Sample Wind Farm Lease Agreement

According to Dean Retherford of Halderman Farm Management, Lafayette, IN, farmers should address agricultural production issues in the first contract negotiations. Retherford has helped negotiate leases for several wind projects in northwestern and western Indiana, which involve 39 wind turbines on farms it manages. From the proponent`s perspective, the authorization of a separation of wind rights or revenue streams from the ownership of the basic land under the wind energy contract raises concerns about future relationships between the parties and the ability to adapt to changing circumstances, as well as additional administrative and internal costs. For example, it is not uncommon for a developer to seek to amend its original wind energy contract to reflect the terms of the original agreement (or not in the original agreement). Where the landowner is the person to whom the developer makes the payments, the landowner is encouraged to cooperate, particularly where non-work may result in the loss of the source of income normally provided for by the agreement. If the wind rights and/or payment flow have been separated from the underlying land ownership, this incentive is lacking: the owner of the land owns only land under the wind farm contract and has obligations under the wind land contract. Aside from what the landowner can get from the owner in exchange for possible concessions, that the landowner is prepared to respond to the developer`s request, unless the landowner has a clear and enforceable obligation to follow the desired course, there will be no incentive for the landowner to cooperate if the proposed modification of the wind farm contract does not reduce the burden on the land and/or landowners. The same result applies when an owner sells his source of income to a third party or moves to a third party for a present value of the overall contract value. Some states, such as North Dakota, South Dakota and, more recently, Kansas, have legal prohibitions on the separation of wind duties and limit the life of leases and wind project facilities, or require that certain development measures be put in place within a specified time frame in order to obtain contractual wind rights.