HB 522 — An Act authorizing the Department of Environmental Protection, in consultation with the Department of General Services to lease certain submerged lands within Erie County and associated wind, water and solar resources for the assessment, development, construction and operation of utility scale offshore wind, solar or kinetic energy generation facilities; providing for collection of certain lease and royalty payments; establishing the Lake Erie Large-Scale Energy System Development Fund; and providing for distributions and transfers from the fund.

PRINTER'S NO.   515

                    THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        HOUSE BILL
                        No. 522
                                                 Session of
                                                   2025

     INTRODUCED BY MERSKI, SANCHEZ, HILL-EVANS, PIELLI, HOHENSTEIN,
        KHAN, HARKINS, OTTEN, WEBSTER, KENYATTA, WAXMAN, GIRAL AND
        MADDEN, FEBRUARY 5, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, FEBRUARY 5, 2025


                                      AN ACT
 1   Authorizing the Department of Environmental Protection, in
 2      consultation with the Department of General Services to lease
 3      certain submerged lands within Erie County and associated
 4      wind, water and solar resources for the assessment,
 5      development, construction and operation of utility scale
 6      offshore wind, solar or kinetic energy generation facilities;
 7      providing for collection of certain lease and royalty
 8      payments; establishing the Lake Erie Large-Scale Energy
 9      System Development Fund; and providing for distributions and
10      transfers from the fund.
11                            TABLE OF CONTENTS
12   Chapter 1.   Preliminary Provisions
13   Section 101.   Short title.
14   Section 102.   Legislative declaration.
15   Section 103.   Definitions.
16   Chapter 3.   Leasing of Submerged Lands and Use of the Associated
17                Wind, Water and Solar Resources
18   Section 301.   Authority and duties of department.
19   Section 302.   Qualifications of lessees.
20   Section 303.   Waters of this Commonwealth.
21   Section 304.   Term of leases.
 1   Section 305.   Lease agreements.
 2   Section 306.   Feasibility study.
 3   Section 307.   Improvements.
 4   Section 308.   Covenants.
 5   Section 309.   Federal and State law and permits.
 6   Chapter 5.   Administration
 7   Section 501.   Regulations.
 8   Section 502.   Sublease by department prohibited.
 9   Section 503.   Transfer of interest prohibited.
10   Section 504.   Construction.
11   Section 505.   Interagency responsibilities.
12   Chapter 7.   Royalty Payments and Distributions
13   Section 701.   Royalty payments.
14   Section 702.   Lake Erie Large-Scale Energy System Development
15                Fund.
16   Section 703.   Distributions and transfers.
17   Section 704.   Submerged lands lease consideration.
18   Chapter 9.   Miscellaneous Provisions
19   Section 901.   Effective date.
20      The General Assembly of the Commonwealth of Pennsylvania
21   hereby enacts as follows:
22                                  CHAPTER 1
23                         PRELIMINARY PROVISIONS
24   Section 101.   Short title.
25      This act shall be known and may be cited as the Lake Erie
26   Energy Development Act.
27   Section 102.   Legislative declaration.
28      The General Assembly declares that the Commonwealth owns and
29   holds in trust as public natural resources under section 27 of
30   Article I of the Constitution of Pennsylvania the portion of

