Offshore wind lease sale in California announced by the Department of the Interior | Brownstein Hyatt Farber Schreck

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AUCTIONS HAVE POTENTIAL TO DELIVER RENEWABLE WIND POWER TO MORE THAN 1.5 MILLION HOMES

On May 26, 2022, the U.S. Department of the Interior announced auction proposals for offshore wind leases in two Wind Energy Areas (WEAs) off the northern and central coasts of California: the Energy Area Morro Bay Wind Turbine and the Humboldt Wind Energy Area. The “Proposed Sale Notice” (PSN) proposes to offer multiple lease areas for sale in each wind energy area, with two proposed areas in the Humboldt WEA and three in the Morro Bay WEA.

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

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

  • Unanimous California Coastal Commission Approval of a Conditional Consistency Determination for the Humboldt WEA Lease under the Coastal Areas Management Act;
  • California Energy Commission review of offshore wind power potential; and
  • Ongoing work of the BOEM-California Intergovernmental Renewable Energy Task Force to coordinate federal and state efforts.

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

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

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

BOEM is seeking public comment on the PSN regarding “any matters related to this lease sale that are of interest or concern”, including but not limited to the number, size, focus and location of proposed rental areas, engagement of underserved communities, tender credits to support workforce training, enter into a community benefit agreement, and/or support the offshore wind energy supply chain development.

In addition to seeking input from entities interested in participating in the lease sale, BOEM is also seeking input from the many stakeholders who will play a role in California’s offshore wind, such as tribal governments, labor unions, commercial fishers and recreation, underserved communities, agencies and many other stakeholders. To electronically submit public comments on the PSN, go here.

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

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

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