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.

WIND TURBINE REGULATIONS STILL UP IN THE AIR

by CLAY BARBOUR,

SOURCE madison.com 

December 5, 2011

Officials with the Public Service Commission are still holding on to a set of wind siting rules that were supposed to go into effect almost nine months ago.

The rules were sent to PSC in March. Lawmakers hoped the agency could work out a compromise between the wind industry and its critics and have the new rules in place by now.

Kristin Ruesch, PSC spokeswoman, said the agency had little luck in bringing the two sides together. The issues separating them have not changed: setbacks, noise levels and the effects turbines have on neighboring property owners.

The PSC spent more than a year working out the original rules, with the help of Democrats and Republicans, the wind industry and its critics. Those rules were scheduled to go into effect in March. But after taking office in January, Republican Gov. Scott Walker introduced a bill to increase setbacks.

In the end, the legislative committee that reviews agency rules chose not to act on the governor’s bill and instead voted to send the original rules back to the PSC to see if an agreement could be ironed out.

If no changes are made by March, the original rules go into effect. However, two bills sit in Legislative committees designed to kill the original rules and force the state to start from scratch.

NEXT FEATURE:

West Virginia

YOU CAN'T ESCAPE THE WINING OF THE WINDMILLS

Cumberland Times-News, times-news.com 3 December 2011 ~~

The noise from these windmills on Green Mountain is so great that it is impossible to live near them.

When the wind is from the east there is a constant loud whining that can be heard from inside your home and if it is from the west it sounds like a train running.

The vibrations are so great from the windmills they rattle the windows in my and other neighbors’ homes. The only time there is no noise is when they are shut down.

The front picture window in my house frames three windmills perfectly. I can close the blinds to get away from seeing them, but I cannot get away from the noise.

Anyone who would like to experience this high noise level is welcome to come into my driveway and listen to it. I know this noise is so great that it can never be eliminated.

Neighbors have told me that they have spoken to our county commissioners about this, but they were told they could not do anything.

I believe all of our county commissioners were for the wind farm, These windmills have ruined the lives of both my family and my neighbors.

I want the public to know what these windmills will do to anyone’s life who lives close to them. I have never heard or read anywhere where the windmill advocates ever mentioned the noise level of the windmills.

Most of the time I can hear the windmills from in every room of my house. I have called almost everyone associated with the windmills that I could find a phone number for, but they quit answering or calling me back.

I even called Maria Litos in California who works for I believe Edison Mission Energy and she said they would shut them down at night until they found a solution to stop the noise, but this never happened.

This constant drone from the windmills even makes your head hurt. Something has to be done about this noise because the people around here cannot live with this.

Another problem we have is with the Tasker Road, which I live on, is the cap they put on our road.

This was nothing but a layer of gravel over our original hard surfaced road. This made our road very dangerous as cars would slide almost like on ice.

Most of the gravel has been thrown off of the road by the traffic within a few days. Even the residents on the Pinnacle Road told me they were not happy with the repairing of their road.

I can hear the windmills loud whining even as I write this letter.

Richard L Braithwaite

Keyser, W.Va.

The photos below were taken by Jim Bembinster. They were taken in Columbia County, Wisconsin during the construction phase of a WeEnergies wind project in 2011. One concern farmers have about leasing their land to wind developers is that their fields will be fragmented, making agricultural activities more difficult.

They are right to be concerned.

The photos below were taken by Jim Bembinster. They show how farmfields have been fragmented by wind turbines and access roads in WeEnergie's Columbia County wind project. What they don't show is the compaction of the soil from heavy machinery. Compacted soil affects crop production. Contracts signed by farmers in this project gives WeEnergies the right to site the turbines as they see fit.

CLICK HERE To read about a farmer whose land was leased to WeEnergies for this project and what has happened to his life and his farm since then.

From Minnesota:

SEVERAL LOCAL LANDOWNERS WANT OUT OF WIND CONTRACT

By Regan Carstensen,

SOURCE The Republican Eagle, www.republican-eagle.com

November 21, 2011 

“Those landowners a lot of times are making decisions based on what the wind folks are saying,” said Jaime Edwards of the Minnesota Department of Natural Resources. “If they had both sides of the story, they may not have signed the contracts.”

