Legal Issues Associated with Legal Issues Associated with Wind Farming in KansasWind Farming in Kansas

Jennifer R. O’HareJennifer R. O’Hare

Lincoln County AttorneyLincoln County Attorney

Partner, Metz & O’Hare, Chtd.Partner, Metz & O’Hare, Chtd.

Smoky Hill Wind ProjectSmoky Hill Wind Project Facts Facts Project Developer – TradeWind Energy, LLCProject Developer – TradeWind Energy, LLC Project Ownership – Enel North America, Inc. Project Ownership – Enel North America, Inc.

the wholly owned subsidiary of Enel, SpA.the wholly owned subsidiary of Enel, SpA. Project Location – Just north of I-70 on both Project Location – Just north of I-70 on both

sides of highway 14. In Lincoln and Ellsworth sides of highway 14. In Lincoln and Ellsworth CountiesCounties

Project Interconnection to the Midwest Energy Project Interconnection to the Midwest Energy 230kV transmission line in Ellsworth, County.230kV transmission line in Ellsworth, County.

Project Size – 250 MWs (phase I/phase II)Project Size – 250 MWs (phase I/phase II) Approximately 15 landowners and 10,000 Approximately 15 landowners and 10,000

acres will be involved in the phase I project.acres will be involved in the phase I project.

County PerspectiveCounty Perspective

Road Maintenance AgreementRoad Maintenance Agreement EasementsEasements Improvements to the Roads and Improvements to the Roads and

Easements of the CountyEasements of the County Who makes repairs?Who makes repairs? Who supervises?Who supervises? Who decides if it is good enough?Who decides if it is good enough? Emergency repairsEmergency repairs Consultation with the countyConsultation with the county Temporary AccessTemporary Access

Traffic IssuesTraffic Issues Increased amount of travel on county roadsIncreased amount of travel on county roads SignsSigns How do you alert the public?How do you alert the public?

Notice RequirementsNotice Requirements Length of timeLength of time Pre-construction requirementsPre-construction requirements Video-tapeVideo-tape Subcontractors bound by the agreement?Subcontractors bound by the agreement?

InsuranceInsurance Escrow AgreementEscrow Agreement

Protect the CountyProtect the County AssuranceAssurance

PILOT AgreementPILOT Agreement Payment in lieu of tax payments made to the Payment in lieu of tax payments made to the

CountyCounty Statutory AuthorityStatutory Authority Lincoln County “WEB” FundLincoln County “WEB” Fund

The proposal is a five person board consisting of The proposal is a five person board consisting of a Board of County Commissioners, a member a Board of County Commissioners, a member from Economic Development, and three from Economic Development, and three members from each commissioner district members from each commissioner district appointed by the Lincoln County Board of County appointed by the Lincoln County Board of County CommissionersCommissioners

PurposePurpose ControlControl Public FundsPublic Funds InvestmentsInvestments Economic DevelopmentEconomic Development

Landowner PerspectiveLandowner Perspective

Land involved and length of the Land involved and length of the Agreement.Agreement.

How much of the land is under the agreement?How much of the land is under the agreement? How long will the land under the agreement be How long will the land under the agreement be

affected?affected? Is there an option provision in the agreement?Is there an option provision in the agreement? Improvements to the property.Improvements to the property. Does it involve everything to do with wind Does it involve everything to do with wind

farming, i.e. turbine sites, substations, air space, farming, i.e. turbine sites, substations, air space, buffer areas, vegetation restrictions, transmission buffer areas, vegetation restrictions, transmission lines, building restrictions and right of way?lines, building restrictions and right of way?

PaymentsPayments Are the payments adequate when compared to the Are the payments adequate when compared to the

land that you are giving up?land that you are giving up? Is it a lump sum payment? Is it fair?Is it a lump sum payment? Is it fair? Are there tax consequences for you depending on Are there tax consequences for you depending on

how the payments are made?how the payments are made? Are the payments based on revenues generated Are the payments based on revenues generated

from the wind?from the wind? Can you get information on how they figure Can you get information on how they figure

revenues.revenues. Is there an inflationary provision built in.Is there an inflationary provision built in.

Development of the LandDevelopment of the Land Will the company develop the land or use a Will the company develop the land or use a

portion of it?portion of it? What about oil and mineral leases?What about oil and mineral leases? Does the agreement set forth the number of Does the agreement set forth the number of

wind turbines you will be getting or does it tell wind turbines you will be getting or does it tell you “what if’s”.you “what if’s”.

If not, do you get a minimum payment.If not, do you get a minimum payment. AssignmentAssignment

Can the developer sell of transfer without your Can the developer sell of transfer without your consent any of the rights under the agreement.consent any of the rights under the agreement.

Are they still liable then?Are they still liable then? What about mortgages?What about mortgages? Do they get information? Do you need to Do they get information? Do you need to

consent?consent? Are the new additions bound to the agreement?Are the new additions bound to the agreement?

TerminationTermination What can cause a termination by the What can cause a termination by the

developer?developer? Is it with or without cause?Is it with or without cause? How do the payments work then?How do the payments work then? What are your rights to terminate the What are your rights to terminate the

agreement?agreement? How do you do it?How do you do it? If the agreement is terminated, what happened If the agreement is terminated, what happened

to the wind turbines?to the wind turbines? Whose responsibility are they to remove?Whose responsibility are they to remove? Do they specify what they will remove?Do they specify what they will remove? If they don’t remove them, what can you do?If they don’t remove them, what can you do? Who pays for itWho pays for it Choice of Law provisionChoice of Law provision

Setback or “Buffer” PropertySetback or “Buffer” Property What about adjoining land owned by you.What about adjoining land owned by you. What are you allowed to do on your property.What are you allowed to do on your property. Oil and mineral leasesOil and mineral leases BuildingsBuildings LivestockLivestock Farming operations. USDA programs.Farming operations. USDA programs.

Third partiesThird parties Are you responsible for acts of third parties.Are you responsible for acts of third parties. What if you had no knowledge of itWhat if you had no knowledge of it Can you permit other people on the propertyCan you permit other people on the property Indemnification agreement that indemnifies Indemnification agreement that indemnifies

you the landowner for any liability incurred you the landowner for any liability incurred because of permissive activities like crop because of permissive activities like crop tenants, custom harvesters or other allowed tenants, custom harvesters or other allowed activities on the property.activities on the property.

MiscellaneousMiscellaneous InsuranceInsurance NuisanceNuisance Loss of property valueLoss of property value NoiseNoise Effect on wildlifeEffect on wildlife AestheticsAesthetics Keep copies of everythingKeep copies of everything

ConfidentialConfidential There is usually a confidential provision. There is usually a confidential provision.

Don’t agreeDon’t agree