OUR 'LIVING WITH TURBINES' QUOTE OF THE DAY:

SOURCE -The Caledonian-Record, Letters to the editor

January 20, 2010

"Like Chinese Water Torture" by Justin Lindholm

"When turbine blades are spinning in an average decent wind, the tips of these blades are moving at about 180 miles per hour and are bent back severely because of resistance to the wind.

This resistance to the wind, plus the high speed of the tips, causes turbulence, which creates noise.

The noise sounds like that of a stiff wind when one stands only a couple hundred yards away from the towers.

But when one stands at a spot ½-mile to over 2 miles away, the sound is a low, dull, penetrating, throbbing series of never-ending pressure waves – hour after hour, day and night, sometimes for days on end, like Chinese water torture.

The Lempster turbines have been operating for about a year now. While I was hunting there this year, I noticed that I didn’t need a compass to orient myself in the deep, dark woods 2½ miles away so long as the turbines were throbbing.

On Dec. 5, I talked to two people who work for the town of Lempster. They told me that people are grieving their taxes because of noise.

They also told me that the wind company has turned from being Mr. Friend before the project to being Mr. Foe now. The company is contesting the town’s assertion that the company’s massively heavy machinery caused road damage."

Read the entire letter by clicking here

CLICK HERE to read Today's Turbines in the News:

The New York Times on the high cost of free wind.

Thinking of leasing your land to a wind developer?

The University of Iowa helps you read the fine print--

SOURCE: "Wind Energy Production: Legal Issues and Related Liability Concerns for Landowners in Iowa and Across the Nation"

University of Iowa, Center for Agricultural Taxation, November 2009

Click here to download entire document.

Legal Issues for Landowners to Consider in Negotiating Wind Energy Easements

A wind energy agreement should never be negotiated without first having the agreement reviewed by legal counsel.

Wind energy agreements are long-term agreements that will impact the land subject to the agreement for many years, likely beyond the lifetime of the landowner who executes the agreement.

The following is a list of questions that landowners should ask when analyzing any wind energy agreement:

Scope Questions:

• How much of the land will be subject to the agreement?

Note: The legal description of the covered property is critical.

• How long will the land subject to the agreement be affected?

• Based on the property rights that are given up, are the proposed payments adequate for the present time and for the life of the agreement?

(Note: The answer to this question requires an understanding of the mechanics and economics of wind energy production.)

Estate Planning Issues

• Is it planned that the farming operation will expand in the future?

If so, how will the placement of wind turbines on the property impact the farm’s potential development
and/or expansion?

• Has the issue of wind turbines development been discussed with the on-farm heirs?

Payment Questions:

• Is the landowner entitled to any or all energy credits related to the project?

• If the agreement offers an up-front lumpsum payment, is the payment representative of a fair amount of the rights involved?

• What are the tax consequences of wind energy payments that will be paid under the agreement?

(Note: The answer to this question depends on tax changes at the federal and state levels – an area which is in an almost constant state of flux.)

• Are payments under the agreement based on revenues generated by the wind turbines? Can the landowner get information as to how the owner’s revenue will be calculated?

• If the wind energy company puts additional equipment on the towers and collects compensation for such placement is the landowner entitled to some of the additional compensation?

• Does the agreement guarantee that a set number of wind energy turbines will be constructed on the land by a specific date and, if not, is the developer willing to guarantee a minimum amount of payments?

What are the developer’s rights?

• Does the developer want to develop the land or simply use a portion of the surface for a term of years?

• Is the developer able to sell or transfer without the landowner’s consent any of the land use rights obtained under the agreement? If so, will the original developer remain liable if the new developer or holder of the easement right does not pay the landowner or otherwise defaults?

• What events trigger the developer’s right to terminate the contract? Can the developer terminate the contract at any time without cause? If so, how are payments due under the agreement to be handled?

Cost Questions:

• Will any portions of the property require gating, fencing or limiting of access in any manner? If so, who pays for the cost or building and/or repairing such measures for restricting access?

• Is there any potential for environmental contamination or the release of hazardous materials onto the premises because of the presence of wind turbines on the property?

If so, how are associated costs to be borne?

• Are any additional costs associated with compliance with governmental regulations of wind turbines, present and in the future, the responsibility of the landowner, developer or wind energy company?

