H0254B0217A03646 DMS:EJH 03/18/24 #90 A03646
AMENDMENTS TO HOUSE BILL NO. 254
Sponsor: REPRESENTATIVE VITALI
Printer's No. 217
Amend Bill, page 1, lines 1 through 19; page 2, lines 1
through 16; by striking out all of said lines on said pages and
inserting
Authorizing the Department of Environmental Protection, in
consultation with the Department of General Services to lease
certain submerged lands within Erie County and associated
wind, water and solar resources for the assessment,
development, construction and operation of utility scale
offshore wind, solar or kinetic energy generation facilities;
providing for collection of certain lease and royalty
payments; establishing the Lake Erie Large-Scale Energy
System Development Fund; and providing for distributions and
transfers from the fund.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Legislative declaration.
Section 103. Definitions.
Chapter 3. Leasing of Submerged Lands and Associated Wind,
Water and Solar Resources
Section 301. Authority and duties of department.
Section 302. Qualifications of lessees.
Section 303. Waters of this Commonwealth.
Section 304. Term of leases.
Section 305. Lease agreements.
Section 306. Feasibility study.
Section 307. Improvements.
Section 308. Covenants.
Section 309. Federal and State law and permits.
Chapter 5. Administration
Section 501. Regulations.
Section 502. Sublease by department prohibited.
Section 503. Transfer of interest prohibited.
Section 504. Construction.
Section 505. Interagency responsibilities.
Chapter 7. Royalty Payments and Distributions
Section 701. Royalty payments.
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Section 702. Lake Erie Large-Scale Energy System Development
Fund.
Section 703. Distributions and transfers.
Section 704. Submerged lands lease consideration.
Chapter 9. Miscellaneous Provisions
Section 901. Effective date.
Amend Bill, page 2, lines 19 through 30; pages 3 through 10,
lines 1 through 30; page 11, lines 1 through 8; by striking out
all of said lines on said pages and inserting
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Lake Erie
Energy Development Act.
Section 102. Legislative declaration.
The General Assembly declares that the Commonwealth owns and
holds in trust as public natural resources under section 27 of
Article I of the Constitution of Pennsylvania, the portion of
Lake Erie located in Pennsylvania, including the bed of Lake
Erie and the associated wind, air, water and solar resources.
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Environmental Protection of
the Commonwealth.
"Fund." The Lake Erie Large-Scale Energy System Development
Fund established under section 702.
"Large-scale energy system" or "system." A wind energy
generation system at more than five megawatts as measured by the
nameplate capacity of the system or a solar or kinetic energy
system of at least five megawatts as measured by the nameplate
capacity of the system, ancillary facilities and structures,
including any electrical collection and transmission facilities,
submerged electrical transmission cables and other related
structures.
CHAPTER 3
LEASING OF SUBMERGED LANDS AND USE OF THE
ASSOCIATED WIND, WATER AND SOLAR RESOURCES
Section 301. Authority and duties of department.
(a) Authorization.--The department, acting on behalf of the
Commonwealth and in consultation with the Department of General
Services may, in accordance with this act:
(1) Lease submerged lands equal to or greater than 25
acres, but not in excess of 10,000 contiguous acres, within
the bed of Lake Erie in Erie County.
(2) In association with the lease of the submerged lands
in paragraph (1), allow the use of the wind, water and solar
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resources of Lake Erie in Pennsylvania.
(b) Areas to be leased.--The department shall develop a map
designating the areas of the bed of Lake Erie that may be
considered for leasing for large-scale energy system development
in consultation with the Department of Conservation and Natural
Resources, the Pennsylvania Fish and Boat Commission and the
Pennsylvania Game Commission. The department shall ensure that
the areas that may be leased:
(1) are concentrated in the central and western portion
of Lake Erie;
(2) avoid development in nearshore areas;
(3) avoid shipping lanes; and
(4) avoid areas of Lake Erie and pathways where
migratory species are concentrated.
