38060 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 

DEPARTMENT OF THE INTERIOR 

Bureau of Ocean Energy Management 

[Docket No. BOEM–2014–0038] 

Atlantic Wind Lease Sale 3 (ATLW3) 

Commercial Leasing for Wind Power 

on the Outer Continental Shelf 

Offshore Maryland—Final Sale Notice 

MMAA104000 

AGENCY: Bureau of Ocean Energy 

Management (BOEM), Interior. 

ACTION: Final Sale Notice for 

Commercial Leasing for Wind Power on 

the Outer Continental Shelf Offshore 

Maryland. 

SUMMARY: This document is the Final 

Sale Notice (FSN) for the sale of two 

commercial wind energy leases on the 

Outer Continental Shelf (OCS) offshore 

Maryland, pursuant to BOEM’s 

regulations at 30 CFR 585.216. BOEM is 

offering Lease OCS–A 0489 (North Lease 

Area) and Lease OCS–A 0490 (South 

Lease Area) for sale using a multiple 

factor auction format. The two lease 

areas (LAs) together comprise the 

Maryland Wind Energy Area (WEA) 

described in the Call for Information 

and Nominations (Call) published on 

February 3, 2012 (see ‘‘Area Offered for 

Leasing’’ below for a description of the 

WEA and LAs) (77 FR 5552). The two 

LAs are identical to those announced in 

the Proposed Sale Notice (PSN) for 

Commercial Leasing for Wind Power on 

the Outer Continental Shelf (OCS) 

Offshore Maryland, which was 

published on December 18, 2013, in the 

Federal Register with a 60-day public 

comment period (78 FR 76643). This 

FSN contains information pertaining to 

the areas available for leasing, lease 

provisions and conditions, auction 

details, the lease form, criteria for 

evaluating competing bids, award 

procedures, appeal procedures, and 

lease execution. The issuance of the 

leases resulting from this lease sale 

would not constitute an approval of 

project-specific plans to develop 

offshore wind energy. Such plans, 

expected to be submitted by successful 

lessees, will be subject to subsequent 

environmental and public review prior 

to a decision to proceed with 

development. 

DATES: BOEM will hold a mock auction 

for the eligible bidders on August 12, 

2014. The monetary auction will be held 

online and will begin at 8:30 a.m. 

Eastern Daylight Time (EDT) on August 

19, 2014. Additional details are 

provided in the section entitled, 

‘‘Deadlines and Milestones for Bidders.’’ 

FOR FURTHER INFORMATION CONTACT: Erin 

C. Trager, BOEM Office of Renewable 

Energy Programs, 381 Elden Street, HM 

1328, Herndon, Maryland 20170, (703) 

787–1320 or erin.trager@boem.gov. 

Authority: This FSN is published 

pursuant to subsection 8(p) of the OCS Lands 

Act (43 U.S.C. 1337(p)) (‘‘the Act’’), as 

amended by section 388 of the Energy Policy 

Act of 2005 (EPAct), and the implementing 

regulations at 30 CFR Part 585, including 30 

CFR 585.211 and 585.216. 

Background: The two LAs offered in 

this FSN are the same areas BOEM 

announced in the PSN on December 18, 

2013 (78 FR 76643). BOEM received 20 

comment submissions in response to the 

PSN, which are available in the Federal 

Register docket for this notice through 

BOEM’s Web site at: http:// 

www.boem.gov/State-ActivitiesMaryland/. BOEM also has posted a 

document containing responses to 

comments submitted during the PSN 

comment period and listing other 

changes that BOEM has implemented 

for this lease sale since publication of 

the PSN. The document entitled, 

Response to Comments and Explanation 

of Changes can be found at the 

following URL: http://www.boem.gov/ 

State-Activities-Maryland/. 

On February 3, 2012, BOEM 

published a Notice of Availability 

(NOA) (77 FR 5560) for the final 

Environmental Assessment (EA) and 

Finding of No Significant Impact 

(FONSI) for commercial wind lease 

issuance and site assessment activities 

on the Atlantic OCS offshore New 

Jersey, Delaware, Maryland, and 

Virginia, pursuant to the National 

Environmental Policy Act (NEPA). 

Consultations ran concurrently with the 

preparation of the EA and included 

consultation under the Endangered 

Species Act (ESA), Magnuson-Stevens 

Fishery Conservation and Management 

Act (MSFCMA), section 106 of the 

National Historic Preservation Act 

(NHPA), and the Coastal Zone 

Management Act (CZMA). The two LAs 

identified in this FSN together comprise 

the Maryland Wind Energy Area (WEA) 

described in the preferred alternative in 

the Commercial Wind Lease Issuance 

and Site Assessment Activities on the 

Atlantic Outer Continental Shelf 

Offshore New Jersey, Delaware, 

Maryland, and Virginia Final 

Environmental Assessment (Regional 

EA), which can be found at:http:// 

www.boem.gov/uploadedFiles/BOEM/ 

Renewable_Energy_Program/ 

Smart_from_the_Start/MidAtlantic_Final_EA_012012.pdf. 

On May 29, 2012, BOEM initiated 

consultation with the National Marine 

Fisheries Service under the ESA for 

geological and geophysical (G&G) 

activities in support of oil and gas 

exploration and development, 

renewable energy, and marine minerals 

in the Mid and South Atlantic Planning 

Areas. Formal consultation concluded 

on July 19, 2013, with receipt of a 

Biological Opinion that, along with the 

previous informal consultation, 

informed the development of the 

Maryland commercial wind lease 

packages. 

Additional environmental reviews 

will be conducted upon receipt of the 

lessees’ proposed project-specific plans, 

such as a Site Assessment Plan (SAP) or 

Construction and Operations Plan 

(COP). 

Relevant Information for Potential 

Bidders 

Potential bidders should be aware of 

the following items under consideration 

by BOEM relevant to or situated near 

the Maryland WEA. 

Atlantic Grid Holdings LLC Right of 

Way (ROW) Grant Request: On March 

31, 2011, Atlantic Grid Holdings LLC 

submitted an unsolicited application for 

a ROW grant. Following publication of 

a notice to determine competitive 

interest in the grant area and a 60-day 

public comment period, BOEM 

published its determination of no 

competitive interest on May 15, 2012 

(77 FR 28620). The nomination and 

associated notices can be found at: 

http://www.boem.gov/RenewableEnergy-Program/State-Activities/ 

Regional-Proposals.aspx. On May 1, 

2013, Atlantic Grid Holdings LLC 

submitted a supplement to its 

application, which can be found at the 

web address above. BOEM anticipates 

that the Maryland lease sale will occur 

prior to a decision regarding the 

granting of a ROW to Atlantic Grid 

Holdings LLC, as a result of the required 

environmental compliance 

documentation that is still needed. 

BOEM does not foresee the activities 

under the ROW grant interfering with 

the lessee’s ability to develop the lease 

areas. 

Final Rule: Timing Requirements for 

the Submission of a SAP or General 

Activities Plan (GAP) for a Renewable 

Energy Project on the Outer Continental 

Shelf: On April 17, 2014, BOEM 

published its Final Rule to extend 

timing requirements for submitting a 

SAP and a GAP pursuant to its 

renewable energy regulations. Effective 

May 19, 2014, all OCS renewable energy 

lessees and grantees will have 12 

months from lease or grant issuance to 

submit a SAP or GAP. Previously, 

BOEM regulations required lessees and 

grantees to submit a SAP or a GAP 


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Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 38061 

either 60 days after BOEM determined 

there was no competitive interest in the 

lease or grant, or six months after the 

lease or grant was issued competitively. 

Leases OCS–A 0489 and OCS–A 0490 

have been updated to conform to the 

Final Rule. The Final Rule can be found 

at: http://www.boem.gov/FR-79-21617/. 

Potential Future Restrictions— 

Navigational Safety: Potential bidders 

should note that portions of certain subblocks in both the North and South LAs 

may not be available for future 

development (i.e., installation of wind 

facilities) due to navigational safety 

concerns, as discussed below. 

Proximity to Delaware Bay Traffic 

Separation Scheme (TSS) 

During discussions with the Maryland 

Intergovernmental Task Force on June 

24, 2011, the U.S. Coast Guard (USCG) 

recommended that BOEM not approve 

the installation of wind facilities within 

1 nautical mile of a TSS to help ensure 

navigational safety. This 

recommendation was reiterated at 

subsequent Task Force meetings. 