AWA Goodhue Wind has faced many battles in its journey toward getting a permit for a wind farm in Goodhue County, and another one is about to ensue.

A handful of participating landowners who agreed to be part of the 78-megawatt wind farm are now anxious to get out of their contracts and have sent what they call a letter of termination to AWA Goodhue.

AWA Goodhue officials declined to comment.

In addition to a long list of other reasons, the landowners — who asked not to be identified — said realizations about possible effects on the area’s wildlife caused them to want out of the project.

“Those landowners a lot of times are making decisions based on what the wind folks are saying,” said Jaime Edwards of the Minnesota Department of Natural Resources. “If they had both sides of the story, they may not have signed the contracts.”

Mary Hartman, a Rochester resident, has been monitoring the project footprint because she’s concerned about the area’s ecosystem and how it will be affected by more than 45 wind turbines.

Hartman has been in contact with some of the landowners who are looking to void their contracts, and she said she has been helping them see how she thinks a wind farm could be putting migratory birds — especially eagles — in harm’s way.

“The people who signed didn’t necessarily know that they had to be concerned about this,” Hartman said.

She said that the topography of land — including the rolling terrain and proximity to water — within the project footprint is ideal for eagles and allows them to soar on warm wind currents in the valleys. But Hartman is worried the construction of a wind farm might disrupt their usual flight paths.

“When they want to come out of the ridge, if they’re surrounded by wind turbines they’re going to get hit,” she explained.

DNR officials share Hartman’s concerns.

“It’s nice to try to use alternative energy, but we are right on the Mississippi Flyway,” Edwards said. “You really have to look hard at whether something like this should be placed on a flyway.”

Edwards also said that although the project has fewer than 50 turbines planned, once one moves in, she expects more are likely to follow.

“It’s the American way — if one wind turbine is good, then 200 must be better,” she explained. “But is it really?”

Edwards traveled out to and studied the project footprint in order to provide assessments of any potential impacts to the non-game wildlife there.

Hartman also has had her fair share of bird watching in Belle Creek Township, including a time she pointed out eagles’ nests to officials at Westwood Professional Services, a company that AWA Goodhue hired to assess the project’s impacts on the environment.

Westwood’s technical director of environmental services, Ron Peterson, compiled a report in June about observations he made with Hartman in May, and concluded there were many fewer eagles and nests in the area than she had seen.

He reported that of the 12 nests Hartman said she had previously observed, six did not exist, one was abandoned, one was new but in an uncharacteristic location, three had been previously recognized by Westwood and one was a duplicate reference to an already known nest.

During her most recent trip to Belle Creek Township on Wednesday, Hartman said she saw more than 15 bald eagles in the project footprint. And although the likelihood of seeing them is higher now that it is migration season, Edwards of the DNR said the eagles would be hard to miss at other times of the year as well.

“There’s no way that you cannot see eagles in that area. They were all over the place,” Edwards said of the numerous times she’s studied the area.

In addition to the research done by the DNR, U.S. Fish and Wildlife Service has done studies of the project footprint and made recommendations to AWA Goodhue on how to best avoid negative impacts to the birds.

USFWS can’t do much beyond those suggestions.

“We can’t bring enforcement against anybody until there’s a documented take of a migratory bird or an eagle,” Rich Davis of USFWS explained.

Davis said AWA Goodhue has not applied for an incidental take permit. Without the permit, the company could face a significant fine upon the death of an eagle from a wind turbine collision.

“If they are actually prosecuted for that and found guilty of the take from their project, they would not be eligible to pursue (an incidental take) permit in the future,” he said.

Any additional eagle deaths from wind turbines would result in more substantial fines, Davis said.

TURBINE DAMAGES RAIL TRACK, THEN LEAVES

A couple of men got out, one looked under the turbine, one man hydraulically raised the load; then they got back into the truck and drove off the tracks. They then stopped for a few more minutes before driving away.