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 1   Lake Erie located in Pennsylvania, including the bed of Lake
 2   Erie and the associated wind, air, water and solar resources.
 3   Section 103.     Definitions.
 4      The following words and phrases when used in this act shall
 5   have the meanings given to them in this section unless the
 6   context clearly indicates otherwise:
 7      "Department."     The Department of Environmental Protection of
 8   the Commonwealth.
 9      "Fund."     The Lake Erie Large-Scale Energy System Development
10   Fund established under section 702.
11      "Large-scale energy system" or "system."     A wind energy
12   generation system at more than five megawatts as measured by the
13   nameplate capacity of the system or a solar or kinetic energy
14   system of at least five megawatts as measured by the nameplate
15   capacity of the system, ancillary facilities and structures,
16   including any electrical collection and transmission facilities,
17   submerged electrical transmission cables and other related
18   structures.
19                                   CHAPTER 3
20                  LEASING OF SUBMERGED LANDS AND USE OF THE
21                  ASSOCIATED WIND, WATER AND SOLAR RESOURCES
22   Section 301.     Authority and duties of department.
23      (a)   Authorization.--The department, acting on behalf of the
24   Commonwealth and in consultation with the Department of General
25   Services, may, in accordance with this act:
26            (1)   Lease submerged lands equal to or greater than 25
27      acres, but not in excess of 10,000 contiguous acres, within
28      the bed of Lake Erie in Erie County.
29            (2)   In association with the lease of the submerged lands
30      in paragraph (1), allow the use of the wind, water and solar

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 1      resources of Lake Erie in Pennsylvania.
 2      (b)   Areas to be leased.--The department shall develop a map
 3   designating the areas of the bed of Lake Erie that may be
 4   considered for leasing for large-scale energy system development
 5   in consultation with the Department of Conservation and Natural
 6   Resources, the Pennsylvania Fish and Boat Commission and the
 7   Pennsylvania Game Commission. The department shall ensure that
 8   the areas that may be leased:
 9            (1)   are concentrated in the central and western portion
10      of Lake Erie;
11            (2)   avoid development in nearshore areas;
12            (3)   avoid shipping lanes; and
13            (4)   avoid areas of Lake Erie and pathways where
14      migratory species are concentrated.
15      (c)   Bidding process.--The department has the power to make
16   and execute leases in the name of the Commonwealth, in
17   consultation with the Department of General Services, for the
18   evaluation, development and operation of large-scale energy
19   systems in Lake Erie, whenever it appears to the satisfaction of
20   the department that it would be in the best interests of this
21   Commonwealth. Any proposed leases under this act exceeding
22   $1,000 in value shall be advertised once a week for three weeks
23   on the department's publicly accessible Internet website and in
24   the Pennsylvania Bulletin in advance of awarding the leases. The
25   leases may then be awarded to the highest and best bidder, who
26   must give bond for the proper performance of the leases as the
27   department designates. The requirement of competitive bidding
28   may be waived, and the department may enter into leases with
29   approval of the Governor, and upon terms and conditions as the
30   department deems to be in the best interest of this

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 1   Commonwealth, which at a minimum shall include:
 2          (1)     A demonstration by the bidders of their expertise,
 3      experience and financial capacity to conduct a feasibility
 4      study and to develop such a system.
 5          (2)     A certification that the bidder has the financial
 6      capability to cover all costs associated with the feasibility
 7      study and interconnecting to an energy distribution system.
 8          (3)     A demonstration by the bidders of the benefits to be
 9      accrued by the Commonwealth, including:
10                (i)    The number of full-time jobs to be created.
11                (ii)    The overall economic impact of the proposed
12          system.
13                (iii)    The environmental benefits of the system.
14                (iv)    The overall need for the system.
15                (v)    The amount of power to be provided by the
16          proposed system.
17                (vi)    An initial assessment of community and public
18          acceptance of the proposed system.
19   Section 302.    Qualifications of lessees.
20      The initial feasibility study leases and long-term leases
21   approved under this act shall be restricted to lessees that:
22          (1)     Demonstrate the expertise and capability to develop
23      large-scale energy systems in a marine environment.
24          (2)     Have been deemed to be qualified bidders by the
25      department.
26          (3)     File with the department a bond payable to the
27      Commonwealth to cover the entire cost associated with the
28      removal of facilities developed under this act and located in
29      submerged lands of Lake Erie.
30          (4)     Demonstrate compliance with fair wage standards,