Moreover, the USCG has expressed that 

it may determine in the future that a 

larger setback is necessary under certain 

circumstances. Tables 1 and 2 list 

potentially affected blocks and assume a 

1 nautical mile setback from an 

extended Delaware Bay TSS. Maps 

identifying these sub-blocks are 

available on BOEM’s Web site at: 

http://www.boem.gov/State-ActivitiesMaryland/. 

TABLE 1—NORTH LEASING AREA: BLOCKS WITH POTENTIAL RESTRICTIONS

Protraction name Protraction No. Block No. Sub block 

Salisbury .................................................................. NJ18–05 ................................................................... 6624 D,H. 

Salisbury .................................................................. NJ18–05 ................................................................... 6625 E,I,N. 

Salisbury .................................................................. NJ18–05 ................................................................... 6675 B,C,G,H,L,P. 

Salisbury .................................................................. NJ18–05 ................................................................... 6676 M. 

Salisbury .................................................................. NJ18–05 ................................................................... 6726 A,B,F. 

TABLE 2—SOUTH LEASING AREA: BLOCKS WITH POTENTIAL RESTRICTIONS

Protraction name Protraction No. Block No. Sub block 

Salisbury .................................................................. NJ18–05 ................................................................... 6726 J,K,O,P. 

Salisbury .................................................................. NJ18–05 ................................................................... 6776 D,H. 

Salisbury .................................................................. NJ18–05 ................................................................... 6777 E,I,J,N. 

Salisbury .................................................................. NJ18–05 ................................................................... 6827 C,G,H,L. 

Salisbury .................................................................. NJ18–05 ................................................................... 6828 M. 

Traditional Tug, Towing, and Barge 

Traffic Route 

On April 22, 2013, BOEM received a 

letter from the USCG providing analysis 

of tug, towing, and barge traffic that 

currently transits through the MD WEA. 

The letter discussed potential safety 

implications of allowing offshore wind 

development in the area, particularly in 

the southeastern corner of the WEA, and 

requested that BOEM consider leasing 

two smaller LA configurations. This 

letter can be found on BOEM’s Web site 

at: http://www.boem.gov/StateActivities-Maryland/. 

BOEM gathered input regarding the 

area to lease from the members of 

BOEM’s Maryland Intergovernmental 

Task Force during a Task Force webinar 

held on June 27, 2013, and received 

additional comments and 

correspondence from relevant 

stakeholders since that time. This 

includes correspondence received on 

August 29, 2013, from the American 

Waterways Operators (AWO), an 

organization representing the U.S. 

tugboat, towboat, and barge industry. In 

its August letter, AWO expressed 

concern with the Maryland WEA and its 

potential to disrupt traditional transit 

routes through the southeastern corner 

of the WEA. AWO stated that if full 

build-out were to occur in the Maryland 

WEA, this development could cause 

tugboats to navigate further east or west 

from their current north-south routes, 

which, in certain weather conditions, 

could put these vessels at greater risk 

and jeopardize safe transit due to 

different sea state conditions farther 

offshore and greater congestion closer 

inshore. This letter can be found on 

BOEM’s Web site at: http:// 

www.boem.gov/State-ActivitiesMaryland/. 

In a letter to BOEM dated September 

4, 2013, the Business Network for 

Maryland Offshore Wind requested that 

BOEM refrain from making any 

reductions to the Maryland WEA prior 

to leasing. They provide responses to 

the points in USCG’s April 22, 2013, 

letter and suggest that reducing the area 

now, prior to receipt of a COP and an 

associated navigational risk assessment, 

would be premature. The letter suggests 

that any reduction of the area due to 

potential navigational safety risk and 

any associated costs of rerouting traffic 

would be best addressed during review 

of each lessee’s COP in the context of a 

comprehensive Environmental Impact 

Statement (EIS). 

After considering the issues raised by 

the USCG and other relevant parties and 

evaluating all information available to 

date pertaining to tug, towing, and barge 

traffic through the Maryland WEA, 

BOEM has decided not to reduce the 

size of the MD WEA offered in this FSN. 

BOEM will receive additional vessel 

traffic data and analysis in the future, 

which will better inform BOEM’s 

decisions whether to approve, 

disapprove, or approve with conditions 

a lessee’s COP, particularly with regard 

to site-specific restrictions or 

mitigations to alleviate navigational 

concerns. Additional information that 

BOEM expects to have available to 

inform its decision would include the 

final navigational safety risk assessment 

that will be submitted with each lessee’s 

COP, and the results of two ongoing 

studies: (1) The U.S. Coast Guard’s 

Atlantic Coast Port Access Route Study 

(ACPARS), and (2) a BOEM-funded 

study, ‘‘Marine Vessel Traffic and Wind 

Energy Development Infrastructure on 

the OCS—Risk Analysis,’’ being 

conducted by the Department of 

Energy’s Pacific Northwest National 

Laboratory (PNNL). Further discussion 

on this topic is provided in the 

Response to Comments and Explanation 

of Changes, which can be found at the 

following URL:http://www.boem.gov/ 

State-Activities-Maryland/. 

List of Eligible Bidders: BOEM has 

determined that the following 

companies are legally, technically, and 


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38062 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 

financially qualified, pursuant to 30 

CFR 585.106 and 107, to hold a 

commercial wind lease offshore 

Maryland, and are therefore eligible to 

participate in this lease sale as bidders. 

Company name 

Company 

No. 

Apex Offshore Maryland, LLC ........ 15048 

Bluewater Wind Maryland LLC ....... 15018 

Convalt Energy LLC ....................... 15051 

Dominion Wind Development, LLC 15049 

EDF Renewable Development, Inc. 15028 

Energy Management, Inc. .............. 15015 

Fishermen’s Energy, LLC ............... 15005 

Green Sail Energy LLC .................. 15045 

IBERDROLA RENEWABLES, Inc. 15019 

Maryland Offshore Wind LLC ......... 15016 

Orisol Energy US, Inc. .................... 15020 

RES America Developments Inc. ... 15021 

SCS Maryland Energy LLC ............ 15050 

Sea Breeze Energy LLC ................ 15044 

Seawind Renewable Energy Corporation LLC ............................... 15017 

US Wind Inc. .................................. 15023 

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 a lease pursuant to this 

sale. 

• Bidder’s Financial Form (BFF): 

Each eligible bidder must submit a BFF 

to BOEM by July 17, 2014. The BFF is 

available at: http://www.boem.gov/ 

State-Activities-Maryland/. Once this 

information has been processed by 

BOEM, bidders may log into pay.gov 

and leave bid deposits. BOEM may 

disallow any bidder who fails to submit 

the BFF by this deadline from 

participating in the auction. 

• Bid Deposits: Each bidder must 

submit an adequate bid deposit by 

August 1, 2014, as described in the ‘‘Bid 

Deposits’’ section. BOEM may disallow 

any bidder who fails to submit the bid 

deposit by this deadline from 

participating in the auction. 

• Non-Monetary Package: Each bidder 

must submit a non-monetary package, if 

it is applying for a credit, by August 8, 

2014. 

• Mock Auction: BOEM will hold a 

Mock Auction on August 12, 2014. The 

Mock Auction will be held online. 

BOEM will contact each eligible bidder 

and provide instructions for 

participation. Only bidders eligible to 

participate in this auction will be 

permitted to participate in the Mock 

Auction. 

• Panel Convenes to Evaluate NonMonetary Packages: On August 15, 

2014, the panel described in the 

‘‘Auction Procedures’’ section will 

convene to consider non-monetary 

packages. The panel will send 

determinations of eligibility to BOEM, 

who will inform each bidder by email 

of the panel’s determination of their 

status. 

• Monetary Auction: On August 19, 

2014, BOEM, through its contractor, will 

hold the monetary stage of the auction. 

The auction will start at 8:30 a.m. EDT. 

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 may continue on 

consecutive business days, as necessary, 

until the auction ends according to the 

procedures described in the Auction 

Format section of this notice. 

• Announce Provisional Winner: 

BOEM will announce the provisional 

winner of the lease sale after the auction 

ends. 

• Reconvene the Panel: The panel 

will reconvene to verify auction results. 

• Refund Non-Winners: BOEM will 

return the bid deposits of any bidders 

who did not win a lease. 

