From Five Questions to Ask Before Signing a Wind-Energy Lease

Source: Corn and Soybean Digest

March 15, 2012

1. How will the lease affect my farming operation?

A commercial wind project needs about 60 acres of land per megawatt (MW). But only 3% of that area — roughly three acres — is occupied by turbines, substations and access roads. The rest is a buffer zone to preserve wind flow. The lease should clearly state your rights to use the land for farming, grazing, development of subsurface minerals, hunting or other uses, Jambor-Delgado says.

Despite a relatively small footprint, a wind project can significantly affect farm operations, efficiency and production, says Dwight Aakre, North Dakota State University Extension farm management specialist.

Turbines and access roads can change field configurations, disrupting row orientation and creating inconvenient end rows or land fragments inaccessible to large equipment.

Field-drainage patterns may be altered. Center-pivot irrigation systems can be blocked. On grazing land, fences, gates and cattle guards may have to be changed.

“Aerial crop spraying is often an issue,” Aakre says. In the north, snow plowing can cause headaches for growers. “Those access roads have to be kept open, and if the snow piles up in the field it can take a long time to melt in the spring, delaying or preventing planting.”

Farmers should raise agricultural-production issues in the initial contract talks, says Dean Retherford of Halderman Farm Management, Lafayette, IN. Retherford has helped negotiate leases for several wind projects in northwest and west-central Indiana, involving 39 wind turbines on farms he manages.

“We learned to request input on the location of roads,” Retherford says. “And the wind companies found that landowners were more of a help than a hindrance” in site decisions, he says.

The lease should clearly state how you will be compensated if land is taken out of production or crops, livestock, soil or other property are damaged during construction or operation. On one of the farms Retherford manages, for instance, a crane crushed half a mile of brand new 12-in. tile.

2. How long will the lease tie up my land?

Wind-power leases often last 50 years. The long lease period is necessary to give the developer time to earn a return on the huge up-front investment needed to build a wind farm.

The initial lease term is usually 25 years — the expected life of a turbine. Wind-power leases also include a renewal provision, extending the contract for another 20 or 25 years. The decision on whether to renew the lease is almost always the tenant’s exclusively, Ferrell says. “Landowners don’t have any say.” However, some leases may allow landowners to renegotiate the commercial terms at renewal time. “This is where collective bargaining is a very helpful tool.”

Wind leases will probably affect your estate plans, too, he adds, so it’s a good idea to include your heirs in the discussions.

3. What are my obligations under the lease?

The lease will prohibit you from doing anything that obstructs the flow of wind over the surface of your property.

This includes restrictions on the height and location of structures such as barns, grain bins, cell towers, even houses and trees. In some cases, Ferrell says, the lease may prevent you from improving your property without permission from the wind company. “If you have improvements planned for the property, get approval for them” before you sign the lease, he says.

That goes for drainage upgrades, too, says Retherford, the Indiana farm manager. Wind farms often include underground power lines. “If you’re thinking of installing pattern tile in the next 10 years or so, do it before the turbines come.” After the project is built, you will need advance permission to maintain or repair tile, he adds.

You must also avoid damaging the wind-power structures. Vehicular accidents, fires or other mishaps can result in big losses, which may not be covered by your personal and farm-liability policies, Aakre says.

You will probably need to buy additional insurance to satisfy your indemnification obligations, Ferrell says. “This is especially important if you lease the property to hunters.” He adds: Increased insurance requirements for the landowner should be factored into compensation negotiations.

 Likewise, the developer should indemnify you from damage claims arising from the tenant’s use of your land, Jambor-Delgado says.

Wind-power leases may also affect your obligations under other land agreements, she says. If the property has a mortgage, for example, you may need your lender’s consent to enter into a wind-company lease.

The lease should address the payment of debts secured by the land as well as placement of new liens on the property, she says.

Be wary of lease provisions that require you to personally obtain subordination agreements from your creditors, or that prevent you from using your land to secure future credit, Ferrell says.

A wind lease may also affect your eligibility for government farm programs, Jambor-Delgado says, so don’t sign a lease before checking with the appropriate agencies.

4. How will I be compensated?

Lease payments can be structured in many ways, including:

            •fixed payments based on acreage, towers or megawatt capacity;

            •royalty payments based on a percent of gross revenue;

            •or some combination.

All the wind-lease payments that Dean Retherfordhas negotiated are based on gross revenue per turbine. Each 1.5- or 3-MW turbine earns an annual royalty payment of $5,000 and $8,000, he says. The wind companies pay property taxes on the commercial facility, but not on the leased land.

Most wind-power leases today provide for similar royalties based on revenue, Ferrell says — typically 3-5% of gross earnings. The contract should clearly spell out how your payment will be calculated.