One of those eyewitnesses, concerned that approximately four feet of the rail showed a marked twist, called in to 911 to alert authorities of the possible danger.

SOURCE: Lincoln Daily News, www.lincolndailynews.com

Union Pacific and city crews responded to a report of rail damage at the Keokuk Street railroad crossing at 1 p.m. on Thursday. What they found when they got there concerned the officials.

According to witnesses, an eastbound double trailer carrying a wind turbine base supported between two flatbeds did not clear the tracks. When reaching the slight incline of the tracks, the leading flange from the turbine base scrapped the asphalt approaching the tracks and then, catching one of the rails, came to a jarring halt, bending and twisting the rail.

The eyewitnesses stated that the convoy of two lead trucks, the trailer and rear vehicles all stopped. A couple of men got out, one looked under the turbine, one man hydraulically raised the load; then they got back into the truck and drove off the tracks. They then stopped for a few more minutes before driving away.

One of those eyewitnesses, concerned that approximately four feet of the rail showed a marked twist, called in to 911 to alert authorities of the possible danger.

Tracy Jackson, streets and alleys superintendent, and Mark Mathon, city engineer, were at the crossing all afternoon.

According to the officials, a Union Pacific crew on hand at the crossing was waiting for a northbound evening passenger train to pass through Lincoln before attempting any repairs. All trains were being walked through the damaged area at 3 mph until the repairs could be made.

Jackson said the crew hoped to be able to reset the rail into the ground without having to replace it. He added that if the rail needs to be replaced, that will take some time as the special truck that carries such rails would have to be brought in from either St. Louis or Chicago.

Ironically, the crossing is scheduled to be completely reworked in the next few months.

The 5:30 p.m. northbound passenger train came through the crossing at only 3 mph as Union Pacific crewmen kept on eye on the train and the track. Fortunately the train was able to get through the crossing with no problems, and the repair crew began working on the rail.

By the time the 8:30 p.m. southbound Amtrak came through, the crew had finished. This morning there are no flagmen on the scene.

THE COST OF GREEN: HUGE EASTERN OREGON WIND FARM RAISES BIG QUESTIONS ABOUT THE STATE, FEDERAL SUBSIDIES

Source: The Oregonian, www.oregonlive.com

12 March 2011

By Ted Sickinger,

The gravel haulers start rolling down Oregon 74 before dawn, their air brakes bellowing under the heavy loads they ferry into the neighboring hills.

Just over the rimrock of Willow Creek Valley, hard-hatted contractors scramble to pour the base pads and lay electrical cable for 338 wind turbines that will soon spin over 30 square miles of sagebrush in Gilliam and Morrow counties. When completed in 2012, Shepherds Flat is expected to be the largest wind farm in the world.

The project is a poster child for the nation’s love affair with renewable energy. From President Barack Obama to former Gov. Ted Kulongoski, from the Oregon Legislature to rural county courthouses, politicians have embraced renewable energy as an economic and environmental cure-all, a means to create jobs, reduce dependence on fossil fuels and combat global warming.

They have backed that pitch with public dollars. And no state has jumped on the bandwagon more enthusiastically than Oregon, which has given or promised more than $1 billion in tax breaks to green energy projects.

Shepherds Flat is a prime example of that spending, too.

Clyde Smith talks about his decision to leave the Shepherds Flat Wind Farm area Clyde Smith talks about his decision to leave the Shepherds Flat Wind Farm area Clyde Smith says he was offered about $15,000 by Caithness Energy to sign a concession to a 51-decibel level for the wind turbines at Shepherd Flats Wind Farm, near his property. Smith refused and gave them three choices. Of the three, they chose to buy his property rather than build an underground house for him.

[video available HERE]

Indeed, Shepherds Flat demonstrates how Oregon provides millions of dollars to projects that would probably go forward without state subsidies. It illustrates how Oregon taxpayers subsidize California’s renewable energy demand. It shows how developers have used the program’s loose administrative rules to qualify for multiple tax credits for the same project. And it reveals how a program that was originally intended to promote conservation and clean energy morphed into an extravagantly expensive green jobs program.

