Experts say be careful on wind deals

By Mary Golem, Owen Sound Sun Times
For more info: Leases

Farmers at a wind energy information session in Elmwood this week went home with a clear message: Make sure you know what you are signing if asked to lease land for wind turbines.

Both Ted Cowan, an Ontario Federation of Agriculture energy and taxation specialist and Paisley lawyer Patrick Kelly told about 120 farmers at Tuesday’s meeting “there are too many unknowns” surrounding lease agreements for wind energy projects.

Elmwood-area farmer Byron Monk, and others in the Elmwood area, have been approached in recent weeks by wind energy companies to sign leases.Monk, who told those at the meeting he’s not against wind energy projects, said he’s interested in the compensation such projects offer farmers but “needs to know a whole lot more information” before proceeding.

“That’s why I thought we’d get some farmers and landowners together here today that could be affected by this and try to learn something,” Monk said. He added he’s been told that one company has plans to erect 100 to 125 turbines in the area.

Before addressing the crowd, Cowan handed out a two-page list of more than 30 items he said they “must consider” before signing anything.

“Ontario needs power,” he said. “The OFA backs green energy where generators do not harm things important to farms or the community. But before signing a lease, be sure it fits your plan for your farm.”

Speaking from what Cowan called “a business, not legal perspective,” he discussed each of the 30 items in detail. Concerns he raised ranged from rent and insurance to building restrictions and lease terms.

Good legal advice is a must, he said.

“You need to know how to get in (to an agreement), but more importantly, you need to know how to get out.”

Each tower costs $5 million to construct and in a good location can generate revenue of more than $700,000 per year, Cowan said. Farmers are paid anywhere from $13,000 to $19,000 a year rent. Most leases are for 17 years, but the wording in some agreement may tie up the property for 40 or 45 years.

“The wind company is never obligated to build on your land, yet it still ties up the property,” he said.

Cowan cautioned that “if the property may be valuable for other development in the next 30 years, do not sign. You will be giving the wind company your future profits or capital gains. Some leases have clauses that appropriate your development rights for aggregates, groundwater, topsoil, sale outside of the family and even your right to speak in public on wind power questions. Any such clause should be removed from the agreement.”

Like Cowan, Patrick Kelly warned farmers of what he called “the dangers involved” and said signing a lease “could make you lose control of your property.”

When asked what companies are better than others, Cowan responded “they are all the same . . . all the leases are the same. Some of these considerations have been put into the lease agreements, but in the wrong way. The considerations are not to the farmers’ benefit.

“Wait until you know your choices,” Cowan concluded. “The government has a Feed-In Tariff program. You can have your own wind project or you can find other firms or partners. You may do better than you might as a landlord. Don’t sign a lease until you have considered the choices and determined what is best for your farm operation for the next 20 plus years.”

6 thoughts on “Experts say be careful on wind deals

  1. Another side note maybe not legally required; ask your neighbours how they feel about your future development plans. Even though this might be good for you in financial terms, how will you be intruding on their lives?
    In a day and age where everyone is for themselves, lets be community minded. Divided we fall, and that’s when the vultures, such as a “land securer” and the government law makers, will swoop in.

  2. If the money farmers are receiving is that good, you can be sure it is to good to be true, there is a catch somewhere down the road.

  3. I’m just waiting till a neighbor, or groups of same sue a farmer for the harm his
    tenant’s monstrosities are causing.

    Betcha the farmer eats it and not the tenant!


  4. Just for the sake of discussion that Ontario installs/plans 7,000 wind turbines at 2/property owner.This would require only 3,500 land owners to particapate in the lease program and most likely there will be a lot fewer land owner participants in the program.

    At 4 turbines/land owner then only 1750 are requied to make this wind turbine scheme work. But lots of land owners would like to participate in the program.

    So the government knows they can put over the wind turbine scheme by using only a few willing participants to host the wind tirbines.

    So it dosen’t take many willing participants to cause huge problems for the vast majority of Ontarians.

  5. I also understand (from a contract I’ve seen) that the wind developer has “right of first refusal” meaning that if the landowner wishes to sell, he/she has to notify the wind developer first, opening the door for the developer to buy the land.
    It can be a land grab sometime in the future.

  6. Only a very foolish land owner would give this much power over them to a tenant.

    Seems all the wind developers have to do is wave a little cash in front of these land owners and they lose their common sense.

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