The New York Power Authority (NYPA) announced it is applying for a federal lease for the development of the Long Island-New York City Offshore Wind Project.
The Long Island–New York City Offshore Wind Collaborative (LI-NYC Wind Collaborative), which consists of NYPA, Consolidated Edison Company of New York, Inc. (NYSE: ED), the Long Island Power Authority (LIPA), the City of New York and other New York City and New York State governmental entities, is evaluating the development of between 350 megawatts (MW) up to total of 700 MW of offshore wind by 2016.
A lease from the Federal Bureau of Ocean Energy Management, Regulation and
Enforcement (BOE), formerly known as the Minerals Management Service, is necessary to pursue the project.
The wind project site includes an area of approximately 64,500 acres of
underwater land and is approximately 13 to 15 miles offshore of Long
Island on the Atlantic Ocean’s Outer Continental Shelf (OCS). Offshore property within the first
three miles of the coast falls within New York State jurisdiction and
United States jurisdiction extends from three miles to 200 miles
offshore.
The proposed lease would run for 25 years. An
application fee of $16,000, based on a price of $0.25 per acre, is
required upon submission of the lease application. Annual rent during
project development and construction will be negotiated with BOE and is
expected to be approximately $3 per acre resulting in an approximate
annual rent of $200,000. Once a project is operational, BOE will
receive a portion of the revenue generated from energy sales as the
payment for the lease.
BOE requires the lease be held in the name
of one entity. NYPA, LIPA and Con Ed have determined that NYPA, as a
governmental entity, may be best suited to apply. LIPA is restricted
from holding a lease in federal waters by state legislation governing
its operations.
The LI-NYC Wind Collaborative is also undertaking technical and environmental studies to determine the feasibility of developing the project. If the project moves forward, NYPA intends to assign its lease rights to the project developer, selected through a competitive process. At that time, the project developer will take over all financial obligations associated with the lease for the duration of its term.
"To achieve our PlaNYC goals of improving air quality, increasing the
reliability of our energy network, and reducing greenhouse gas emissions
30% by the year 2030, we must develop renewable sources of
electricity," said Michael Bloomberg, mayor, City of New York.
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