bidder to continue to place a live bid for one lease 
area in the next round.
    (2) Choose not to submit a live bid for either of the two lease 
areas. Doing this sets the bidder's eligibility to zero lease areas and 
precludes the possibility of this bidder submitting any bids in the 
next round or any further round of the auction.
    A bidder that has submitted a live bid for one lease area in the 
previous round may choose to submit an intra-round bid in the current 
round (for that one lease area). Placing an intra-round bid that 
includes one lease area terminates the bidder's ability to submit 
subsequent bids.
    For example, consider the case of a bidder who has bid on both 
lease areas in the previous rounds, and hence is eligible to continue 
bidding on both lease areas in the current round. Suppose that the 
asking prices for OCS-A 0545 and OCS-A 0546 were $10,000,000 and 
$11,000,000 in the previous round and are now $10,000,000 and 
$12,000,000 in the current round, respectively. OCS-A 0546 received 
competition in the previous round, resulting in its increased price, 
but there was not competition for OCS-A 0545. Since the bidder placed a 
bid on both lease areas, with one of the lease areas having 
competition, the bidder may enter a single, intra-round bid for both 
areas that it bid on in the previous round. This single offer price 
must be more than $21,000,000 and less than $22,000,000. If the bidder 
wishes to continue to place bids in the auction, the bidder must also 
place a live bid for a single lease area in the same round. The bidder 
can satisfy this requirement by choosing to submit (along with its 
intra-round bid) a single live bid of $10,000,000 for OCS-A 0545 or 
$12,000,000 for OCS-A 0546. Alternatively, the bidder may choose not to 
submit any live bid, precluding the ability to place bids in future 
rounds.
    If the bidder had only bid on one lease area in the previous round, 
it may be eligible to submit an intra-round bid during the current 
round. If its previous round's bid was for OCS-A 0546, the bidder could 
submit an intra-round bid for that area of more than $11,000,000 and 
less than $12,000,000, reducing its live bid eligibility to zero lease 
areas, and hence precluding bids in subsequent rounds. Alternatively, 
if the bidder's previous round's bid was on OCS-A 0545, it cannot 
submit an intra-round bid (or any other bid), because the previous 
round's bid was uncontested. In this case, since the bidder had no 
competition for OCS-A 0546, its sole bid of $10,000,000 from the 
previous round is automatically recorded by BOEM as a submitted live 
bid of the same amount for that lease area in the current round.
    Bidders are cautioned that dropping immediately from bidding on two 
lease areas to bidding on zero lease areas, without placing any live 
bid on one lease area, as in bidding option (2) (above), has 
implications for the winner determination described below. Such bidding 
behavior would signify that the bidder wishes only to win both lease 
areas or neither lease area. As such, dropping immediately from two to 
zero can lead to potentially counterintuitive results in which the 
bidder wins nothing in the auction.
    Intra-round bids are not considered to be live bids for the purpose 
of determining whether to conclude the auction, for determining whether 
to increase the asking price for a particular lease area, or for 
disclosing the demand for a lease area. During the auction, an intra-
round bid can only be seen by BOEM, and not by other bidders.
    After the bidding ends, BOEM will determine the provisionally 
winning bids in accordance with the process described in this section. 
This process consists of two stages: Stage 1 and Stage 2, which are 
described herein. Once the auction itself ends, nothing further is 
required of bidders within or between Stages 1 and 2. In practice, the 
two stages of the process will be implemented by the auction software, 
which will analyze the bids, determine the provisional winners, and 
calculate the applicable prices. The winner determination will be 
reviewed, checked and validated by the panel.
     Stage 1
    In Stage 1, a bidder with a live bid in the final round is 
provisionally assured of winning the lease area(s) included in its 
final-round live bid, regardless of any other bids. If both lease areas 
receive live bids in the final round, they are awarded to bidders in 
Stage 1, and the rest of this determination is not necessary. 
Otherwise, BOEM will select the combination of final-round bids that 
maximizes the sum of the bid amounts of the selected bids, subject to 
the following constraints: (1) A bidder must win all lease areas 
included in its final-round live bid (if any); (2) either a bidder's 
live bid or intra-round bid, but not both, can be selected; and (3) the 
selected bids must be feasible, in that each lease area cannot be 
included in more than one of the selected bids. If there is a unique 
combination of bids that meets the maximization objective described in 
the previous sentence, then these are deemed to be the Qualified Bids. 
If two or more combinations of bids tie by producing the same maximized 
sum of bid amounts, the tie is broken by: First, bringing each of these 
combinations forward into the Stage 2 problem (below) and selecting the 
combination that produces the largest value in the Stage 2 problem; and 
second, if two or more of these combinations tie in producing the 
largest value, the auction system will select one of the combinations 
by generating pseudorandom numbers. If any of the lease areas is not 
assigned in

[[Page 17334]]