• What is the cost of the landowner becoming an additional insured on the insurance policy of the wind energy company?

• Are there any potential costs of construction liens that might be placed on the property?

• If the agreement limits the ability of the landowner to expand the farm or make improvements (such as installing irrigation equipment, field tile, or additional structures), what are the economic costs to
the overall operation of such limitations?

• The development of the property will require the construction of roads. Does the agreement provide compensation for any damage to existing drainage tile and/or additional costs associated with the change
in the flow of surface water that could negatively impact adjacent property?

• If the development of the property with wind turbines increases the ad valorem real property valuation of the property, must the landowner pay the additional taxes?

• If an adjacent landowner files a lawsuit against the landowner based on nuisance or other tort theories, will the wind energy company pay the landowner's legal costs and any resulting judgment rendered against the landowner directly tied to the presence of the wind turbines?

• When the agreement ends or is otherwise terminated, does the landowner bear the cost of removing wind energy structures? What are the landowner’s rights?

• What termination rights does the landowner have? How does the landowner exercise those rights?

Note: Wind energy agreements often contain termination clauses designed to minimize the risk of termination to the developer so as to aid the developer in receiving financing. Accordingly, wind energy agreements typically prevent a landowner from terminating (or taking action against the wind energy company) an agreement due to noise, flicker, vibrations, air turbulence, electromagnetic interference with global positioning systems, and other effects caused by the wind turbines.

• If the agreement is terminated, whether by consent of the parties or otherwise, what happens to the wind energy structures and located facilities erected on the property?

What is the developer required to remove? How soon must structures be removed? Who pays for their removal?

Crafting an Equitable Agreement

When a wind energy agreement is being negotiated, certain issues are critical to the creation of an equitable agreement.

Unfortunately, a common problem with many wind energy agreements is that once they are proposed and submitted to a landowner, the company wanting to execute an agreement tends to refuse to negotiate changes to the terms of the agreement.

The company’s ability to refuse to negotiate terms of the proposed agreement will depend largely on whether a landowner has meaningful options and competent legal representation.

Key provisions to a wind energy agreement that require careful attention by legal counsel for landowners contemplating a wind farm include the following:

• Is the proposed contract a lease or an easement? If a lease is involved, it should be long enough for the developer to recoup its investment (probably at least 20 years).

Does the developer have a right of renewal? If so, does the landowner have the right to renegotiate any of the lease terms?

Any lease should not be perpetual- a violation of the rule against perpetuities might be involved (at least in those states that have retained the rule).

• If an easement is involved, does the easement include turbine sites, substations, air space, buffer areas, vegetation restrictions, building restrictions, transmissions, and associated rights of way?

• Is a sale of the land contemplated? If so,how is the selling price computed? Any sale price should consist of the fair market value of the land plus the wind energy value.

• What are the setback requirements and fees to neighboring landowners?

• What is the amount of compensation to be paid? Take care to ensure that the definition of “gross revenue” is done properly.

Is it defined as the sale of electrons or the sale of green credits, or is it calculated in some other manner?

• Is the revenue to be a flat amount annually, an annual payment per tower, a percentage of gross proceeds, a payment of a certain amount of kilowatt hours generated annually, or an amount based on the selling price of megawatts per year, whichever amount is greater?

• Is an inflationary factor built into the contract payment provisions? To protect the landowner’s interest, there should be.

• Does the agreement cover land that will not be needed for the wind farm and related structures? From the landowner’s perspective, there shouldn’t be such coverage.

• An up-front lump-sum payment has tax consequences- make sure they are understood.

• What are the intentions of the developer concerning the use of the land? That makes understanding the use provisions of the agreement of primary importance. The construction clause should limit the construction of wind energy structures to not more than 3 or 4 years with adequate compensation paid to the landowner for
restricting the use of the land during that time.

• Can the developer assign the agreement? If so, a clause should be inserted that ensures the original developer’s liability if the assignee defaults under the terms of the agreement.

(Note: Developers want the ability to assign the agreement and subordination language.)

• Is the landowner willing to consent to a mortgagee of the developer? If so, a clause should be included that limits the landowner’s obligations to the mortgagee.

