Land owners could face huge turbine costs

by John Miner, London Free Press
GODERICH – Land owners considering allowing wind turbines to be built on their property should put a hold on signing any deal with an energy company until after the provincial election, a University of Guelph economics professor warned Saturday.

“If you haven’t put a shovel in the ground, my advice is to wait,” said Prof. Glenn Fox.  For those that have already have turbines, Fox’s advice is to cross their fingers.

With lucrative prices guaranteed by the province, wind farms have sprung up across Southern Ontario.

Progressive Conservative leader Tim Hudak, leading in the polls, has promised to end the subsidies if he wins the election.

While some have argued it would be reprehensible for a new government to rip up the contracts, Fox said it has happened before, such as when the federal government canceled a military helicopter deal.

Without the subsidies, solar and wind farms in Ontario could end up abandoned as has happened in some places in Europe, Fox said.

“It is not inconceivable that it could happen in Ontario,” he said.

Speaking to a meeting organized by an anti-wind energy group, Fox said land owners could be left with the removal and disposal costs of wind turbines if the energy company goes bankrupt.

“That (cost) would be just astronomical,” he said.

Ben Lansink, a London real estate appraiser, said wind turbines will lower the value of not only the farm where they are built, but neighbouring ones as well.

“It is a major and significant problem that is here and is going to get worse,” he said.

Required set backs from the turbines mean livestock facilities and homes can’t be built in the area.

When there are restrictions, the market value of the property is reduced, he said.

13 thoughts on “Land owners could face huge turbine costs

  1. So, then, is it safe to assume – The Green Energy and Green Economy Act (bill 150) is –
    in fact “Ultra Virus”?……..or, at the very least – ‘an illegal Act’?
    If the answer is yes – then, that is very good news for Ontario citizens.

    The ‘cronyism’ demonstrated by the Ontario Power Authority (OPA) is a disgrace –
    in a free society.

    Set up, by McGuinty Liberals, as a temporary agency in 2005 – to plan the electricity system in Ontario – has proven to be a disaster – for the economy, and citizens – this agency should be dismantled immediately! If possible – before the election.

    Whereas, for the property owners – that were adults at the time of signing legal documents, to allow wind turbines etc. onto their land – well, all I can say, is – ‘too bad’.

    Land owners that accommodated energy projects:
    I believe – in any business dealing – and, issues – concerning, safety of others – ‘due diligence’ – still is, a very important element – and, for the sake of ‘not arguing’ we can assume – the land owners knew what they were doing – at the time of signing their lucrative secret deals – and, no further consideration, or concern should be given to them.

  2. Decommission IWTs which will happen sooner than later has not been planned nor has responsibility been established other then the land owner. When an IWT should be decommissioned has not been defined. Without a clear definition an IWT could be decommissioned only when it becomes a safety issue and someone complains. Ideas the scrap value is enough to take them down does not take into consideration the labour, disposing of non renewable materials such as the fibreglass rotor blades and electronic components. The larger corporations will protect themselves from responsibilities by developing smaller independent companies to front them.

  3. Professor Glenn Fox is about 3-5 years too late for most of the landowners in Western Ontario. My guess is that the bulk of the leases were signed about 4 years ago, with some as early as 5 years ago.

    Once a lease is signed there is very little that can be done. Some leases do allow the landowner to opt out on the 5 year anniversary date. HOWEVER, it is the landowner’s responsibility to note that and act on it if s/he so desires. The IWT company will NOT notify the landowner of this. IF they do not opt out at the 5 year mark, the lease in most cases renews automatically for 20 years.

    I know of one landowner who is counting down the days until his 5 year anniversary comes around – ’cause he is going to OPT out – and be happy to do so.

    Some of the earliest leases were only a few pages long. Then landowners and lawyers started asking questions, so some of the latter leases can be up to 30 pages long, depending on the IWT company.

    • Petra,
      Hold on a minute!
      ……… I understanding this correctly?

      Opt out – 5 yr. mark clause: means lessor/property owner can opt out, and the company will come and dismantle the project?

      Lawyers started asking questions? What a novel idea.

      There must be – ‘more’ fine print – than I thought.

      • The leases I’ve seen (and legally they are licenses, not leases, I think) have a 5-year option period that gets automatically renewed. At the developers discretion, the option can be converted into a 20+ year lease when the project finally goes ahead. Once the 20+ year lease is activated, there are no options for the land owner to undo it.

      • Wayne,

        when you were looking at the lease/license agreements –
        was there any reference to easements on property – if, so –
        the owner of the property should have – or should get a copy of the documentation –
        of what has happened to their property.
        I believe an easement would be required for the project – to add security for the proponent, and, also future owners of the project – on a 20 + 20 option.

      • Free Thinker – easements per se weren’t mentioned one way or the other in what I’ve seen, but the developer is given the right to file whatever he thinks is necessary on the deeds. So far they haven’t filed any easements, liens etc any earlier than necessary to keep things secret.

      • Wayne,
        Certainly sounds promising for the proponent.
        Unbelievable – the land owner – not better informed.
        And – not knowing – who the end owner will be.
        It most definitely will not be the nice people that came knocking.

    • Sorry, I should clarify. The opt out is only available on some leases and only if NO IWT’s have been erected. Sorry for the confusion.

      • Petra,
        one more question.
        Is the opt out clause – available to both parties?

  4. Free Thinker,
    I don’t know for sure if the opt out option is there for both parties, my guess is yes. If a multi-billion $$$$ company can’t get out of a contract with a landowner, then there is something wrong with their legal department. I am sure it must be buried somewhere within the 30 pages.

    • Petra,
      that being said – and I agree with what you have just expressed –
      but – still begs the question – can the property owner opt out?
      I suppose we will eventually find out – sooner or later.

  5. There must be a ‘trick’: understanding the issues!

    First! – Get your ‘bowl of peas’!

    Landowners in Ontario now have a free and comprehensive guide on wind power in Ontario, says James Murphy, co-author of the Ontario Landowners Guide to Wind Energy. The guide provides landowners with detailed information on land option and land lease agreements.

    Endorsed for use by the Ontario Federation of Agriculture (OFA) and the Canadian Wind Energy Association (CanWEA), the Ontario Landowners Guide to Wind Energy is the first publication of its kind in Ontario and is the definitive source of information on wind energy for landowners.

    Speaker: Bruce Lourie, President, Ivey Foundation, Director, Ontario Power Authority
    We’ve come a long way since 1990s when dozens more nuclear and coal were the direction. Community power didn’t even exist. A dramatic shift has occurred from not even considering conservation and renewables to becoming a leader here in Ontario.

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