For example, if your royalty is 4% of gross revenue, how will gross revenue be defined? Does it include only the sale of electricity, or does it also include revenue from the sale of tax credits or renewable energy credits? Will your payment be based on revenue from the turbines on your land alone, or on average revenue for the entire wind farm? What can be subtracted from gross revenue? Can the wind-power company deduct for power lost during transmission or for periodic curtailments?

Leases that include a royalty should also set a minimum rent that will be paid whether or not the turbines are generating power for sale, Ferrell says. In addition, many royalty leases now include an “escalator” provision raising the royalty percentage at specified intervals. This arrangement can be a good deal for both the developer and the landowner, he says. During the early years of the project, the company can recover its initial costs faster. In later years, the landowner shares in a greater percentage of profits.

Royalty leases should always include an audit provision, Aakre says, which allows access to the company’s financial records “to verify the revenues produced by the wind farm.”

5. What happens when the project ends?

“A frequent fear of landowners is that the developer will default or dissolve, and the landowner will be left with huge, inoperable machines” littering the property, Ferrell says.

Such fears are not unfounded, Aakre says. “It’s a real risk.” North Dakota’s relatively weak reclamation law, for example, “permits turbines to stand idle so long that the company could be long gone.”

Your lease should provide for the removal of the wind farm structures and roads when the project is finished and restoration of the soils, Aakre says. The lease should outline your rights if the wind company doesn’t fulfill its obligation. Some agreements require a performance bond from the developer to ensure that money is available to pay for decommissioning.

Land reclamation is one of the most difficult parts of a wind-power lease negotiation, Retherford says. Although the towers have significant metal salvage value, they require specialized cranes to dismantle. And the massive foundations are expensive to remove.

“Each turbine has 40 yards of concrete in the foundation. One company wanted to grind the concrete down to 6 ft., but we negotiated removal down to 8 ft. so you could tile over it.” Benton County, IN, where the project is located, requires wind companies to deposit money in an escrow fund to pay for the reclamation, he adds.

Types of wind-power property agreements

There are several types of legal agreements that give developers access to your land and wind, says Jennifer Jambor-Delgado, a staff attorney at Farmers’ Legal Action Group, which has published a book on wind-power leases (www.flaginc.org). Farmers should keep in mind that “once you have a written agreement with a developer, that agreement controls” the rights and obligations of both parties, she says. “Any verbal agreements can’t be relied on if they are not written into the contract.”

Property agreements used to develop a wind farm include:

• Option: Gives the developer the right to lease the land at an agreed-upon price, subject to agreed-upon terms.
• Access Easement:Allows the developer to travel across your property and construct roads to reach turbine areas.
• Construction Easement: Gives access for construction of turbines and support equipment, as well as temporary “lay-down” areas for equipment and machinery storage.
• Transmission Easement: Allows developer to construct and operate underground and above-ground transmission lines and substations.
• Wind Non-obstruction Easement: You agree not to construct any improvements that could interfere with wind speed or direction.
• Overhang or Encroachment Easement: You agree to allow turbine blades to overhang your property, even if the turbine is not on your land.
• Noise Easement: You agree to allow a certain level of noise from the turbine.
• Covenant:Binds later purchasers of the land to abide by certain restrictions.
• Lease:Creates a landlord-tenant relationship for a set period of time allowing tenant the exclusive right to use the property. If the landowner wants to retain rights to use the land, such rights must be specifically stated.

Sources: Shannon Ferrell, Oklahoma State University; Windustry; Farmers’ Legal Action Group, Inc.

Senate Votes Down Big Oil, But Also Renewable Energy PTC

SOURCE SustainableBusiness.com News

Yesterday, the Senate voted on several important amendments to the Transportation bill. 

All the amendments failed: the Renewable Energy Production Tax Credit (PTC) was not extended; the bid to open oil and oil shale drilling everywhere was defeated, as was the attempt to eliminate ALL energy tax breaks and retroactively rescind renewable energy tax breaks that have already been granted. 

Renewable Energy Production Tax Credit (PTC)

The Senate voted not to extend the PTC which expires at the end of this year, 49-49.

Sen. Debbie Stabenow's (D-MI) amendment needed 60 votes to pass.

It would also have extended the tax grant program as well as incentives for energy efficient homes, appliances, electric vehicles, and efficient manufacturing.

Eliminate All Energy Tax Breaks

Sen. Jim DeMint's (R-SC) amendment to eliminate all energy tax breaks failed 26-72.

His amendment would have applied the savings to a corporate tax cut and would have repealed the soon-to-expire renewable PTC immediately, along with incentives for electric cars, biofuels, and some oil and gas incentives.