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 1      including compliance with the provisions of the act of August
 2      15, 1961 (P.L.987, No.442), known as the Pennsylvania
 3      Prevailing Wage Act, related to all work undertaken under
 4      this act.
 5   Section 303.    Waters of this Commonwealth.
 6      A lease and any subsequent long-term lease approved under
 7   this act shall ensure reasonable accommodation for fishing,
 8   maritime commerce, energy transmission rights-of-way and other
 9   current and future commercial and recreational uses of the
10   waters of this Commonwealth held in the public trust.
11   Section 304.    Term of leases.
12      (a)   Term of initial feasibility leases.--
13            (1)   The term of initial feasibility leases shall be for
14      a term of up to seven years. The department may upon
15      sufficient justification renew the initial feasibility leases
16      for additional three-year terms.
17            (2)   In the event a lessee does not develop the parcel
18      studied or contiguous parcels of submerged lands by
19      installing a large-scale energy system in accordance with a
20      subsequent long-term lease as provided in subsection (b), the
21      lease shall terminate.
22      (b)   Term of long-term lease.--
23            (1)   A lessee under subsection (a) may be eligible to
24      enter into a long-term lease for a large-scale energy system.
25            (2)   The department, based upon satisfactory evidence
26      that the lessee is capable of long-term operation of the
27      large-scale energy system, may enter into a long-term lease
28      with an initial term of up to 35 years for the construction,
29      operation, maintenance and removal of a large-scale energy
30      system and any associated transmission facilities in Lake

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 1      Erie.
 2            (3)   The initial long-term lease may be extended for all
 3      or any portion of the leased premises for additional terms of
 4      up to 35 years upon finding that it serves the best interest
 5      of the Commonwealth.
 6            (4)   The long-term lease shall contain a provision for
 7      termination if the lessee has not completed construction of
 8      the large-scale energy system within a reasonable period of
 9      time to be established in the terms of the lease.
10            (5)   The department may allow, as an option to the long-
11      term lease, the ability of the lessee to lease contiguous
12      parcels. The department shall have the authority to determine
13      the size of the contiguous parcels but not to exceed
14      increments of 10,000 acres.
15   Section 305.    Lease agreements.
16      (a)   Approvals.--The leases authorized by this act shall be
17   approved as to form and legality by the Attorney General and the
18   Office of General Counsel, which approvals may not be
19   unreasonably withheld, in accordance with law and shall be
20   executed by the department in the name of the Commonwealth.
21      (b)   Lessee rights under lease.--A lease shall grant the
22   lessee the right to use the premises in accordance with this act
23   for the purposes of conducting a feasibility study and
24   development of large-scale energy systems.
25   Section 306.    Feasibility study.
26      (a)   Initial lease.--Prior to entering into a long-term lease
27   in accordance with section 304(b), an initial lessee shall
28   conduct a feasibility study to assess the ability of the large-
29   scale energy system to be viable and to assess the
30   environmental, navigational, public safety, structural and any

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 1   other impacts and siting considerations necessary to the
 2   successful development of such a system.
 3      (b)   Environmental impact.--In addition to the evaluation of
 4   environmental impacts associated with all other Federal and
 5   State authorizations required, the environmental impacts to be
 6   assessed and mitigated to the satisfaction of the department
 7   shall include:
 8            (1)   The impacts to fishing and migratory bird and mammal
 9      routes.
10            (2)   The impacts to the ecosystems and habitats within
11      and adjacent to Lake Erie.
12            (3)   Ecological impacts, including to fish-spawning beds
13      and other habitats of importance, for all species, including
14      ecologically valued species and sportfish, such as steelhead
15      and lake trout, which are important to the local economy of
16      the Lake Erie region.
17      (c)   Siting considerations.--The siting considerations to be
18   considered and addressed shall include:
19            (1)   Site conditions, including wind speed, ice, lakebed,
20      waves and currents.
21            (2)   Geophysical conditions and geohazards, including
22      impacts on sediment transport, beach replenishment and bluff
23      protection.
24            (3)   Ports and infrastructure, including the availability
25      of support facilities in Pennsylvania and the region,
26      existing supply chain and supply chain strategies and an
27      analysis of harms and benefits to navigation and the
28      recreation industry.
29            (4)   Fixed and floating technology options.
30            (5)   Interconnection, such as access to onshore energy