(c) Bidding process.--The department has the power to make
and execute leases in the name of the Commonwealth, in
consultation with the Department of General Services, for the
evaluation, development and operation of large-scale energy
systems in Lake Erie, whenever it appears to the satisfaction of
the department that it would be in the best interests of this
Commonwealth. Any proposed leases under this act exceeding
$1,000 in value shall be advertised once a week for three weeks
on the department's publicly accessible Internet website and in
the Pennsylvania Bulletin in advance of awarding the leases. The
leases may then be awarded to the highest and best bidder, who
must give bond for the proper performance of the leases as the
department designates. The requirement of competitive bidding
may be waived, and the department may enter into leases with
approval of the Governor, and upon such terms and conditions as
the department deems to be in the best interest of this
Commonwealth, which at a minimum shall include:
(1) A demonstration by the bidders of their expertise,
experience and financial capacity to conduct a feasibility
study and to develop such a system.
(2) A certification that the bidder has the financial
capability to cover all costs associated with the feasibility
study and interconnecting to an energy distribution system.
(3) A demonstration by the bidders of the benefits to be
accrued by the Commonwealth, including:
(i) The number of full-time jobs to be created.
(ii) The overall economic impact of the proposed
system.
(iii) The environmental benefits of the system.
(iv) The overall need for the system.
(v) The amount of power to be provided by the
proposed system.
(vi) An initial assessment of community and public
acceptance of the proposed system.
Section 302. Qualifications of lessees.
The initial feasibility study leases and long-term leases
approved under this act shall be restricted to lessees that:
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(1) Demonstrate the expertise and capability to develop
large-scale energy systems in a marine environment.
(2) Have been deemed to be qualified bidders by the
department.
(3) File with the department a bond payable to the
Commonwealth to cover the entire cost associated with the
removal of facilities developed pursuant to this act and
located in submerged lands of Lake Erie.
(4) Demonstrate compliance with fair wage standards,
including compliance with the provisions of the act of August
15, 1961 (P.L.987, No.442), known as the Pennsylvania
Prevailing Wage Act, related to all work undertaken under
this act.
Section 303. Waters of this Commonwealth.
A lease and any subsequent long-term lease approved under
this act shall ensure reasonable accommodation for fishing,
maritime commerce, energy transmission rights-of-way and other
current and future commercial and recreational uses of the
waters of this Commonwealth held in the public trust.
Section 304. Term of leases.
(a) Term of initial feasibility leases.--
(1) The term of initial feasibility leases shall be for
a term of up to seven years. The department may upon
sufficient justification renew the initial feasibility leases
for additional three-year terms.
(2) In the event a lessee does not develop the parcel
studied or contiguous parcels of submerged lands by
installing a large-scale energy system in accordance with a
subsequent long-term lease as provided in subsection (b), the
lease shall terminate.
(b) Term of long-term lease.--
(1) A lessee under subsection (a) may be eligible to
enter into a long-term lease for a large-scale energy system.
(2) The department, based upon satisfactory evidence
that the lessee is capable of long-term operation of the
large-scale energy system, may enter into a long-term lease
with an initial term of up to 35 years for the construction,
operation, maintenance and removal of a large-scale energy
system and any associated transmission facilities in Lake
Erie.
(3) The initial long-term lease may be extended for all
or any portion of the leased premises for additional terms of
up to 35 years upon finding that it serves the best interest
of the Commonwealth.
(4) The long-term lease shall contain a provision for
termination if the lessee has not completed construction of
the large-scale energy system within a reasonable period of
time to be established in the terms of the lease.
(5) The department may allow, as an option to the long-
term lease, the ability of the lessee to lease contiguous
parcels. The department shall have the authority to determine
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the size of the contiguous parcels but not to exceed
increments of 10,000 acres.
Section 305. Lease agreements.
(a) Approvals.--The leases authorized by this act shall be
approved as to form and legality by the Attorney General and the
Office of General Counsel, which approvals may not be
unreasonably withheld, in accordance with law and shall be
executed by the department in the name of the Commonwealth.
(b) Lessee rights under lease.--A lease shall grant the
lessee the right to use the premises in accordance with this act
for the purposes of conducting a feasibility study and
development of large-scale energy systems.
