On October 18, 2022, the U.S. Bureau of Ocean Energy Management (BOEM) made available the Final Sale Notice (FSN) for the Morro Bay and Humboldt Wind Energy Areas (WEAs) offshore of California. The FSN was published in the Federal Register on October 21, 2022.
Of the five leases being offered for sale, three are in the Morro Bay WEA and two are in the Humboldt WEA. The leases will not authorize development of offshore wind facilities, but will grant the lessee an exclusive right to conduct site assessment and characterization activities and submit a construction and operations plan to BOEM for approval.
The lease sale will take place via an auction scheduled for December 6. That sale represents the expansion of offshore wind development to the Pacific Coast and the first U.S. commercial offshore wind lease in water depths requiring the use of floating foundation technology.
The FSN summarizes several conditions of the leases that have been the subject of intensive stakeholder and inter-agency engagement by BOEM since before the issuance of the Proposed Sale Notice. In response to a joint comment letter submitted to BOEM by California state agencies, BOEM has agreed to incorporate into the leases the conditions of Coastal Zone Management Act Consistency Determinations that the California Coastal Commission issued for the California WEAs earlier this year. These conditions require bidders to coordinate with the California Coastal Commission in the development of project-specific site assessment and construction and development plans, implement vessel speed limitations and marine mammal monitoring measures, avoid intentional contact with hard substrate, rock outcroppings, seamounts, or deep-sea coral/sponge habitat and include a buffer of at least 40 feet from hard bottom substrates that fully protects these habitats from bottom contact, among other conditions. To avoid impacts to cultural resources, the lessees will be required to submit descriptions of methods that are proposed to be used to conduct archaeological surveys. Lease stipulations will also include progress reports and stakeholder and agency engagement reports throughout the lease term.
The FSN provides that up to 30 percent of combined bidding credits are available to potential bidders for commitments to support workforce training programs and community benefits agreements with coastal users, tribes and other communities or groups expected to be affected by development under the lease. Pursuant to the FSN, benefits provided to the impacted communities should not duplicate benefits or mitigation measures that may be imposed upon the lessees under any law with the exception of the Outer Continental Shelf Lands Act. This means that environmental mitigation and avoidance measures that will be incorporated into the project approvals as a result of state environmental reviews, including the California Environmental Quality Act, may be in addition to commitments made by the lessees under community benefits agreements.
The FSN lists 43 entities that have qualified to participate in the lease auction. In order to encourage competition between developers, the FSN also requires entities wishing to bid to identify any other qualified entities with which they are affiliated (for example, if they share common ownership or are subsidiaries of the same parent company). If multiple affiliated entities have qualified, only one affiliate will be allowed to bid. In each round of the auction, a bidder may only bid for one of the offered leases, although it can switch its bid between different lease areas from round to round. Ultimately, each bidder may only acquire one of the five leases.
BOEM's response to the comments received on the Proposed Sale Notice is available on BOEM's website for the agency's California activities. The comments on the PSN may be reviewed at regulations.gov, Docket ID BOEM-2022-0017.
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