Wind developer Geronimo Energy confirmed Wednesday it’s attempting to sign new leases with landholders at Black Oak wind farm in response to a deadline in state law that voids a lease if a project doesn’t begin commercial operation within seven years of the original contract signing date.
At the same time, the Edina-based wind and solar developer continues to pursue Plan B, a legislative fix for an up-to-82 megawatt wind facility apparently facing an uncertain future.
In a statement to Watchdog Minnesota Bureau, Geronimo Energy acknowledged that “in the event that signing new leases will not fully resolve the issue, we are working with local legislators and legislative leaders to provide clarifying language that would allow the original project leases to be executed according to their current terms and conditions.”
Watchdog Minnesota Bureau has reported that Geronimo Energy backed a March 19 amendment to the Senate Omnibus Energy Bill that extends “lease of wind rights to an eight-year period” to a project matching Black Oak’s description. The up-to-41 turbine wind farm has been in development in Stearns County since 2008.
Individual wind rights contracts with landowners typically run 30 years, clashing with the state law that provides a window for landowners to opt out if turbines are not up and running within seven years.
Geronimo Energy concedes Black Oak will not be in operation by the time the seven-year timeline passes for some landowners, potentially leaving the central Minnesota facility’s future in doubt. The developer contends the law was intended to protect property owners against speculators who buy up leases but never build, rather than stop projects from going up.
“This language has the potential effect of causing some of our leases to be nullified by operation of law in the middle of construction. Black Oak Getty is a project that is desired by the landowners, with the associated economic rewards (for both landowners and the community-at-large) just around the corner,” according to the statement.
But the wind developer stepped back somewhat from the controversial Senate amendment. While maintaining that long-term leases with property owners should trump other legal concerns, Geronimo pledged to work with legislators to clarify the amendment’s language. The developer also opposes any legislation that changes the terms of existing leases.
“We very much regret that some in the surrounding community have misunderstood that our proposed language would extend the terms of leases by statute, but looking at the language that has been proposed, we can see how it may be interpreted that way,” said the wind company’s statement. “Geronimo wants the legislation to be clear, supportive and reiterative that the language in executed wind energy development leases is what ultimately controls lease terms and outcomes.”
Critics maintain the adopted amendment violates the spirit of the law against special legislation for corporations and undercuts the only option for landowners who may have second thoughts. 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.”
“If passed into law, the amendment will completely strip away the landowners’ negotiating position with Geronimo and their existing right to demand a wind facility be built on a timely basis under their current lease,” said Peter Nelson, director of public policy for the Center of the American Experiment.
The amendment’s author, Sen. Bill Weber, R-Luverne, has not been approached by the wind developer to rework the amendment, according to an aide.
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