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DANVILLE – Chrisman-area farmer Joe Glick was contacted about a month ago about putting a wind turbine on his property in southern Vermilion County, and even though Glick believes in the wind-energy concept, he wants more information about the effect of leasing land for the turbines.
“I was looking for an unbiased opinion,” Glick said.
He was one of about 120 farmers from Vermilion, Douglas and Champaign counties who filled the Vermilion County Farm Bureau auditorium Monday morning to hear from an attorney and an Illinois farmer who have plenty of experience with this quickly growing alternative source of energy.
Jerry Quick, senior counsel with the Illinois Farm Bureau, and Rob Sharkey, a Bradford farmer and Bureau County Farm Bureau president who has seven turbines on his property, spoke about their experience with the industry and answered many questions.
Many in attendance are either considering leasing land to wind-turbine companies or developers or have property near landowners who are considering leases.
Todd Lee of Vermilion Advantage also spoke at the meeting and said four wind-turbine development companies are officially working with his office, and others have made contact with local landowners. The four companies in contact are considering projects in different four areas, and two stretch across land in Vermilion and Champaign counties.
Quick has reviewed many lease contracts between landowners and wind-turbine developers in Illinois. He told Monday’s audience they should involve an attorney in the process even though farmer managers, bankers and others can also offer assistance. He also addressed the four major issues that farmers should focus on first in negotiating a wind-turbine lease (please see below).
Sharkey gave the farmers a firsthand account of how he and other farmers in his county worked out leases with developers and companies to erect some of the first wind turbines in Illinois.
“You need to determine exactly how you feel about having a turbine on your property,” said Sharkey, who explained that initially he was all for the idea personally.
He said farmers must determine what it’s really worth to them to farm around the devices.
“It sounds easy, but what I found out was it was extremely hard,” said Sharkey, who explained part of the difficulty arose when developers and companies began a bidding war for the landowners.
He and other landowners formed a group and decided to deal with the turbine companies rather than developers, and the group negotiated a flat, annual compensation rate of $10,000 per turbine. Sharkey said he has seven turbines on his property, but he advised the audience to negotiate compensation on a per-megawatt basis. He said some landowners are receiving up to $15,000 per year on a megawatt basis.
He said the transmission lines that are laid to carry the power have created one of the biggest problems in their area, because field tile gets damaged. The enormous cranes that deliver the turbine sections also damage tile and tear up the ground because of their weight.
“That’s one of the things you will have to accept and deal with in the contracts,” said Sharkey, who used GPS to map out every piece of property touched during construction to be more aware of where problems could arise.
Glick said the meeting was very informative and answered some questions he has had, but he will continue to do research. He said there are some sacrifices involved in leasing land for turbines, but he thinks it’s a good direction not only for him but also for the country.
“Overall, I think it’s a great thing to strive for for our future,” he said.
What farmers should know about wind-turbine leases
Jerry Quick, an attorney with the Illinois Farm Bureau, told farmers to focus on four major issues when negotiating wind turbine leases, and he touched on some other minor issues.
1. Know what Illinois land will be covered in the agreement: the exact acreage and the boundaries.
2. Know exactly what the companies or developers will be allowed to do on the leased land, and whether air and underground rights are covered. Also know what rights the farmer will have on the leased land. Can it still be farmed or sprayed from the air, which has caused some issues in other areas? Some aerial sprayers have refused to spray at all or have implemented surcharges or required farmers to have insurance to spray around turbines.
3. Pay attention to the term of the lease. Quick said the shortest he has seen in Illinois was a 30-year lease and the longest was 60 to 75 years. Whatever the length, he said, a farmer must be comfortable with the term.
4. Compensation should be the fourth major area on which a farmer focuses, he said. Some pay the landowners with a fixed rate per turbine while others do revenue-sharing, per megawatt. Landowners should consider compensation for crop damage during the construction phase and know how and when they get paid.
Other minor issues
Quick said landowners should also consider possible effects of the turbines on cell-phone use, televisions and radios; the amount of liability insurance the company or developer will carry on each turbine; compensation for damage to field tiles; and what happens at the end of the term or in the event of the company going bankrupt. Agreements must contain language about how a turbine will be dismantled and removed if it’s no longer being used.
Quick said although contracts include language about deconstruction of turbines, there is no security in making sure it happens in the case of a bankruptcy, for example.
Quick said he and a colleague have been working on a statewide solution that could provide landowners some protection on that issue.
By Tracy Moss
The News-Gazette
27 January 2009
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