Section 306. Feasibility study.
(a) General rule.--Prior to entering into a long-term lease
in accordance with section 304(b), an initial lessee shall
conduct a feasibility study to assess the ability of the large-
scale energy system to be viable and to assess the
environmental, navigational, public safety, structural and any
other impacts and siting considerations necessary to the
successful development of such a system.
(b) Environmental impact.--In addition to the evaluation of
environmental impacts associated with all other Federal and
State authorizations required, the environmental impacts to be
assessed and mitigated to the satisfaction of the department
shall include:
(1) The impacts to fishing and migratory bird and mammal
routes.
(2) The impacts to the ecosystems and habitats within
and adjacent to Lake Erie.
(3) Ecological impacts, including to fish-spawning beds
and other habitats of importance, for all species, including
ecologically valued species and sportfish, such as steelhead
and lake trout, which are important to the local economy of
the Lake Erie region.
(c) Siting considerations.--The siting considerations to be
considered and addressed shall include:
(1) Site conditions such as wind speed, ice, lakebed,
waves and currents.
(2) Geophysical conditions and geohazards, including,
but not limited to, impacts on sediment transport, beach
replenishment and bluff protection.
(3) Ports and infrastructure, such as the availability
of support facilities in Pennsylvania and the region,
existing supply chain and supply chain strategies, and an
analysis of harms and benefits to navigation and the
recreation industry.
(4) Fixed and floating technology options.
(5) Interconnection, such as access to onshore energy
infrastructure, including existing local generation assets,
electric load and the potential interconnection and
integration of the electric grid.
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(6) Cost projection modeling and financing assumptions.
(7) Economic development and opportunities for
employment and workforce development.
(8) Federal and State permitting considerations,
including the potential to disturb cultural, archaeological
and historical resources.
(9) In addition to environmental impact analysis,
environmental risk, benefit and mitigation analysis, such as
impacts on or improvement to cumulative impacts on air
quality, water quality and the local ecology.
(10) Ecological and human health and safety
considerations, such as reduction or mitigation of noise,
vibration and harmonics, flicker or other impacts to those
living or working near the site, including recreational or
commercial fisheries, tourism and viewshed.
(11) Public support and an equity benefit analysis.
(d) Use of study.--The department shall utilize the results
of the feasibility study, as part of the review process
associated with lease approval or disapproval under this act.
Section 307. Improvements.
Development of the parcels authorized to be leased by this
act shall be for large-scale energy systems, including
electrical collection and transmission facilities, submerged
electrical transmission cables and other related structures.
This act does not authorize the department to grant any property
interest outside of the bed of Lake Erie. A lessee under this
act shall obtain all rights of ways, easements and other
necessary property rights outside of the bed of Lake Erie
necessary for conducting its operations under a lease entered
into under this act.
Section 308. Covenants.
The conditions imposed under this act shall be covenants that
run with the land and shall be binding upon the lessee. Should
the lessee permit the parcels authorized to be leased under this
act, or any portion thereof, to be used in a manner inconsistent
with the conditions contained in this act, all rights and
interests in the lease authorized by this act shall terminate
immediately.
Section 309. Federal and State law and permits.
No feasibility study, construction, installation or operation
of large-scale energy systems or other related structures on the
lands subject to lease shall occur without adherence to Federal
and State laws and prior receipt of all applicable Federal and
State permits, certifications, authorizations or other
approvals.
CHAPTER 5
ADMINISTRATION
Section 501. Regulations.
The Environmental Quality Board may, for purposes of the
leasing of the bed of Lake Erie for large-scale energy system
development under this act, adopt regulations which at a
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minimum:
(1) Determine minimum standards for the technology used
to construct large-scale energy systems on and to transmit
electricity from the areas of Lake Erie leased for that
purpose.
(2) Establish procedures for the conduct of feasibility
studies by large-scale energy system developers related to,
but not limited to, the siting, economics and environmental
issues of a system.
(3) Establish reasonable fees to cover the costs
incurred by the department and directly related to the
preparation, review, execution of lease or other agreements
associated with this act.
