Entries in wind farm eminent domain (2)

If you're interested in leasing your land to a wind developer, you should be interested in this:

Fargen, Olson propose changes to wind-energy leases
By CHUCK CLEMENT, Staff Reporter


Mitch Fargen

South Dakota landowners interested in leasing their property to wind-energy developers should have an interest in bills to be presented to the State Affairs Committee on Thursday afternoon.

Three bills that the State Affairs Committee has scheduled for testimony at 4 p.m. deal specifically with the contracts that landowners can sign for leasing land to wind farm developers. Two of the bills have District 8 state legislators as their prime sponsors.

State Rep. Mitch Fargen, D-Flandreau, has proposed adding several new requirements and restrictions to state law in HB 1268 that are intended to protect landowners. Fargen has proposed a waiting period between a property owner's decision to sign a lease agreement and the actual signing of the contract.

"When developers sit down to talk about leasing your land, the details can get complicated and a landowner can wind up looking at a 20-page contract," Fargen said. "In my bill, when you sit down with me to talk about development, I have 10 days before I have to sign so I can talk to a lawyer."

Fargen's bill also contains other clauses that:

-- Disallow confidentiality agreements about negotiations or proposals, unless both parties agree to a mutual confidentiality agreement in the final executed lease or easement.

-- Ensure property owners have the right to continue conducting their business operations during the term of the agreement.

-- Ensure that the property owner is not held responsible for the facility's property taxes or damages caused by the equipment.

-- Disallow any requirement for the arbitration of disputes that would replace the landowner's option of taking disagreements to court.

Fargen said his bill is scheduled for a hearing on Thursday along with HB 1194, sponsored by state Sen. Russell Olson, R-Madison, and HB 1263, sponsored by Rep. Kristi Noem, R-Castlewood.

Olson's HB 1194 would specify the state's definition of development to actual construction at a wind-turbine site.

State law currently places a five-year time limit on wind-energy development that makes a lease void if the developer has not started construction within five years of the contract's signing. Current law provides protection against speculators who could hold land "hostage" to drive up the price that they would receive from an actual energy developer.

HB 1194 specifies that development means that a turbine foundation has been constructed on the property. According to Fargen, some development companies want the definition of development to include contract negotiations.

Noem has sponsored HB 1263 that would strip the five-year deadline for property development. Instead, Noem's bill would allow the term of an easement to become whatever length of time is agreed between wind-energy developers and property owners. The law would still require that the term of any such easement could not exceed 50 years.

HB 1263 also allows the developer to only need to file a memorandum of easement, not the actual easement, with the county register of deeds.

According to Fargen, plans have been made for the sponsors of the three bills to meet before Thursday to see if a compromise is possible.

"Hopefully, all of the parties involved can meet and work together to make a good bill," Fargen said.

Fargen is currently scheduled to offer testimony on Thursday regarding all three bills before the State Affairs Committee.

Blender pumps bill

Fargen is also scheduled to speak on Thursday before the State Affairs Committee on HB 1192, which would create an ethanol blender-pump incentive program.

HB 1192, which is sponsored by Fargen, would create incentive grants so that retailers could install ethanol blender pumps at their facilities. Each retail location could receive up to $5,000 out of a $1 million fund created from federal economic stimulus dollars.

Fargen has cut the fund amount in half -- from $2 million -- since the bill was submitted. He expects to see support for the bill at this week's hearing from the Rounds administration.

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

Source: The Ogden Reporter

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.

CLICK HERE to read about farmers experiencing wind turbine related stray voltage problems

CLICK HERE to download a document from North Dakota State University called "Wind Turbine Lease Considerations For Land Owners

CLICK HERE to read about wind leases and contracts in AGWEEK's informative article called "Dealing in Wind"

CLICK HERE to download 30 Suggestions for Farmers regarding wind farm leases

CLICK HERE to read why a Wisconsin farmer regrets signing on with wind developers

CLICK HERE to download landowner lease/easement guidelines from Windustry

CLICK HERE to download Harvesting the Wind: A Legal Guidebook for Landowners