Updates

Lots of interesting things in wind contracts

By EDNA McGINNETT

Having read several different industrial wind energy landowner contracts, I really have to hand it to wind developers. In exchange for a few thousand dollars, the wind company can preempt landowners’ rights to: extract sand and gravel from their property, develop mineral rights on their property, allow hunting, build additional outbuildings or plant trees, etc.

If, in the sole discretion of the wind developer, such activities would interfere with or alter the flow of wind currents over the property, or interfere in any way with the building or operation of the wind project.

The wind company has the sole discretion as to what electrical generation equipment will be placed where and when on leased property. In addition, these leases contain language which allows the wind developer to use other land owned by the landowner even if such acreage is not included in the lease agreement.

These landowner contracts subordinate the landowners’ rights in favor of the wind developers. Once landowners sign an option they are under obligation to sign the lease agreement if the developer decides to exercise the option.

One of the reasons these contracts are so restrictive is explained in comments made by NYSERDA about wind energy lease agreements: “Before allowing wind turbines to be purchased and installed, project investors, financing organizations, and power purchasers will want to be sure the lease provides clear, unimpeded rights to use of the land over the expected life of the project.”

“Termination clauses need to be ‘reasonable’ so that the risk of installing the wind turbine equipment and having the lease terminated is low and manageable. If the risk of termination is deemed too high, it will be difficult for the project developer to obtain financing for the project.”

These leases typically prevent a landowner from complaining or taking action against the wind company because of noise, flicker, visual, audio, vibrations, air turbulence, electromagnetic, electric and radio frequency disturbances and other side effects caused by the operation of the project.

Yes, I really have to hand it to these wind developers, and if you have signed one of these leases, you probably already have.

Published on 3/14/08 in the Dunkirk, NY Observer

Labels: Legal Issues, Process