Wind Leases
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):
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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
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Length of the lease agreement
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Whether or not the developer has exclusive rights, and if so for how long
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Liability issues, during both the construction phase and the operations phase, and possible impacts on landowner’s insurance rates
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Assurance that the wind resource will be developed within a certain time frame
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Tax consequences
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Utility services and concerns
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How much land is taken out of commission (turbine base, road access, etc.)
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Reserved rights to hunting, farming, grazing, mineral rights, land improvement
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Restoration of land after the construction phase is completed
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Transferability of the lease and subleasing
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Termination rights
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Decommissioning of the structures
This information does not represent legal advice. If you are a landowner and someone gives or sends you a wind lease, always take it to a lawyer with experience in natural resource law, or contact the Kansas Farm Bureau Legal Foundation.
No one can ever take away your right to legal consultation.
NOTE: Across the state, landowners in high wind resource areas are talking about forming cooperatives to negotiate wind contracts with developers.
NOTE: Counties in Kansas also negotiate Payments in Lieu of Taxes (PILOTs) with wind developers. These are separate from arrangements with landowners.
Leasehounds
Wind is a young, booming industry. Not surprisingly it has attracted its fair share of speculators. Some refer to speculators as “leasehounds.”
Leasehounds are more interested in easy profits than in building long-term relationships with communities, and developing wind resources with respect for people and the environment.
Things to watch for – -
Developer is asking for more rights than needed for a longer time than needed
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Excessive length of time – up to 150 years in some cases
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Low rates of compensation
- Excessive statements about confidentiality, with terms that you did not have an opportunity to negotiate
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