Better Plan, Wisconsin

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.

From Michigan

EXELON SAYS IT'S WORKING WITH UPSET LANDOWNERS

“To say landowners are irate is putting it mildly,” said Fred Hasen, Huron County Planning Commission chairman.

By Kate Hessling, Assistant News Editor,

Source: Huron Daily Tribune, www.michigansthumb.com

March 10, 2012 

ELKTON — A spokesman from Exelon Corp. said Friday the company is working one-on-one with landowners in the Harvest Wind II project to address concerns about land being damaged because of preliminary construction activities for the 59.5 megawatt expansion of Harvest Wind I.

During Wednesday’s Huron County Planning Commission meeting, officials said they had been contacted by landowners in the project area, which includes land in McKinley, Chandler and Oliver townships, because they had concerns that contractors installing underground electrical cables have not been respectful of the farm land, and they fear the activities will affect the condition of the land in the spring.

“To say landowners are irate is putting it mildly,” said Fred Hasen, Huron County Planning Commission chairman.

Bob Judge, communications manager for Exelon Corp., said in the process of trenching land to install underground electrical cable, there have been some issues with equipment because the ground hasn’t frozen as deep as it normally would in this milder-than-normal winter.

“We are handling this situation … and Harvest Wind II will restore the land to the conditions (that existed) before construction,” Judge said, noting conditions in the lease agreements with landowners require the project restore the land to pre-construction conditions. “We are dealing with landowners on a one-to-one basis as this issue arises.”

Exelon still needs final site plan review approval before any wind turbines are erected, and building and zoning officials said the concerns of area landowners will be a topic of discussion when Exelon comes before the planning commission for final approval for its work in McKinley Township.

Oliver and Chandler townships are not under the county’s zoning jurisdiction, but concerns of those landowners will be discussed at the county-level because they are Huron County citizens, planners said Wednesday.

Hasen said Exelon, as well as other wind developers, need to remember they are guests of Huron County, using Huron County’s resources, as wind development projects progress.

Judge said Exelon understands some temporary damage has occurred, and it will restore the land to its pre-digging condition once the trenching is done.

He said trenching began earlier this year, and the project currently is in the beginning phase of construction. Turbine assembly is expected to take place this summer, and the project is expected to be operational by the end of this year.

Project officials previously stated the project will consist of 30 turbines if it uses 2-megawatt turbines and 32 to 33 turbines if it uses 1.8-megawatt turbines.

In the Harvest Wind I project, there are five turbines in Chandler Township and 27 in Oliver.

SIGN THEFTS IN TOWN OF FOREST LEAVE SOME RESIDENTS UNERVED

SOURCE: New Richmond News, www.newrichmond-news.com

March  1, 2012

The Town of Forest has been the target for a 102 megawatt wind turbine project that will be comprised of 41 500-foot towers.

Local residents have diligently fought against the project for over a year and a half, even to the point of recalling the all the members of the town board prior to February 2011.

The project is up for approval by the Wisconsin Public Service Commission and is supported by the developer, Emerging Energies of Wisconsin LLC, host land owners and various green lobbyist organizations.

The residents opposed to the project formed the Forest Voice LLC and continue to fight against it due to the decline in surrounding property values and adverse health effects the turbines would cause. Until now, the opposing sides have interacted mainly in town meetings, letters to the editor, and posting signs in yards – all legal activities.

The climate is beginning to change by recent activities of theft and vandalism to private property by the pro-wind side. Many residents opposed to the project are now afraid on how much this will escalate and what will happen next.

Some town residents who oppose the Highland Wind Farm Project had “No Wind Turbine” signs stolen off their properties overnight Feb. 12th. At least 29 signs were illegally removed and the St. Croix County Sheriff’s Department was notified. An investigation is currently underway.

