Care with wind farm contracts urged

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February 23, 2017 - 12:00 AM

MORAN — A handful of farmers were warned here Tuesday evening to explore fully before signing any contract that proposed use of their land for wind farm turbines.
“I hope you are here ahead” of signing a contract, said Roger A. McEowen, Kansas Farm Bureau professor of agricultural law and taxation at Washburn University’s School of Law.
Of the eight attendees with farm interests, three have been approached about land for a wind farm. A fourth, Gary Covey, already has signed on with NextEra. He expressed no regrets.
McEowen said wind farm contracts often are modeled after oil and gas leases, some having originated a century ago, and “all are written by the company.”
EDP Renewables, a subsidy of an international energy company based in Madrid, Spain, already has lease options on 14,000 acres north of U.S. 54 in the east part of Allen County. Rory Peterson, associate director of development for EDP in Kansas City, Kan., told the Register his company expected to erect between 58 and 100 turbines, with two or three and no more than five on a section (640 acres) of land.
NextEra is a more recent player, and has designs for a wind farm in Bourbon and southeast Allen counties. Sam Massey, NextEra project director, is not ready to attach numbers for his company’s endeavor, although it was noted Tuesday evening NextEra is offering $1,000 a year to hold land, regardless of acreage involved, until it is ready to make a move forward.
Among McEowen’s suggestions was for landowners to band together to negotiate to “a better deal.” He also agreed that engaging legal counsel would be wise before signing any binding document.

THE PROFESSOR dove into specifics of contracts and asides that might come into play.
About 5.5 percent of U.S. power is generated by commercial wind turbines, he noted, and if action to contrary is not taken, federal tax credits will amount of $23.7 billion during 2016-2020.
In Kansas, wind farms enjoyed tax abatement for perpetuity until the law was changed last year to 10 years. Counties, who carry the biggest club because commissioners hold sway over rural zoning, negotiate payments in lieu of (property) taxes (PILOT). EDP paid Coffey County nearly $500,000 last year for the wind farm near Waverly.
Farmers should evaluate more other than just financial aspects of a contract, McEowen continued. Such as: environmental concerns, issues neighborhood might have, zoning and setbacks of turbines from residences and boundary lines, and effect on farm programs. If a turbine were placed on CRP (Conservation Reserve Program) ground, that might violate a landowner’s eligibility, even to the point he might have to repay what had been earned from CRP enrollment, he said.
Succession of ownership within a family or sale to a third party might be affected by terms of a lease, he added.
McEowen mentioned several farm issues that should be considered — trespassing, third party usage of the land, environmental and aesthetics matters and nuisance complaints.
He dwelt on the nuisance factor. In recent court cases elsewhere judgments have been leveled against energy companies because of such things as noise and vibrations emanating from turbines, flicker from blades, pulsating red clearance lights atop towers and the imposing appearance of generators standing on nearby property. Those all are issues that Patti Boyd, rural Moran, spoke about in her rail against wind farms in recent planning commission meetings.
McEowen, when he concluded, did say wind farms hold certain economic development advantage, as long as federal tax credits are in place. He questioned whether they would be viable without federal support.
Covey, in a conversation with the Register, said economic development was on his mind when he agreed to open his farm to NextEra.
“I remember people in some small towns didn’t want industry years ago and now they wish they had; they’re dying.” The county will benefit financially from the wind farms, he said, “and we have to have things to keep our kids here. They have to have jobs.”
Peterson said EDP would have 12 to 18 technicians onsite with its wind farm, providing 24/7  response if any problems occurred. Reality is such projects mean to make a profit and don’t if turbines aren’t operating. Also, it is logical companies are eager to avoid problems with landowners, those whose land they lease and others, to keep turbines generating.
McEowen’s counter was that many investors shy from wind farms and contracts often are assigned to foreign companies — EDP clearly is associated with the Spanish conglomerate.

LIABILITY is a component of any venture and with wind farms McEowen urged his listeners to be certain they have that issue under thumb before signing a contract that obligates their land.
This, and others issues, are addressed in an 11-page document County Counselor Alan Weber put together with help of planning commissioners in meetings over several months.
Landowners also would be wise to ensure themselves lease termination rights don’t rest solely with a developer, and compensation is to their way of liking, he advised.
“You want the contract to say I’m just leasing the ground and have no responsibility,” McEowen stressed.

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