Resource Library Category: Law (20 items)
Documents presented here are not the product of nor are they necessarily endorsed by National Wind Watch. This resource library is provided to assist anyone wishing to research the issue of industrial wind power and the impacts of its development. The information should be evaluated by each reader to come to their own conclusions about the many areas of debate.
Five questions to ask before signing a wind-energy lease
Source: Morrison, Liz
Leasing your farmland for wind power offers another source of income — one that lets you continue farming the land. But wind agreements create complex legal and financial issues, and affect your property rights far into the future, says Jennifer Jambor-Delgado, a staff attorney at Minnesota-based Farmers’ Legal Action Group.
Because of this complexity — and the enormous sums of money and time involved in a wind project — you need competent legal advice from someone well-versed in wind power agreements, says Shannon Ferrell, an agricultural law professor at Oklahoma State University who specializes in renewable-energy contracts.
Ferrell also urges landowners to form a negotiation group “the moment you hear that someone in your area has been approached about wind power. You’ll strengthen your bargaining power.”
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.
How to evaluate the wind-power developer
How do you know if the wind-power developer you’re working with is reputable?
“That’s a separate challenge in itself,” says Dean Retherford, an Indiana farm manager who has been involved in many wind-lease negotiations in the Hoosier State, which has seen a tenfold increase in wind power since 2009.
Landowners should investigate the developer’s history and track record, he says. “Who is the company? Where is their financing coming from? Does the company have experience building turbines? Do they have other projects operating?” These are all questions landowners should ask, he says.
“There are a lot of experienced wind power developers now,” says Shannon Ferrell, an agricultural law professor at Oklahoma State University. You can ask the company for references and talk to landowners where the developer has done other projects.
Other signs that the developer has the know-how and resources to put together a wind farm include an agreement to sell the wind power to a utility company, and an agreement to connect to the electricity grid.
“I encourage landowners to take their time,” says Dwight Aakre, a North Dakota State University farm management specialist. “Don’t rush into an agreement. And don’t let the developer push you around.”
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.
How a wind turbine could affect your farming operation
Construction phase damage: Soil compaction and damage to crops, drainage structures, terraces, fences and other farm property may occur during the construction phase.
Improvement restrictions: Wind power leases usually restrict buildings to protect wind flow. Drainage tile installation and maintenance work may also be restricted due to underground power lines.
Aerial spraying: Wind towers may interfere with crop spraying in the area.
Field configuration: Turbines and access roads can change field configurations, resulting in new end rows, strips inaccessible to large equipment, irrigation disruptions and irregular fields that reduce efficiency of field operations.
Snow removal: Snow piled up on fields due to clearing access roads can delay or even prevent spring fieldwork.
Sources: Dwight Aakre, Dean Retherford, Shannon Ferrell, Farmers Legal Action Group, Windustry
—Liz Morrison, Corn and Soybean Digest, Mar. 1, 2012
Review of NSW Draft Wind Farm Guidelines
Source: Acoustic Group
EXECUTIVE SUMMARY
In late 2011 The Acoustic Group performed a desk-top review of the acoustic documents comprising the acoustic assessment for the Flyers Creek Wind Farm and conducted preliminary sound monitoring at an existing operational wind farm (the Capital Wind Farm) which was approved in New South Wales on the basis of similar analyses, guidelines and reports to that provided for the Flyers Creek Wind Farm. The assessment found deficiencies and inadequate information in the acoustic assessment of the Flyers Creek proposal such that the true acoustic impact of the proposed wind farm had not been presented to the community.
In the intervening period a set of Draft Wind Farm Guidelines have been issued by the NSW Department of Planning and Infrastructure (“the Department”) for public comment.
The Acoustic Group was requested by the Flyers Creek Wind Turbine Awareness Group to examine the Draft Wind Farm Guidelines with respect to acoustic issues. As there are no acoustic compliance reports for operational wind farms in NSW in the public domain, The Acoustic Group was also requested to conduct additional testing to assess the Draft Guidelines with respect to practical aspects of their application to operating wind farms.
The Draft Wind Farm Guidelines have identified that they closely follow the existing South Australian Guidelines in relation to the noise criteria. The problem for the broader community in comprehending the Guidelines is that from a noise perspective by definition, the Guidelines must be expressed in technical terms which are not readily understood by the community. The community therefore relies on the preparation by the Department of noise guidelines that set rigorous criteria and assessment procedures as well as a rigorous compliance regime. A reasonable person would expect that such Guidelines would be drawn from and based upon solid data and measurements. Despite the fact that the Department has had the opportunity to scrutinize data and undertake scientific investigations of operating wind farms for the purpose of the Draft Guidelines, it has not done so.
The Draft Wind Farm Guidelines set out measurement, assessment and compliance procedures which are likely to be unworkable in practice. This review highlights a number of outstanding issues in relation to noise impacts from wind farms that require the Draft Guidelines to be amended in order to safeguard the acoustic amenity of residents in areas where wind farms are proposed and where there has previously been no such noise source.
It is recommended that the proposed base criteria for wind farms be amended to 30 dB(A) when assessed under the worst case scenario. In particular, it is concluded:
- There is no material or reference in the Guidelines supporting the use of 40 dB(A) as an acceptable amenity level in rural NSW. Examination of the Department’s compliance review of the Capital Wind Farm confirms Leq levels when turbines are shut down which are significantly lower than 40dB(A) and which undermine this standard as an acceptable amenity.