• Department of Justice (DOJ) Review: 

BOEM will afford DOJ 30 days to 

conduct an antitrust review of the 

auction, pursuant to 43 USC 1337(c), 

which reads, in relevant part: 

Antitrust review of lease sales. (1) 

Following each notice of a proposed 

lease sale and before the acceptance of 

bids and the issuance of leases based on 

such bids, the Secretary [of the Interior] 

shall allow the Attorney General, in 

consultation with the Federal Trade 

Commission, 30 calendar days to review 

the results of such lease sale, except that 

the Attorney General, after consultation 

with the Federal Trade Commission, 

may agree to a shorter review period. 

• Deliver the Leases: BOEM will send 

three lease copies to each winner, with 

instructions on how to accept and 

execute the lease. The first year’s rent 

payment is due 45 days after the winner 

receives the lease for execution. 

• Return the Leases: The auction 

winner will have 10 business days from 

receiving the lease copies in which to 

post financial assurance, pay any 

outstanding balance of their bonus bids, 

and sign and return the three copies. 

• Execute the Leases: Once BOEM has 

received the lease copies and verified 

that all required materials have been 

received, BOEM will make a final 

determination regarding its execution of 

the lease and execute if appropriate. 

• Reject Unsuccessful Bids: Once the 

lease has been executed, BOEM will 

provide unsuccessful bidders a written 

statement of the reasons their bids were 

rejected. 

Areas Offered for Leasing: The North 

and South LAs described for leasing in 

this FSN are the same areas described in 

the Maryland PSN (78 FR 76643, 

December 18, 2013). The North and 

South LAs together contain 9 whole 

OCS blocks and 80 sub-blocks, or 

approximately 79,707 acres. The North 

LA consists of 32,737 acres and the 

South LA consists of 46,970 acres. If 

there are adequate bids, two leases will 

be issued pursuant to this lease sale. A 

description of the LAs and lease 

activities can be found in Addendum 

‘‘A’’ of each lease, which BOEM has 

made available with this notice on its 

Web site at: http://www.boem.gov/StateActivities-Maryland/. 

Map of the Area Offered for Leasing: 

A map of the North and South LAs can 

be found at the following URL: http:// 

www.boem.gov/State-ActivitiesMaryland/. 

A large scale map showing boundaries 

of the area with numbered blocks is 

available from BOEM at the following 

address: Bureau of Ocean Energy 

Management, Office of Renewable 

Energy Programs, 381 Elden Street HM 

1328, Herndon, Virginia 20170, Phone: 

(703) 787–1300, Fax: (703) 787–1708. 

Withdrawal of Blocks: Interested 

parties should note that BOEM reserves 

the right to withdraw portions of the 

LAs prior to its execution of a lease 

based upon relevant information 

provided to the Bureau. 

Lease Terms and Conditions: BOEM 

has included specific terms, conditions, 

and stipulations for the OCS 

commercial wind leases in the 

Maryland WEA within Addendum ‘‘C’’ 

of each lease. BOEM reserves the right 

to apply additional terms and 

conditions to activities conducted on 

the lease incident to any future approval 

or approval with modifications of a SAP 

and/or COP. Each lease, including 

Addendum ‘‘C’’, is available on BOEM’s 

Web site at: http://www.boem.gov/StateActivities-Maryland/. Each lease 

consists of an instrument with 20 

sections and the following seven 

attachments: 

• Addendum ‘‘A’’ (Description of 

Leased Area and Lease Activities); 

• Addendum ‘‘B’’ (Lease Term and 

Financial Schedule); 

• Addendum ‘‘C’’ (Lease-Specific 

Terms, Conditions, and Stipulations); 

• Addendum ‘‘D’’ (Project Easement); 

• Addendum ‘‘E’’ (Rent Schedule); 

• 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 


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be completed at the time of COP 

approval. 

Plans: Pursuant to 30 CFR 585.601, 

the lessee must submit a SAP within the 

1 year Preliminary Term. If the lessee 

intends to continue its commercial lease 

with an 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 

basic annual payments that the Lessee 

must pay under the lease terms, and the 

financial assurance requirements that 

will be associated with each lease. 

Rent: The first year’s rent payment of 

$3 per acre for the entire leased area is 

due within 45 days of the date the 

winning bidder receives the lease for 

execution. Thereafter, annual rent 

payments are due on the anniversary of 

the Effective Date of the lease, i.e., the 

Lease Anniversary. Once the first 

commercial operations under the lease 

begin, rent will be charged on the part 

of the lease not authorized for 

commercial operations, i.e., not 

generating electricity. However, instead 

of geographically dividing the LA into 

acreage that is ‘‘generating’’ and acreage 

that is ‘‘non-generating,’’ the fraction of 

the lease accruing rent is based on the 

fraction of the total nameplate capacity 

of the project that is not yet in 

operation. The fraction is the nameplate 

capacity not yet authorized for 

commercial operations at the time 

payment is due, divided by the 

maximum nameplate capacity 

authorized in the lessee’s most recent 

approved COP. This fraction is then 

multiplied by the amount of rent that 

would be due for the lessee’s entire 

leased area at the rental rate of $3 per 

acre to obtain the annual rent due for a 

given year. 

For example, for a lease the size of 

32,737 acres (the size of the Maryland 

North LA), the amount of rent payment 

will be $98,211 per year if the entire 

leased area is not yet authorized for 

commercial operations. If the lessee has 

250 megawatts (MW) authorized under 

commercial operations and its most 

recent approved COP specifies a 

maximum project size of 500 MW, the 

rent payment will be $49,106 (reflecting 

that rental payments are rounded up to 

the nearest whole dollar). 

The lessee also must pay rent for any 

project easement associated with the 

lease commencing on the date that 

BOEM approves the COP (or 

modification) that describes the project 

easement. Annual rent for a project 

easement that is 200 feet wide and 

centered on the transmission cable 

would be $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 the purposes of 

calculating the initial annual operating 

fee payment, an operating fee rate is 

applied to a proxy for the wholesale 

market value of the electricity expected 

to be generated from the project during 

its first 12 months of operations. This 

initial payment is 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 start 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 nameplate capacity, the 

total number of hours in the year 

(8,760), a capacity utilization factor, and 

the annual average price of electricity 

derived from a historical regional 

wholesale power price index. For 

example, an annual operating fee for a 

100 MW wind facility operating at 40% 

capacity (decimal equivalent is 0.4) with 

a regional wholesale power price of $40/ 

MWh under an operating fee rate of 2% 

(decimal equivalent is 0.02) would be 

calculated to be $277,440 as follows: 

Annual operating fee = 100 MW × 8,670 

hours/year × 0.4 × $40/MWh power 

price × 0.02. 

Operating Fee Rate: The operating fee 

rate is set at 0.02 (i.e., 2%) during 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 

nameplate capacity at the start of each 

year of commercial operations on the 

lease will be specified in the COP. For 

example, if the Lessee has 20 turbines 

under commercial operations rated by 

the design manufacturer at 5 MW of 

output each, the nameplate capacity of 

the wind facility at the rated wind speed 

of the turbines would be 100 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 

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%) to allow for one 

year of installation and testing followed 

by five years at full availability. 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 percent 

of the previous period’s value. 

Wholesale Power Price Index: 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—PJM West power market for 

the most recent year of data available as 

reported by the Federal Energy 

Regulatory Commission (FERC) as part 

of its annual State of the Markets Report 

with specific reference to the summary 

entitled, ‘‘Electric Market Overview: 

Regional Spot Prices.’’ The wholesale 

power price is adjusted for inflation 

from the year associated with the 

published spot price indices to the year 

in which the operating fee is to be due 

based on the Lease Anniversary using 

annual implicit price deflators as 

reported by the U.S. Department of 

Commerce’s Bureau of Economic 

Analysis. 

Financial Assurance: Within 10 

business days after receiving the lease 

copies, the provisional winner 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. 

BOEM will base the amount of all SAP, 

COP, and decommissioning financial 

assurance requirements on estimates of 

the cost to meet all accrued lease 

obligations. BOEM will determine the 

amount of supplemental and 

decommissioning financial assurance 

requirements on a case-by-case basis. 

The financial terms can be found in 

Addendum ‘‘B’’ of the lease, which 

BOEM has made available with this 

notice on its Web site at: http:// 


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www.boem.gov/State-ActivitiesMaryland/. 

BID Deposit: A bid deposit is an 

advance cash deposit submitted to 

BOEM in order to participate in the 

auction. No later than August 1, 2014, 

each bidder must have submitted a bid 

deposit of $450,000 per unit of desired 

initial eligibility. Each lease is worth 

one unit of bid eligibility in the auction. 

