November 23, 2014
Iowa

Proposed wind-energy transmission line jolts some farmers

By Jim Offner | Business Monthly | Waterloo Cedar Falls Courier | November 23, 2014 | wcfcourier.com

WATERLOO | Controversy is swirling like a tempest across the prairie as a Texas-based company plans to invest billions of dollars in Iowa’s emerging wind-energy sector to transmit power out of the state to the East Coast.

In early November, Rock Island Clean Line, a subsidiary of Houston-based Clean Line Energy Partners LLC, filed petitions with the Iowa Utilities Board asking for permission to construct and operate a 500-mile transmission line that will carry 3,500 megawatts of wind-generated direct current from O’Brien County in northwest Iowa to the Quad-Cities area, where it will cross the Mississippi River into Illinois.

RICL said the project will generate enough electricity to power about 1.4 million homes.

The private line would deliver electricity generated by 2,000 wind turbines Clean Line-contracted developers will build in O’Brien County to customers in Illinois and eastern states via a converter station near Morris, Ill., which turns the faster and more efficient direct current into transmittable and utility-ready alternating current, Clean Line Energy said.

Developers say the $2 billion project would lead to $7 billion in new wind farm investments, the creation of more than 5,000 construction jobs and more than 500 permanent operational positions. It also would require construction of a $250 million converter station in O’Brien County.

Iowa won’t get any of the electricity, but the state will get an economic jolt, said Beth Conley, Iowa manager for Rock Island Clean Line in Des Moines.

“Our project will open up the opportunity for a $7 billion investment in wind farms,” Conley said. “In northwest Iowa, you haven’t seen the growth that matches the potential for wind energy because of the lack of transmission capacity.”

The expansion of that capacity raises the ire of farmers along the path of the proposed transmission line, which will cross 16 counties -– including Franklin, Grundy, Black Hawk, Buchanan and Benton in the Cedar Valley.

The Preservation of Rural Iowa Alliance, a grassroots group of farmers purporting to represent more than 1,000 landowners across the 16-county region, formed in opposition to the project, said Carolyn Sheridan, an organizer and a farmer in O’Brien County.

Rock Island is seeking to use eminent domain to purchase land to run a network of towers to stretch the transmission line across the state, Sheridan said.

“In our opinion, the RICL transmission line does not serve a public good in the state,” Sheridan said. “No electricity will be used in Iowa. They’re also promoting the development of thousands of wind turbines in western Iowa and South Dakota. If somebody wants to put a bunch of wind turbines on your land, it’s a personal choice. This is not a personal choice. In this case, there is a huge percentage of people that do not want to do this.”

Meanwhile, she said, there were nearly 1,200 formal objections filed with the utilities board.

“The Iowa Utilities Board is going to have to look at how to deal with such a large group,” Sheridan said. “We well understand the franchise process and that there’s a process in Iowa and it will be followed, but a big part of that is landowner rights. People don’t necessarily understand what is happening. It’s not something that happens every day.”

Ted and Kim Junker, who farm near Stout in northeastern Grundy County, say the plan calls for planting the transmission line across a parcel of their land, and they don’t want to go along. They have placed a semi trailer proclaiming “Stop RICL” in large red letters along U.S. Highway 20 in Grundy County.

“They try and compensate you for the land they take out of production; that’s debatable about whether that’s fair,” Ted Junker said.

Eminent domain should not be available to a privately owned transmission line that publicly regulated utilities aren’t using, Junker said.

“There’s a lot of open-ended discussion about what should happen,” he said. “Rock Island isn’t regulated by anyone, and no one else can use their line; it’s their own private highway, so there’s a lot at issue on whether they should be granted use of eminent domain.”

The Junkers point out the presence of transmission towers the company says are about 110 feet high could interfere with farm operations.

“It’s going to have to cut across our land and disrupt our farming quite a bit,” Kim Junker said. “Our farming equipment, you don’t just go out there and farm, you have to bypass transmission towers, and when you aerial spray you can’t do that with voltage transmission lines in your way.”

“We feel it’s going to lower the value of our farmland, it’s going to reduce productivity, what and how much we can grow,” she said. “It’s gonna be here forever, as long as we own the farm, and we have to farm around it. We don’t think the contract or compensation is fair. The contract is a joke. There are so many things in there that are in their favor.”

Kim Junker pointed out RICL has ingress and egress rights and “can come on the farm any time, anywhere,” and “if somebody gets hurt they have a legal right to come back and sue us.”

The company counters that in all cases, landowners are protected from litigation

“In our form of easement, we indemnify and hold harmless landowners,” Conley said, noting there are no exceptions. “All have that wording. That’s true of construction workers or if somebody had an accident 10 years from now on the field with the pole, that doesn’t go back on the landowner.”

