Resource Documents: Ohio (12 items)
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Wind leasing: an all or none proposition
Author: Thompson, Gene
[Editor’s note: The doctrine of correlative rights limits use of a common groundwater source to a share in proportion to the landowner’s property above it. Many states apply the doctrine to oil and gas fields as well. Gene Thompson argues here that it should also be applied to the extraction of wind power.]
Producing energy for everyday use has been a necessity for a long time. Oil Exploration and Production companies (E&Ps) have been at it for over 150 years. Wind farm companies have been at it for around 20 years. There are some regulations and laws still in the making that will guide both industries as they become more sophisticated and thus more productive. However, as of today, there is at least one big difference in the way the that the two industries operate. Unlike the wind industry, the oil companies are mandated to follow the doctrine of correlative rights. The wind companies are not.
The process of building a large oil drilling unit is very different than building a wind farm. When the oil company begins, they must gather leases, analyze plat maps, and then determine the best chances of finding a group of adjoining properties with a high percentage of neighbors that want to be part of the drilling unit. Before production can begin, the unit will need to contain 100% leased land. If not, the E&P must either reshape, relocate the unit boundaries or attempt to negotiate with any remaining unleased landowners. Sometimes it doesn’t work out and the holdouts are left outside the production zone. Essentially, the E&P sand the government legislators have both come to realize that not everyone wants to participate in a large-scale unitized drilling unit. When 50 to 100 landowners are asked to come together and cooperate with the development of a unit, it is inevitable that some landowners will hold out for varying reasons. More money, environmental concerns, and loss of peaceable enjoyment of the land are a few of the reasons. However, there are some instances where unleased, yet essential, land can be force pooled. That is a process wherein a landowner is forced to accept their just and equitable share of production. Additionally, prior to any force pooling, the holdout will have many opportunities to lease with competitors. This drives competition and is a win for the landowner. Ultimately, the State and E&P reserve the option to utilize rules of capture (correlative rights) and force pooling to bring the unit to completion. All states recognize that capturing our natural resources is for the greater good and is essential. Our laws consider it unfair for one unwilling landowner to have control over natural resource production that will ultimately benefit our society. And so, the majority claims correlative rights. Conversely, 95% of wind farm owners have zero correlative rights. Additionally, wind farm residents have no force pooling rules.
With that in mind, it is important to note that If the residents of a proposed area of development are heavily divided on oil production, the towel gets thrown in early on and the oil company keeps looking for clusters of landowners that want to participate. Lands that are chosen for development must pass EPA surveys and observe established rules for the industry. As a unit nears completion, the correlative rights doctrine comes into play as a tool to guarantee the rights of the majority. Generally, when landowners become informed of their rights and the value of their resources, development gets much easier. Better informed people are more willing to sign leases and participate in the production of oil. That is yet another difference between wind and oil production. Although similar, both industries encumber large clusters of acreage to capture a resource. Unfairly, yet with the government’s blessing, the wind industry pays disproportionately to very few. The oil industry pays proportionately to all.
The success of energy development either succeeds or fails depending how the rules are applied. In Ohio, wind energy is getting tremendous opposition because the industry is held to an entirely different set of standards. Perhaps that has something to do with legislators that do not have enough experience to understand the old drilling rules (150 years in the making) versus the relatively new rules for wind (20 years in the making). It’s no secret that noncompensated landowners in wind farms feel cheated and bullied. The absence of correlative rights for wind farm members is extraordinary.
Comparing wind to oil, the rules for wind farms dictate that profit be paid only to turbine hosts, and the majority of landowners will receive not one nickel. The majority will never be able to sign a lease with a competitor. They will never have a “cash-generating turbine” on their land. The only sharing aspect for wind farm inclusion is that the majority will share equally the burden of any ill effects. Their right to capture is worthless and is totally lost. The noncompensated wind farm resident has no voice as the state conveys our tax dollars to the wind company for support along with the exclusive right to capture. Hence, thousands of acres become stranded from any future production as one company monopolizes the production zone with the blessing of ill-informed or misguided state regulators. Consider this: If every person that lies within the bounds of a wind farm wanted to build their own industrial turbine, they could not because of setback rules. In contrast, the government would never consider allowing an oil company an exclusive right to drill and to then pay only to the landowner that hosts the wellhead. The wind turbine host enjoys that exact scenario to their exclusive benefit. If legislators can see fit to ensure fairness to every landowner that is encumbered in an oil drilling unit, then why not have similar protective rules for the wind farms?