The required bid deposit for any 

participant intending to bid on both 

leases in the first round of the auction 

will be $900,000. Any participant 

intending to bid on only one of the 

leases during the auction must submit a 

bid deposit of $450,000. Any bidder that 

fails to submit the bid deposit by August 

1, 2014, may be disqualified from 

participating in the auction. Bid 

deposits will be accepted online via 

pay.gov. 

Following publication of the FSN, 

each bidder must fill out the BFF 

included in the FSN. BOEM has made 

a copy of the proposed BFF available 

with this notice on its Web site at: 

http://www.boem.gov/State-ActivitiesMaryland/. This form requests that each 

bidder designate an email address, 

which the bidder should use to create 

an account in pay.gov. After 

establishing the pay.gov account, 

bidders may use the Bid Deposit Form 

on the pay.gov Web site to leave a 

deposit. 

Following the auction, bid deposits 

will be applied against any bonus bids 

or other obligations owed to BOEM. If 

the bid deposit exceeds a bidder’s total 

financial obligation, the balance of the 

bid deposit will be refunded to the 

bidder. BOEM will refund bid deposits 

to unsuccessful bidders. 

Minimum Bid: In this auction, 

approximately 32,737 acres will be 

offered for sale as Lease OCS–A 0489 

(North Lease Area), and approximately 

46,970 acres will be offered for sale as 

Lease OCS–A 0490 (South Lease Area). 

The minimum bid is $2 per acre for 

each LA. Therefore, the minimum 

acceptable bid will be $65,474 for the 

North Lease Area and $93,940 for the 

South Lease Area. 

Auction Procedures 

Summary 

For the sale of Lease OCS–A 0489 

(North Lease Area) and Lease OCS–A 

0490 (South Lease Area), BOEM will use 

a multiple-factor auction format with a 

multiple-factor bidding system. Under 

this system, BOEM may consider a 

combination of monetary and 

nonmonetary factors, or ‘‘variables,’’ in 

determining the outcome of the auction. 

BOEM has appointed a panel of three 

BOEM employees for the purposes of 

reviewing the non-monetary packages 

and verifying the results of the lease 

sale. BOEM reserves the right to change 

the composition of this panel prior to 

the date of the lease sale. The panel will 

meet to consider non-monetary 

packages on August 15, 2014. The panel 

will determine whether any bidder has 

earned a non-monetary credit to be used 

during the auction, and, if one or more 

bidders have earned such a credit, the 

percentage the credit will be worth. 

The auction will balance 

consideration of two variables: (1) a 

cash bid, and (2) a non-monetary credit, 

i.e., if a bidder holds a Power Purchase 

Agreement (PPA), or a Maryland Public 

Service Commission (PSC) issued 

Offshore Renewable Energy Credit 

(OREC), as described herein. In sum, 

these two variables comprise the multifactor bid or ‘‘As-Bid’’ auction price. A 

bidder’s As-Bid price, which is the sum 

of its cash bid and any credit portion 

earned, can be submitted by the bidder 

at BOEM’s asking price or as an IntraRound Bid price subject to certain 

conditions, as described more fully 

herein. BOEM’s regulations at 30 CFR 

585.220(a)(4) and 585.221(a)(6) provide 

for multiple-factor auctions, wherein 

both monetary and nonmonetary bid 

variables may be considered. 

Overview of the Multiple-Factor 

Bidding Format Proposed for This Sale 

Under a multiple-factor bidding 

format, as set forth at 30 CFR 

585.220(a)(4), BOEM may consider a 

combination of factors as part of a bid. 

The regulations state that one bid 

proposal per bidder will be accepted, 

but do not further specify the 

procedures to be followed in the 

multiple-factor format. A multiple-factor 

format is intended to allow BOEM 

flexibility in administering the auction 

and in balancing the variables 

presented. The regulations leave to 

BOEM the determination of how to 

administer the multiple-factor auction 

format to ensure the receipt of a fair 

return under the Act, 43 U.S.C. 

1337(p)(2)(A). BOEM has chosen to do 

this through an auction format that 

considers a non-monetary factor along 

with ascending bidding over multiple 

rounds, sharing certain useful 

information with bidders at the end of 

each auction round (e.g., the number of 

live bids associated with each LA), and 

ensuring that a bidder’s live bid 

submitted in the final round of the 

auction will win the LAs included in 

that bid. This auction format enhances 

competition and reduces bidder 

uncertainty more effectively than other 

auction types that BOEM considered 

because the multiple-factor format 

provides for sharing relevant 

information and allowing bidders to 

respond in subsequent rounds as that 

information is revealed. 

BOEM’s regulations at 30 CFR 

585.220(a)(4) provide for a multi-round 

auction in which each bidder may 

submit only one proposal per LA or for 

a set of LAs in each round of the 

auction. This formulation presents an 

administratively efficient auction 

process. It also takes advantage of the 

flexibility built into the regulations by 

enabling BOEM to benefit from both the 

consideration of more than one bidding 

factor and the price discovery involved 

in successive rounds of bidding. 

The auction will be conducted in a 

series of rounds. At the start of each 

round, BOEM will state an asking price 

for the North LA and an asking price for 

the South LA. The asking price for a bid 

on both LAs is the sum of the asking 

prices for the North LA and the South 

LA. Each bidder will indicate whether 

it is willing to meet the asking price for 

one or both LAs. A bid submitted at the 

full asking price for one or both LAs in 

a particular round is referred to as a 

‘‘live bid.’’ A bidder must submit a live 

bid for at least one of the LAs in each 

round to participate in the next round 

of the auction. As long as there is at 

least one LA that is included in two or 

more live bids, the auction continues, 

and the next round is held. 

A bidder may meet the asking price 

by submitting a monetary bid equal to 

the asking price or, if it has earned a 

credit, by submitting a multiple-factor 

bid—that is, a live bid that consists of 

a monetary element and a non-monetary 

element, the sum of which equals the 

asking price. A multiple-factor bid 

would consist of the sum of a cash 

portion and any credit portion that the 

bidder has earned. 

An uncontested bid is a live bid that 

does not overlap with other live bids in 

that round. For example, a bid for both 

the North and the South LAs is 

considered contested if any LA included 

in that bid is included in another bid — 

a bid cannot be ‘‘partially uncontested.’’ 

If a bidder submits an uncontested bid 

consisting of one LA, and the auction 

continues for another round, BOEM 

automatically carries that same live bid 

forward as a live bid into the next 

round, and BOEM’s asking price for the 

LA contained in the uncontested bid 

would remain unchanged from the 

previous round. If the price on the LA 

in that bid rises later in the auction 

because another bidder places a live bid 

on that LA, BOEM will stop 

automatically carrying forward the 

previously uncontested bid. Once the 


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asking price goes up, the bidder that 

placed the previously carried-forward 

bid is free to bid on either LA at the new 

asking prices. 

Following each round in which either 

LA is contained in more than one live 

bid, BOEM will raise the asking price 

for that LA by an increment determined 

by BOEM. The auction concludes when 

neither the North LA nor the South LA 

is included in more than one live bid. 

The series of rounds and the rising 

asking prices set by BOEM will facilitate 

consideration of the first variable—the 

cash portion of the bid. 

The second variable—a credit of up to 

25% of a monetary bid for holding a 

PPA or a Maryland OREC Order—will 

be applied throughout the auction 

rounds as a form of imputed payment 

against the asking price for the highest 

priced LA in a bidder’s multiple-factor 

bid. This credit serves to supplement 

the amount of a cash bid proposal made 

by a particular bidder in each round. In 

the case of a bidder holding a credit and 

bidding on more than one LA, the credit 

will be applied only on the LA with the 

highest asking price. More details on the 

non-monetary factors are found in the 

‘‘Credit Factors’’ section herein. 

Under BOEM’s regulations at 30 CFR 

585.222(d), a panel will weigh the 

variables and determine the winner(s) of 

the auction. The regulations state that 

BOEM ‘‘will determine the winning bid 

for proposals submitted under the 

multiple-factor bidding format on the 

basis of selection by the panel. . .’’ 30 

CFR 585.224(h). The panel will evaluate 

each non-monetary package to 

determine whether it meets the criteria 

provided in this FSN, and therefore 

whether it will qualify for a credit for its 

holder. It is possible that the panel 

could determine that no bidder qualifies 

for a non-monetary credit during the 

auction, in which case the auction 

would otherwise proceed as described 

in the FSN. The panel will determine 

the winning bids for each LA in 

accordance with the procedures 

described in this FSN. 

