Gauging the wind: Landowners face many facets in energy farm contracts 

Communities are either brought together or torn apart over wind farms, attorneys with experience in the field said.

The division is a concern of one farmer in the Haven area, while NextEra Energy Resources pushes to lease land for a proposed wind farm in southeast Reno County. Not wanting to upset any neighbors, the farmer agreed to share his wind farm contract with The News on condition of anonymity.

Three attorneys agreed to review the contract for The News.

The dilemma

The farmer said he knew of two other farmers and himself who were waiting to see what farmers who owned more land in the area decide to do. He said that included the Millers and the Bogners. Others also mentioned the Showalters.

The Showalters and the Millers could not be reached for comment.

Don Bogner, a fifth-generation farmer, said he’s had two attorneys look over the contract. The gray-bearded man talked about his concerns while his nephew constructed an indoor pen for calves.

“What I’m scared of is they will get enough people, and we won’t get anything,” he said. “And we will have to look at them.”

The family operation would need the signatures of all six siblings and their spouses.

Besides garnering support from everyone, Bogner had several concerns:
Sticking turbines in someone’s backyard Signing a contract that will affect future Bogners Not knowing whether they would get turbines or lines running to turbines The decommissioning of the turbines if the company goes bankrupt The potential “effects” outlined in the contract.

Bogner said he didn’t feel pressured despite multiple visits from a NextEra representative.

“He’s just doing his job,” he said.

Attorneys’ outlook

Attorneys said the potential 96-year lease is more “lengthy” than any other contracts they’ve reviewed, although, neither thought it was cause for alarm.

Lee Legleiter, of Hampton & Royce, L.C., said the compensation in the contract is based on a formula and in line with industry standards.

Legleiter said it’s more advantageous for community members to be seeing eye to eye. Together, he said, they have more influence over the contracts.

The attorney noted that’s what landowners did in the NextEra proposal for a wind farm in Washington and Republic counties. Legleiter would not say specific amounts negotiated in the wind farm project.

“It was a material difference,” he said. “It was worth hiring us.”

So far, community-wide talks for the Silver Lake Project have not occurred. Bogner hopes talks will start now that the holiday season is over.

If landowners do decide to go it alone, Legleiter suggested they ask for a favored-nation clause, which gives the landowner the best terms given to other landowners.

NextEra Energy Resources response

Spokesman Bryan Garner said the company started its first Kansas wind farm in 2001. Today, the company has six without a “single complaint” about shadow flicker, when spinning turbine blades cause sunlight to appear to be flickering, or health concerns, such as sleep disruption caused by turbine vibration. Garner said a clause restricting landowners from making public comments is typical in such contracts.

A GateHouse Media investigation that appeared in The News from Dec. 26 to Dec. 30 found 400 families who publicly complained about the effects of living near a wind farm.

Garner said the series did not “reflect the vast majority of people in this country” who live in communities with wind farms. NextEra Energy Resources operates over 120 wind farms across the country and Canada.

Garner would not say how much land the company had procured. The land in question in Reno County encompasses roughly 29,000 acres from east of Yoder Road and within Sumner and Haven townships. That land will be dwindled down as existing environmental factors restrict development in some areas and by landowners who refuse to lease their property.

About the potential 96-year life of the contract, Garner only said it is in line with other contracts in the industry. The spokesman declined to talk about other specifics in the contract.

The proposal is for a 200- to 300-megawatt wind farm or approximately 100 wind turbines. Landowners retain other rights to the area as long as it doesn’t interfere with the wind farm.

Garner said the company also has approached landowners in Reno County and a few other counties about a solar panel project. He didn’t have any additional details about that project.

County decisions

Reno County commissioners will need to approve a conditional-use permit if the project moves forward. The county can only regulate zoned areas, but the wind farm must meet state and federal standards wherever it builds.

County commissioners can request a lump sum of money within the conditional-use permit to ensure if the company becomes insolvent that the turbines will be decommissioned.

One of NextEra Energy Resources’ latest projects in Kansas was a 121-turbine wind farm in Pratt and Kingman counties.

Carol Voran, a Kingman County commissioner at the time and now part of the county’s economic team, said she just sees the project as positive.

The county already had wind farms, and landowners with existing turbines welcomed more, she said. But a small group did lodge complaints.

“I think the people that were opposing them will always oppose them,” she said. “And the people who are for them will always be for them.”

The wind farm is up and running and the people who didn’t voluntarily sign on are like “sour grapes.”

“I don’t know of anyone who has changed their mind about getting on,” she said.

Voran recommended the County Commission be diligent and address public concerns. She said one of the biggest complaints Kingman County addressed in its negotiations was restrictions on roads built to access the turbines.

Reno County has regulations for wind farms.

The energy in Kingman and Pratt counties was sold to Westar Energy. No decision has been made on a buyer of the proposed energy in Reno County, Garner said.

Government aid

The U.S. Department of Energy lists a number of benefits of a wind farm. A boost in the local economy, reduction in the amount of atmospheric gases and the means to provide electricity with a renewable energy all made the list.

The U.S. government has spent billions of tax dollars to subsidize renewable energy. Many people fear when a tax credit falls off in 2020 that renewable energy companies may become insolvent.

“Wind energy is one of the most economic energies today. It will be even when the subsidies decrease in 2020.” Garner said.

The NextEra spokesman said more new wind farms were produced last year than other renewable energy sources. Garner added that improvements in technology have made it cheaper to construct wind farms.

Personal choice

Garner reiterated that the choice to enter a NextEra agreement is voluntary. He said tens of thousands of people across the country have signed into agreements with NextEra and have benefited from consistent income on land that may produce inconsistent commodity prices.

Bretz & Young attorney Ethan Kaplan said “some landowners may find the agreement includes far too much legal jargon for their understanding. This is typical with most professionally prepared agreements as they have typically been tried and tested through the legal system over the years.”

He suggested any confused landowners take advantage of a NextEra clause that reimburses landowners up to $750 for attorney fees.

Kaplan singled out sections in the contract: one that involved on-site tests done by the developer or a sub-contractor and another about reimbursements to landowners for any damages. Kaplan said the invasiveness of the tests and the specific reimbursable damages needed to be spelled out “preferably in writing.”

“That is why reviewing the agreement on a case-by-case basis is important,” he said, adding each landowner uses his property differently.

Patricia Voth Blankenship, an attorney with Foulston Siefkin LLP, has represented landowners and developers in wind farm projects for 15 years.

She currently represents landowners in McPherson and Marion counties for a separate proposed NextEra wind farm. She said, ultimately, the decision falls on landowners to understand the agreement they enter.

“These agreements are lengthy and sophisticated and cover a topic that many property owners do not spend time thinking about,” Voth Blankenship said. “Take the time to read the entire agreement and understand. It’s difficult to win a (court) case on (something) you didn’t understand.”