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 1      infrastructure, including existing local generation assets,
 2      electric load and the potential interconnection and
 3      integration of the electric grid.
 4            (6)    Cost projection modeling and financing assumptions.
 5            (7)    Economic development and opportunities for
 6      employment and workforce development.
 7            (8)    Federal and State permitting considerations,
 8      including the potential to disturb cultural, archaeological
 9      and historical resources.
10            (9)    In addition to environmental impact analysis,
11      environmental risk, benefit and mitigation analysis,
12      including impacts on or improvement to cumulative impacts on
13      air quality, water quality and the local ecology.
14            (10)    Ecological and human health and safety
15      considerations, such as reduction or mitigation of noise,
16      vibration and harmonics, flicker or other impacts to those
17      living or working near the site, including recreational or
18      commercial fisheries, tourism and viewshed.
19            (11)    Public support and an equity benefit analysis.
20      (d)   Use of study.--The department shall utilize the results
21   of the feasibility study, as part of the review process
22   associated with lease approval or disapproval under this act.
23   Section 307.     Improvements.
24      Development of the parcels authorized to be leased by this
25   act shall be for large-scale energy systems, including
26   electrical collection and transmission facilities, submerged
27   electrical transmission cables and other related structures.
28   This act does not authorize the department to grant any property
29   interest outside of the bed of Lake Erie. A lessee under this
30   act shall obtain all rights of way, easements and other

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 1   necessary property rights outside of the bed of Lake Erie
 2   necessary for conducting the lessee's operations under a lease
 3   entered into under this act.
 4   Section 308.    Covenants.
 5      The conditions imposed under this act shall be covenants that
 6   run with the land and shall be binding upon the lessee. Should
 7   the lessee permit the parcels authorized to be leased under this
 8   act, or any portion thereof, to be used in a manner inconsistent
 9   with the conditions contained in this act, all rights and
10   interests in the lease authorized by this act shall terminate
11   immediately.
12   Section 309.    Federal and State law and permits.
13      No feasibility study, construction, installation or operation
14   of large-scale energy systems or other related structures on the
15   lands subject to lease shall occur without adherence to Federal
16   and State laws and prior receipt of all applicable Federal and
17   State permits, certifications, authorizations or other
18   approvals.
19                                  CHAPTER 5
20                                ADMINISTRATION
21   Section 501.    Regulations.
22      The Environmental Quality Board may, for purposes of the
23   leasing of the bed of Lake Erie for large-scale energy system
24   development under this act, adopt regulations which at a
25   minimum:
26          (1)     Determine minimum standards for the technology used
27      to construct large-scale energy systems on and to transmit
28      electricity from the areas of Lake Erie leased for that
29      purpose.
30          (2)     Establish procedures for the conduct of feasibility

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 1      studies by large-scale energy system developers related to
 2      the siting, economics and environmental issues of a system.
 3            (3)   Establish reasonable fees to cover the costs
 4      incurred by the department and directly related to the
 5      preparation, review, execution of lease or other agreements
 6      associated with this act.
 7            (4)   Establish a process for the developer of the large-
 8      scale energy system to demonstrate community and public
 9      acceptance of the proposed system.
10            (5)   Establish siting, design and other technical
11      specifications and requirements.
12            (6)   Establish any other requirements that the department
13      determines are necessary to implement or administer this act.
14            (7)   Prohibit lessees from entering into subleases.
15   Section 502.    Sublease by department prohibited.
16      The department may not enter into subleases or nondisturbance
17   agreements on any of the submerged lands of Lake Erie.
18   Section 503.    Transfer of interest prohibited.
19      Except as provided in section 301, this act does not
20   authorize or otherwise allow for or include any transfer of any
21   mineral or other surface or subsurface interest associated with
22   the submerged lands of Lake Erie.
23   Section 504.    Construction.
24      Except as provided in section 301, nothing in this act shall
25   be construed to affect or otherwise limit the provisions of the
26   act of November 26, 1978 (P.L.1375, No.325), known as the Dam
27   Safety and Encroachments Act, that may require further measures
28   to provide for public access and use of the land and adjacent
29   water.
30   Section 505.    Interagency responsibilities.