Details of the Auction Process 

Bidding—Live Bids 

Each bidder is allowed to submit a 

live bid for one LA (North or South), or 

both LAs based on its ‘‘eligibility’’ at the 

opening of each round. A bidder’s 

initial eligibility is determined based on 

the amount of the bid deposit submitted 

by the bidder by August 1, 2014. To be 

eligible to offer a bid on one LA at the 

start of the auction, a bidder must 

submit a bid deposit of $450,000. To be 

eligible to offer a bid on both the North 

and South LAs in the first round of the 

auction, the bidder must submit a bid 

deposit of $900,000. 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 

continuing eligibility is determined by 

the number of LAs 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 LA in the 

previous round, that bidder may submit 

a bid that includes at most one LA in 

the current round. If a bidder submitted 

a live bid comprised of both LAs in the 

previous round, that bidder may submit 

a live bid that also includes these two 

LAs in the current round. Unless a 

bidder has an uncontested bid that is 

carried forward into the next round, a 

bidder that submitted a live bid for both 

LAs may choose to submit a live bid for 

one LA. Thus, eligibility in successive 

rounds may stay the same or go down, 

but it can never go up. 

In the first round of the auction, 

bidders have the following options: 

A bidder with an initial eligibility of 

one (that is, a bidder who submitted a 

bid deposit of $450,000) may: 

• Submit a live bid on the North LA 

or the South LA, or 

• Submit nothing, and drop out of the 

bidding. 

A bidder with an initial eligibility of 

two (that is, a bidder who submitted a 

bid deposit of $900,000) may: 

• Submit a live bid for both the North 

and South LAs, 

• Submit a live bid for either the 

North LA or the South LA, or 

• Submit nothing, and drop out of the 

bidding. 

Before each subsequent round of the 

auction, BOEM will raise the asking 

price for any LA that received more than 

one live bid in the previous round. 

BOEM will not raise the asking price for 

a LA that received only one or no live 

bids in the previous round. 

BOEM, in its sole discretion, will 

determine asking price increments. 

BOEM will base asking price increments 

on a number of factors, including: 

• Making the increments sufficiently 

large that the auction will not take an 

unduly long time to conclude; and 

• Decreasing the increments as the 

asking price of a LA nears its apparent 

final price. 

BOEM reserves the right during the 

auction to increase or decrease 

increments if it determines, in its sole 

discretion, that a different increment is 

warranted to enhance the efficiency of 

the auction process. Asking prices for 

the LAs included in multiple live bids 

in the previous round will be raised and 

rounded to the nearest whole dollar 

amount to obtain the asking prices in 

the current round. 

A bidder must submit a live bid in 

each round of the auction (or have an 

uncontested live bid automatically 

carried forward by BOEM) for it to 

remain active and continue bidding in 

future rounds. All of the live bids 

submitted in any round of the auction 

will be preserved and considered 

binding until determination of the 

winning bids is made. Therefore, the 

bidders are responsible for payment of 

the bids they submit and can be held 

accountable for up to the maximum 

amount of those bids determined to be 

winning bids during the final award 

procedures. 

Between rounds, BOEM will release 

the following information: 

• The level of demand for each LA in 

the previous round of the auction (i.e., 

the number of live bids that included 

the LA); and 

• The asking price for each LA in the 

upcoming round of the auction. 

In any subsequent round of the 

auction, if a bidder’s previous round bid 

was uncontested, and the auction 

continues for another round, then 

BOEM will automatically carry forward 

that bid as a live bid in the next round. 

A bidder whose bid is being carried 

forward will not have an opportunity to 

modify or drop its bid until some other 

bidder submits a live bid that overlaps 

with the LA in the carried forward bid. 

Note that in this sale, a carried-forward 

bid will always be for only one LA—if 

a live bid consisting of both North and 

South was uncontested, the auction 

would end. In particular, for rounds in 

which a bidder finds its uncontested bid 

is carried forward, the bidder will be 

unable to do the following: 

• Switch to the other LA; 

• Submit an Intra-Round Bid (see 

herein for discussion of Intra-Round 

Bids); or 

• Drop out of the bidding. 

In this scenario, the bidder is 

effectively ‘‘frozen’’ through future 

auction rounds for as long as its bid for 

that LA remains uncontested. Moreover, 

the bidder may be bound by that bid or, 

indeed, by any other bid which BOEM 

determines is a winning bid in the 

award stage. Hence, a bidder cannot 

drop an uncontested bid. In no scenario 

can a bidder be relieved of any of its 

bids from any round until a 

determination is made in the award 

stage about the LAs won by the bidder. 

If a bidder’s bid is not being carried 

forward by BOEM (i.e., a contested bid), 

a bidder with an eligibility of one (that 

is, a bidder who submitted a live bid for 


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38066 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 

either the North LA or the South LA in 

the previous round) may: 

• Submit a live bid for either the 

North LA or the South LA; 

• Submit an Intra-Round Bid for the 

same LA for which the bidder submitted 

a live in the previous round, and exit 

the auction; or 

• Submit nothing, and drop out of the 

bidding. 

Additionally, if a bid is not being 

carried forward by BOEM (i.e., a 

contested bid), a bidder with an 

eligibility of two (that is, a bidder who 

submitted a live bid for both North and 

South in the previous round) may: 

• Submit a live bid for both the North 

and South LAs; 

• Submit a live bid for either the 

North LA or the South LA; 

• Submit an Intra-Round Bid for both 

the North and South LAs, and a live bid 

for either the North LA or the South LA; 

• Submit an Intra-Round Bid for both 

the North and South LAs, no live bids, 

and exit the auction; or 

• Submit nothing, and drop out of the 

bidding. 

Subsequent auction rounds occur in 

this sale as long as either the North LA 

or the South LA is contested. The 

auction concludes at the end of the 

round in which neither the North LA 

nor the South LA is included in the live 

bid of more than one bidder, e.g., all live 

bids are uncontested. 

Bidding—Intra-Round Bids 

All asking prices and asking price 

increments will be determined by the 

BOEM Auction Manager. Intra-round 

bidding allows bidders to more 

precisely express the maximum price 

they are willing to offer for the North, 

South, or both LAs while also 

minimizing the chance of ties. An IntraRound Bid must consist of a single offer 

price for exactly the same LA(s) 

included in the bidder’s live bid in the 

previous round. 

When submitting an Intra-Round Bid, 

the bidder is indicating that it is not 

willing to meet the current round’s 

asking price, but it is willing to pay 

more than the previous round’s asking 

price. In particular, in an Intra-Round 

Bid, the bidder specifies the maximum 

(higher than the previous round’s asking 

price and less than the current round’s 

asking price) that it is willing to offer for 

the specific LA(s) in its previous 

round’s live bid. 

Although an Intra-Round Bid is not a 

live bid, in the round in which a valid 

Intra-Round Bid is submitted for both 

LAs, the bidder’s eligibility for a live bid 

in that same round and future rounds is 

permanently reduced from including 

two LAs to one LA. In other words, once 

an Intra-Round Bid is submitted, the 

bidder will never again have the 

opportunity to submit a live bid on as 

many LAs as it has bid in previous 

rounds. 

BOEM will not consider the presence 

of Intra-Round Bids for the purpose of 

determining whether to increase the 

asking price for a particular LA or to 

end the auction. Also, BOEM will not 

count or share with bidders between 

rounds the number of Intra-Round Bids 

received for each LA. 

All of the Intra-Round Bids submitted 

during the auction will be preserved, 

and may be determined to be winning 

bids. Therefore, bidders are responsible 

for payment of the bids they submit and 

may be held accountable for up to the 

maximum amount of any Intra-Round 

Bids or live bids determined to be 

winning bids during the final award 

procedures. 

Determining Provisional Winners 

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 stages 

of the process will be determined by the 

auction software, which will analyze the 

monetary and credit portion of the bids, 

determine provisional winners, find the 

LAs won by the provisional winners, 

and calculate the applicable bid prices 

to be paid by the winners for the LAs 

they won.] This evaluation will be 

reviewed, checked and validated by the 

panel. The determination of provisional 

winners, in both stages, will be based on 

the two auction variables, as well as on 

a bidder’s adherence to the rules of the 

auction, and the absence of conduct 

detrimental to the integrity of the 

competitive auction. 

