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defending its approvals of the first fully permitted utility-scale offshore wind projects in federal court . Thus far , BOEM has been successful in defending its permits . The Vineyard Wind and South Fork Wind projects offshore Massachusetts and New York have begun offshore construction , with South Fork Wind placing its first steel in the water in late June . The agency appears to have no intention of slowing down — it intends to hold an auction for offshore wind leases in the Gulf of Mexico in August 2023 .
In addition to BOEM ’ s efforts on leasing and permitting , legal issues related to interconnection of offshore wind projects in the United States , transmission planning and cost allocation , and the procurement of power to be produced by them continue to emerge . Interconnection queue backlogs and the need for network upgrades pose significant challenges to developers seeking to interconnect prospective projects . Developers that have entered into agreements with States for the procurement of power have gone back to public utility commissions seeking to renegotiate the price of power following the COVID-19 pandemic , the war in Ukraine , and rising costs associated with inflation .
2 . Permitting and Leasing Developments a . BOEM ’ s Modernization Rule
Early in the year , BOEM began its efforts to alter the offshore wind regulatory landscape . On January 12 , 2023 , BOEM announced a proposed rule ( the “ Modernization Rule ”) to modernize its regulations for renewable energy development on the OCS . 2 The announcement marked the first time BOEM has substantially updated its renewable energy program regulations since they were first promulgated in 2009 at Title 30 , Part 585 , 30 C . F . R . §§ 585.100 – 585.703 . The Modernization Rule aimed to harmonize BOEM ’ s regulations with its current practices and to reflect lessons learned during the industry ’ s massive growth since 2009 .
Much of the Modernization Rule proposed to align Part 585 with BOEM ’ s current practices in planning , permitting , site assessment , leasing , and project review . This effort includes multifactor auctions and bidding credits , which BOEM deployed in its most recent lease auctions offshore New York , North Carolina , and California in order to bolster domestic supply chain development , labor training , and community benefits . The Modernization Rule would also provide a regulatory anchor for using Project Design Envelopes ( PDE ) when permitting offshore wind projects . BOEM adopted this approach in 2018 , mirroring the European regulatory landscape . 3 PDEs allow project applicants to propose a range of design parameters in their project applications , so that agencies can start their permit reviews while the applicant continues to refine the commercial project within the PDE . While PDEs are standard practice now , the Modernization Rule proposed cementing them as a key element of agency practice .
2 . Renewable Energy Modernization Rule , 88 Fed . Reg . 5968 ( Jan . 30 , 2023 ); Renewable Energy Modernization Rule , 88 Fed . Reg . 19,578 ( Apr . 3 , 2023 ) ( extension of public comment period ).
3 . Id . at 5979 .