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 1      The department shall work cooperatively with:
 2          (1)     The Department of General Services to ensure that
 3      all of the systems under this act satisfy all requirements
 4      under this act, all requirements for form and legality, all
 5      applicable environmental standards and all environmental
 6      permit requirements.
 7          (2)     The Pennsylvania Public Utility Commission to
 8      establish that the proposed large-scale energy system is
 9      viable, both economically and from an energy production
10      perspective. The Pennsylvania Public Utility Commission shall
11      assist the department in assessing all of the following:
12                (i)    The system's impact on ratepayers.
13                (ii)    Whether a bidder has sufficient resources.
14                (iii)    Whether a bidder has the ability to
15          successfully complete all of the activities necessary for
16          interconnection to the electric distribution system.
17                                   CHAPTER 7
18                       ROYALTY PAYMENTS AND DISTRIBUTIONS
19   Section 701.    Royalty payments.
20      Each lessee of a long-term lease under this act shall be
21   subject to the payment to the Commonwealth of submerged lands
22   occupation fees, development rental fees, bonuses and royalties
23   from the energy generation and energy credits to be determined
24   in the long-term lease. The operator of the system shall submit
25   the royalty payment annually unless an alternative payment
26   schedule is approved by the department. The operator shall
27   submit the initial royalty payment beginning January 1 of the
28   year following the system's being placed into production.
29   Section 702.    Lake Erie Large-Scale Energy System Development
30                Fund.

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 1      (a)   Establishment.--The Lake Erie Large-Scale Energy System
 2   Development Fund is established in the State Treasury. The fund
 3   shall be used as provided by this act to conserve and maintain
 4   Lake Erie public natural resources. The money in the fund is
 5   appropriated on a continuing basis for the distributions and
 6   transfers provided under section 703.
 7      (b)   Deposits.--All development rental, bonus and royalty
 8   payments from energy generation and energy credits from large-
 9   scale energy systems situated in Lake Erie shall be deposited
10   into the fund.
11   Section 703.    Distributions and transfers.
12      On the last business day of each calendar quarter, the State
13   Treasurer shall make the following distributions and transfers
14   from the fund:
15            (1)   Ten percent of the fund shall be distributed to the
16      department for its administration of the leases under this
17      act and for waters of this Commonwealth conservation and
18      maintenance projects.
19            (2)   Twenty percent of the fund shall be distributed to
20      the department for payment to Erie County for public natural
21      resource conservation and maintenance related projects in the
22      county.
23            (3)   Twenty percent of the fund shall be distributed to
24      the Pennsylvania Fish and Boat Commission for programs,
25      projects or other activities related to conservation and
26      maintenance projects associated with Lake Erie.
27            (4)   Thirty percent of the fund shall be transferred to
28      the Energy Development Fund to support efforts by the
29      Pennsylvania Energy Development Authority for energy
30      efficiency, renewable energy or clean energy projects that

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 1      reduce air pollution or improve air quality.
 2          (5)     Twenty percent of the fund shall be transferred to
 3      the Conservation District Fund for distribution to Lake Erie
 4      Watershed county conservation districts consistent with
 5      guidelines established by the State Conservation Commission
 6      for public natural resource conservation and maintenance
 7      projects.
 8   Section 704.    Submerged lands lease consideration.
 9      Submerged lands occupation fees for the use and occupation
10   in, along, under, across or over the bed of Lake Erie as
11   described in this act shall be reasonable to compensate for the
12   use and occupation of the bed of Lake Erie and shall be
13   deposited into the Clean Water Fund.
14                                 CHAPTER 9
15                          MISCELLANEOUS PROVISIONS
16   Section 901.    Effective date.
17      This act shall take effect in 120 days.




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