The developer of the proposed project Emerging Energies of Wisconsin LLC had just announced last week that they were going to drop a $25 million claim against the township in order to create better relations with the Town of Forest. While it is still not known who removed the signs, it was definitely someone that was unhappy with the local opposition to the project.

This is a project that will receive federal subsidies from the Department Of Energy, which of course is (made possible by) our tax dollars. By removing these signs, it is a clear violation of our First Amendment Rights to express our opposition. It is ironic that the various parties supporting it feel it necessary to deny us this right to the point they would illegally trespass on private property to vandalize and steal.

Many of the people that had the signs stolen are now very concerned about the violation of their private property and how far this could escalate.

Over the past year, there have been threats made and reports of unfamiliar vehicles in the township cruising very slowly and observing residences of people known to be in opposition of the wind development.

It is not right that these folks should have to live in fear in their own houses simply because they choose to exercise their First Amendment rights.

Emerging Energies of Wisconsin LLC needs to step up to the plate on this one and assist local law enforcement in apprehending the perpetrators if they truly want to improve relations with the Town of Forest.

A $100 reward is also available for information leading to an arrest.

Jeff Ericson

Town of Forest

LOBBYIST HELPS A PROJECT HE FINANCED IN CONGRESS

via The New York Times, www.nytimes.com

By Erick Litchtblau

January 12, 2012

Amid the revolving door of congressmen-turned-lobbyists, there is nothing particularly remarkable about Mr. Delahunt’s transition, except for one thing. While in Congress, he personally earmarked $1.7 million for the same energy project.

So today, his firm, the Delahunt Group, stands to collect $90,000 or more for six months of work from the town of Hull, on Massachusetts Bay, with 80 percent of it coming from the pot of money he created through a pair of Energy Department grants in his final term in office, records and interviews show.

WASHINGTON — Soon after he retired last year as one of the leading liberals in Congress, former Representative William D. Delahunt of Massachusetts started his own lobbying firm with an office on the 16th floor of a Boston skyscraper. One of his first clients was a small coastal town that has agreed to pay him $15,000 a month for help in developing a wind energy project.

Amid the revolving door of congressmen-turned-lobbyists, there is nothing particularly remarkable about Mr. Delahunt’s transition, except for one thing. While in Congress, he personally earmarked $1.7 million for the same energy project.

So today, his firm, the Delahunt Group, stands to collect $90,000 or more for six months of work from the town of Hull, on Massachusetts Bay, with 80 percent of it coming from the pot of money he created through a pair of Energy Department grants in his final term in office, records and interviews show.

Experts in federal earmarking — a practice of financing pet projects that has been forsaken by many members of Congress as a toxic symbol of political abuse — said they could not recall a case in which a former lawmaker stood to benefit so directly from an earmark he had authorized. Mr. Delahunt’s firm is seeking a review of the arrangement from the Energy Department.

Mr. Delahunt’s work for the town raises legal and ethical questions, mainly because of federal restrictions on the use of federal funds for lobbying, several legal experts said.

Beyond the town of Hull, Mr. Delahunt’s clients include at least three others who received millions of dollars in federal aid with his direct assistance while he was in Congress, records show.

Mr. Delahunt declined repeated requests for an interview last week. In a statement released through his office on Friday, he also declined to respond to specific questions about his work, but said: “I want to be clear — I have no federal lobbying relationship with any past or current client. I have not lobbied anyone in Washington since leaving Congress.

“Further, while in Congress, I had no conversations with anybody regarding any future consulting contract,” he said, “and I am extremely proud of our work and the assistance we were able to bring to many communities throughout our district.” Federal law prohibits former congressmen from lobbying some ex-colleagues for one year after leaving office.

Mr. Delahunt was a natural choice for the job, said Philip E. Lemnios, town manager for Hull, because he was familiar with the stalled project and did impressive work getting the seed money for it while in Congress. The town now hopes to get $60 million or more in federal, state and private funds for four offshore wind turbines that might someday power the entire town and serve as a model for other towns.

