1. Virginia Economic Development Partnership Federal and State Leasing and Permitting Stephen Walz Department of Mines, Minerals and Energy December 7, 2010

2. Virginia Coastal Energy Research Consortium Virginia Coastal Energy Research Consortium “…serve as an interdisciplinary study, research, and information resource for the Commonwealth on coastal energy issues…” and “… facilitate the application and transfer of new coastal energy technologies…” “…serve as an interdisciplinary study, research, and information resource for the Commonwealth on coastal energy issues…” and “… facilitate the application and transfer of new coastal energy technologies…” Offshore wind was not only viable - but VA is an ideal location Offshore wind was not only viable - but VA is an ideal location Class 5-6 winds; 30 meter water depth or less; protected from hurricanes Class 5-6 winds; 30 meter water depth or less; protected from hurricanes Proximity to maritime/manufacturing industries Proximity to maritime/manufacturing industries Genesis

3. June 2009 - Minerals Management Service (now BOEMRE) issued regulations for OCS offshore wind energy development, “the rule” June 2009 - Minerals Management Service (now BOEMRE) issued regulations for OCS offshore wind energy development, “the rule” September 2009 - Two unsolicited applications for lease blocks off the Virginia coast September 2009 - Two unsolicited applications for lease blocks off the Virginia coast December 2009 - MMS to create a MMS/Virginia taskforce December 2009 - MMS to create a MMS/Virginia taskforce Federal Leasing in Virginia

4. BOEMRE Virginia Task Force BOEMRE Virginia Task Force Federal (civilian & military), State, Local Federal (civilian & military), State, Local “to facilitate coordination and consultation on commercial leasing proposals on the OCS offshore Virginia” “to facilitate coordination and consultation on commercial leasing proposals on the OCS offshore Virginia” December 2009 – First meeting December 2009 – First meeting MMS to issue a Request for Interest (RFI) for developable areas off the coast of VA MMS to issue a Request for Interest (RFI) for developable areas off the coast of VA Department of Defense, Coast Guard, other stakeholders review of potential lease blocks to ensure no conflict with their operating areas Department of Defense, Coast Guard, other stakeholders review of potential lease blocks to ensure no conflict with their operating areas Federal Leasing in Virginia

5. BOEMRE Task Force BOEMRE Task Force April 27, 2010 – Department of Defense presents lease blocks with potential for development April 27, 2010 – Department of Defense presents lease blocks with potential for development Up to 36 lease blocks usable on a site-specific basis Up to 36 lease blocks usable on a site-specific basis State review of lease blocks – ID most likely for development with limited military, shipping, environmental and other uses State review of lease blocks – ID most likely for development with limited military, shipping, environmental and other uses Federal Leasing in Virginia

7. BOEMRE -- RFI expected in late December 2010 / early January 2011 BOEMRE -- RFI expected in late December 2010 / early January 2011 Vetted by interested parties (DoD, Coast Guard, Commonwealth of Virginia, other) Vetted by interested parties (DoD, Coast Guard, Commonwealth of Virginia, other) Open except military operating areas, major shipping lanes, Chesapeake Light Tower, areas of other uses; conflict with shore resources Open except military operating areas, major shipping lanes, Chesapeake Light Tower, areas of other uses; conflict with shore resources Federal Leasing in Virginia

8. June 2010 - Secretary of the Interior Salazar forms the Atlantic Offshore Wind Energy Consortium, - DOI; 11 East Coast states June 2010 - Secretary of the Interior Salazar forms the Atlantic Offshore Wind Energy Consortium, - DOI; 11 East Coast states Recommendation: Cut permitting timeline from 7–9 years to 4 years Recommendation: Cut permitting timeline from 7–9 years to 4 years Salazar agrees to make streamlining a priority Salazar agrees to make streamlining a priority Federal Leasing

9. November 2010 - “Smart from the Start” November 2010 - “Smart from the Start” Accelerated approach to develop Atlantic wind resources Accelerated approach to develop Atlantic wind resources Identify East Coast Wind Energy Areas – Virginia WEA’s identified through RFI process Identify East Coast Wind Energy Areas – Virginia WEA’s identified through RFI process Simplify non-competitive lease process Simplify non-competitive lease process Assist in developing site assessment data – initiate NEPA assessment Assist in developing site assessment data – initiate NEPA assessment Compile existing site assessment data from other federal agencies Compile existing site assessment data from other federal agencies Federal Leasing

10. If no significant impacts found, BOEMRE to offer leases late 2011/early 2012 If no significant impacts found, BOEMRE to offer leases late 2011/early 2012 Developers to complete site-specific comprehensive NEPA review Developers to complete site-specific comprehensive NEPA review Applications for offshore transmission lines processed simultaneously with WEA NEPA processes Applications for offshore transmission lines processed simultaneously with WEA NEPA processes Federal Leasing