The rule for force pooling in the oil industry wasn’t created until 1965, after 100+ years of drilling. After years of abuse and inappropriate interpretation, public awareness worked to drive a change. Since we now live in the information age, it shouldn’t take us 100 years to wise up to the wind companies. Our legislators must be aware of the inconsistent rules for energy production. The rules for wind farms need to be updated to keep pace with the changes in technology and rapid development. If the wind industry and our government expect landowners to go green and buy into the turbine idea, then they both need to take a lesson from the rules set forth in the oil industry and then consider the upside of sharing the profit fairly.
Gene Thompson
Tiffin, Ohio
Wind farm participation and support agreement
Author: Apex Clean Energy
Owner is the owner of that certain tract of real property located in Van Wert County, Ohio …
1. Setback Waiver.
1.1 To the extent that any applicable law, ordinance, regulation or permit establishes, or has established, minimum setbacks from the exterior boundaries of the Property (or any structures thereon) for Windpower Facilities constructed on Wind Farm Property, Owner hereby waives any and all such setback requirements (the “Setback Waiver”); provided however, Grantee agrees not to construct a Wind Turbine within One Thousand Three Hundred Twenty Feet (1,320’) of any occupied residence located on the Property (as measured from the edge of the base of the Wind Turbine to the exterior of the closest foundation of any occupied residence on the Property as of the date hereof) and not to allow the blade of any Wind Turbine to overhang any boundary of the Property.For the avoidance of doubt, this Agreement does not grant to Grantee the right to construct Windpower Facilities on the Property. …
11. Confidentiality. Owner shall maintain in confidence all information pertaining to the financial terms of or payments under this Agreement, whether disclosed by Grantee or discovered by Owner, unless such information is in the public domain by reason of prior publication through no act or omission of Owner or its employees or agents. Owner shall not publish or otherwise disclose such information to others except to accountants, lawyers, or other professionals who receive such information under an obligation of confidentiality; buyers of the Property; lenders that have a security interest in the Property; or family members who agree to keep such information confidential. The provisions of this Section 11 shall survive the termination or expiration of this Agreement.
12. Wind Energy Lease Agreement. In the event that Owner and Grantee enter into a Wind Energy Lease Agreement or other similar instrument whereby Owner grants Grantee the exclusive right to install Wind Turbines and/or Windpower Facilities on the Property, then this Agreement shall be superseded by such instrument and this Agreement and all payment obligations hereunder shall terminate as of the effective date of such instrument. The foregoing shall not obligate either party to enter into any Wind Energy Lease Agreement or other similar instrument unless it determines in its own best interest to do so.
FEE SCHEDULE
Grantee shall make the following payments to Owner during the Term:
(1) within thirty (30) days of the Effective Date of this Agreement, a one-time payment of Five Hundred and No/100 Dollars ($500.00); AND
(2) Upon the Commercial Operations Date of the Phase in which the Property is a part (as determined by Grantee in its reasonable discretion), an annual payment equal to one of the following, as applicable:
(B) One Thousand and No/100 Dollars ($1,000.00) if any boundary of the Property is within one thousand one hundred twenty-five feet (1,125’) of the nearest Wind Turbine (measured horizontally from the tip of the turbine’s nearest blade at 90 degrees from the turbine tower to the nearest adjacent property line of the Property) on such date; OR
(C) Five Hundred and No/100 Dollars ($500.00) if neither subsection (A) nor (B) above apply.
The annual payment due hereunder, shall be paid by Grantee within thirty (30) days after the Commercial Operations Date and then annually within thirty (30) days after each anniversary of the Commercial Operations Date until all of the Wind Turbines in the Phase of the Wind Farm of which the Property is a part are decommissioned.
Download original document: “Wind farm participation and support agreement”
Re: Hardin Wind Application, Logan Co., Ohio
Author: Logan Co., Ohio, County Commissioners
WHEREAS, … the Logan County Commissioners have reviewed the application, and different
portions of the application are incomplete or inadequate; and, …
WHEREAS, the wind developer has created confusion and given misinformation to the press
through statements and advertisements causing misunderstanding with the public; and, …
WHEREAS, if the only feasible way this project can go forward is through a tax exemption and
payment in lieu of taxes, as the wind developer claims, then something is wrong with the State tax law.