(4) Establish a process for the developer of the large-
scale energy system to demonstrate community and public
acceptance of the proposed system.
(5) Establish siting, design and other technical
specifications and requirements.
(6) Establish any other requirements that the department
determines are necessary to implement or administer this act.
(7) Prohibit lessees from entering into subleases.
Section 502. Sublease by department prohibited.
The department may not enter into subleases or nondisturbance
agreements on any of the submerged lands of Lake Erie.
Section 503. Transfer of interest prohibited.
Except as provided in section 301, this act does not
authorize or otherwise allow for or include any transfer of any
mineral or other surface or subsurface interest associated with
the submerged lands of Lake Erie.
Section 504. Construction.
Except as provided in section 301, nothing in this act shall
be construed to affect or otherwise limit the provisions of the
act of November 26, 1978 (P.L.1375, No.325), known as the Dam
Safety and Encroachments Act, that may require further measures
to provide for public access and use of the land and adjacent
water.
Section 505. Interagency responsibilities.
The department shall work cooperatively with:
(1) The Department of General Services to ensure that
all of the systems under this act satisfy all requirements
under this act, all requirements for form and legality, all
applicable environmental standards and all environmental
permit requirements.
(2) The Pennsylvania Public Utility Commission to
establish that the proposed large-scale energy system is
viable, both economically and from an energy production
perspective. The Pennsylvania Public Utility Commission shall
assist the department in assessing all of the following:
(i) The system's impact on ratepayers.
(ii) Whether a bidder has sufficient resources.
(iii) Whether a bidder has the ability to
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successfully complete all of the activities necessary for
interconnection to the electric distribution system.
CHAPTER 7
ROYALTY PAYMENTS AND DISTRIBUTIONS
Section 701. Royalty payments.
Each lessee of a long-term lease under this act shall be
subject to the payment to the Commonwealth of submerged lands
occupation fees, development rental fees, bonuses and royalties
from the energy generation and energy credits to be determined
in the long-term lease. The operator of the system shall submit
the royalty payment annually unless an alternative payment
schedule is approved by the department. The operator shall
submit the initial royalty payment beginning on January 1 of the
year following the system's being placed into production.
Section 702. Lake Erie Large-Scale Energy System Development
Fund.
(a) Establishment.--The Lake Erie Large-Scale Energy System
Development Fund is established in the State Treasury. The fund
shall be used as provided by this act to conserve and maintain
Lake Erie public natural resources. The money in the fund is
appropriated on a continuing basis for the distributions and
transfers provided under section 703.
(b) Deposits.--All development rental, bonus and royalty
payments from energy generation and energy credits from large-
scale energy systems situated in Lake Erie shall be deposited
into the fund.
Section 703. Distributions and transfers.
On the last business day of each calendar quarter, the State
Treasurer shall make the following distributions and transfers
from the fund:
(1) Ten percent of the fund shall be distributed to the
department for its administration of the leases under this
act and for waters of this Commonwealth conservation and
maintenance projects.
(2) Twenty percent of the fund shall be distributed to
the department for payment to Erie County for public natural
resource conservation and maintenance related projects in the
county.
(3) Twenty percent of the fund shall be distributed to
the Pennsylvania Fish and Boat Commission for programs,
projects or other activities related to conservation and
maintenance projects associated with Lake Erie.
(4) Thirty percent of the fund shall be transferred to
the Energy Development Fund to support efforts by the
Pennsylvania Energy Development Authority for energy
efficiency, renewable energy or clean energy projects that
reduce air pollution or improve air quality.
(5) Twenty percent of the fund shall be transferred to
the Conservation District Fund for distribution to Lake Erie
Watershed county conservation districts consistent with
guidelines established by the State Conservation Commission
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for public natural resource conservation and maintenance
projects.
Section 704. Submerged lands lease consideration.
Submerged lands occupation fees for the use and occupation
in, along, under, across or over the bed of Lake Erie as
described in this act shall be reasonable to compensate for the
use and occupation of the bed of Lake Erie and shall be
deposited into the Clean Water Fund.
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 901. Effective date.
This act shall take effect in 120 days.
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