11. BOEMRE Contact – Virginia Leasing BOEMRE Contact – Virginia Leasing Al Pless Al Pless Bureau of Ocean Energy Management and Regulation Enforcement Bureau of Ocean Energy Management and Regulation Enforcement al.pless@boemre.gov al.pless@boemre.gov.pless@boemre.gov

12. State Leasing & Permitting Guiding Policy Guiding Policy Virginia Energy Plan – Code of Virginia §§ 67- 101 – 102 Virginia Energy Plan – Code of Virginia §§ 67- 101 – 102 Offshore Energy Resources - §§ 67-300 Offshore Energy Resources - §§ 67-300 Governor McDonnell – Energy Capital of the East Coast Governor McDonnell – Energy Capital of the East Coast

13. State Leasing State waters State waters Virginia Marine Resources Commission Virginia Marine Resources Commission Opportunities for Offshore Wind Energy in State Territorial Waters – 2010 Senate Document 10 Opportunities for Offshore Wind Energy in State Territorial Waters – 2010 Senate Document 10 http://leg2.state.va.us/dls/h&sdocs.nsf/By+Year/SD102010/$file/SD10.pdf Limited areas suitable – Community Scale and Testing Limited areas suitable – Community Scale and Testing Use Joint Permitting Process / Joint Permitting Application Use Joint Permitting Process / Joint Permitting Application

14. State Permitting State process State process Right of way across state waters Right of way across state waters DEQ Permit-By-Rule DEQ Permit-By-Rule Up to 100 MW Up to 100 MW 5 MW deminimus 5 MW deminimus Air permitting Air permitting Participation in federal permitting Participation in federal permitting Coastal Zone Management consistency Coastal Zone Management consistency Historic Resources Historic Resources Research / data assistance Research / data assistance Comments on environmental reviews Comments on environmental reviews

15. State Permitting Utility investments Utility investments State Corporation Commission review/approval State Corporation Commission review/approval Ratepayer impact Ratepayer impact Reasonableness Reasonableness Transmission jurisdiction at FERC Transmission jurisdiction at FERC Tie to PJM Interconnection process Tie to PJM Interconnection process

16. Virginia Offshore Wind Development Authority (VOWDA) 2010 - HB 389 (Janus) / SB 577 (McEachin/Wagner) 2010 - HB 389 (Janus) / SB 577 (McEachin/Wagner) Mission Mission Facilitate offshore wind industry/projects; supply chain Facilitate offshore wind industry/projects; supply chain Public-private partnerships Public-private partnerships Met-Ocean & Environmental Data Met-Ocean & Environmental Data Port and Logistical Site Facilities Port and Logistical Site Facilities Accept grants/donations/ federal loan guarantees Accept grants/donations/ federal loan guarantees Own property Own property Interstate partnerships Interstate partnerships

17. Virginia Offshore Wind Development Authority (VOWDA) Met-Ocean Report Met-Ocean Report Chesapeake Light Tower Chesapeake Light Tower Needed actions for data and analysis Needed actions for data and analysis Phased program Phased program I – Conventional mast / vertical LIDAR on CLT I – Conventional mast / vertical LIDAR on CLT II – Horizontal Volume-Scanning LIDAR on CLT II – Horizontal Volume-Scanning LIDAR on CLT III – Met Tower or buoys in commercial lease areas III – Met Tower or buoys in commercial lease areas IV – Met Tower for technology demonstration IV – Met Tower for technology demonstration Tie to National Offshore Wind Technology Center (NOWTC) Tie to National Offshore Wind Technology Center (NOWTC)

18. Virginia Offshore Wind Development Authority (VOWDA) Interconnection Studies Interconnection Studies PJM Interconnection PJM Interconnection 10 GW connection along Mid-Atlantic 10 GW connection along Mid-Atlantic Minimal congestion Minimal congestion Dominion Dominion More specific study More specific study Assessed 2.7 GW / 4.5 GW connection in Virginia Assessed 2.7 GW / 4.5 GW connection in Virginia No capacity single contingency No capacity single contingency Energy – Need upgrades -- $30-70 million Energy – Need upgrades -- $30-70 million

19. National Offshore Wind Technology Center (NOWTC) Support early job growth Support early job growth Leveraged key Virginia assets Leveraged key Virginia assets Port of Hampton Roads Port of Hampton Roads Research Research Support and supply chain companies Support and supply chain companies Military coordination Military coordination Continues VCERC mission Continues VCERC mission

20. National Offshore Wind Technology Center (NOWTC) Divisions Divisions Turbine testing and certification/accreditation Turbine testing and certification/accreditation Met-Ocean data resources Met-Ocean data resources Operational research Operational research Installation and operations Installation and operations Supply chain Supply chain Radar Radar Military coordination Military coordination Ocean resource stewardship Ocean resource stewardship

21. NOWTC FEDERAL DOE, DOI STATE VOWDA/DMME JMU OPERATIONS VCERC RESEARCH TURBINE MANUF. FOUNDATION/ TOWER MANUF. SHIPBUILDERS ENGINEERING FIRMS FINANCING PRIVATE PARTNERS/CUSTOMERS $$ $