Tax abatements are to incentivize development in a specific location, not to create the business model
for the project to be developed. It is curious that under the energy project law, the local governments
are expected to take a loss of revenue while the State of Ohio’s tax revenue (commercial activity tax,
kilowatt hour tax, etc.) is to remain entirely whole; and,
WHEREAS, the Logan County Board of County Commissioners is not convinced that over the life
of the project that granting the PILOT would benefit the community. Likewise with respect to job
creation, the Logan County Board of County Commissioners is not convinced that the amount of taxes
abated would be exceeded by the benefit of gaining relatively few permanent employees; and,
NOW THEREFORE, BE IT HEREBY RESOLVED by the Logan County Board of Commissioners that:
… The application submitted by Hardin Wind, LLC, is hereby rejected, in so far as it request any
tax exemption in Logan County.
Resolution by Trustees of Richland Township: … Road damage & drainage … Population density … Health & Safety … Environment … Housing … Taxation … The Richland Township Trustees are opposed to the construction of the Scioto Farm Wind Turbines.
Resolution by Rushcreek Township Trustees: … hereby again earnestly recommend to the Logan County Commissioners to deny a Payment in Lieu of Taxation (PILOT), and any other tax abatement for the Scioto Ridge Wind Installation, and all other industrial wind installations within this township and county.
Download original document: “Re: Hardin Wind Application, Logan Co., OH”
Letter to Governor Kasich Concerning Ohio Power Siting Board
Author: Residents of Ohio
Sorry, this post has been removed, to be published later.
The undersigned residents of Ohio communities affected or threatened with industrial wind development wish to bring to your attention the untenable situation we face due to the failure of the Ohio Power Siting Board (“OPSB”) to protect the public interest. We assert that the OPSB has not adopted rules that adequately and faithfully implement the requirements of siting statutes. Moreover, it has acted in ways that contribute to public confusion resulting in the loss of due process. The actions and omissions of the OPSB have abridged our fundamental constitutional right to be protected and secure in the possession of our property. We call for legal reforms to curb the errors and failures in the Board’s administration of the wind power siting program over the past six years.
For example, the OPSB was supposed to complete a mandatory five-year review of its rules through a proceeding it initiated in July 2012; to this end it issued orders adopting new rules in Case No. 12-1981-GE-BRO. Throughout that rulemaking proceeding, OPSB invited the input of utilities, wind developers, parties who recently filed applications, and their attorneys. However, the Board never notified or solicited the input of members of the public who intervened in OPSB matters. The Board did not even notify intervenors who were extensively involved in the development of the Board’s original wind power siting rules in 2008-09. Furthermore, the Board never filed notice of the proposed or final rules in the Register of Ohio, presumably because the OPSB and PUCO are exempt from the notice-and-comment rulemaking requirements of R.C. Chapter 119. In sum, while the Board’s recent rulemaking was open to utilities, wind developers, other regulated entities, and their attorneys, the process was entirely “under the radar” as far as the public was concerned.
Furthermore, under Ohio law, agencies such as the OPSB must file newly adopted rules with the Joint Committee on Agency Rule Review (“JCARR”) so that the rules can be evaluated by the General Assembly based on specified legal criteria. Yet, although the OPSB adopted its new set of rules on February 18, 2014, the OPSB has not filed its newly adopted wind power siting rules with JCARR and is thereby denying the public an opportunity to address the mismatch between the OPSB’s rules and the requirements specified by the Ohio General Assembly.
Time and again OPSB’s hearing process has proven hostile to public participation. Before approving a power siting certificate, the Board must hold both a “public hearing” at which any interested party may be heard and an “evidentiary hearing” at which only the applicant, Board Staff, and approved intervenors may participate. But the Board representatives conducting public hearings refuse to answer questions about the project and refer members of the public back to the wind developer for responses to their questions. In evidentiary hearings, the Board routinely imposes a discriminatory double standard by requiring intervenors (usually members of the public) to submit live expert witness testimony while allowing developers to submit reams of documentary information as “evidence” without expert support. The Board delegates the oversight and conduct of both hearings to an Administrative Law Judge employed by the PUCO, who then prepares the written decision and certificate for the Board’s approval (usually at a single meeting with minimal discussion). No Board member participates in the hearings, which calls into question the depth of the Board members’ understanding of the issues they are called on to decide.
From the perspective of local property owners, who strongly object to the placement of wind farms near their homes and property, we must spend our time and our own money to do the job that the OPSB should be doing for the public and yet we feel we are being undercut by the OPSB at every turn. The net result of OPSB actions works to effectively deprive us of any meaningful opportunity to be heard. At the same time, the OPSB is issuing, over the strong objections of local property owners and local government officials, more certificates authorizing the construction of new industrial wind facilities that intend to violate the minimum setback requirements in current law. In other cases, the OPSB is allowing certificated wind farms to evade the General Assembly’s new setback requirements by improperly extending the life of those certificates before the effective date of the setback requirements.
