Wind Energy Leases
With rising oil costs, many companies, states and municipalities are exploring and developing alternative energy sources. One of the cleanest and cheapest forms of energy come from wind energy plant, or “wind farms”.
Right now, most landowners participate in utility scale wind through lease agreements – they negotiate with a wind developer for the right to place turbines on their property. In exchange the landowner receives compensation. The developer owns the turbines and develops the project.
The landowner has many interests that need to be represented in the lease, including (but not limited to):
- The highest rate of compensation over time – the rate per turbine (per megawatt of turbine) varies widely across the country, from $2,000 to $10,000. Some also give landowners a royalty on energy produced, and/or escalator clauses
- Length of the lease agreement
- Whether or not the developer has exclusive rights, and if so for how long
- Liability issues, during both the construction phase and the operations phase, and possible impacts on landownder’s insurance rates
- Assurance that the wind resource will be developed within a certain time frame
- Tax consequences
- Utility services and concerns
- How much land is taken out of commission (turbine base, road access, etc.)
- Reserved rights to hunting, farming, grazing, mineral rights, land improvement
- Restoration of land after the construction phase is completed
- Transferability of the lease and subleasing
- Termination rights
- Decommissioning of the structures
The attorneys at Bailey & Galyen can help you with the drafting and negotiating of a wind energy lease that maximizes the income potential of your property and provides the necessary landowner protections. Contact Us Today!