Stacking federal, state and county subsidies is perfectly legal. But the result is that taxpayers who subsidize a project may bear a greater burden for development than the company that profits from it.

For Shepherds Flat, for instance, federal, state and local subsidies total more than $1.2 billion, about 65 percent of its $1.9 billion cost, according to a White House memo.

Caithness Energy, the New York-based developer of Shepherds Flat, did not respond to numerous phone calls from The Oregonian or detailed questions e-mailed to the company concerning the White House analysis and the company’s state tax breaks.

Clyde Smith, a retired truck driver who recently sold his property to Caithness rather than live in the wake of the project’s noise, says he’s been treated well by the company, including a purchase price well above the value of his property.

But as a taxpayer, he’s outraged.

“This is taking money out of your pocket, my pocket, everybody’s pocket,” he said. “This is a boondoggle of boondoggles. It’s a huge waste of our state and federal money.”

To be sure, Shepherds Flat is a boon for Gilliam and Morrow counties, which stand to collect more than $100 million in taxes and fees from the project over 15 years. Construction will create 400 temporary jobs. The project’s ongoing operation will bring 35 permanent jobs into a moribund employment market. And a few landowners will collect lucrative lease fees for the turbines on their property.

“It’s more jobs than that part of the state has seen in 20 years,” said Paul Woodin, a consultant who helped Gilliam and Morrow counties negotiate property tax breaks with Caithness. “It’s changing the economics of these counties.”

Yet by any standard, the cost per job is enormous: $34 million per permanent position when all federal and state subsidies are tallied. Moreover, it’s not clear that those jobs have any link to the $30 million in proposed tax credits from the state of Oregon.

“It just makes me sick,” said state Sen. Ginny Burdick, D-Portland, who attempted to reduce the tax credit for large wind farms during the 2009 Legislature but was forced to compromise after Kulongoski vetoed the bill.

“This really exemplifies the problem,” she said. “This is a windfall for a particular company, and that’s not what a taxpayer subsidy is supposed to do.”

Huge federal subsidies

In his most recent State of the Union address, Obama described the nation’s clean energy push as part of this generation’s “Sputnik moment.” He proposed a major increase in research subsidies and urged Congress to pass a national mandate that 80 percent of the nation’s electricity come from “clean” sources by 2035.

Yet Obama’s own advisers have been critical of some of the green subsidies he champions. Last October, former Treasury Secretary Larry Summers, energy czar Carol Browner, and Vice President Joe Biden’s chief of staff Ron Klain wrote a memo to the president outlining a number of problems with the federal government’s loan guarantee program for renewable energy.

They included the fact that taxpayers were subsidizing projects that would have gone ahead anyway.

Shepherds Flat was Exhibit A.

The memo said the project was “double-dipping,” gorging on a $1.2 billion smorgasbord of federal and state subsidies. The incentives — all within existing law — include a $500 million federal grant, $200 million in federal and state tax benefits from accelerated depreciation, $220 million in premium power prices attributed to state renewable energy mandates, and a $1.3 billion loan guarantee with a value of $300 million.

The memo concluded that the carbon reductions from Shepherds Flat would have to be valued at more than six times the going rate for the climate benefits to equal the subsidies.

Meanwhile, they said, Caithness has “little skin in the game” — about 10 percent of the project’s cost — but stands to earn a 30 percent return on its investment.

“This project would likely move without the loan guarantee,” the memo concluded. “The economics are favorable for wind investment given tax credits and state renewable energy standards.”

A profitable place to build

Wind farm developers have long insisted that Oregon’s business energy tax credit is essential to attract them here rather than to competing states. And there certainly has been an explosion of utility-scale wind farms built in Oregon since 2007.

That’s when the Legislature passed a law that said Oregon would pay 50 percent of the cost of a developer’s new facility, up to $20 million, or a $10 million credit per project.

The legislators who created and expanded the program “should be commended,” said a statement from the Renewable Northwest Project, an advocacy group whose members include project developers, environmental groups and ratepayer advocates. The credits “put Oregon on the map, and it is our hope that sustained support for the program and renewable energy expansion will continue our state’s leadership.”