• Stage 1 

Live bids submitted in the final round 

of the auction are Qualified Bids. Live 

bids submitted before the final round 

and any Intra-Round Bids submitted in 

any round of the auction are Contingent 

Bids. In Stage 1, a bidder with a 

Qualified Bid is provisionally assured of 

winning the LA(s) included in its final 

round bid, regardless of any other 

Contingent Bids. If both LAs receive live 

bids in the final round, they are 

awarded to bidders in Stage 1, and the 

second award stage is not necessary. If 

either the North LA or the South LA 

received a Contingent Bid but not a 

Qualified Bid, BOEM will proceed to 

Stage 2 to award the leases. 

Following the auction, all winning 

bidders must pay the price associated 

with their winning bids, which may 

consist of cash and non-monetary 

credits or just cash. 

• Stage 2 

In Stage 2, BOEM will consider 

Contingent Bids to determine if the 

LA(s) not awarded in Stage 1 can be 

awarded in Stage 2. BOEM will award 

these LAs in Stage 2 based upon the 

Contingent Bids that maximize the total 

As-Bid prices in the auction. However, 

in order to preserve the award of 

Qualified Bids in Stage 1, the only 

circumstance in which a Contingent Bid 

may replace a Qualified Bid is when the 

Contingent Bid is submitted by the same 

bidder and includes the LA of the 

Qualified Bid it replaces. For example, 

suppose a particular bidder placed a 

live bid for the North LA in the final 

round of this auction and a live bid was 

not entered for the South LA in that 

round. In Stage 2, BOEM would then 

consider only awards in which this 

bidder receives the North LA and 

possibly also the South LA (e.g., as a 

result of a Contingent Bid for both the 

North LA and South LA). If the bidder’s 

Qualified Bid is replaced by its 

Contingent Bid for the North and South 

LAs (represented either by an IntraRound bid for both LAs or by a bid 

comprising both LAs in the previous 

round), the bidder would pay the price 

associated with its Contingent Bid for 

the LAs contained therein. 

Under certain circumstances, different 

combinations of Contingent Bids from 

two or more bidders may result in the 

same total As-Bid price. In such cases, 

BOEM will resolve the resulting tie with 

a random drawing. 

In the event a bidder submits a bid for 

a LA that the panel and BOEM 

determine to be a winning bid, the 

bidder will be expected to sign the 

applicable lease documents in a timely 

manner and submit the full cash 

payment due, pursuant to 30 CFR 

585.224. If a bidder fails to timely sign 

and pay for the lease, then BOEM will 

not issue the lease to that bidder, and 

the bidder will forfeit its bid deposit. 

BOEM may consider failure of a bidder 

to timely pay the full amount due as an 

indication that the bidder is no longer 

financially qualified to participate in 

other lease sales under BOEM’s 

regulations at 30 CFR 585.106 and 

585.107. 

Credit Factors 

Prior to the auction, BOEM will 

convene a panel pursuant to 30 CFR 

585.222(d) to evaluate bidders’ nonmonetary packages to determine 

whether and to what extent each bidder 


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is eligible for a non-monetary credit 

applicable to the As-Bid auction price 

for one of the LAs in each round of the 

auction, as described herein. In order to 

receive a credit for a PPA or Maryland 

OREC Order, a bidder must be legally, 

technically and financially eligible to 

acquire a commercial OCS wind lease, 

and any single PPA or Maryland OREC 

Order cannot be used by more than one 

bidder in the auction. 

The percentage credit that will be 

applicable to each bidder throughout 

the auction and award process is 

determined based on the panel’s 

evaluation of required documentation 

submitted by the bidders as of August 

8, 2014. Bidders will be informed by 

email before the monetary auction about 

the percentage credit applicable to their 

bids. A bidder may not receive more 

than one credit, and the bid credit will 

be applicable to only one LA. Any nonmonetary credit will be applicable only 

to the higher priced LA in a bid for both 

LAs. For an Intra-Round Bid containing 

both LAs, the higher priced LA will be 

determined using the previous round’s 

asking prices. In each round, the auction 

system will display to each bidder 

information showing how their As-Bid 

auction prices are affected by the credit 

imputed to their bid to determine their 

net monetary payment due to BOEM, 

should their bids prevail as winning 

bids in the award stages. Application of 

the credit percentage to the appropriate 

As-Bid auction price will be rounded to 

the nearest whole dollar amount. 

The bidder’s credit percentage is 

limited to the greater of 25% for a 

Maryland OREC Order, or up to 25% for 

a PPA. This credit percentage will be 

applied to the highest priced LA related 

to the bidder’s latest live bid or IntraRound Bid. During each round, bidders 

are informed by the BOEM Auction 

System how the credit applies to their 

live bid and any Intra-Round Bid. In the 

case of a live bid for both LAs, the credit 

will apply only to the LA having the 

highest current round asking price. In 

the case of an Intra-Round Bid for both 

LAs, the credit will apply only to the 

higher-priced LA, but the applicable 

price for calculating the credit will be 

based on the previous round’s asking 

prices, not on any additional amount 

above the previous round’s asking 

prices as reflected in the incremental 

amount associated with its Intra-Round 

Bid. 

The panel will review the nonmonetary package submitted by each 

bidder, and, based on the criteria of a 

PPA or Maryland OREC Order as 

provided in this FSN, determine 

whether bidders have established that 

they are qualified to receive a credit and 

the percentage at which that credit will 

apply. If the panel determines that no 

bidder has qualified for a non-monetary 

factor, the auction will proceed with 

each bidder registered with no imputed 

credit. 

Credit Factor Definitions 

The definitions herein will apply to 

the factors for which bidders may earn 

a credit. 

Power purchase agreement (PPA) is 

any legally enforceable long-term 

contract negotiated between an 

electricity generator (Generator) and a 

power purchaser (Buyer) that identifies, 

defines, and stipulates the rights and 

obligations of one party to produce, and 

the other party to purchase, energy from 

an offshore wind project to be located in 

the lease sale area. The PPA must have 

been approved by a public utility 

commission or the equivalent. The PPA 

must state that the Generator will sell to 

the Buyer and the Buyer will buy from 

the Generator capacity, energy, and/or 

environmental attribute products from 

the project, as defined in the terms and 

conditions set forth in the PPA. Energy 

products to be supplied by the 

Generator and the details of the firm 

cost recovery mechanism approved by 

the state’s public utility commission or 

other applicable authority used to 

recover expenditures incurred as a 

result of the PPA must be specified in 

the PPA. To qualify, a PPA must contain 

the following terms or supporting 

documentation: 

(i) A complete description of the 

proposed project; 

(ii) Identification of both the 

electricity Generator and Buyer that will 

enter into a long term contract; 

(iii) A timeline for permitting, 

licensing, and construction; 

(iv) Pricing projected under the long 

term contract being sought, including 

prices for all market products that 

would be sold under the proposed long 

term contract; 

(v) A schedule of quantities of each 

product to be delivered and projected 

electrical energy production profiles; 

(vi) The term for the long-term 

contract; 

(vii) Citations to all filings related to 

the PPA that have been made with state 

and Federal agencies, and identification 

of all such filings that are necessary to 

be made; and 

(viii) Copies of or citations to 

interconnection filings related to the 

PPA. 

If the panel determines a bidder has 

executed a PPA for at least 250 MW, it 

will be eligible for the entire 25% credit. 

If the panel determines a bidder has 

executed a PPA for an amount less than 

250 MW, the bidder may still be eligible 

for a non-monetary credit proportional 

to the PPA’s fraction of 250 MW. The 

smaller percentage for a partial credit 

will be calculated according to the 

formula below: 

Where: 

• Partial Credit = Percent credit for which a 

smaller PPA is eligible. 

• Full PPA = 250 MW. 

• Full Credit = 25%. 

• Partial PPA = amount (less than 250 MW) 

of power under contract. 

Maryland OREC Order is an order 

issued by the Maryland PSC approving 

a qualifying offshore wind project and 

establishing an OREC pricing schedule, 

pursuant to Public Utilities Article § 7– 

704.1 of the Maryland Code Annotated. 

If the panel determines a bidder has 

been issued a Maryland OREC Order, it 

will be eligible for the entire 25% credit. 

Additional Information Regarding the 

Auction 

Non-Monetary Auction Procedures 

All bidders seeking a non-monetary 

auction credit are required to submit a 

non-monetary auction package. If a 

bidder seeks a non-monetary auction 

credit, this submission must contain 

information sufficient to establish the 

bidder’s eligibility to receive a nonmonetary credit in the monetary phase 

of the auction. Further information on 

this subject can be found in the section 

of this notice entitled, ‘‘Credit Factor 

Definitions.’’ If a bidder does not submit 

a non-monetary package by August 8, 

2014, to BOEM, then BOEM will assume 

that bidder is not seeking a nonmonetary auction credit and the panel 

will not consider that bidder for a nonmonetary auction credit. 


