A Fond Du Lac Farmer has regrets about agreeing to host a wind turbine--
Why can't he speak openly about it?
When you sign a 20 to 30 year contract to host a wind turbine on your property you may be signing away many rights you're unaware of. A confidentiality agreement in the contract may mean legal action can be taken against you if you complain publicly about the project. A Fond Du Lac farmer signed away his rights. He was interviewed by Don Bangart who wrote the following on behalf of the farmer, whose contract with the wind company prevents him from speaking openly about any problems.
This was printed as a full page ad in the Chilton, Wisc., Times-Journal, October 25, 2007.
WHAT HAVE I DONE?
Now each morning when I awake, I pray and then ask myself, “What have I done?”
I am involved with the BlueSky/Greenfield wind turbine project in N.E. Fond du Lac County. I am also a successful farmer who cherishes his land. My father taught me how to farm, to be a steward of my fields, and by doing so, produce far better crop production. As I view this year’s crops, my eyes feast on a most bountiful supply of corn and soybeans. And then my eyes focus again on the trenches and road scars leading to the turbine foundations. What have I done?
In 2003, the wind energy company made their first contacts with us. A $2,000 “incentive” started the process of winning us over, a few of us at a time. The city salesmen would throw out their nets, like fishermen trawling for fish. Their incentive “gift” first lured some of us in. Then the salesmen would leave and let us talk with other farmers. When the corporate salesmen returned, there would be more of us ready to sign up; farmers had heard about the money to be made. Perhaps because we were successful farmers, we were the leaders and their best salesmen.
Sometime in 2004 or 2005, we signed $4,000 turbine contracts allowing them to “lease” our land for their needs. Our leases favored the company, but what did we know back then? Nobody knew what we were doing. Nobody realized all the changes that would occur, over which we would have no control. How often my friends and I have made that statement: What have I done?!
I watched stakes being driven in the fields and men using GPS monitors to place markers here and there. When the cats and graders started tearing 22-foot-wide roads into my fields, the physical changes started to impact not only me and my family, but, unfortunately, also my dear friends and neighbors. Later, a 4-foot-deep by 2-foot-wide trench was started diagonally across my field. A field already divided by their road was now being divided again by the cables running to a substation. It was now making one large field into 4 smaller irregularly shaped plots. Other turbine hosts also complained about their fields being subdivided or multiple cable trenches requiring more of their land. Roads were cut in using anywhere from 1,000 feet to over half a mile of land to connect the locations. We soon realized that the company places roads and trenches where they will benefit the company most, not the landowner. One neighbor’s access road is right next to some of his outbuildings. Another’s is right next to his fence line.
At a wind company dinner presented for the farmers hosting the turbines, we were repeatedly told — nicely and indirectly — to stay away from the company work sites once they start. I watched as my friends faces showed the same concern I had, but none of us spoke out. Months later, when I approached a crew putting in lines where they promised me they definitely would not go, a representative told me I could not be there. He insisted that I leave. The line went in. The company had the right. I had signed the lease.
Grumbling started almost immediately after we agreed to 2% yearly increases on our 30-year lease contracts. Some felt we should have held out for 10%. What farmer would lock in the price of corn over the next 5 years, yet alone lock one in at 2% yearly for 30 years? Then rumors emerged that other farmers had received higher yearly rates, so now contracts varied. The fast-talking city sales folk had successfully delivered their plan. Without regard for our land, we were allowing them to come in and spoil it. All of the rocks we labored so hard to pick in our youth were replaced in a few hours by miles of roads packed hard with 10 inches of large breaker rock. Costly tiling that we installed to improve drainage had now been cut into pieces by company trenching machines.
Each night, a security team rides down our roads checking the foundation sites. They are checking for vandals and thieves. Once, when I had ventured with guests to show them foundation work, security stopped us and asked me, standing on my own property, what I was doing there. What have I done?
Now, at social functions, we can clearly see the huge division this has created among community members. Suddenly, there are strong-sided discussions and heated words between friends and, yes, between relatives about wind turbines. Perhaps this is a greater consequence than the harm caused to my land — life is short, and friendships are precious.
I tried, as did some of the other farmers, to get out of our contracts, but we had signed a binding contract. If you are considering placing wind turbines on your property, I strongly recommend that you please reconsider. Study the issues. Think of all the harm to your land, and, in the future, to your children’s land, versus the benefits from allowing companies to lease your land for turbines.
WHAT HAVE I DONE?
PLEASE DO NOT DO WHAT I HAVE DONE!
The Ontario Federation of Agriculture offers these 30 suggestions for wind farm leases for farmers. Some of these are specific to Canada but they will give you an idea of the unexpected complications and the kinds of rights you may be signing away (click here to read it at its source)
From the ONTARIO FEDERATION of AGRICULTURE APRIL 2007
30 Suggestions on Wind Power Leases for Farmers
Ontario needs power and farmers need income. OFA favours wind power where generators do not harm
other things important to the community. If you sign a lease make sure it fits your plan for your farm.