Open Oil Drilling Everywhere

Sen. Pat Roberts's (R-KS) sweeping amendment to force the opening of the entire east and west coasts to oil drilling, millions of acres in the West to oil shale, open the Arctic National Refuge and Bristol Bay in Alaska to drilling, and force through Canada's tar sands pipeline was defeated 41-57. 

TURBINES CAUSED HEALTH PROBLEMS

www.htrnews.com

March 12 2012 

by Alyssa Ashley

Since I am not old enough to vote or sign a petition, I would like a chance to voice the truth. On May 8, 2011, I left my home in Glenmore, Wis., due to many health problems that are a result from the Shirley Wind Project built at the end of 2010.

Inside my home, I was able to detect when the turbines were turning on and off by the sensations in my ears. I could not hear or see the turbines at the time; I could feel them. In early 2011, I had been noticing extreme headaches, ear pain and sleep deprivation, all three things that were either a rarity for me, or nonexistent. This caused me to struggle with my school work. I could not concentrate due to pressure releasing from my head, or to the fact that I had very little sleep.

After staying away from my home for a week-and-a-half, my symptoms started to subside. I could sleep again, and my headaches were lessening. The longer I was away, the better I felt. Due to our turbine-related health issues, I spent all summer living in a camper with my family, away from the turbines.

At the end of August, my family reluctantly purchased another small house away from the wind turbines, leaving us paying two mortgages. I have not been in the Shirley area since Nov. 19, 2011, and I do not experience headaches anymore and I can sleep soundly.

My ears, however, are still sensitive to the cold and loud noises. This has never been a problem for me in my entire life, and I wonder if this damage to my ears will ever go away.

When contemplating wind turbine siting, think of me.

Alyssa Ashley

De Pere

SECOND FEATURE

BIRD CONSERVANCY SEEKS ENFORCEABLE WIND TURBINE STANDARDS

Bonner R. Cohen

SOURCE Heartlander, news.heartland.org

March 13, 2012 

The American Bird Conservancy has filed a 100-page petition with the U.S. Fish and Wildlife Service (FWS) requesting replacement of FWS’s proposed voluntary guidelines for operating wind farms with mandatory, enforceable standards designed to protect birds and bats from turbines’ deadly blades.

If FWS accepts the arguments laid out in the Bird Conservancy’s petition, wind farms will be subject to a mandatory permitting system and required to mitigate harm to birds and bats.

Massive Bird Kills

Although wind power supplies only 2 percent of electricity in the United States, FWS reports the wind turbines supplying that power kill 440,000 birds each year. Other analysts maintain the number is much larger because FWS may be overlooking a substantial number of birds that receive mortal wounds from turbine strikes but don’t die in the immediate vicinity of the machines, where FWS counts bird carcasses.

Two well-documented incidents in the mountains of West Virginia shed light on the magnitude of the problem. On a single night in September 2011, a single wind farm atop Mount Storm killed 59 birds. One month later, 484 birds were killed in a single night at the newly constructed wind farm on Laurel Mountain.

In these and other incidents across the country, birds of every description—hawks, bald eagles, golden eagles, the endangered California condor, yellow-billed cuckoos, wood thrushes, and other migratory birds—have lost their lives to wind farms.

Wind Farms Given Free Pass

Migratory birds may pose the biggest threat to the wind energy industry. To date, the Migratory Bird Treaty Act has not been applied to wind firms, but the potential liability could pose a real problem to the industry. The law does not require intent, meaning incidental kills could be prosecuted by the Justice Department.

The legal uncertainty over the potential liability of wind farms might make an FWS permitting process the lesser of two evils for the wind industry. Fearful a permitting process would lead to costly bureaucratic delays, the American Wind Energy Association (AWEA) has expressed a clear preference for FWS’s proposed voluntary guidelines. But a change of heart by the Justice Department leading to prosecution of owners of wind farms for incidental kills of migratory birds would cast a pall over the whole industry.

The industry has never been told it would not be prosecuted. Similarly, if endangered birds or bats are killed in sufficient numbers by wind farms so as to trigger lawsuits under the Endangered Species Act, the industry could be facing even greater uncertainty and costly litigation.

Congress Reconsidering Subsidies

Meanwhile, the wind industry, which has seen its political connections pay off in recent years, is facing a serious threat from another direction: Congress is losing its appetite for subsidizing renewable energy. The spectacular bankruptcy of solar panel maker Solyndra, with a loss of over $500 million suffered by U.S. taxpayers, has made Capitol Hill lawmakers wary of loan guarantees and other subsidies designed to prop up renewable energy ventures.

