1. How to Grow the U.S. Offshore Wind Industry Presented By Katherine A. Roek STOEL RIVES LLP February 24, 2010

2. 2 To order any of these books, please contact: Katherine A. Roek * 612.373.8820 karoek@stoel.com * www.stoel.com

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4. Why are we discussing offshore? 4

5. Which States are Active? 5 Source: U.S. Offshore Wind Collaborative, www.usowc.org

6. Overview What are the major regulatory challenges? What are the driving factors? What are states doing to encourage development? What about public/private partnerships? What does the future hold? 6

7. 7 Siting Authority – Federal Waters Outer Continental Shelf (OCS) under the jurisdiction of: Minerals Management Service (MMS) Federal Energy Regulatory Commission (FERC)

8. Siting Authority – Great Lakes 8 Each state – out to center of Lake

9. Siting Authority – State Waters Great Lakes –each state out to center of lake Atlantic/Pacific coasts – up to 3 nautical miles offshore Gulf of Mexico (Texas, Florida) –9 nautical miles offshore –Texas: General Land Office 9

10. Federal – MMS Leasing Regulations MMS issued final regulations for granting competitive / non-competitive commercial leases, limited leases, rights-of-way and rights-of-use and easements on the OCS. –Finalized proposed regs that were issued July 9, 2008 10 April 22, 2009

11. Federal – MMS Leasing Regulations Types of leases: –Commercial Energy development ~30 years Competitively bid –Limited Data gathering ~5 years BUT: limited power sale permitted 11

12. Great Lakes Permitting / Siting of Offshore Wind U.S. Army Corps of Engineers will be lead federal permitting agency –NEPA review will be triggered through permit Section 10 of Rivers & Harbors Act Section 404 of Clean Water Act –EIS vs. EA? Depends on size, location… –Programmatic assessments? 12

13. Great Lakes Permitting / Siting of Offshore Wind, con’t Other agencies: –State environmental regulatory agencies e.g. Michigan Department of Environmental Quality for placement of structures in the Great Lakes – joint application process already in place –U.S. Coast Guard Guidance on Offshore Renewable Energy Installations (OCS) – will adapt to Great Lakes (Corps, not MMS) –State coastal management agency –Fish and wildlife (state and federal) 13

14. State Leasing/Permitting State Waters –Great Lakes –Within 3 nautical miles of coasts –Within 9 nautical miles of TX, FL States to Develop Permitting/Leasing –TX has process, administered through General Land Office –Rhode Island, New Jersey creating state water zoning –Other states, such as Michigan, need to amend current regulatory scheme 14

15. What are the Driving Factors? Pricing Financing Regulatory Certainty Infrastructure Supply Chain Jobs Economic Development 15

16. What are States Doing to Encourage Development? Performing Feasibility Studies or Environmental Assessments Working with Developers or Industry Offering or Developing Incentives 16

17. Environmental Assessments / Feasibility Studies Rhode Island –Coastal Resources Management Council developing Special Area Management Plan New Jersey –Department of Environmental Protection preparing Environmental Baseline Assessment Massachusetts –Ocean Management Act; created U.S. Offshore Wind Collaborative; MA Executive Office of Energy & Environmental Affairs prepared Massachusetts Ocean Plan 17

18. Environmental Assessments / Feasibility Studies, con’t Maryland –Study announced to evaluate offshore viability Virginia –Coastal Energy Research Consortium preparing report Delaware –University of DE conducted assessment from MA to DE 18

19. New York –NYSERDA funded studies to explore feasibility Michigan –GLOW Council prepared report, includes criteria for identifying/mapping prudent siting areas Wisconsin –Wind Working Group prepared feasibility study 19 Environmental Assessments / Feasibility Studies, con’t

20. States Working with Developers or Industry Rhode Island –Selected preferred developer (Deepwater) New Jersey –Selected three preferred developers (Bluewater, Deepwater + PSEG, Fishermen’s Energy) Maine –Governor’s Task Force include offshore legislative recommendations; Univ. of ME received $8M to develop deepwater offshore wind test center. 20

21. States Working with Developers or Industry, con’t Delaware –PSC approved PPA between Bluewater and utility for offshore project. New York –NYPA issued RFP for Great Lakes project (Lake Erie, Ontario); Long Island-NYC Offshore collaborative issued RFI and has filed interconnect request. Maryland –Issued RFEI assessing options for offshore development. 21

22. North Carolina –Governor established offshore energy advisory panel. South Carolina –State partnering with local utility and universities on feasibility studies. 22 States Working with Developers or Industry, con’t

23. States Offering or Developing Incentives Rhode Island –Legislation requiring state’s largest electricity supplier to purchase energy from offshore wind farm New Jersey –Working on Offshore Renewable Energy Credit (OREC) program, modeled after solar REC program –Issued $12M in grant/rebate for met towers to preferred developers Wisconsin –Legislation including in-state carveout for increased RPS? 23

24. Public/Private Partnerships Rhode Island –Quonset Development Corp. working with Deepwater Wind to locate staging and assembly facility at port (former Naval base) North Carolina –Duke Energy Carolinas partnering with UNC to install three offshore turbines 24

25. South Carolina –Santee Cooper partnering with Coast Carolina University & SC Energy Office to launch and analyze data from offshore buoys and land- based stations Wisconsin –We Energies issued RFP for data collection in Lake Michigan Ohio –Cleveland Foundation, Cuyahoga County, Case Western University partnering on feasibility study, pilot project 25 Public/Private Partnerships, con’t

26. Projects and Incentives 26 Source: U.S. Offshore Wind Collaborative, www.usowc.org

27. Resources 27 www.mms.gov/offshore/alternativeenergy/regulator yinformation.htm www.awea.org/faq/wwt_offshore.html www.psc.wi.gov www.mass.gov www.michiganglowcouncil.org www.ri.gov www.nj.gov www.linycoffshorewind.com www.usowc.org

28. Thank you! Katherine A. Roek (612) 373-8820 karoek@stoel.com www.stoel.com www.lawofrenewableenergy.com 28