• Consider including an indemnification clause that indemnifies the landowner for any liability incurred as a result of permissive activities (such as crop tenants, custom harvesters, and subsurface tenants) on the property subject to the wind energy agreement.

• What are the landowner’s rights concerning usage of the property? For example, will the landowner be able to lease the property for hunting or other recreational activities?

Will the landowner be able to mortgage or insure the property? Can the landowner develop any other potential mineral or renewable energy exploration?

• Consider the use of a clause that requires the landowner to be treated as favorably as neighbors (consider how to define “neighbor”) executing similar agreements.

• Include a clause requiring the removal of all improvements the developer makes upon termination (whether voluntary or otherwise) of the agreement. Relatedly, for developments in the Flint Hills (eastern Kansas), include a provision specifying which party gets the rock that gets excavated to build the wind energy structures.

Note: Regardless of whether termination is voluntary or involuntary, it is critical to set-forth timing and costs
associated with decommissioning.

• Require the agreement to be recorded (not just a “memorandum of agreement”) to eliminate the necessity of having to locate a copy of the lease in the event of sale or mortgage of the property.

• Never agree to confidentiality clauses concerning the terms and conditions of the agreement.

• Have the contract reviewed by the landowner’s insurance agent for analysis of any additional risks created by the wind energy project.

In addition, consideration should be made as to whether a bonding should be required. Similarly, a landowner should consider being a payee on the developer’s insurance policy.

• Will the agreement violate any USDA landuse restrictions if the subject land is enrolled in a USDA program?

If such a possibility exists, consider including in the agreement a clause requiring the developer to indemnify the landowner for any lost government payments or the imposition of any penalties.

• Will the wind farm development be designed so as to minimize interference with aerial crop dusting activities?

• Can the landowner sell the property, or can portions of the property be sold?

• Evaluate the agreement with an eye toward the risk faced by the landowner. This includes environmental concerns, issues that could be raised by neighbors (i.e., nuisance related concerns), and potential violation of applicable zoning and set-back requirements.

Wind Industry Background Check:

The current 'Wind Industry' as it stands would not exist without Enron. This short summary from the University of Iowa explains the connection:

SOURCE: University of Iowa, Center for Agricultural Taxation

"Wind Energy Production: Legal Issues and Related Liability Concerns for Landowners in Iowa and Across the Nation"

Click here to download entire document.

OVERVIEW:
Farmers have long used wind energy. Beginning in the 1800’s, farmers installed several million windmills across the Midwest and Plains to pump water and generate power for lights and radios.

Today, farmers, ranchers, and other rural landowners in suitable areas are utilizing wind energy in a different manner.

But, where did the current emphasis on wind generation of electricity come from?

There were early attempts dating back to the 1970s and 1980s, but it wasn’t until the late 1980s and early 1990s, that Enron (an energy company based in Houston, TX) lobbied the Congress with a friendly “renewable energy” project, and packaged it with their “electricity deregulation” lobbying and political efforts.

Their efforts were successful in getting laws passed at both the federal and state levels that would permit them to tie into the grid, require utilities to buy unreliable and unpredictable electricity (i.e., electricity generated by wind) under Renewable Portfolio Standards, allow them to sell “renewable energy certificates” separate and apart from the electricity, and utilize a newly created production tax credit and take advantage of a special accelerated depreciation rule.

SECOND FEATURE:

More from the University of Iowa report: Property Values

"At the present time, anecdotal data indicates that wind turbines have a depressing effect on nearby land values and are a drag on the ag real estate market.

Most recent anecdotal data from Illinois indicates that assessed value on farmland is dropping approximately 22-30 percent on farmland that is near land where wind turbines
have been placed.

Also, the increased risk of getting sued for nuisance has a dampening effect on value. Likewise, the annual payments, to an extent, are replacement income for the property rights that have been given up in getting the turbines in the first place.

Many of the agreements are quite restrictive in terms of potential development of the property, farming activities, placement of buildings, etc.

A willing buyer would take all of those factors into consideration when determining what price to pay for the property "

- "Wind Energy Production: Legal Issues and Related Liability Concerns for Landowners in Iowa and Across the Nation"

University of Iowa, Center for Agricultural Taxation

Click here to download entire document.