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Bidder Authentication 

Prior to the auction, the Auction 

Manager will send several bidder 

authentication packages to the bidders 

shortly after BOEM has processed the 

BFFs. One package will contain tokens 

for each authorized individual. Tokens 

are digital authentication devices. The 

tokens will be 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 BFF, 

a bid deposit, or does not participate in 

the auction, BOEM will de-activate that 

bidder’s token and login information, 

and the bidder will be asked to return 

its tokens. 

The second package contains login 

credentials for authorized bidders. The 

login credentials will be 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 Auction System 

Technical Supplement and Alternative 

Bidding Form. The login information, 

along with the tokens, will be tested 

during the Mock Auction. 

Monetary Auction Times 

This section will describe, from a 

bidder’s perspective, how the auction 

will take place. This information will be 

elaborated on and clarified in the 

Auction System Technical Supplement 

available on BOEM’s Web site at: http:// 

www.boem.gov/State-ActivitiesMaryland/. The Auction System 

Technical Supplement describes 

auction procedures that are 

incorporated by reference in this notice, 

except where the procedures described 

in the Auction System Technical 

Supplement directly contradict this 

notice. 

The monetary auction will begin at 

8:30 a.m. EDT on August 19, 2014. 

Bidders may log in as early as 6:30 a.m. 

on that day. We recommend that 

bidders log in no later than 7:30 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 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; 

• Sometime during the Recess, 

previous Round results are posted; 

• Bidders review the previous Round 

results and prepare their next Round 

bids; 

• Next Round bidding begins. 

The first round will last about 30 

minutes, though subsequent rounds may 

be closer to 20 minutes in length. 

Recesses are anticipated to last 

approximately 10 minutes. The 

descriptions of the auction schedule and 

asking price increments included with 

this FSN are tentative. Bidders should 

consult the auction schedule on the 

bidding Web site during the auction for 

updated times. Bidding will continue 

until about 6:00 p.m. each day. BOEM 

anticipates the auction will last one or 

two business days, but bidders are 

advised to prepare to continue bidding 

for additional business days as 

necessary to resolve the auction. 

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 the auction, it will use 

the messaging feature to notify bidders 

that a revision has been made, and 

direct bidders to the relevant page. 

BOEM will also use the messaging 

system for other changes and items of 

particular note during the auction. 

Bidders may place bids at any time 

during the round. At the top of the 

bidding page, a countdown clock will 

show how much time remains in the 

round. Bidders have until the scheduled 

time to place bids. Bidders should do so 

according to the procedures described 

in the Auction System Technical 

Supplement and practiced at the Mock 

Auction. No information about the 

round is available until the round has 

closed and results have been posted, so 

there should be no strategic advantage 

to placing bids early or late in the 

round. 

Alternate Bidding Procedures 

Any bidder who is unable to place a 

bid using the online auction and would 

be interested in placing a bid using the 

Alternate Bidding Procedures must: 

• Call BOEM/the BOEM Auction 

Manager at the help desk number that 

is listed in the Auction Manual before 

the end of the round. BOEM will 

authenticate the caller to ensure he/she 

is authorized to bid on behalf of the 

company. The bidder must explain to 

the BOEM Auction Manager 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. 

• The Alternate Bidding Procedures 

enable a bidder who is having 

difficulties accessing the Internet to 

submit its bid via an Alternate Bidding 

Form that can be faxed to the auction 

manager. If the bidder has not placed a 

bid, but calls BOEM before the end of 

the round and notifies BOEM that it is 

preparing a bid using the Alternate 

Bidding Procedures, and submits the 

Alternate Bidding Form by fax before 

the round ends, BOEM will likely 

accept the bid, though acceptance or 

rejection of the bid is within BOEM’s 

sole discretion. When using the 

Alternate Bidding Procedures, if the 

bidder calls during the round, but does 

not submit the bid until after the round 

ends (but before the round is posted), 

BOEM may or may not accept the bid, 

in part based on how much time 

remains in the recess. Bidders are 

strongly encouraged to submit the 

Alternate Bidding Form before the 

round ends. If the bidder calls during 

the recess following the round, but 

before the previous round’s results have 

been posted, BOEM will likely reject its 

bid, even if it has otherwise complied 

with all of BOEM’s Alternate Bidding 

Procedures. If the bidder calls to enter 

a bid after results have been posted, 

BOEM will reject the bid. 

Except for bidders who have 

uncontested bids in the current round, 

failure to place a bid during a round 

will be interpreted as dropping out of 

the auction. It is possible that bids 

entered in prior rounds, before the 

bidder stopped bidding, may be 

awarded one or both LAs pursuant to 

BOEM’s stage 2 procedures. Bidders are 

held accountable for all bids placed 

during the auction. This is true if they 

continued bidding in the last round, if 

they placed an Exit Bid, or if they 

stopped bidding during the auction. 

Acceptance, Rejection, or Return of 

Bids: BOEM reserves the right and 

authority to reject any and all bids. In 

any case, no lease will be awarded to 

any bidder, and no bid will be accepted, 

unless (1) the bidder has complied with 

all requirements of the FSN, applicable 

regulations and statutes, including, 

among others, those related to: bidder 

qualifications, bid deposits, and 

adherence to the integrity of the 

competitive bidding process, (2) the bid 

conforms with the requirements and 

rules of the auction, and (3) the amount 

of the bid has been determined to be 

adequate by the authorized officer. Any 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 38069 

bid submitted that does not satisfy any 

of these requirements may be returned 

to the bidder submitting that bid by the 

Program Manager of BOEM’s Office of 

Renewable Energy Programs and, in that 

case, would not be considered for 

acceptance. 

Process for Issuing the Leases: If 

BOEM proceeds with lease issuance, it 

will issue three unsigned copies of the 

lease to each winning bidder. Within 10 

business days after receiving the lease 

copies, the winning bidder must: 

1. Execute the lease 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 of the bonus bid (bid 

amount less the bid deposit). BOEM 

requires bidders to use EFT procedures 

(not pay.gov, the Web site bidders used 

to submit bid deposits) for payment of 

the balance of the bonus bid, following 

the detailed instructions contained in 

the ‘‘Instructions for Making Electronic 

Payments’’ available on BOEM’s Web 

site at: http://www.boem.gov/StateActivities-Maryland/. 

If the winning bidder does not meet 

these three requirements within 10 

business days of receiving the lease 

copies as described above, or if the 

winning bidder otherwise fails to 

comply with applicable regulations or 

the terms of the FSN, the winning 

bidder will forfeit its bid deposit. BOEM 

may extend this 10 business-day time 

period if it determines the delay was 

caused by events beyond the winning 

bidder’s control. 

In the event that the provisional 

winner does not execute and return the 

leases according to the instructions in 

this notice, BOEM reserves the right to 

reconvene the panel to determine 

whether it is possible to identify a bid 

that would have won in the absence of 

the bid previously determined to be the 

winning bid. In the event that a new 

winning bid is selected by the panel, 

BOEM will follow the procedures in this 

section for the new winner(s). 

BOEM will not execute a lease until 

(1) the three requirements above have 

been satisfied, (2) BOEM has accepted 

the winning bidder’s financial 

assurance, and (3) BOEM has processed 

the winning bidder’s payment. The 

winning bidder may meet financial 

assurance requirements by posting a 

surety bond or by setting up an escrow 

account with a trust agreement giving 

BOEM the right to withdraw the money 

held in the account on demand by 

BOEM. BOEM may accept other forms 

of financial assurance on a case-by-case 

basis in accordance with its regulations. 

BOEM encourages provisionally 

winning bidders to discuss the financial 

assurance requirement with BOEM as 

soon as possible after the auction has 

concluded. 

Within 45 days of the date that the 

winning bidder receives the lease 

copies, the winning bidder must pay the 

first year’s rent using the pay.gov 

Renewable Energy Initial Rental 

Payment form available at: https:// 

pay.gov/paygov/forms/

formInstance.html?agency

FormId=27797604. 

Subsequent annual rent payments 

must be made following the detailed 

instructions contained in the 

‘‘Instructions for Making Electronic 

Payments’’ available on BOEM’s Web 

site at: http://www.boem.gov/StateActivities-Maryland/. 