“Obviously he’s got connections into the federal government that we don’t have,” Mr. Lemnios said in an interview. “We’re hoping he can open doors at the federal level that we could never open.”

An affable New Englander known for close ties with Republicans as well as fellow Democrats, Mr. Delahunt, 70, has quickly established himself as a go-to lobbyist in the Boston-Washington corridor.

He has capitalized on relationships he developed with many Massachusetts groups in his 14 years representing one of the state’s most affluent districts, which includes Cape Cod and Martha’s Vineyard.

The Mashpee Wampanoag tribe, for instance, paid the Delahunt Group at least $40,000 to lobby for approval of a casino. Mr. Delahunt had secured Congressional earmarks for the tribe totaling $400,000 in 2008 and 2009 for a substance abuse program and other projects, the records show.

The city of Quincy, Mass., meanwhile, brought on Mr. Delahunt last year to help deal with federal officials on a downtown redevelopment program. In 2008, Mr. Delahunt secured nearly $2.4 million in earmarks for the city on a separate tidal restoration project.

And a fishermen’s group on the elbow of Cape Cod hired Mr. Delahunt to navigate regulatory issues; he had helped the group get a low-interest, $500,000 federal loan in 2010, records show. The group, which thanked Mr. Delahunt, then a congressman, for his help getting the loan, used the money to renovate a historic coastal home as its headquarters.

“Bill was an ally of small boat fishermen in Massachusetts, absolutely,” said John Pappalardo, chief executive of the group, the Cape Cod Commercial Hook Fishermen’s Association.

After Mr. Delahunt left Congress, the fishermen’s group hired him “to get the lay of the land politically” about possible changes in federal and regional fishing policies, Mr. Pappalardo said. The group paid the Delahunt Group $14,000 last year for its work, according to lobbying records filed in Massachusetts.

“He was sort of like an emissary,” Mr. Pappalardo said in an interview.

With nearly 400 former members of Congress hired as lobbyists or corporate “consultants” in the last decade, it has become commonplace for ex-members to work for groups or industries that they had helped get financing while in office.

For example, former Senator Rick Santorum of Pennsylvania, who is seeking the Republican nomination for president, has drawn criticism over possible conflicts stemming from his earmarks. After leaving the Senate, he was paid $65,000 in consulting fees from a lobbying shop that represented clients he had helped with earmarks.

Mr. Delahunt’s financial connections to the energy project are much more direct, however.

“That’s not something I’ve ever heard of,” Kenneth A. Gross, a Washington lawyer who specializes in political ethics issues, said when asked about a former congressman receiving fees from earmarks he appropriated.

Several issues could influence whether the unusual arrangement was considered illegal or unethical, Mr. Gross and other ethics lawyers said.

Questions include whether Mr. Delahunt knew that he might go work for the town at the time he requested the earmarks; whether federal funds were being used to “lobby” Congress in violation of federal restrictions; which federal officials Mr. Delahunt’s firm contacted as part of its work; and whether those contacts fell within the one-year “cooling off” period.

Barney Keller, communications director for the Club for Growth, an influential conservative group in Washington that tracks earmarks, said: “I cannot recall such an obvious example of a member of Congress allocating money that went directly into his own pocket. It speaks to why members of Congress shouldn’t be using earmarks.”

Mr. Delahunt, a former district attorney who was known in Congress for embracing liberal causes, also became known over his time in Washington for bringing home federal money. He was particularly active in 2009, ranking in the top fifth of all House members, with more than $46 million in earmarks, including the Hull and Mashpee tribe grants, according to data from the Center for Responsive Politics, a nonprofit research group in Washington.

On retiring in early 2011, he told home-state reporters that he was hesitant to go the typical route of lobbying. But within a few months he did just that, starting the Delahunt Group, where he serves as chairman. He brought in three top congressional aides to help lead it and set up four offices in Massachusetts and Washington, and joined with a national law firm and another lobbying shop as well.

