LEASING & PERMITTINGOFFSHORE WIND & CABLES

IN NEW ENGLAND

Michael Ernst, Esq, Director of Regulatory Affairs

EBC Renewable Energy Committee Meeting

Boston, MA January 15, 2013

Introduction to Tetra Tech Tetra Tech, Inc.

FY 2011 Revenues - $2.6 Billion

More than 13,000 employees in 330 offices worldwide

Ranked #1 Wind Development Consulting Firm in 2012 andTop 10 Environmental Firms by Engineering News Record

Full-Service Firm Providing Integrated Services

Consulting (Siting, Surveys, Permitting), Engineering & Construction

Critical Issues Studies: Siting; Avian, Wetlands & Marine Surveys

Supported Development of over 1000 Energy Projects last decade

Supporting 500 wind projects totaling 25,000 MW

Supporting 65 utility scale solar projects

30 Energy Construction projects 2500 MW and $500 M

Supporting Siting & Permitting of 10 Offshore Wind Farms Atlantic Coast: Maine, RI, MA, NY, NJ, DE, MD, VA, & NC Lakes Erie & Michigan

Outline of Presentation European Offshore Wind Industry Offshore Wind Resource for Coastal U.S. States Federal Offshore Wind Process

Identify Wind Energy Areas/Environmental Assessments Requests for Information & Lease Block Nominations Competitive Bidding or Non-Competitive Process Site Assessment Plan (Surveys) & Construction & Operations Plan

Federal & State Approvals Offshore Submarine Cables Status of East Coast Projects

Massachusetts Rhode Island Maine

Financial Challenges Policies to Overcome Challenges

International Offshore Wind Industry Denmark: First offshore turbines

installed in 1990 European Installations

4.3 GW installed in 2012 40 GW planned for 2020 150 GW by 2030; 14% of EU demand 40,000 European Jobs

> 300,000 jobs by 2020 DOE: Atlantic Coast could produce

>54 GW of offshore wind DOE Projections:

54,000 MW by 2030 =14M homes 300,000 jobs and Cost reduced to 10 cents/kwh

Incentives: RPS, Renewable Energy Credits, Long term contracts,Investment and Production Tax Credits

United States Wind Resource

WindPowerClass

ResourcePotential

Wind PowerDensity at 50 mW/m

2

Wind Speedat 50 mm/s

a Wind Speedat 50 mmph

a

34567

FairGoodExcellentOutstandingSuperb

300 - 400400 - 500500 - 600600 - 800800 - 1600

6.4 - 7.07.0 - 7.57.5 - 8.08.0 - 8.88.8 - 11.1

14.3 - 15.715.7 - 16.816.8 - 17.917.9 - 19.719.7 - 24.8

a Wind speeds are based on a Weibull k value of 2.0

Wind Power Classification

Total Wind Resource Potential ExceedsTotal U.S. Electricity Demand

Eastern Wind Integration Transmission Study

OCS Alternative Energy Rulemaking EPACT 2005 directs DOI to issue rules within 270 days

DOI delegates to MMS, now Bureau of Ocean Energy Management

Programmatic EIS: May 2005 – December 2006 1000 pages of analysis plus appendices PEIS Conclusion: “In general, most impacts would be

negligible to moderate for all phases of wind energydevelopment assuming that proper siting and mitigationmeasures are followed.”

Final Rule June 29, 2009 (233 pages in Federal Register) Minerals Management Service acknowledged final lease process

may take 5-7 years or more by requiring 2 full EISs

Negotiations with MMS, lead NEPA agency, in late 2009 toreduce length of process consistent with NEPA and other federallaws: Level of NEPA review should be commensurate withthe likely environmental impacts

BOEM Smart from the Start Program: BOEM EA for SiteAssessment & 1 EIS before Construction;

BOEM Lease Process State Task Forces Identify Area of Interest aka a

or Wind Energy Area (WEA) Request For Interest (RFI) Call for Information (Call) Determination of Competitive Interest Lease issued for Site Assessment with

Site Assessment Plan (SAP) & EA Construction & Operations Plan (COP) File Permit Applications NEPA Review

Draft EIS (Third Party Contractor) Final EIS Record of Decision

COP approved; Lease for Construction Certified Verification Agent approves Final

Design & Construction Plans

Lease Nominations Request for Interest Process

State Task Force: Area of Interest State Constraint Analyses & Meetings

Request for Interest Nominations for specific lease blocks

Demonstrate Legal, Technical &

Financial Qualifications

Public comments on any concerns

Call for Nominations & Information Identify Wind Energy Area

Environmental Assessment for Site

Assessment & Characterization

Regional EA for VA, MD, DE & NJ

EA for MA and RI/MA Area Mutual Int.

