Common use of Supply Chain Operating Fee Credit Clause in Contracts

Supply Chain Operating Fee Credit. To promote the development of the United States’ offshore wind supply chain, the Lessee is encouraged to procure major offshore wind components domestically. The Lessee may be eligible for an operating fee rate of 1% for a period of five years. To qualify, the Lessee must satisfy four or more of the following conditions: • All nacelles for the project are assembled in the United States;‌ • All turbine blades are manufactured in the United States;‌ • All towers are manufactured in the United States;‌ • All foundations are manufactured in the United States;‌ • All transition pieces are manufactured in the United States;‌ • All inter-array cables are manufactured in the United States;‌ • All export cables are manufactured in the United States;‌ • The offshore substations are manufactured in the United States.‌ The domestic assembly and manufacturing conditions described above must be meaningful and substantial, as determined by BOEM. For example, a nacelle that is assembled abroad with minor components added in the United States would not satisfy the requirement. To qualify for the operating fee credit, Lessees must request the credit and must provide to BOEM evidence that four or more of the above-listed conditions were met. Upon BOEM’s review and determination that the requesting Lessee has met the criteria to earn the operating fee rate adjustment, the operating fee rate starting in the year after the completion of the review and determination will be 0.01 for five years.

Supply Chain Operating Fee Credit. To promote the development of the United States’ offshore wind supply chain, the Lessee is encouraged to procure major offshore wind components domestically. The Lessee may be eligible for an operating fee rate of 1% for a period of five years. To qualify, the Lessee must satisfy four or more of the following conditions: •  All nacelles for the project are assembled in the United States;‌ •  All turbine blades are manufactured in the United States;‌ •  All towers are manufactured in the United States;‌ •  All foundations are manufactured in the United States;‌ •  All transition pieces are manufactured in the United States;‌ •  All inter-array cables are manufactured in the United States;‌ •  All export cables are manufactured in the United States;‌ •  The offshore substations are manufactured in the United States.‌ The domestic assembly and manufacturing conditions described above must be meaningful and substantial, as determined by BOEM. For example, a nacelle that is assembled abroad with minor components added in the United States would not satisfy the requirement. To qualify for the operating fee credit, Lessees must request the credit and must provide to BOEM evidence that four or more of the above-listed conditions were met. Upon BOEM’s review and determination that the requesting Lessee has met the criteria to earn the operating fee rate adjustment, the operating fee rate starting in the year after the completion of the review and determination will be 0.01 for five years.