1. Meet with your neighbours – Meet and work with your neighbours and OFA Services Rep.
2. Cost of a Lawyer - Ask the wind power company to pay to have the agreement reviewed by a
lawyer who will work for everyone in the area. This saves you $ 500 to $ 1,000.
3. Transferability - Add a clause that stipulates that the agreement cannot be transferred by the
wind company to any person or company without your approval.
4. Appearance – No leases address appearance, but you could have to look at it for 50 years.
Add a clause that prohibits advertising on the tower.
Add a clause that stipulates the paint colour be agreed and repainted if it becomes rusty.
Add a clause that covers effective reclamation of the site when all is done.
5. Building Restrictions – Attach a map of the property to the agreement that outlines areas
where new buildings over 20 metres can and cannot be built.
6. Fill Material - Under no circumstances should a developer use fill taken from your land.
7. Gear oil - You can use the lease to prohibit the use of toxic gear oil.
8. Option Termination - Add a clause that stipulates that the option ends at 5:00 p.m. on a
specific date if construction has not started by that date. You need a clear ending to the option.
9. Net Meter Tower - Ask the company to lend you its crane to install your own net metered
wind generator. You must be ready when they are, but it could save you $ 10,000.
10. Option - The minimum should be $ 5,000/ 100 acres for three to five years. No renewal; they
put up a wind tower or they are gone. No payment is enough to make a bad lease worthwhile.
11. Rent – Rent should be at 3% for the first eight years then go to 8% once bank loans etc. are
covered. Rent should apply to all income from the project including green house gas credits.
12. Insurance - Add a clause stipulating that the wind company must produce a valid certificate of
insurance covering liability to the farm and others each year and that it assumes full liability for
damage caused by the wind tower or the contractors or consultants etc..
13. Protect Capital Value - Add a clause requiring the wind power company to make whole any
losses in re-sale value that might occur as a result of the lease or a wind tower being in place. If
the wind tower effects your land value, losses might not be covered by rent.
14. 0ther Development – If the property may be valuable for other development in the next 30
years do not sign, you will be giving the wind company your future profits or capital gains.
15. Your Other Rights - Some leases have clauses that appropriate your development rights for
aggregates, ground water, top soil, sale outside of the family and even your right to speak in
public on wind power questions. Any such clause should be stricken from the agreement.
16. Tenants Rights - Stipulate that the only rights the tenant will have are the rights to do needed
studies, the rights to construct, operate and maintain no more than two wind towers per 100
acres as well as required roads and wires, and to remove the electricity from the site to the grid.
17. A Cooling Off Period – have a clause that states that either party may cancel the agreement
within 30 days without reason or penalty.
18. Power Sales - Stipulate that power must be sold to government or you get to approve any
other contract. Without this power can be sold to a subsidiary of the wind power company and
the 3% rent you were hoping for will 3% of very little.
19. Hours, Times of Access – Access for emergencies at any time. Other access between 8:00
a.m. and 5:00 p.m. Monday to Friday and requires notice so there is no interference with
seeding, harvests, calving, or other farm or family activities that are time restricted
20. Area of Lease - Limit the area covered by lease to a suitably small area – 1 to 5 acres
21. Applies to One Lot Only - Limit the agreement so it only applies to the actual lot leased and
that there is no reference to any other land owned by the farmer
22. Conversion to Easement – Do not allow a conversion to an easement as it will be more
difficult, perhaps impossible to discharge at the end.
23. Quitclaim – ensure the lease provides for a clean end so the wind company cannot be
released from the lease or recover funds from the escrow account without your approval and
certification that they have met all their obligations including clean up.
24. Wind Rights Only - Do not allow any clause that gives the wind power company a right of first
refusal or an option for any purpose other than the use of the wind. Such clauses encumber
sales, wills, development of other businesses etc.
25. Term of Lease – suggest 3 year option, 20 years for first term and 5 year renewals to follow.
This provides enough time to do tests and make profits and brings the replacement date for the
generator and the lease renewal dates closer together, which improves your negotiating position.
26. Assessment and Property Taxes – the land owner is ultimately responsible for taxes – a
clause to require the wind power company to pay taxes associated with the wind tower is
essential and it requires an enforcement clause – you cannot afford their taxes, unless you have
their income. In the case of default, you should get the licences to produce and sell power.
27. Escrow Fund – Require the tenant to have an escrow fund held with your lawyer or a trust
company. This fund will be established with the start of construction and used to pay any
arrears in taxes, any maintenance that the company refuses to do and will fund reclamation.
28 Registration of Surveys – surveys should only be registered with your approval and the
agreement should specify that the tenant does not acquire a legal right of way or any privilege
that could lead to shared or sole title. The tenant only acquires limited rights to use for a period,
but no easements or rights of way.
29. Wait ‘Til You Know Your Choices – The government has a Standard Offer. You can have
your own wind project or you can find other firms or partners. You may do better than you
might as a landlord. Don’t sign a lease until you have considered the choices and
determined what is best for your farm operation for the next 20 plus years.
30. If you wish to increase your bargaining power apply to Hydro One or your local
distribution company for the right to connect a generator yourself. The connection
agreement is valuable, acquire it for yourself.