Stage 1, BOEM will proceed to Stage 2 to attempt to assign the 
remaining lease areas.
     Stage 2
    In Stage 2, BOEM will consider bids from all bidding rounds to 
determine if the lease area(s) not awarded in Stage 1 can be awarded in 
Stage 2. The combination of bids selected in Stage 1 are Qualified 
Bids. BOEM will select the combination of bids from all bidding rounds 
that maximizes the sum of the bid amounts of the selected bids, subject 
to the following constraints: (1) A bidder must win all lease areas 
included in its Qualified Bid (if any); (2) either a bidder's live bid 
or intra-round bid from a single bidding round, but not both, can be 
selected; and (3) the selected bids must be feasible, in that each 
lease area cannot be included in more than one of the selected bids. If 
there is a unique combination of bids that solves the maximization 
problem, then these are deemed to be the provisionally-winning bids. If 
two or more combinations of bids tie by producing the same maximized 
sum of bid amounts, the auction system will select one of the 
combinations by generating pseudorandom numbers. The provisional 
winners will pay the amounts of their provisionally winning bids.
    c. Provisional Winners: BOEM's panel will review the auction 
results and certify the provisional winners. A provisional winner may 
be disqualified if it is 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 balance (if any) of its bonus bid (i.e., 
winning monetary bid less the applicable non-monetary bidding credit 
(if appropriate) and 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 does not timely sign the lease copies, does not establish all 
required financial assurance, does not pay the balance of its winning 
bid, or otherwise fails to comply with applicable regulations or the 
terms of the FSN. In that case, the bidder will forfeit its bid 
deposit.
    BOEM will publish the provisionally winning bidder and bid amount. 
The bid results, including exit bids, will be published on BOEM's 
website after review of the results and announcement of the provisional 
winner(s).
    d. Authorized Individuals and Bidder Authentication: A company that 
is eligible to participate in the auction will identify on its BFF up 
to three individuals who are authorized to bid on behalf of the 
company, including their names, business telephone numbers, and email 
addresses. After BOEM has processed the bid deposits, the auction 
contractor will send several emails to the authorized individuals. The 
emails will contain user login information and instructions for 
accessing the bidder manual for the auction system and the auction 
system technical supplement (ASTS).
    The auction system will require software tokens for two-factor 
authentication. To set up the tokens, authorized individuals must 
download an app onto their smartphone or tablet with a recent operating 
system. One of the emails sent to authorized individuals will contain 
instructions for installing the app and the credentials needed to 
activate the software token. A short telephone conversation with the 
auction contractor may also be needed to use the credentials. The login 
information, along with the tokens, will be tested during the mock 
auction. If an eligible 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.
    e. Timing of Auction: The auction will begin at 9:00 a.m. EDT on 
May 11, 2022. Bidders may log in as early as 8:30 a.m. EDT on that day. 
BOEM recommends that bidders log in earlier than 9:00 a.m. EDT 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 will be shorter. Recesses are anticipated to last approximately 
10 minutes. This description of the auction schedule is tentative. 
Bidders should consult the auction schedule on the auction system 
during the auction for updated times. Bidding will continue until about 
6:00 p.m. EDT each day. BOEM anticipates that the auction will last 1- 
to 2-business days, but may continue for additional business days as 
necessary until the auction has concluded.
    f. Messaging Service: 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 end of the round to place bids. Bidders 
should place bids 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.
    g. Alternate Bidding Procedures: Redundancy is the most effective 
way to mitigate technical and human issues during an auction. Bidders 
should strongly consider authorizing more than one individual to bid in 
the auction--and confirming during the mock auction that each 
individual is able to access the auction system. A 4G card or other 
form of wireless access is helpful in case a company's main internet 
connection should fail. As a last resort, an authorized individual 
facing technical issues may request to submit its bid by telephone. In 
order to be authorized to place a telephone bid, an authorized 
individual must call the help desk number listed in the auction manual 
before the end of the round. BOEM will authenticate the caller's 
identity, including requiring the caller to provide a code from the 
software token. The caller must also explain the reasons why a 
telephone bid must be submitted. BOEM may, in its sole discretion, 
permit or refuse to accept a request for the placement of a bid using 
this alternate telephonic bidding procedure.
    h. Prohibition on Communications Between Bidders During Auction: 
During the auction, bidders are

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prohibited from communicating with each other regarding their 
participation in the auction. Also, during the auction, bidders are 
prohibited from communicating to the 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.
    XIV. POST-AUCTION PROCEDURES
    a. Rejection or Non-Acceptance of Bids: BOEM reserves the right and 
authority to reject all bids that do not satisfy the requirements and 
rules of the auction, the FSN, or applicable regulations and statutes.
    i. 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. Such 
behavior may manifest itself in several different ways, including, but 
not limited to:
    1. An express or tacit agreement among bidders not to bid in an 
auction or to bid a particular price;
    2. An agreement among bidders not to bid or not to bid on one of 
the Lease Areas;
    3. An agreement among bidders not to bid against each other; or
    4. Other agreements among bidders that have the potential to affect 
the final auction price.
    Pursuant to 43 U.S.C. 1337(c), BOEM will decline to award a lease 
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.
    b. 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/renewable-energy/state-activities/carolina-long-bay.
    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 paying the balance of the 
bonus bid if BOEM determines the delay was caused by events beyond the 
provisionally winning bidder's control pursuant to 30 CFR 585.224(e).
    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 and 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/renewable-energy/state-activities/carolina-long-bay.
    c. 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 parts 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 
requirement as a condition in their contracts and other transactions.
    d. 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, pandemics 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 703-787-1121 if they have concerns.
    e. 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.
    f. 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).
    XV. Protection of Privileged or Confidential Information: BOEM will 
protect privileged and 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

[[Page 17336]]

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.

Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2022-06507 Filed 3-25-22; 8:45 am]
BILLING CODE 4310-MR-P