Several state legislators are pushing a bill that would make compensation for wind turbines more similar to the system used in the oil industry.
House Bill 1460 seeks what’s known in the industry as unitization, a process where profits from a wind turbine are shared with the owners of surrounding property whose own wind rights are being affected by the development.
While wind may not be finite like other resources, its capture can be affected by its own development. Wind turbines reduce the wind that passes through them, requiring that turbines be placed a certain distance apart.
Problems can develop when turbines are built on property lines, however, with turbines on one side potentially hindering development on the other. That’s just what the bill sponsors are trying to prevent.
Rep. Phillip Mueller, D-Valley City, a co-sponsor of the bill, said many of the people who make disparaging comments about wind development are often those who are in the footprint of other development.
“If they have been included in some kind of compensation agreement, perhaps that would’ve alleviated their concerns,” Mueller said at a hearing on the bill.
Rep. George Keiser, R-Bismarck, said that with his district covering Bismarck and the surrounding rural area, he’s already hearing of problems from constituents and said the problem needs to be addressed now rather than kicking the can down the road.
“It’s a minor problem now, but if transmission lines are ever going to get built, it’s going to be a big deal,” Keiser said.
Transmission lines are a main reason wind development hasn’t taken off at an even more rapid pace in the state, yet already rural residents are complaining.
Keiser related the complaints to the way residents are affected by a neighbor’s oil well being compensated.
“If I could only own 9 percent of an oil well, I’d still want to own part of an oil well,” he said.
Brad Crabtree, a renewable energy expert who helped craft the bill, said unitization allows utility companies to put wind turbines in the optimal place without hurting adjacent landowners. Those neighbors would not be able to stop a project under the bill. All those factors lead to more certainty for developers, Crabtree said.
However, it also could lead to some extra costs.
“It would increase the cost marginally, but giving a handful of people extra compensation makes them feel like partners in wind development, not victims,” Crabtree said.
How much extra it may end up costing utilities would largely be up to the Public Service Commission, which would be responsible for creating the formula and writing the rest of the administrative rules under the bill.
The bill is not a winner with utilities or the PSC.
John Olson, a lobbyist for NextEra Energy and Florida Power and Light, said the bill is unnecessary because companies already can make such arrangements with landowners, but he worries there is a potential for cost increases.
“They can unitize now under a private contract, but a law like this has the potential to drive things up,” Olson said.
While the company does have that right, it’s not something NextEra typically does.
“We don’t (unitize) as a practice. That’s why we’re against the bill, because that’s not something we believe in,” said company spokesman Steve Stengel. “There may have been special cases in the past because of township rules, but as a general rule, that’s not something we do.”
Some townships do adopt rules that require profit-sharing among landowners, but that’s up to each individual township.
Rep. Mike Brandenburg, R-Edgeley, said he wants to keep that level of local control. He spoke out against the bill, relating wind rights to grazing cattle.
Those with lower-lying land have greener and better moisturized pastures compared to their highlander counterparts, yet people have not traditionally let their neighbors cows graze on their low lying land.
Now the highlanders have the upper hand, Brandenburg said, as their land is better for turbines, yet complaints are coming from those without them. He questioned whether unitization of wind could lead to unitization of other resources, something he said is un-American.
“Some people are going to be winners; some are going to be losers. That’s life,” Brandenburg said.
While the PSC would be somewhat responsible for settling disputes under the bill, it’s one the commission doesn’t want.
PSC attorney Illona Jeffcoat-Sacco said it is the commission’s job to look at siting issues from an environmental perspective, including how it will affect possible heritage areas, animals and farm land.
“I could see us trying to site a turbine that has a compensation battle when all we’re really supposed to do is look at where it should go environmentally,” Jeffcoat-Sacco said.
The commission is pushing a bill that would give it the control to site all commercial wind farms, rather than just those above a certain megawatt as is now required.
“If you lower the threshold you now have the exact same environmental regulations for all of them,” she said.
“It simplifies the problem, it doesn’t solve it,” Jeffcoat-Sacco said.
The bill has been heard, but has not yet been given a recommendation from the House Natural Resources Committee.
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