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In light of the recent economic stimulus plan and the ObamaAdministration's push for green jobs and renewable energies,livestock producers from coast to coast are interested on how theycan financial benefit from this trend and negotiate a wind energylease on their property.
Since wind leases generally range from as five to as many as 50years or more, cattlemen are well advised to put these agreementsin writing and have them reviewed by an attorney prior to signingthem. Here is some guidance to assist farmers and ranchersinterested in a possible wind energy lease on their property.
The first question every landowner should ask themselves is whethertheir property is suitable for a wind farm. Another is determiningwhether your land is marketable to wind developers. Rocky,mountainous terrain and protected federal lands serve asconstraints for wind developers. Proximity to transmission linescan also make a property more marketable. Finally, location alsodetermines federal, state, and local legal frameworks and availableeconomic incentives for wind developers.
Join forces with your neighbors. Once property is determinedto be suitable for wind development, neighboring area beefproducers should form a landowner association to increase theircollective bargaining power with wind companies.
The more acreage that can be bundled, the more marketable theproperty will be to a wind developer and the greater the leverageof landowners in negotiating terms. Landowner associations alsomake it more affordable to retain an attorney to review andnegotiate terms in the wind lease. Finally, cooperation amongseveral producers helps improve transparency ensuring alllandowners get the best possible terms in their lease.
Understand the four wind development stages. Whennegotiating a wind lease agreement, there are typically four majorstages of wind development, and the duration of each stage shouldbe narrowly defined in the lease:
Development period,
Construction period,
Operational period and
Termination period.
Development period.
In this initial stage, the wind companyevaluates the property for its potential by completing thefollowing activities - wind assessments, environmentalreview, economic modeling, permitting, and securing financing.During this stage, other than installing a meteorological tower onthe property to measure the wind, the wind developer typicallymakes little use of the property itself.
Construction period.
During this period, wind turbinegenerators, steel towers, foundations, concrete pads, anchors,fences, and other fixtures will be installed in the pasture orfield. If construction doesn't commence within the specifiedtime, the lease should terminate automatically or...