David Ganje: Beware the bandwagon
In life, one must be handsomely skeptical of data and of the truth as provided by large institutions and government.
The federal Energy Information Administration tells us that electricity generated from renewables surpassed coal in the United States for the first time in 2022. The agency also reports that renewable sourced energy capture also surpassed nuclear generation in 2022. The generation of electricity from wind is a renewable energy source providing man with electricity.
Over the last several years, wind energy development is riding the bandwagon.
The motivation and reasoning of a wind energy developer presenting a landowner with a proposed wind turbine agreement are uncertain things. Let us therefore review some, but certainly not all, common issues facing landowners before the landowner decides to get on the bandwagon.
Is the developer uninsured, underinsured or inadequately insured? Does the wind farm agreement have a level of insurance providing for the type of loss or claims common to an operation? South Dakota law does not require that a wind farm maintain project-wide general liability insurance coverage. Both North Dakota and Wisconsin require insurance coverage.
A wind farm permit approved a few years back by the SD PUC will be used as an illustration. This wind farm development and operation was approved with 42 permit conditions required of the operator. These conditions were imposed by the SD PUC. None of the 42 conditions in my example required project-wide general liability insurance. The lengthy official application and approval file shows no indication of such insurance coverage. Naked in the wind.
Regardless of whether a county has established setback distances, entered into road haul agreements, required site plans and engineering drawings from developers, or established decommissioning procedures, the landowner negotiating a wind turbine agreement should address these issues.
Landowners negotiating a wind turbine agreement should insist that setback distances be at least one and one-half (1 ½) miles from off-site residences to the base of the turbine and make sure the point from which the setback is measured is defined. Even if an ordinance states otherwise, the distance of a mile or more finds support in South Dakota and other jurisdictions, and if there is a consensus among independent authorities, it is for more distant setbacks, measured in miles. Moreover, the landowner should define the point from which the setback will be measured to ensure that the agreement does not preclude the landowner from future construction or uses.
When county ordinances fail to provide an adequate road haul agreement, the landowner should require liability for any damages to roads caused by the wind farm development as well as require financial assurances are in place to make good on the repairs.
Landowners should insist that the developer provide site plans and engineering drawings.
Landowners negotiating a wind turbine agreement should ensure that the developer has a written decommissioning plan in place that the landowner approves of and that discloses how the project will be decommissioned.
Landowners negotiating a wind turbine agreement should ensure that the developer has a surety bond to protect the landowner if a problem arises during the project. South Dakota does not require a surety bond for wind farm operators and some ordinances are silent concerning requirements regarding financial assurances.
David Ganje is an attorney who practices natural resources, environmental and commercial law.