THIRD FEATURE: 

Note from the BPWI research nerd: In an already depressed housing market, those who live in areas where wind farms have been proposed have a new problem to contend with when trying to sell their homes. Will the disclosure about the coming wind farm help or hurt the sale? What happens if you sell your home without disclosing it?

More from the University of Iowa report: Contractual Issues

In a recent New York case, the plaintiff bought the defendant’s farm (including the residence) and sought to have the sale contract rescinded based on the seller’s alleged fraud and misrepresentations for not disclosing that plans were in the works for the construction of large wind turbines on an adjacent parcel.

The plaintiffs submitted the affidavit of a neighbor of the defendant who detailed two conversations with the defendant that occurred months before the defendant put his farm on the market during which the wind farm development was discussed.

The defendant, at that time, stated that the presence of commercial wind turbines on the adjacent tract would “force” him to sell his farm.

When the plaintiff sought to rescind the contract, the defendant claimed he had no duty to the plaintiff and that the doctrine of caveat emptor (“buyer beware”) was a complete defense to the action.

The court denied summary judgment for the seller and allowed the case to go to trial.

Near Town of Byron, Fond du Lac County, Wisconsin. Turbine construction phase of Invenergy Forward Energy Wind Farm. Photo by Gerry Meyer

How will you know if wind developers have targeted your community? If you're lucky there may be something about it in the local paper, or something may be listed on the published agenda for the Town board meeting.

In the past, developers were very open with the community about their plans. They changed that once people began to oppose projects. Now they are more likely to keep news of wind farms a secret from the community until key landowners are signed up.

Wisconsin's recently passed turbine siting reform legislation requires that only neighbors directly adjacent to a hosting landowners property be notified that wind turbines are about to go in near their homes.

This notification does not have to happen until the wind developer submits a formal application for the project to the Town board and/or the Public Service Commission.

A developer won't file an application until enough landowners are signed up, so by the time you find out about it, the project may well be on its way. That's what happened to one of our neighbors to the north who tells us his story here

Commentaries: Study of wind project may blow you away

By: Erin Logan, Zumbrota,

SOURCE: The Republican Eagle

Click on the image above to hear what turbines can sound like on a bad day. This video was shot by a resident of the Invenrgy Forward Energy project near the Town of Byron in Fond du Lac County, Wisconsin. The closest turbine to his house is less than 1600 feet away.

Are setbacks and noise limits a public health issue or a profitability issue ?

Profitability for a wind project relies on the same short setbacks and inadequate noise limits that cause problems for residents forced to live with them.

Initially, Wisconsin families complaining of harm due to short setbacks and inadequate noise limits were not believed and even openly ridiculed, particularly by wind developers and lobbyists.

In granting recent approval for the Glacier Hills wind project, the Public Service Commission admitted the problems do exist, and some residents will be bothered by turbine noise and shadow flicker. The commission even suggested the utility consider a buyout of the most severely affected homes.

Now that the PSC has acknowledged the problem, the attitude toward wind farm resident's complaints and concerns has changed. The harm caused to families by inadequate setbacks is now considered unfortunate but acceptable collateral damage, a minor concern when weighed against the greater good.

But what is the greater good in the case of Glacier Hills? Most of us assume it's the reduction of green house gas emissions by using wind power.

However, Clean Wisconsin let the PSC know that there would be no reduction in CO2/GHG levels unless the utility is required to shut down an existing coal burning plant, something the utility has no plans of doing.

In a post hearing brief submitted to the PSC, Clean Wisconsin states:

"If the Commission allows WEPCO to continue construct Glacier Hills and operate all of its existing coal-fired capacity, WEPCO’s rate-payers will be paying over $525 million for a new facility that is not needed to satisfy demand and will not result in overall CO2 emission reductions."

Which begs the question: If there is to be no reduction in CO2 emissions, what is the state getting in exchange for forcing Wisconsin families to sacrifice their health, well being, and property value?

NOTE FROM THE BPWI RESEARCH NERD: It's not just Wisconsin residents who are being forced to make questionable sacrifices. Click on the image below to hear about sacrifices our neighbors to the north are forced to make. An Ontairo dairy farmer speaks about wind leases, turbine related negative health effects and electrical pollution