“Generally, that would be in case of emergency, so if there were some sort of terrible emergency and a line went down, we would need to have access,” she said. “You wouldn’t do that without informing the land owner at all possible cost.”

“They have the right to go across any part of your farmland, not just where the easement is located,” he said. “If the easement is on the back side of your land, they have the right to cross all your land. We feel it’s not necessary.”

Rock Island says it has done its due diligence, having held “hundreds” of meetings in Iowa and Illinois with community, state and federal officials, “to introduce the transmission project, answer questions and gather feedback on routing options.”

The company says it has run a “transparent process” that has kept all interested parties up to date on its plan.

RICL says its compensation – in the form of lump sums or yearly payments that increase by 2 percent a year for the life of each affected parcel – ranges between $9,300 and $12,400 per acre. The company says it is paying $11,800 per acre in Grundy County; $11,300 in Black Hawk; $10,400 in Franklin; $10,050, Buchanan; and $11,900, Benton.

“We have worked really hard to put together a package that we believe is fair and also consistent,” Conley said. “We work with landowners. We hosted some open house meetings in 2011 and talked with people about the types of compensation that would be appealing to them and tried to incorporate that with a one-time or annual payment. If you compare traditionally what utility easements offer, I think ours are a little bit more aggressive than that. We worked really hard to put together a fair compensation package.”

Conley said “25 to 30 percent of fair-market value” is common for easements. She said RICL is around 90 percent.

“We might be the first utility in Iowa to offer structured payment,” she said. “When you look at the footprint in the structure and easement area, less than 1 percent of the easement area is taken out of production.”

Rock Island Clean Line cited, as an example, a landowner in Grundy County with an easement on his or her property that is a half-mile long by 145 feet wide with two towers can expect total compensation of around $115,000, plus crop damages.

“In addition to the easement payment, we’re providing a payment for each structure,” she said. “If it’s a monopole, which is our preferred structure, they have an option to take one-time payment of $6,000 or an annual payment of $500 at a compounding escalation factor of 2 percent.

Lattice towers also may be part of the plan if engineering requires, and there are higher payments for those, Conley said, $18,000 up front or $1,500 per year as long as the structure stands and that payments go up by 2 percent yearly.

Farm advocacy groups and state agriculture officials say they’re listening to both sides.

“Obviously, it affects return to some land out there and there are folks definitely on both sides,” Iowa Agriculture Secretary Bill Northey said. “It’s the same with turbines. You have folks that say, ‘I don’t want to be near that at all’ and others say, ‘Tell me what it’s worth, and there’s a place that I think it would be worth it for me.’ Even with lower (commodity) prices out there, there may be certain folks who may be friendly to some income opportunities. There could be difference in attitude between landlord and tenant.”

Don Petersen, director of government relations with the West Des Moines-based Iowa Farm Bureau Federation, said energy conduction lines – whether for electricity or a proposed crude oil pipeline that would cut across Iowa and affect properties in 17 to 19 counties – are a reality in Iowa.

“Basically, if we’re going to develop projects to transmit electricity, if it’s in the public’s interest to do that, we want farmers to be treated fairly and equitably in the development of those projects,” Petersen said, noting that’s the general consensus among his organization’s membership.

It’s likely nobody would invite any such project into their backyard, but there is a “recognition that every now and then you’re going to have that project that has to be done,” Petersen said. “We know, as there’s a public need, chances are it’s going to cross farmers’ land somewhere.”

“We try to listen to our members,” he said. “Obviously, we’re never going to get unanimity on this type of thing, but we got a very strong consensus. They do a pretty good job of weighing out what’s the bigger picture.”

The Iowa line is only one of five projects Clean Line Energy Partners is developing – all of which are designed to transmit wind-generated electricity to the East, Conley said.

“You have a stranded, very strong wind resource in the middle of country, and you have markets that want access to that affordable, renewable resource,” she said.

“We’re in the staff-review process,” she said. “There’s a possibility that could take up to six months. After that, you’d have a hearing that could take another couple of months. I’d say 12 months would be a good guess for the whole process. After that, you go to work on it potentially.”

Construction of the turbines and converter station would more or less parallel that process, Conley said.

“That would most likely be simultaneous with our construction process,” she said. “We’ll enter a capacity agreement with developers. We’d have to have capacity contracts with those wind farms, and then their construction would most likely be simultaneous.”

Ted Junker remains unconvinced a transmission line across the state is necessary.

“Turbines are all over the place and, with the new technology, they can put them anywhere,” he said. “We don’t need to have 2,000 turbines in northwest Iowa. It would make more sense to move that juice 100 miles rather than 500 miles.”