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Wyoming bill would create wind energy rights

CHEYENNE – State legislators are drafting a bill that would set the groundwork for wind energy law in Wyoming, including establishing wind energy property rights alongside surface and mineral rights.

The bill would also prevent Wyoming landowners from selling their wind energy rights separate from their surface rights, as some property owners in the state have already done. And it would set time limits for wind energy producers to start developing land they’ve leased, or else the lease would be canceled.

The legislation, which is currently being drafted in the Joint Judiciary Committee, isn’t as high-profile or potentially contentious as other wind energy issues that are likely to arise during next year’s legislative session, such as wind generation tax rates and granting wind developers eminent domain rights.

But Dennis Stickley, a University of Wyoming law professor who helped develop the draft bill, said the proposed legislation is intended to set down ground rules as the nascent industry grows in the state.

“It’s taken about 125 years to sort out the relationship just between the mineral owners and the surface owners,” Stickley said. Without these new rules, he said, “we’ll have another 100 years of litigation and conflicts between wind rights and surface rights.”

Under the draft legislation, wind energy rights could still be leased, but they wouldn’t be able to be sold separately from surface ownership. North Dakota, South Dakota and Nebraska already have similar policies in effect.

Several Wyoming legislators and attorneys said while only a few landowners in the state have already sold their wind energy rights, interest in doing so is growing. And that, they said, could lead to trouble down the line.

“I had a couple clients who were talking about it, but I was able to talk them out of it,” said Wheatland attorney Stephen Sherard. “The wind rights are so intricately related to the surface, that it’d be a nightmare. … Because both rights are on the surface, it’s almost impossible to divorce the two.”

The current version of the bill wouldn’t cancel any sales of wind rights that have already taken place, nor would it affect the primacy of mineral rights or the ability for a surface owner to transfer lease royalty payments elsewhere.

The draft legislation also sets time limits for wind energy producers to develop leased land. Under the bill, unless the developer and landowner agree otherwise, any wind energy lease would automatically be canceled if wind energy production ceases for 10 years or if no electricity is generated from a wind turbine within 20 years of the lease being signed.

An initial draft of the legislation contained additional protections for landowners, including a 75-year cap on all wind energy leases. But those provisions were removed after groups ranging from the Wyoming Stock Growers Association and the Powder River Basin Resource Council voiced concern that landowners should be given more leeway when negotiating leases.

Officials with the Stock Growers Association and Powder River Basin Resource Council each said Friday that they support the current version of the bill.

State Sen. Tony Ross, who co-chairs the Joint Judiciary Committee, said it’s important to set the framework for wind energy rights now before inevitable conflicts arise.

“There’s a number of people and landowners that are wondering how to develop their wind energy rights,” Ross said. “The object is to be proactive rather than reactive.”