PRINTER'S NO. 217
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
254
Session of
2023
INTRODUCED BY MERSKI, SIEGEL, BURGOS, MADDEN, PROBST, SANCHEZ,
GUENST, KRAJEWSKI, VITALI, DELLOSO, NEILSON, OTTEN AND
HARKINS, MARCH 10, 2023
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
MARCH 10, 2023
AN ACT
Authorizing the Department of General Services to lease
submerged lands within Erie County for the assessment,
development, construction and operation of utility scale
offshore wind or solar energy generation facilities;
providing for collection of 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
Section 301. Authority and duties of department.
Section 302. Qualifications of lessees.
Section 303. Waters of this Commonwealth.
Section 304. Term of lease.
Section 305. Lease agreements.
Section 306. Feasibility study.
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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.
Section 702. Lake Erie Large-Scale Energy System Development
Fund.
Section 703. Distributions and transfers.
Chapter 21. Miscellaneous Provisions
Section 2101. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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
lands within the bed of Lake Erie, all of which lands are
located in Erie County.
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
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context clearly indicates otherwise:
"Department." The Department of General Services 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 500 megawatts as measured by the
nameplate capacity of the system or a solar energy system of at
least 12 megawatts as measured by the nameplate capacity of the
system.
CHAPTER 3
LEASING OF SUBMERGED LANDS
Section 301. Authority and duties of department.
(a) Authorization.--The department, acting on behalf of the
Commonwealth, may 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.
(b) Areas to be leased.--The department shall develop a map
designating the areas of the bed of Lake Erie that may be leased
for large-scale energy system development. 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 where migratory birds are
concentrated.
(c) Competitive process.--The department shall develop and
implement a competitive process for the leasing of submerged
lands for the development of large-scale energy systems to
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convert wind or solar energy to electricity. The competitive
process shall include, at a minimum:
(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.
A lease and a subsequent long-term lease approved under this
act shall be restricted to a lessee who:
(1) Demonstrates the expertise and capability to develop
large-scale energy systems in a marine environment.
(2) Has been deemed to be the most qualified bidder
based upon the criteria listed in section 301(c) and any
other additional criteria that may be developed by the
department.
(3) Files with the department a bond payable to the
Commonwealth to cover the entire cost associated with the
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removal of facilities developed pursuant to this act and
located in submerged lands of Lake Erie.
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 lease.
(a) Term of initial lease.--
(1) The initial term of a lease shall be for a term of
up to seven years. The department may upon sufficient
justification renew the lease for an additional three-year
term.
(2) In the event a lessee does not develop the parcel or
contiguous parcels of submerged lands by installing a large-
scale energy system within the initial seven-year lease
period, 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 the facilities to be
constructed.
(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
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or any portion of the leased premises for additional terms of
up to 35 years.
(4) In addition to termination of a lease under
subsection (a)(2), the long-term lease shall contain a
provision for termination if the lessee has not initiated
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 permit, 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
the size of the contiguous parcels but not to exceed
increments of 10,000 acres.
Section 305. Lease agreements.
(a) Approvals.--A lease and any other documents authorized
by this act shall be approved as to form and legality by the
Attorney General and the Office of General Counsel in accordance
with law and shall be executed by the department, which
approvals shall not be unreasonably withheld, 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 commencing construction of the
system, a lessee shall conduct a feasibility study to assess the
ability of the large-scale energy system to be viable and to
assess the environmental impacts and siting considerations
necessary to the successful development of such a system.
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(b) Environmental impact.--The environmental impacts to be
addressed shall include the impacts to fishing and migratory
bird and mammal routes.
(c) Siting considerations.--The siting considerations to be
assessed shall include:
(1) Ice impacts.
(2) Wind speed.
(3) Ship traffic.
(4) Viewshed impacts.
(d) Use of study.--The department shall utilize the results
of the feasibility study, as part of the review process
associated with the approval or disapproval, to proceed with the
construction of a large-scale energy system.
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.
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
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and State laws and prior receipt of all applicable Federal and
State permits.
CHAPTER 5
ADMINISTRATION
Section 501. Regulations.
The department shall, for purposes of leasing the bed of Lake
Erie for large-scale energy system development, adopt
regulations which at a 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 any other requirements that the department
determines are necessary to implement or administer this act.
(6) 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.
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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 Environmental Protection to ensure
that all of the systems meet all applicable environmental
standards and comply with 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
successfully complete all of the activities necessary for
interconnection to the electric distribution system.
CHAPTER 7
ROYALTY PAYMENTS AND
DISTRIBUTIONS
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Section 701. Royalty payments.
Each operator of a large-scale energy system shall be subject
to the payment to the Commonwealth of a 2% royalty on the gross
revenues of the system. 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 money
of the fund is appropriated on a continuing basis for the
distributions and transfers provided under section 703.
(b) Deposits.--All royalty payments from the production of
electricity from large-scale energy systems situated on lands
owned by the Commonwealth 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) Twenty percent of the fund shall be distributed to
the department for payment to Erie County.
(2) Twenty percent of the fund shall be distributed to
the Pennsylvania Fish and Boat Commission for programs,
projects or other activities related to Lake Erie.
(3) Forty percent of the fund shall be distributed to
the Department of Environmental Protection for dam removal,
restoration and repair projects.
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(4) Twenty percent of the fund shall be transferred to
the Conservation District Fund for distribution to county
conservation districts consistent with guidelines established
by the State Conservation Commission.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Effective date.
This act shall take effect in 120 days.
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