For years, the wind energy industry has benefited from, and indeed depended on, one such subsidy, known as the production tax credit (PTC). The PTC provides a 2.2 cents-per-kilowatt-hour subsidy for wind power generators for their first ten years of existence. In effect since 1992, the PTC could well expire at the end of this year. In working out a deal earlier this year on the extension of the payroll tax deduction, the House and Senate, despite heavy lobbying by AWEA, refused to include an extension of the PTC.

Without the PTC, the industry will be hobbled in its efforts to compete with cheaper coal and natural gas. With the growing likelihood of an expiration of the PTC at the end of the year, orders for new turbines have come to a screeching halt.

Wind Power’s Environmental Downside

“It’s about time that we look at the downside of alternative energies,” said Marita Noon, executive director of the Citizens’ Alliance for Responsible Energy.

“Since the theory of manmade climate change became fashionable, we’ve heard only that fossil fuels are bad and renewable energy is good,” said Noon. “The propaganda shows pictures of black smoke belching out of stacks contrasted with pristine, white, wind turbines. Neither reflects reality. The black smoke was cleaned up years ago. Wind turbines kill birds and bats.

“As Americans make energy decisions, they need to be based on reality, on complete science,” Noon explained. “There is no free lunch, and energy policy should fully weigh the pros and cons of each option.”

Above, PR man for VESTAS speaking about theoretical turbine noise.

Below, the reality of turbine noise: Recorded by a Wisconsin resident in Fond Du Lac County.

From California

SURVEY FINDS HIGH RATE OF WIND TURBINE SYNDROME FROM NEWER TURBINE MODELS

By Miriam Raftery,

SOURCE: East County Magazine, eastcountymagazine.org

March 10, 2012 

With two new wind farms proposed for our region and another already in operation, evaluating potential health impacts is important.

A survey was conducted on wind farm noise as part of a Master’s dissertation by Zhenhua Wang, a graduate student in Geography, Environment and Population at the University of Adelaide, Australia. The results show that 70% of respondents living up to 5 kilometers away report being negatively affected by wind turbine noise, with more than 50% of them “very or moderately negatively affected”. This is considerably higher than what was found in previous studies conducted in Europe.

The survey was made in the vicinity of the Waterloo wind farm, South Australia, which is composed of 37 Vestas V90 3 MW turbines stretching over 18 km (1). These mega turbines are reported to be emitting more low frequency noise (LFN) than smaller models, and this causes more people to be affected, and over greater distances, by the usual symptoms of the Wind Turbine Syndrome (WTS): insomnia, headaches, nausea, stress, poor ability to concentrate, irritability, etc, leading to poorer health and a reduced immunity to illness.

The wind industry has consistently downplayed concerns over health issues, disputing findings such as those made by Dr. Nina Pierpont in her book and peer-reviewed report, Wind Turbine Syndrome. Dr. Pierpont received her medical degree from John Hopkins University and holds a PhD from Princeton University.

However some jurisdictions are enacting regulations to protect residents as evidence mounts to suggest negative health impacts are a dark side of going green through wind energy.

The Danish government recognized recently that LFN is an aggravating component in the noise that affects wind farm neighbors. This prompted their issuing regulations that limit low-frequency noise levels inside homes to 20 dB(A). Unfortunately, as denounced by Professor Henrik Moller, they manipulated the calculation parameters so as to allow LFN inside homes to actually reach 30 dB(A) in 30% of cases. “Hardly anyone would accept 30 dB(A) in their homes at night”, wrote the Professor last month (2).

A summary of the Australian survey has been published (3), but the full Masters dissertation has not been made available to the public. In the interest of public health, the European Platform against Windfarms (EPAW) and the North-American Platform against Windpower (NA-PAW), have asked the University of Adelaide to release this important document.

A neighbor of the Waterloo wind farm, Mr Andreas Marciniak, wrote to a local newspaper last week: “Do you think it’s funny that at my age I had to move to Adelaide into my Mother’s shed and my brother had to move to Hamilton into a caravan with no water or electricity?” Both Mr Marciniak and his brother have been advised by their treating doctors, including a cardiologist, to leave their homes and not return when the wind turbines are turning.

How many people will be forced to abandon their homes before governments pay attention, wonder the thousands of wind farm victims represented by EPAW and NAPAW. “It’ll take time to gather enough money for a big lawsuit”, says Sherri Lange, of NAPAW. “But time is on our side: victim numbers are increasing steadily.”

References:
(1) – http://ecogeneration.com.au/news/waterloo_wind_farm_officially_opened/054715/
(2) – http://www.epaw.org/press/EPAW_NA-PAW_media_release_10Feb2012.pdf
(3) – http://www.wind-watch.org/documents/evaluation-of-wind-farm-noise-policies-in-south-australia/