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Wind energizing state

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Indiana Lawyer Focus

Taking a drive on Interstate 65 just north of Lafayette, it’s hard to miss the many wind turbines along the highway. As wind power continues to gain momentum in Indiana, and as more counties change their zoning ordinances to include wind turbines, this will likely be a sight in more counties, especially in the northern part of the state.

Near a wind farm, one may also see the larger-than-life blades or other components of the wind turbines on the backs of semi-trucks or being hoisted by cranes.

While the visuals might seem out of the ordinary for most Hoosiers, the rest of the process – land leases, construction agreements, and zoning ordinances – are more or less like any other construction project, according to attorneys familiar with the legal issues of wind farms.

It’s just on a much grander scale.

shoultz Shoultz

Before a company can even start building a wind farm, it must consider location and wind, said J. Spencer Harmon of the Jeffersonville office of Stites & Harbison, who works on environmental issues and has been following wind-farm development in Indiana.

Location also includes whether the county has a zoning ordinance that allows for wind turbines based on height, noise, and other restrictions. For instance, some counties will account for things like the color and finish of the turbine, and “shadow flicker,” which happens when the sun shines on a turbine blade. This effect can potentially distract someone who is driving in the area.

Nikki Shoultz, an attorney at Bose McKinney & Evans, said that some counties have yet to allow for wind turbines to be installed, likely because those counties anticipate growth that would spread to land that is currently used for agriculture but may someday include residential properties.

“In White County, I think among the farmers I represent, they think the land will likely remain agricultural land for the next 30 to 50 years,” she said. That may not be the case for counties that are reluctant to add wind-farm ordinances, such as Boone County, which has been expanding in terms of residential property in the area north of Indianapolis.

Shoultz and Alan Townsend, also from Bose McKinney & Evans, will address these and other legal issues of wind farms at a Nov. 10 CLE, “The Winds of Change: Wind Leases in Indiana” at the Indiana Continuing Legal Education Forum’s Conference Facility, 230 E. Ohio St., Indianapolis.

Shoultz started representing land owners on their leases with wind companies in 2007. Since then, she has worked

on at least 20 deals on behalf of the farmers, and the groups have included anywhere from three to 80 landowners.

For the first deal she worked on, a wind farm in Randolph County, she worked with 80 landowners who had been approached by a handful of different companies to build turbines on their properties, she said.

To help the farmers make a decision, she helped coordinate presentations for the companies to share their proposed leases with the landowners. Then attorneys at the firm, including Shoultz, created a matrix with all the different possible issues.

“Ultimately, they selected a company and we negotiated the lease,” she said.

wind farm Wind turbines, like these in Benton County, appear on the landscape along Interstate 65 in northwestern Indiana. Companies consider farmers’ concerns when negotiating use of their land. (IBJ file photo)

Among the provisions to consider on wind farm leases are the company’s history; is the company financially sound; what is the possible damage to the property, including crops, soil, and access roads; what happens if the wind farm is decommissioned and the company walks away from the turbines they’ve installed; and what happens if the company is taken over by another company of which the landowner may not approve.

While some landowners are concerned about what farmers in neighboring counties had been paid for their leases, she said one of the biggest concerns is the damage the wind companies can do during the installation process.

Heavy trucks and cranes need to go through the fields, which can cause soil compaction, crop damage, and damage to drainage tiles that are under the fields.

Another potentially damaging aspect of the construction phase is how the wind company moves the turbine components from point A to point B via access roads, something she said wasn’t obvious in her early negotiations.

She also tries to work with the wind companies for a severable lease so that everything except the language about the overhead transmission lines will be in the first lease the farmers sign, and the overhead transmission lines will be part of a separate contract.

The reason, she said, is during the early stages of the process, the company doesn’t yet know where those lines will go, as they will need to study the wind patterns and other aspects of the land before they come up with a schematic and start installing the turbines.

These overhead lines can also impede farming, she said, particularly when a farmer has a large sprayer boom used to spray the crops that can’t open if overhead transmission lines are in the way.

Another aspect of the lease her clients consider is how they will get paid. In one scenario, the wind company will pay the farmer based on how much land they are using and what the turbine is rated in terms of energy production. In this case, there is a flat rate so the landowner will always know what he will get.

Another scenario is based on the amount of energy produced by the entire wind farm, and each land owner is paid based on how much energy is produced and the percentage of those turbines that are on his land.

Leases can also be a hybrid of those two, she said.

Harmon said that some farmers may also want to consider some kind of wording in the lease to account for payments based on inflation and anticipated increases for cost of living.

While Shoultz expects wind-farm development to continue in Indiana, she said one trend she has noticed is the individual farmers seeking her help as opposed to the large groups that she worked with early on. She would suggest the farmers try to work together on a lease because if they can offer more land to the company, they usually have more of a say in what they want in their lease and may get better terms than if they go it alone.

spencer harmon Shoultz

She and Harmon both mentioned the grid system for delivering energy will also need to be updated in some way as the energy from the wind turbines needs somewhere to go and a way to get to people who can use it.

This is also an issue when it comes to where the wind companies set up their turbines, Harmon said, because as electricity travels to the grid system, it loses energy along the way.

There are similar issues for individuals to consider if they want a wind turbine to power their home, Harmon added, particularly when it comes to zoning ordinances.

The Indiana Court of Appeals addressed this issue Aug. 31 when it affirmed a decision from the Warrick Superior Court that found the Board of Zoning Appeals of the Area Plan Commission of Warrick County was right in allowing a 20-foot variance for the construction of a residential wind turbine in Timothy Hamby, et al. v. Board of Zoning Appeals of the Area Plan Commission of Warrick County and the Board of Commissioners of Warrrick County, No. 87A04-0912-CV-700.

But Harmon said he didn’t anticipate too many more wind turbines built for residences. For one, they’re still expensive so the return on investment isn’t very good; and second, some ordinances might not allow a turbine to be high enough in a residential area to catch enough wind to produce the energy needed to power a house.

Regardless of the issues for building a wind turbine – either on a farm or for one’s personal use – Harmon and Shoultz expect more wind farms to be constructed in the future, especially as counties continue to change their ordinances to allow for them and as wind companies continue to see Indiana as a good place to build.•

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