As generous as Oregon’s tax credits are, many developers aren’t content with just one, and have subdivided their projects to qualify for multiple tax credits.

Shepherds Flat is no exception. In 2007, Caithness applied to Oregon’s Energy Facility Siting Council for a site certificate covering a single project. But by July 2008, when Caithness submitted applications for tax credits, the project had been divided into three legal entities, each applying for a separate $10 million tax credit.

A cover letter accompanying the applications explained that the company originally sought a single permit for “reasons of efficiency and economy,” and would amend its site certificate to reflect the new reality.

The letter went on to say that no financial commitment had been made to the project, and “making such financial commitments depends in significant part” on whether the tax credits were certified by the state.

Such arm-twisting has become a standard — and effective — part of the industry’s lobbying message in Salem. Kulongoski vetoed a bill in 2009 that would have slashed Oregon’s tax subsidies for large wind farms, insisting that it went too far and would jeopardize the growth of Oregon’s green economy.

Yet Oregon has all the essential ingredients for a profitable wind project already in place: a ready market, plenty of wind, and transmission to move the power.

Oregon, California and Washington have each established aggressive renewable energy standards, creating a big, guaranteed market. Utilities are effectively required to invest in windmills, and independent developers are assured of ready customers for their premium-priced power.

Industry officials insist that there are windier places to build than Oregon, notably Wyoming. But Oregon’s wind belt sits directly atop the existing high voltage transmission system built to ship electricity from nearby hydroelectric dams around the Northwest, and even more important, to California.

California already purchases more than half the wind power generated in the Northwest. And when Shepherds Flat is completed, all of its subsidized output is contracted to go to Southern California Edison.

Economical transmission is a make or break proposition for wind projects. Despite growing transmission congestion in the Northwest, Portland General Electric estimates that the cost of importing wind from Wyoming would be 66 percent higher than a local resource, mostly because of transmission costs.

Wyoming offers little in the way of incentives to wind farm developers. In fact, lawmakers there passed an excise tax last year on wind farm output. A study conducted for Wyoming by Energy and Environmental Economics Inc., or E3, found that Oregon’s wind farms could deliver electricity to the West Coast more cheaply than Wyoming’s — even if Oregon’s energy tax credits were eliminated.

Wind developers have told Oregon legislators that in the absence of the state tax credits, Washington is a better place to build because of lower property taxes.

But E3 found the opposite.

“Our analysis found that Washington has one of the least favorable tax codes for wind,” said Arne Olson, a partner with E3. Oregon’s tax structure is favorable to wind even without the tax breaks, he said. “It’s not even close.”

That conclusion didn’t factor in the property tax breaks Oregon counties are providing to wind farm developers. Gilliam and Morrow counties, for example, have agreed to cut Shepherds Flat’s property taxes by an estimated $34 million over the life of their 15-year agreements with Caithness.

Terry Tallman, the Morrow County judge who helped negotiate property tax breaks with Caithness, suspects the state tax break wasn’t necessary to attract the investment. Another wind company considering a large project in the county, Spain’s Gamesa, told Morrow County commissioners that the state credits won’t be a factor in its investment decision.

PGE and PacifiCorp say essentially the same thing.

In the end, E3′s Olson said, both states are seeing plenty of new wind farms, because “the gorge region has been ideal. It meets all the criteria, and that’s why you’ve seen the development.”

SHEPHERDS FLAT WIND FARM: WHAT'S THE COST TO TAX PAYERS?

The Business Energy Tax Credit started life in the 1970s as a conservation and clean energy incentive, but the chief rationale has become economic development — namely green jobs.

So just how much does a wind farm job cost taxpayers? The answer depends on the formula, and involves an implicit assumption that the jobs wouldn’t exist without the subsidy — questionable in the case of Oregon’s large wind farms.

Either way, the simplest formula is to divide all public subsidies for a project by the number of permanent jobs it creates. For Shepherds Flat, with $1.2 billion in subsidies for 35 permanent jobs, that equation delivers a cost per job of $34 million.