“This is nowhere as stressful as being a congressman,” he told The Cape Cod Times last June as he showed off the firm’s new office on the cape.

But he rejected any suggestion that he was cashing in on his time in Congress. “To say that former members wouldn’t use the skill set they developed, particularly if they are passionate about the interests of their clients, I really think is wrong-headed,” he told the newspaper.

But concerns about possible financial conflicts have already slowed the Delahunt Group’s work on the wind energy project in Hull.

Executives at Mr. Delahunt’s firm have been working informally on the energy project for several months, attending meetings and offering guidance, and they are expected to meet with “key federal and state officials” and provide advice on securing grants for the project, according to a draft of the $15,000-a-month contract.

But the town and the Delahunt Group have delayed signing a formal contract for at least a few weeks. They want to first make certain that Energy Department officials have no concerns about Mr. Delahunt’s unusual dual roles in earmarking the money for the project and now getting paid as a consultant to work on it, according to Mr. Lemnios, the Hull town manager, and Mark Forest, the Delahunt Group’s executive director.

“So far, they don’t have an issue with it,” Mr. Lemnios said. “But it would be a natural thing for people to think there might be a conflict of interest, and if people do have questions about a conflict, we want to be able to address that.”

From Ontario

FARM FEDERATION WANTS BLOCK ON WIND POWER

By Lee Greenberg

via Ottawa Citizen, www.ottawacitizen.com

January 21, 2012

Plans to dot Ontario’s countryside with wind turbines should be shelved, says the province’s largest agricultural organization.

The Ontario Federation of Agriculture is calling on the government to properly address a range of concerns, including the health effects of turbines, before it issues any more permits for development.

“A lot of these issues haven’t been resolved,” says Mark Wales, president of the OFA. “It’s really dividing rural communities and that’s not healthy, that’s not good.”

In a statement Friday, the OFA identifies numerous concerns with wind power, including its inefficiency, excessively high prices and inadequate rules on the distance of turbines to the nearest home.

They’re also pushing the government to give power back to local municipalities.

The provincial Liberals took siting authority away from municipalities because of concerns over NIMBYISM (“Not In My Back Yard”).

“We elected not to give all 440-plus municipalities in the province of Ontario a veto,” says Energy Minister Chris Bentley. “Because the natural result of that would be that no projects would proceed.”

New wind turbines are massive steel structures that stand as tall as 146 metres – higher than most modern skyscrapers.

The OFA is not targeting solar power, or any other less intrusive form of green energy encouraged by Ontario through 2009 legislation.

Wales denies the new position is a knee-jerk reaction against wind.

“Our members are telling us we need to come out strongly,” he said. “The time is now to slow the process down and get it right. There’s so much divisiveness in the rural community, you can’t have a healthy discussion, you can’t find the right solutions.”

Provincial regulations state all turbines must be 550 metres away from the nearest home.

Wind opponents believe low-frequency noise from the turbines disturbs sleep and causes a range of other conditions, including anxiety, de-pression and even hypertension causing heart disease.

Bentley says the OFA helped the government come to that decision. He also says the health concerns “have been reviewed by Ontario’s medical officer of health, the federal health Canada officer (and) a number of tribunals.”

Bentley added that a current review of the legislation could result in more changes, including ways to ensure “greater local input.”

The OFA represents 37,000 farm families across the province. In a statement, the Canadian Wind Energy Association said it was “surprised and disappointed” by the OFA’s position.

“We will continue to provide fact-based answers to ensure Ontarians have the information they need to make informed choices as Ontario moves toward a cleaner, stronger and affordable energy system,” the lobby said in the statement.

The new OFA position comes just days after a couple in Stayner, Ontario, announced a lawsuit against a nearby farmer who leased some land to a wind company. John and Sylvia Wiggins say they have been unable to sell their $1.15 million 48-acre horse farm since the new project was announced.