Better Plan: The Trouble With Industrial Wind Farms in Wisconsin - -NEW! Leasing Your Land to a Wind Developer

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Thinking of leasing your land to a wind developer? What to know before you sign on the dotted line

Thinking of signing on with a wind developer but need to know more?

--Address Concerns over wind farm option agreements

by KATHY PIERCE STAFF WRITER
February 3, 2010

A PROPOSED WIND energy farm south of Ogden remains at a standstill at the present time as many of the landowners still have unanswered questions and concerns with the project.

Local landowners were invited to an informational meeting last April hosted by Renewable Power Markets Access Iowa, Wind Development, LLC (RPM Access) to discuss development of a utility-scale wind energy project in this area.

Since that time the company has been talking with individual landowners to review and revise preliminary site plans and obtain landowner approval.

The proposed 120 megawatt Peoples wind farm will involve 60 to 80 wind turbines on 256' towers and will encompass 14,000 acres in 22 sections of Peoples and March Townships in Boone County. Expected construction start date is April 2011.

To help address these concerns, Erin Herbold, an attorney with the Center for Agricultural Law and Taxation (CALT)*, met with over a dozen landowners Thursday, Jan. 28 at the Leonard Good Community Center.

"There are easements and leases floating all around. My job is to give information to help you make a decision about the option agreements," Herbold told the group. "There is much concern over easements and payments."

Some of the landowners said they haven't decided what to do, that they are still "riding the fence." Most agreed that wind energy is a good thing and will help us become more energy efficient, and one landowner said he "was all for it, but in someone else's back yard."

A change in the landscape and noise are big concerns of those living near wind farms. Herbold invited those present to introduce themselves and share some of their concerns which included:

      * Compaction of the soil when putting up the turbines
      * Raise in aerial application costs
      * How tile would be put in - plowing or trenching.
      * Signing over your rights to the ground.
      * Can the landowner benefit from the tax credits offered the company?
      * What if the company were to go under?
      * Concerns over assigning the agreement to someone else.
      * Change in value of the land.

Although ag land in the wind farm area will probably not see much of a difference Herbold says there is evidence of a big effect on residential land values in some areas where wind farms are currently located.

Herbold said she did not find any fault with the wind energy contract and that it looks fairly normal compared to other contracts, but she thinks the landowner, through negotiation, can cut a more lucrative deal.

"Agreements look really attractive on the surface, but don't be afraid to ask questions." Mostly, she says, this is all about what you can live with or not live with. It's about location."

Looking through the contract Herbold shared some areas she saw as a concern.

* She says there is limited liability so landowners should check with their insurance company to see if they'll need any additional insurance coverage. If so, consider asking the wind company to compensate for this. Livestock could create other liability issues.

* Right now, Herbold says the energy tax credits make the wind energy business more lucrative. Her concern is if Congress will continue with the credits.

* Decommissioning of the towers is another concern. Herbold says to make sure the company is putting money in escrow to cover that expense.

* The current contract allows for a 2 1/2" inflation rate.
"I'd like to see the adjustment linked to the consumer price index," said Herbold. This she feels would keep payments more in tune with inflation.

* Herbold would like to see the option shortened from seven years as currently stated in the contract.

* Although there is allowance for crop damage Herbold thinks payments should be linked to another month when grain prices are higher.

* Since easements pass with the land she encourages you to talk with your children since it is likely they'll inherit the ground. It is also a good idea to make sure they have copies of the contract.

* Though it may not be a problem, she suggests you check with the Farm Service Agency (FSA) office concerning any CRP losses as the USDA has veto authority if you are in violation of the CRP contract.

Another concern for Herbold is that wind turbines may invalidate federal estate "special use valuation" in the courts.

* The Center for Agricultural Law and Taxation is a primary source of professional educational training in agricultural law and taxation. CALT does not provide legal advice.

Note from the BPWI Research Nerd: To read more click on links below for important concerns for land owners considering hosting turbines, from CALT and the University of Iowa

Click here to read recent, important advice for landowners from the University of Iowa

CLICK HERE to download full University of Iowa Report, Center of Agricultural Law and Taxation, Nov 2009

Click on the image below to learn more about wind farm contracts.