Delaware

Constraints Map

Competitive Interest Process

Competitive Interest ProcessCall for Information & NominationsArea Identification by BOEM after State InputNEPA Review & Coastal Zone ManagementAct Consistency DeterminationProposed Sale Notice & 60-day CommentsFinal Sale NoticeCompetitive Auction Process Options:

Sealed biddingAscending biddingTwo-stage biddingMultifactor bidding(30 CFR §585.221)

Bid EvaluationIssuance of Lease

NYPA, LIPA, Con Ed Site

South of Long Island, NY

Site Assessment Plan Survey Plan Development

Per the BOEM Rules, the SAP (or GAP) must: Describe the survey activities proposed to characterize the development area;

Demonstrate how site assessment activities will collect the necessary information and datarequired for the COP filing; and

Show how the developer will comply with all relevant Federal statutes when conductingsurvey activities.

The following 5 offshore site assessment surveys will play an integral part ofoffshore wind facility siting, planning, permitting, construction and operation. Avian and Bat Surveys

Marine Mammal and Sea Turtle Surveys

Geological, Geophysical and Hazard Surveys

Marine Cultural Resource Surveys; and

Benthic Surveys

Each survey plan should be developed in closecoordination with resource agencies of concernbefore implementation.

Regional Environmental Assessments reducestudy & review requirements for standard surveys

Individual EA tier off any Regional EA

Construction & Operations Plan

BOEM COP Regs & Guidelines (30 CFR §585.627) Site Investigation Report - Survey Results (shallow

hazards, geological, geotechnical, biological, archeological)

Construction & operation concept

Compliance with Lease Stipulations

Interconnection cables and power lines

Decommissioning Plan

Mitigation Measures

List of Federal, State & Local Approvals

NEPA Compliance Analysis: EIS

Oil Spill Response Plan

Safety Management System

Major Federal, State & Local Approvals Federal, state and local approvals and consultations for the project will include but not

be limited to: CZMA Consistency Determination for SAP and COP (NY Dept. of State) NOAA Letter of Concurrence to support Geophysical surveys activities USACE Section 10/404 Permit EPA Air Permit (construction vessel emissions) NOAA Incidental Harassment Authorization/Incidental Take (IHA/ITS) Permits

under ESA and Marine Mammals Protection Act USFW Consultation and possible Incidental Take Permit under ESA for Eagles or

EFH for endangered species, and Migratory Bird Treaty Act Advisory Council on Historic Preservation & SHPO Consultation under NHPA Dept. of Defense Consultation for military practice areas and defense radar USCG Private Aid to Navigation (PATON) and Local Notice to Mariners (LNM)

State Determines Consistency with State Coastal Zone Management Plans State Siting Board Approval of Interconnection Cables into State State Submerged Lands Easement for Cables State Tidal and Freshwater Wetlands Permits, Coastal Erosion Permits, CWA 401

Water Quality Certification, NPDES Stormwater Construction Permit

Local zoning and building code approvals for interconnections & substations

Offshore Submarine Cables toInterconnect Renewable Projects to Grid

BOEM Regulations for Cable Associated with OffshoreWind Farm A commercial lease will confer the right to a “project

easement” to install on the OCS “gathering, transmission,and distribution cables…” 30 CFR § 585.200(b)

Preliminary transmission plans submitted with theConstruction & Operations Plan (COP) or GeneralActivities Plan (GAP)

Terms and conditions for the project easement will beissued by BOEM in an addendum to the lease

Offshore Cables for Renewable Projects Regulations for Independent Cable to Transmit Offshore

Renewable Energy BOEM will “issue ROW grants to allow for the construction and

use of a cable or pipeline for the purpose of gathering,transmitting, distributing, or otherwise transporting electricity …generated or produced from renewable energy not generated ona lease issued under this part.” §585.300(a).

