Wind farm contracts discussed

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CUBA — Information on points landowners should consider before signing wind contracts was presented in Cuba February 11.

About 70 people attended the meeting hosted by Kansas Farm Bureau, the Kansas Livestock Assn., and the Republic County Farm Bureau Association.

“Having seen the leases going around and knowing what was in the lease the last time, they have changed,” said Republic County native Aaron Popelka, vice-president of government and legal affairs for the KLA. Popelka noted his family has land within the boundaries of the wind farm project proposed by NextEra Energy.

Draft contracts provided to landowners name the newest NextEra project High Banks Wind LLC. Dan Scheffler, lead project manager for NextEra Energy Resources in Kansas and Missouri, told Republic County Commissioners in January that the company has representatives in eastern Republic County gauging landowner interest in a 600-megawatt wind farm, transmission line, and substation. In general, the company is primarily interested in properties in an area that includes Fairview, Farmington, Richland, Jefferson, Grant and Elk Creek Townships, he said.

However, several people at the meeting in Cuba Thursday said that wind farm agents have contacted property owners south and west of Belleville, into Lincoln and Norway Townships.

Five years ago, NextEra researched a project that included property in Republic and Washington counties, but did not renew the options on many of the contracts for that project. Scheffler said some of the properties leased for the project in 2016 will not be pursued because of restrictions by the Federal Aviation Administration and the Department of Defense. Much of the area affected by those restrictions is in Washington County, he said.

Scheffler said a greater possibility now exists to build transmission lines from a Republic County wind farm to energy customers.

SETBACKS, PROPERTY

Two attorneys, Joseph Aker and Elizabeth Bosch from Hampton & Royce, L.C., in Salina spoke in Cuba and outlined what landowners should consider before signing a wind contract. Hampton & Royce worked with landowners in 2016 when NextEra first proposed a wind project in Republic and Washington Counties.

Property owners should consider whether land use and liability issues are addressed by a wind farm developer before signing a contract.

“Defining land use is hard because everyone uses their land a little differently,” Aker said. “Overall, you can’t interfere with the developer’s use of your land.”

Land use issues might include farming and grazing practices, and recreational practices like hunting.

“Setbacks (how near a wind turbine can be placed to a home or other structures) are a really big topic that deserves to be discussed in detail,” said Bosch. “You’re essentially waiving any setback requirements of the county.”

Republic County does not have a zoning ordinance that regulates setbacks. A contract might outline setbacks and overhangs for the landowner, but not how that affects neighbors, Bosch said.

Aker said landowners should also consider whether the developer uses property for other purposes without compensation to the landowner, including cellphone, radio or internet devices.

PROPERTY TAXES

Popelka said the issue of property taxes and wind farms “is one that doesn’t get talked about enough.” Wind farms are granted a 10-year tax abatement by the state, but may make payments to counties in lieu of taxes. Eventually the developer will pay taxes on the turbines, but the taxes on the land where a turbine sits is the responsibility of the owner.

“Property converted from ag use value to commercial use - that’s going to increase your taxes,” Popelka said. That increase would affect only the footprint of the tower and access road, but a question remains as to how wind turbines affect the overall value of a property remains, he said.

Compensation for wind turbines and transmission lines varies greatly, Bosch said. Landowners may be offered a $1,000 to $5,000 signing bonus depending on where their ground is located. Annual payments for option agreements may range from $1,000 to $3,000 per year, or from $3 to $20 per acre. Options can extend for two to 10 years.

If a turbine is built, a landowner could be paid $2,000 to $6,500 per megawatt of power generated, with an increase in payments of two to five percent per year, Aker said. Using an example of a 2.1 megawatt tower with a payment of $4,000 per megawatt, an increase of two percent per year would payout an average of $14,000 per year over 5o years, he said.

Properties earmarked for a transmission line may receive a one-time payment of $2,500 to $7,500 per acre affected, although Bosch said determining that acreage is “complicated”. Landowners should also consider whether they will be compensated for guy wires, poles, and materials storage, she said.

MET TOWERS

NextEra’s Scheffler said the company plans to erect meteorological “met” towers to gather wind speed data in the next month.

NextEra owns and operates eight wind farms in Kansas, the oldest built in 2001. Several are in southern and western Kansas; two are in Nemaha and Marshall Counties. The company also operates the Steel Flats wind farm in Jefferson and Gage counties in Nebraska, as well as two projects in Webster and Franklin counties in Nebraska.