Oregon taxpayers pay a share of the federal subsidies, but for simplicity’s sake, consider the cost of the jobs based on the Oregon tax credits alone.

Shepherds Flat is pre-certified for $30 million in state tax credits. At that price, the cost per permanent position is $857,000.

Bob Repine, director of the Oregon Department of Energy, says it’s possible that Shepherds Flat might not get final approval for all three tax credits. One tax credit would cost $10 million, or $285,000 a job.

Critics of tax credits like to calculate how long it would take to repay the subsidies from personal income taxes generated by the resulting jobs.

Industry experts estimate that the 35 permanent jobs would pay an average of $50,000 a year in wages. Assume each employee gets an annual raise of 3 percent. On that basis, it would take about 46 years to generate $10 million in tax revenues from the jobs created directly by the project, and 77 years to generate $30 million.

At a minimum, that’s double the effective life of the wind turbines for the state subsidies alone.

Economic development officials say such analyses are too simplistic. When they analyze the potential return on an incentive, they factor in a multiplier effect that accounts for all the other jobs created indirectly as workers spend their wages and businesses buy local supplies.

That multiplier would be smaller for a wind farm than say, a manufacturer, as wind farms don’t buy as many supplies or raw materials, and the equipment installed is manufactured elsewhere. But in the interest of conservatism, assume that the multiplier effect quadruples the number of permanent jobs created by Shepherds Flat. Then assume that all of the resulting jobs pay $50,000 a year, with 3 percent annual raises, whether it’s a grocery store clerk, a truck driver or the manager of a hardware store.

It’s an economic development fantasy. But under that scenario, it would still take 19 years to repay $10 million in subsidies for Shepherd’s Flat, and 39 years to repay $30 million.

WIND FARM WILL BE INVASIVE TO FARMS

SOURCE Wisconsin State Journal, host.madison.com

June 3, 2010

Regarding the State Journal editorial on May 25 titled “Wind turbines fit with farms”: As a resident of the town of Scott in northeast Columbia County, I can tell you the Glacier Hills Energy Park is not like the wind project at Montfort in Iowa County, which you featured in a photograph.

When Florida Power and Light first proposed a wind farm to our family, the idea was to place a row of turbines on an area we call the high line. This sounded like an idea worth pursuing. Seven years later, with WE Energies in control, the project has 90 very large turbines in a scattered pattern that are invasive to everyone’s environment in this area.

Contrary to what you think, there will be a large amount of very productive farm land out of production, or production will be compromised.

I heard very compelling testimony at a PSC hearing against this turbine arrangement. After the hearing, I felt the PSC would never allow this project. The evidence appears to have been disregarded.

It is alarming what a large company with government support can do to ordinary people. As a farming family, we could have turbines on our property in the future, but we now doubt if the money is worth the cost.

Sharon Prochnow, Cambria

SECOND FEATURE

COUPLE SETTLE LAWSUIT ON WIND TURBINE NOISE

SOURCE: Altoona Mirror

By Kay Stephens and David Hurst

June 4, 2010

HOLLIDAYSBURG - The lawsuit between a Blair County couple and a company that operates Allegheny Ridge Wind Farm has been settled.

"All I can say about the resolution is that it's confidential," Pittsburgh attorney Bradley S. Tupi said Thursday. "I can't talk about the settlement."

Tupi represented Todd and Jill Stull, the Portage RD couple who sued in May 2008, complaining that the wind turbine noise had destroyed their quality of life.

They moved to the Juniata Township farm in 1992, and the turbine farm, which borders their property and spans five townships, went into operation in 2007.

The court case between the Stulls and Allegheny Ridge Wind Farm LLC was on track for a jury trial in July before Blair County Judge Daniel Milliron.

Tupi recently filed the decision on the settlement, with no details, at the Blair County Courthouse.

Allegheny Ridge attorney Jason Richey, who has been contesting the complaints and challenging the Stulls' requests for information, filed nothing at the courthouse regarding the settlement.

Richey and the Stulls did not return phone calls for comment.

Everyone involved in the case has agreed to the confidentiality clause, Tupi said.