Anti-Competitive Behavior: In 

addition to the auction rules described 

in this notice, bidding behavior is 

governed by Federal antitrust laws 

designed to prevent anticompetitive 

behavior in the marketplace. 

Compliance with the BOEM’s auction 

procedures will not insulate a party 

from enforcement of the antitrust laws. 

In accordance with the Act at 43 

U.S.C. 1337(c), following the auction, 

and 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.’’ 

If a bidder is found to have engaged 

in anti-competitive behavior or 

otherwise violated BOEM’s rules in 

connection with its participation in the 

competitive bidding process, BOEM 

may reject the high bid. 

Anti-competitive behavior 

determinations are fact specific. 

However, such behavior may manifest 

itself in several different ways, 

including, but not limited to: 

• An agreement, either express or 

tacit, among bidders to not bid in an 

auction, or to bid a particular price; 

• An agreement among bidders not to 

bid for the LA; 

• An agreement among bidders not to 

bid against each other; and 

• Other agreements among bidders 

that have the effect of limiting the final 

auction price. 

BOEM may decline to award a lease 

pursuant to the Act at 43 U.S.C. 1337(c) 

if it is determined by the Attorney 

General in consultation with the Federal 

Trade Commission that doing so would 

be inconsistent with the antitrust laws 

(e.g., heavily concentrated market, etc.). 

For more information on whether 

specific communications or agreements 

could constitute a violation of Federal 

antitrust law, please see: http://

www.justice.gov/atr/public/businessresources.html, or consult counsel. 

Bidder’s Financial Form SelfCertification: Each bidder is required to 

sign the self-certification, in accordance 

with 18 U.S.C. 1001 (Fraud and False 

Statements) in the BFF, which can be 

found on BOEM’s Web site: http://

www.boem.gov/State-ActivitiesMaryland/. The form must be filled out 

and returned to BOEM in accordance 

with the ‘‘Deadlines and Milestones for 

Bidders’’ section of this notice. 

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 and agree to 

communicate the requirement to 

comply with these regulations to 

persons with whom the lessee does 

business as it relates 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 date, time, and/or location specified 

in the FSN 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), wars, riots, acts of terrorism, 

fire, strikes, civil disorder or other 

events of a similar nature. In case of 

such events, bidders should call 703– 

787–1320 or access the BOEM Web site 

at: http://www.boem.gov/RenewableEnergy-Program/index.aspx. 

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 


tkelley on DSK3SPTVN1PROD with NOTICES
38070 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Notices 

Information Act (FOIA). Exemption 4 of 

FOIA applies to trade secrets and 

commercial or financial information 

that you submit that is privileged or 

confidential. If you wish to protect the 

confidentiality of such information, 

clearly mark it and request that BOEM 

treat it as confidential. BOEM will not 

disclose such information, subject to the 

requirements of FOIA. Please label 

privileged or confidential information 

‘‘Contains Confidential Information’’ 

and consider submitting such 

information as a separate attachment. 

However, BOEM will not treat as 

confidential any aggregate summaries of 

such information or comments not 

containing such information. 

Additionally, BOEM may not treat as 

confidential the legal title of the 

commenting entity (e.g., the name of 

your company). Information that is not 

labeled as privileged or confidential will 

be regarded by BOEM as suitable for 

public release. 

Dated: June 23, 2014. 

Walter D. Cruickshank, 

Acting Director, Bureau of Ocean Energy 

Management. 

[FR Doc. 2014–15759 Filed 7–2–14; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF JUSTICE 

[OMB Number 1123–0011] 

Agency Information Collection 

Activities; Proposed eCollection 

eComments Requested; Revision and 

Extension of a Currently Approved 

Collection; Department of Justice 

Equitable Sharing Agreement and 

Certification 

AGENCY: Asset Forfeiture and Money 

Laundering Section, Department of 

Justice. 

ACTION: 60-day notice. 

SUMMARY: The Department of Justice 

(DOJ), Criminal Division, Asset 

Forfeiture and Money Laundering 

Section, will be submitting the 

following information collection request 

to the Office of Management and Budget 

(OMB) for review and approval in 

accordance with the Paperwork 

Reduction Act of 1995. The proposed 

information collection is published to 

obtain comments from the public and 

affected agencies. 

DATES: Comments are encouraged and 

will be accepted for 60 days until 

September 2, 2014. 

FOR FURTHER INFORMATION CONTACT: If 

you have additional comments 

especially on the estimated public 

burden or associated response time, 

suggestions, or need a copy of the 

proposed information collection 

instrument with instructions or 

additional information, please contact 

Jennifer Bickford, Acting Assistant 

Deputy Chief, Asset Forfeiture and 

Money Laundering Section, 1400 New 

York Avenue NW., Washington, DC 

20005 (phone: 202–514–1263). 

SUPPLEMENTARY INFORMATION: This 

process is conducted in accordance with 

5 CFR 1320.10. Written comments and 

suggestions from the public and affected 

agencies concerning the proposed 

collection of information are 

encouraged. Your comments should 

address one or more of the following 

four points: 

—Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the Bureau of Justice 

Statistics, including whether the 

information will have practical utility; 

—Evaluate the accuracy of the agency’s 

estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

—Evaluate whether and if so how the 

quality, utility, and clarity of the 

information to be collected can be 

enhanced; and 

—Minimize the burden of the collection 

of information on those who are to 

respond, including through the use of 

appropriate automated, electronic, 

mechanical, or other technological 

collection techniques or other forms 

of information technology, e.g., 

permitting electronic submission of 

responses. 

Overview of This Information 

Collection 

(1) Type of Information Collection: 

Revision and extension of a currently 

approved collection of the Department 

of Justice Equitable Sharing Agreement 

and Certification, a previously approved 

collection for which approval will 

expire on September 30, 2014. 

(2) The Title of the Form/Collection: 

Department of Justice Equitable Sharing 

Agreement and Certification. 

(3) The agency form number, if any, 

and the applicable component of the 

Department sponsoring the collection: 

There is not an agency form number. 

The applicable component within the 

Department of Justice is the Asset 

Forfeiture and Money Laundering 

Section, in the Criminal Division. 

(4) Affected public who will be asked 

or required to respond, as well as a brief 

abstract: The Attorney General is 

required by statute to ‘‘assure that any 

property transferred to a State or local 

law enforcement agency . . . will serve 

to encourage further cooperation 

between the recipient State or local 

agency and Federal law enforcement 

agencies.’’ 21 U.S.C. 881(e)(3). The 

Asset Forfeiture and Money Laundering 

Section (AFMLS) ensures such 

cooperation by requiring that all such 

‘‘equitably shared’’ funds be used only 

for law enforcement purposes and not 

be distributed to other governmental 

agencies by the recipient law 

enforcement agencies. By requiring that 

law enforcement agencies that 

participate in the Equitable Sharing 

Program (Program) file an Equitable 

Sharing Agreement and Certification 

(ESAC), AFMLS can readily ensure 

compliance with its statutory 

obligations. 

The ESAC requires information 

regarding the receipt and expenditure of 

Program funds from the participating 

agency. Accordingly, it seeks 

information that is exclusively in the 

hands of the participating agency. 

(5) An estimate of the total number of 

respondents and the amount of time 

estimated for an average respondent to 

respond: An estimated 7,600 state and 

local law enforcement agencies 

electronically file the ESAC annually 

with AFMLS. It is estimated that it takes 

30 minutes per year to enter the 

information. All of the approximately 

7,600 agencies must fully complete the 

form each year to maintain compliance 

and continue participation in the 

Department of Justice Equitable Sharing 

Program. 

(6) An estimate of the total public 

burden (in hours) associated with the 

collection: The estimated public burden 

associated with this collection is 3,800 

hours. It is estimated that respondents 

will take 30 minutes to complete the 

form. (7,600 participants × 30 minutes = 

3,800 hours). 

If additional information is required 

contact: Jerri Murray, Department 

Clearance Officer, United States 

Department of Justice, Justice 

Management Division, Policy and 

Planning Staff, Two Constitution 

Square, 145 N Street NE., 3E.405B, 

Washington, DC 20530. 

Dated: June 30, 2014. 

Jerri Murray, 

Department Clearance Officer for PRA, U.S. 

Department of Justice. 

[FR Doc. 2014–15627 Filed 7–2–14; 8:45 am] 

BILLING CODE 4410–14–P 


tkelley on DSK3SPTVN1PROD with NOTICES