- The Draft Wind Farm Guidelines ignore “Offensive Noise.” In so doing, the Guidelines set criteria which are inconsistent with the EPA’s Industrial Noise Policy. Examination of noise data from the Capital Wind Farm confirms that the current Draft Guidelines will permit noise significantly above background level i.e. offensive noise which is likely to interfere unreasonably with a person’s health, comfort or repose.
- The base limit for wind farms should be 30 dB(A) when assessed under the worst case scenario. Testing establishes that this limit would be consistent with EPA guidelines for the protection of acoustic amenity in rural areas.
- The Guidelines are vague and inconsistent in relation to the assessment of and measurement during temperature inversions. This undermines the efficacy of the noise criteria.
- The use of the A-weighting filter is not sufficient to account for the audibility and annoying characteristics of wind farm noise. This is demonstrated with data obtained from the Capital Wind Farm, Woodlawn Wind Farm and Cullerin Range wind Farm.
- The guidelines do not specifically require full spectrum noise monitoring inside residential properties. Data obtained demonstrates that such monitoring is essential to reflect noise impact and specific noise characteristics.
- The Guidelines require more detailed acoustic analysis at the proposal stage to identify the effects of different weather scenarios. These scenarios are typically required for industrial noise assessments and in their absence, proper compliance monitoring is impossible.
- The measurement procedure in relation to specific noise characteristics describes measurements conducted over a 10 minute period. This does not permit identification of these characteristics which are associated with swish, modulation, discrete tones and low frequency noise. This is demonstrated with analysis of data from operating wind farms. Criteria in relation to amplitude modulation are uncertain.
- Examination of data demonstrates that compliance monitoring can only be effective with the provision of permanent noise monitoring within the wind farm, recording noise levels, wind speed and direction at receiver locations and recording wind speed and direction at hub height. The Guidelines do not, but should, provide for such permanent noise monitoring supplemented with temporary remote monitoring in real time to deal with complaints.
- The provision of permanent noise monitoring data together with real time presentation of the wind speed and direction at the hub, the power output and operational status of individual turbines must be provided in the public domain to permit independent compliance testing. There is no provision for this in the Draft Guidelines.
- Compliance procedures are ineffective. The Guidelines do not provide a clear indication of what triggers non-compliance. The specified effects of non-compliance are vague. There are no provisions requiring a cessation of operations if the wind farm is not compliant.
Download original document: “Review of NSW Draft Wind Farm Guidelines”
Download Appendices (CV and data)
Critical Comments on the NSW Draft Wind Farm Guidelines
Source: Parkesbourne/Mummel Landscape Guardians
Concluding remarks
As the acoustic and medical research, necessary to determine accurately adequate setbacks, has not been completed, there should be an immediate moratorium on further wind farm development in NSW, and on the construction of wind farms approved, but not yet built. There must be a curfew on the night-time operation of existing wind farms, and the conditions of consent of those wind farms must be reviewed, as must the conditions of consent of wind farms, approved, but not yet built.
When the research is completed, and it is possible to determine a setback distance adequate to guarantee protection for neighbours against chronic annoyance and chronic sleep disturbance and other adverse health effects, then that setback distance must be imposed on all wind farm projects, past, present, and future. In accordance with that setback, turbines of future proposals must be prohibited within that distance. Turbines of proposals being assessed must be prohibited within that distance. Turbines of projects approved, but not yet built must be prohibited within that distance. Turbines of existing wind farms must be shut down, if they fall within that distance.
If the NSW Cabinet declines to institute a moratorium, and a research programme, then two setbacks should be immediately resolved upon: a general setback of at least 5 kilometres from any residence, whether urban or rural; a setback of 1 kilometre from any property boundary. There must be a proviso that these setbacks will be extended, if that is justified by further research. These setbacks must be imposed on all wind farms, existing, approved but not yet built, being assessed, and still to be proposed, so that the construction and/or operation of wind turbines within those setbacks shall be prohibited.
Download original document: “Critical Comments on the NSW Draft Wind Farm Guidelines”
Submission on Draft NSW Planning Guidelines – Wind Farms
Source: Watts, Alan; and Watts, Colleen
SUMMARY
The “Draft NSW Planning Guidelines – Wind Farms” is a discussion paper only. Its inherent poor quality ensures this.
An examination of this document reveals little rigour, contradictions, omissions and escape clauses which would easily allow circumvention of the embarrassingly absent regulatory authority this document should contain.
Close examination of this document reveals several reoccurring and alarming aspects:
- The obvious lack of due diligence by parties responsible for the authorship of this document. This ensures criticism of these guidelines by any reasoned analysis.
- The obvious bias contained to ensure swift success of industrial wind turbine developments.
These Guidelines were developed to overcome the legal deficiencies which became apparent in the SA 2003 Planning Guidelines (used by the NSW Department of Planning and Infrastructure) following the appeal in the SA Supreme Court of the Quinn-AGL matter (see Section 2 (iv)).
Surprisingly very little has changed:
- There is still insufficient protection for the non-host residents.
- Setback distances are inadequate.
- Health implications are largely ignored or treated very perfunctorily.
- Rights of appeal by objectors to any wind farm proposal are weak and are obscured by layers of bureaucracy.
- Any appeal process that is open to residents and prospective neighbours of proposals are skewed by inequities of finance, power and access to expert witnesses.
- There are too many opportunities for abuse of power, violation of natural justice, attacks on local democracy and citizens’ rights, inequality and bias.
Download original document: “Submission on Draft NSW Planning Guidelines – Wind Farms”
