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Contract extension could leave landowners flapping in the breeze

Critics say a proposed legislative fix violates the spirit of the law against special legislation for corporations and undercuts options for landowners who may rethink their involvement with wind developers.

The controversy focuses on the 82-megawatt Black Oak wind farm – on the drawing board in Stearns County since 2008. State law requires that wind energy projects be operational within seven years. If not, landowners with the seven-year itch can renegotiate or reconsider their options. The measure protects property owners against speculators that could tie up sizable tracts without following through on construction.

Geronimo Energy concedes Black Oak will not be up and running by the time some landowners’ seven-year leases expire, potentially putting the futures of 41 turbine wind farms on the line. The developer wants legislators to extend those expiring contracts one year, allowing time to complete construction on Black Oak.

“We have a project in the middle of construction, and the legislation right now says it has to be in operation at the end of seven years. So we thought just a one year extension would help the situation for this particular project,” Betsy Engelking, vice president of Geronimo Wind Energy, said at a Senate Environment and Energy Committee hearing in March.

Wind power skeptics say the proposal crosses the line, removing one of the few protections for landowners involved in renewable energy developments. Geronimo Energy did not respond to Watchdog Minnesota Bureau requests for comment.

“There’s no reason for them to go to the Legislature. It’s absolutely no business of the Legislature, intervening on behalf of a wind company in a private contract with their landholders, and that’s what this is,” said Kristi Rosenquist, a citizen watchdog who monitors renewable energy policy.

Just the same, proponents recently inserted a 76-word amendment in the 2015 Senate Omnibus Energy bill that re-ups landowners’ leases. Technically, the amendment doesn’t name the project, but the author, Sen. Bill Weber, R-Luverne, removed any remaining doubts, stipulating Black Oak as the facility behind his legislation’s artful wordsmithing.

“The project is in its early stages of construction. However, it will not be completed by the time the seven-year period expires,” Weber said in the hearing. “The purpose of this amendment is to thereby extend that seven-year period by one year to an eight-year period. The amendment is very specific as to the description of the project and it is this project.”

The Minnesota Constitution prohibits the passage of special legislation “granting to any private corporation, association, or individual any special or exclusive privilege, immunity or franchise.”

“Minnesota courts have cited this part of the state constitution to give Minnesotans greater equal protection rights than the federal constitution provides. This prohibition is squarely aimed at protecting people like the landowners in this case from being abused by unfair legislation that specifically tips state law in favor of someone else,” said Peter Nelson, Director of Public Policy for the Center of the American Experiment.

Black Oak has reached out to property owners.

“We’ve contacted all of our landowners about this situation. We are actually working with them to effectuate a new lease that would allow us to have this extension,” testified Betsy Engelking, Vice President of Geronimo Wind Energy. “…The project actually began construction at the end of 2014 (and) with the project actually reaching some pretty extensive construction this summer, we also felt that this legislation would be another option.”

No state senator voiced objections to the amendment. The provision was adopted as part of the Senate Omnibus Energy bill that will be negotiated with the House companion bill later in the 2015 session.

“This is a really poor way to do policy,” said Carol Overland, an attorney who has represented residents opposed to Black Oak. “… It’s crafted in such a way that they don’t name it. Therefore, they would say it’s not special legislation. But it is designed only for this project.”