BOEM will consider “on a case-by-case basis, renewable energyROWs supporting the transmission of energy from oil or gassources that is combined with energy from sources other than oilor gas, provided that renewable energy generated from sourcesother than oil and gas is primarily what is beingtransmitted.” 74 Fed Register 19671

Application for ROW (200 foot width plus area necessary forsubstation(s)

Atlantic Wind Connection filed ROW Request & BOEM issuedRequest for & Determination Competitive Interest

Offshore Submarine Cable Backbone Atlantic Wind Connection

6000 MW HVDC Cable Interconnections in

NY, NJ, DE & VA

Filed application for lease &GAP at BOEM in March 2011

No Competitive Interest

Deepwater Wind Cable Rhode Island Sound Wind

Farm Cable to Long Island

Mass. RFI 2 Cable Bids

Dominion Resources Study Virginia Cable Study multiple wind farms

Delaware Atlantic CoastWeather Study

Northeast Submarine Cables Rhode Island Sound Maine – Mass. NH – Mass.

Massachusetts – Cape Wind Wind Farm in Federal Waters >3 miles offshore

12 mile 115kV transmission cable within MA borders and subject to Mass. regulation

Coastal Zone Management Act gives state jurisdiction over wind farm impacts to MA

USACE Application 2001 - Met Tower: USACE IP & EA 2003

EFSB

Petition for Interconnection only filed 2002

Interconnection approval conditioned on approval of wind farm 2005; upheld by SJC

Composite Permit – All State & Local Approvals – 2009 SJC Upheld 2010: sufficient delegation of DEP Authority to EFSB for Tidelands License

Chapter 91 Waterways License 2008

Water dependent use: “infrastructure facility” because it “delivers or otherwise provideselectric . . . services to the public from an offshore facility located outside theCommonwealth.” 310 CMR 9.12(2)(b)10

DEP 401 Water Quality Certificate 2008

MA Ocean Sanctuaries Act-Sec.16 exemptions for electric power; cables approved by DPU

Cape Cod Commission & Local Conservation Commission Approvals

BOEM FEIS & Lease 2010

Final geotech surveys 2012 and construction planned fall 2014

Massachusetts – Cape Wind MEPA MEPA ENF Filed 2001, MEPA Certificate 2002

Coordinated MEPA/NEPA Review until EPACT 2005 made MMS Lead Fed Agency

Draft EIR/EIS 2004; FEIR Filed February 2007; FEIR MEPA Certificate 2008

Energy Policy Act of 2005 gives MMS NEPA Jurisdiction

Draft EIS 2008; MMS Final EIS 2009

MEPA Issues Cable under MEPA threshold, but CW agreed to Discretionary EIR under MEPA Regs: Section 11.06

Avian impacts:

Loss of less than 1 Piping Plover and Roseate Tern per year for full wind farm

Environmental Management System for post construction monitoring

Marine mammal construction noise impact limit of 180dB

Secretary designated OCZM to oversee and allocate $10M compensation, incl. 27% of fed lease feesfor MA programs

Finds “environmental benefits and compensatory mitigation adequate to mitigate the project impacts”

No strict MEPA requirement to present alternatives due to limited state jurisdiction

CW still presented alternative fossil and renewable generation options at same scale

Conclusion: Massachusetts “impacts adequately avoided, minimized & mitigated”

Wind Turbine Visibility

Massachusetts Lease Area Ocean Management

Plan 2009

BOEM Request forInformation: Dec.2010

11 Bids for leases>2,000 sq. nautical mi.

Commercial fishermenobjected: => 1,000 mi.