Contrary to the statutory requirements enacted by the General Assembly, the OPSB is complicit in and protective of unfair and unreasonable wind industry practices. Examples include:
- Permitting legal notice of public hearings to appear at times when the public is least likely to see them;
- Scheduling public hearings at times the public is least able to attend;
- Allowing wind companies to conduct required pubic information meetings without specifying the location of proposed wind turbines;
- Allowing wind companies to meet the Board’s public notification requirements using maps that lack necessary detail, such as roads or parcel boundaries, to enable landowners to assess the potential impact on their properties;
- Enabling wind companies to negotiate unfair and one–sided contracts that obligate the signer to waive impacts they often do not understand; that burden the entirety of a property for up to 45 years; that are negotiated using a divide and conquer strategy ; that include no right of rescission; and that include onerous and overbroad confidentiality clauses. Oftentimes, the property owner is elderly and may not be in a position to understand or negotiate in his or her best interest.
- Failing to establish clear and enforceable standards for audible noise and instead allowing the use of vague “design goals” that fail to consider worst-case impacts;
- Failure to establish any standards at all for inaudible low frequency noise emissions;
- Refusing to consider a report from a Wisconsin power siting proceeding that cited new scientific findings regarding low frequency noise from wind turbines and concluded that there is now enough evidence to classify low-frequency noise and infrasound from wind turbines as “a serious issue, possibly affecting the future of the wind industry.”
- Failing to require that setback waivers be obtained from all adjacent property owners as required by law;
- Failing to require wind developers to specifically articulate the alleged benefits accruing to the described project area and, instead, accepting alleged benefit claims that pertain to unrelated and distant communities even though the impact/burden of the project is borne by the local property owners;
- Failing to accord due weight to local governments who object to applications on the basis of harms to the community’s economic health and welfare or cultural identity;
- Failing to adopt rules for siting industrial wind turbines near public and private recreational areas, including Indian Lake as well as numerous golf courses and equestrian facilities;
- Extending certificate expiration dates without following the statutory requirements for amendment of certificates, such as the requirements for investigation by the OPSB staff and for public hearing to consider substantive changes in the assumptions underlying the original certificate (chief among these changes is the dramatic increase in blade length which increases vibration and low frequency emissions as well as recent medical studies concerning related health effects);
- Failing to consider cumulative impacts in areas where multiple projects are sited;
- Failing to require developers to establish a complaint resolution protocol acceptable to the community prior to issuing a certificate; and
- Blaming insufficient funding/lack of resources to fully carry out their duties.
As the Ohio Supreme Court has stated, “It is axiomatic that the federal and Ohio constitutions forbid the state to take private property for the sole benefit of a private individual.” Norwood v. Horney (2006), 110 Ohio St.3d 353, 365. Yet that is exactly what the Power Siting Board has repeatedly permitted to occur. The constitutionally protected property rights of Ohioans are being harmed in favor of industrial wind development. These massive industrial power plants are being imposed in rural residential communities by private for-profit developers. The developments are structured as limited liability
companies owned more often than not by foreign private equity firms. These massive industrial power plants are not public utilities and are not empowered with the right of eminent domain but through the faulty administration of the law by the Ohio Power Siting Board that is effectively the result. Ohio’s administration of wind power development is unregulated under the guise of regulation.
We request that you halt further consideration of any active industrial wind power siting case until lawful rules are established, eliminate the exemption from rulemaking due process currently afforded to the Ohio Power Siting Board under Revised Code Chapter 119, and require that any application for certificate amendment or extension be subjected to the due process of meaningful public notice, a full investigation, and a fair hearing. If the State of Ohio is unable to administer a fair regulatory program that protects her citizens, siting decisions must be returned to local zoning and control.
Should you have any questions or require additional information, please contact Julie Johnson at juliejohnson/ctcn.net or call 614-284-6151. Thank you for your consideration.
Respectfully Submitted,
Signed by Residents of Ohio [Whose Names and Addresses Were Attached Hereto]
November 11, 2014
TO: Governor John Kasich
State of Ohio
Riffe Center, 30th Floor
77 South High Street
Columbus, OH 43215-6117
cc:
Lt. Governor Mary Taylor
Senator Keith Faber, President, Ohio Senate
Speaker William Batchelder, Ohio House of Representatives
Senator William Seitz, Chairman, Senate Public Utilities Committee, Ohio Senate
Rep. Peter Stautberg, Chairman, House Public Utilities Committee
Chairman Tom Johnson, Public Utilities Commission of Ohio
Download original document: “Letter to Governor Kasich Concerning Ohio Power Siting Board”
