Long Island-NYC Offshore Wind Project Advances With Approval For Federal Lease Application

New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel announced that the NYPA Trustees have authorized the application for a lease from the Federal Bureau of Ocean Energy Management, Regulation and Enforcement (BOE), formerly known as the Minerals Management Service, for lands beneath the Atlantic Ocean for development of the Long Island-New York City Offshore Wind Power 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. (Con Edison), 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 energy by 2016. The application for a lease is a necessary measure to pursue the feasibility of the offshore wind farm project.

“By taking this step, New York moves closer to the clean energy economy which combines the benefits of emission-free generation for a better environment with the economic development opportunities of the jobs and industries that will aim to make New York a leader in the growth of offshore wind,” said Kessel, president and chief executive officer.

"To achieve our PlaNYC goals of improving air quality, increasing the reliability of our energy network, and reducing greenhouse gas emissions 30 percent by the year 2030, we must develop renewable sources of electricity," said Michael Bloomberg, mayor, City of New York.

"Beginning the process of leasing the land beneath the ocean will get us closer to developing power from Long Island-New York City offshore wind farm, which when built, will reduce our dependence on fossil fuels and promote economic development."

“An offshore wind turbines project will provide a clean and viable energy alternative for our region. This collaborative effort involves many social and economic challenges and, if they are successfully addressed, will provide benefits for our residents and businesses,” said Kevin Burke, chairman and chief executive officer, Con Edison.

“The action by the NYPA Board of Trustees is the next big milestone in exploring the feasibility of developing an offshore wind farm and positioning New York as leaders in the renewable energy world,” said Kevin S. Law, president and chief executive officer, LIPA. Our project has the potential to diversify our energy portfolio, strengthen the economy with the creation of new quality jobs, and help to meet the State’s ‘45 by 15’ clean energy initiative.”

The wind farm project site includes an area of approximately 64,500 acres of underwater land and is approximately13 to 15 miles offshore of Long Island in the Atlantic Ocean’s Outer Continental Shelf (OCS), an area under the jurisdiction of BOE—a federal bureau within the United States Department of Interior. BOE is responsible for granting leases for environmentally responsible renewable energy including the sites for offshore wind farms on the 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 concept for the offshore wind power project supports the New York State Master Energy Plan including Governor David A. Paterson’s “45 by 15” program, which establishes the goal for the State to meet 45 percent of its electricity needs through improved energy efficiency and renewable sources by the year 2015. The offshore wind project is also aligned with City of New York Mayor Michael Bloomberg’s PlaNYC goal to reduce greenhouse gas emissions in New York City 30 percent by 2030.

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.