Call for NominationsFebruary 2012: 10 bids

EA issued Oct. 2012;

Comments due Dec.3

Competitive processextend through 2013

Environmental Assessment for MA Wind Energy AreaCommercial Leases & Site Assessment Activities Reasonably Foreseeable Activities & Impacts

Assumes 5 Leases and up to 2500 turbines

(<1800 MW/lease and up to 9000 MW total)

Site Characterization Surveys

Met Tower or Buoy Construction Impacts

Commercial Fishing

North Atlantic Right Whales – Std. Operating Conditions

No Pile-driving November 1 to April 30

NOAA Marine Fisheries trained observers onboard always

1500 foot buffer from sighted whales and 10 knot max. speed

160dB & 180dB Exclusion Zones for Geophysical Surveys

Night surveys only with active or passive acoustic monitoring

Public Comments Due December 3, 2012

Proposed Sale Notice to be issued in 2013

Rhode Island Special Area Management

Plan (SAMP)

RI-MA Area of MutualInterest

Call for Nominations

Draft EA June 2012

Competitive Process

Proposed process:Simultaneous Ascend-ing Clock Auction

Pre-Sale Notice & EA

Final Sale Notice

Lease Award

SAP, COP, Final Lease

.

Rhode Island Block Island Wind Farm & Cable

30 MW – 5 6-MW Turbines

110 meter hub height; blades 77 m

21 mile cable from Block Island toNarragansett Switchyard

Power Purchase Contract

State RFP: Preferred Developer

24.4 cents/kwh with National Grid

PUC: not commercially reasonable

New Standard of Review enacted: Compare with new renewable energy

BOEM Right of Way for Cable

All Permits filed October 2012

USACE NEPA Lead FederalAgency – EnvironmentalAssessment Spring 2013

BOEM ROW & other permits 2013

Block Island Wind Farm & Cable

Rhode Island

Deepwater Wind EnergyCenter

150 6-MW SiemensTurbines

15 miles off Martha’sVineyard

Power Contract

300 MW to Rhode Islandor Massachusetts

Preferred RI Developer

600 MW to Long Island

Cost in mid-teens/kwh Deepwater Wind Energy Center

Maine

Statoil Hywind Floating Turbines

4 3-MW Turbines

20 miles offshore

500 feet deep

BOEM Lease & ROW

Determination of NoCompetitive Interest 12/19/12

Surveys & COP 2013

EIS & Approvals 2015

DOE Grant

Maine PUC Contract Rejected

29 cents/kwh

$40M committed to Mainecompanies

Overcoming Financial Challenges Offshore Wind Development Cost Savings

Manufacture Components and Turbines in U.S. Manufacture Cables in U.S. Offshore Submarine Cable Backbone for Many Wind Farms Construct U.S. Construction Vessels; Train U.S. Crews Extend Production & Investment Tax Credits Competitive Long Term Contract RFPs Broad Net Benefits Standard of Review for PPA at PUCs Increase Ocean Renewable Energy Credits (ORECs-NJ) Federal and State Loan Guarantees Federal and State Low Interest Loans Accelerated Depreciation Federal R&D (foundations; turbines, e.g.,floating)

Future U.S. Offshore Wind Project Prices Deepwater projects low teens/kwh for 1000 MW wind farms DOE & U.Maine project 10 cents/kwh by 2030

Navigant Consortium Offshore Wind Market ReportInitial Major Policy Recommendations

Extend Investment Tax Credits: (~5 cents/kwh)

Strengthen Renewable Portfolio Standards -- Offshore Carve Outs

Ocean Renewable Energy Credits (NJ, MD)

Mandate Long Term Power Purchase Agreements

Coordinated Competitive Procurement: (~3.5 cents/kwh)

• Provide Low Interest Financing

• Loan Guarantees/Tax Exempt Bonds: (~2 cents/kwh)

Expand Transmission/Interconnection Incentives

Offshore Submarine Backbones (Atlantic Wind Connection)

Broaden Transmission Cost Allocation (FERC Order 1000)

Streamline Leasing & Permitting

Target Total Price: <10 cents/kwh

Questions? ? ?Contact Info:Michael Ernst, Esq.

Director, Regulatory Affairs

Tetra Tech Energy Program

617 443-7520

Michael.Ernst@tetratech.com

160 Federal StreetSuite 300

Boston, MA 02110

QUESTIONS??

1. Is this sun setting or rising overoffshore wind industry in New England?

Michael Ernst, Esq.Director Regulatory AffairsTetra Tech Inc.160 Federal Street, Suite 300, Boston

Michael.Ernst@tetratech.com