The Portage Township supervisors were aware of the settlement and its confidentiality clause.

"The township didn't have to pay anything," Supervisor Kenneth Trimbath said. "This was between [Allegheny Ridge] and the Stulls."

The township paid about $420 in legal fees to attorney Walter Wall in connection with the lawsuit. It called the money well spent.

"We had our lawyers involved to keep us out of it," township Manager Bruce Brunett said, "And it worked."

Juniata Township supervisors previously tried to help resolve the Stulls' complaint by working with the wind farm operators and then by hiring an independent company to measure the turbine noise.

But after the study came back showing the wind turbine noise lower than levels permitted by ordinance, solicitor Michael Routch advised supervisors that the township was not in a position to do more.

Other Juniata Township residents, in addition to the Stulls, have complained about turbine noise from the Allegheny Ridge Wind Farm.

"Tell them to contact me," Tupi said.

SOME BACKGROUND ON THE LAWSUIT:

Wind experts duped local officials, Blue Knob couple’s lawsuit claims

SOURCE The Tribune Democrat 

December 24, 2008

By KATHY MELLOTT

HOLLIDAYSBURG — New documents filed in an ongoing civil lawsuit by a Portage-area couple against the Allegheny Ridge Wind Farm say that wind energy experts duped local officials into believing the turbine sound was insignificant.

Todd and Jill Stull of the Blue Knob area say that developer Gamesa Energy USA and owner Babcock & Brown misled local officials by supporting development of an ordinance addressing higher noise levels.

The Stulls filed an amended suit Tuesday. The ordinance establishes a maximum sound level of 45 decibels and does not address the lower frequency noises, including turbine vibration that is said to cause health and other problems suffered by the Stulls.

Mrs. Stull, holding a bottle of water inside her home, can feel the turbines’ vibrations throughout her hand, their lawyer said.

Nine of the 40 windmills in Phase One of the planned three-phase wind farm are within a mile of the Stulls’ home, which is situated where the Portage, Juniata and Greenfield township lines converge.

Three years ago, ordinances established that turbines must be a minimum 2,000 feet from residences and not exceed a noise level of 45 decibels. They were adopted by Portage, Washington and Cresson townships, Cambria County, and Juniata and Greenfield townships, Blair County.

The Stulls filed the civil suit in April and, earlier this month, while a Blair judge kept the lawsuit intact, he dismissed several counts, including one claim that Gamesa created a public nuisance.

He allowed to stand a claim that Allegheny Ridge created a private nuisance.

But Pittsburgh Bradley Tupi, representing the Stulls, was told by Judge Daniel Milliron to provide additional evidence in order for a fraudulent misrepresentation claim to stand.

In the amendment, Tupi claimed the companies knew the turbines would be noisy and failed to tell local officials – whom he said were depending on the wind companies for guidance in developing local laws.

“Brian Lammers and/or other Allegheny representatives told the Portage Township officials that the wind turbines would be quiet,” Tupi said in the lawsuit, referring to a May 2005 conversation with then-Supervisors James Decort and Richard Olshavsky.

“Lammers told Portage Township officials that there would be no noise or minimal noise from the wind turbines,” Tupi said in the document.

The Stulls said the turbines have had a significantly negative impact on their sleep, health, quality of life and enjoyment of their 100-acre property purchased in 1992.

They describe the sound from the equipment as a “whooshing” and “screeching.’’

Lammers told officials the windmill noise would be equivalent to a refrigerator.

Representatives from Babcock & Brown and Gamesa could not be immediately reached for comment Wednesday. In the past, Gamesa officials have said they would not comment on the lawsuit.

HAVE YOU REACHED OUT AND TOUCHED YOUR PSC TODAY?

The PSC is asking for public comment on the recently approved draft rules for siting wind turbines in our state. The setback recommended in this draft is 1250 feet from non-participating homes.

CLICK HERE to get a copy of the draft siting rules approved by the commissioners on May 14th, and to find out more about the Wind Siting Council

CLICK HERE and type in docket number 1-AC-231 to read what's been posted so far.

CLICK HERE to leave a comment on the Wind Siting Council Docket