Wind development contractsAlthough we hear less about wind development these days with the constant hum of the Bakken oil boom in the background, there are still several wind development projects proposed in the state.
By: Derrick Braaten, Agweek
Bismarck, N.D. — Although we hear less about wind development these days with the constant hum of the Bakken oil boom in the background, there are still several wind development projects proposed in the state. As a result, landowners are likely to receive offers for wind development contracts.
It is as important to know your rights with respect to a wind energy agreement as it is with any energy development project on your land.
Fortunately, North Dakota law has some strong protections for landowners. North Dakota Century Code chapter 17-04 contains provisions related to wind energy projects. As many other states have done, North Dakota has limited wind development options to five years.
Under North Dakota law, the wind agreement is void after five years if a requisite certificate of site compatibility (issued by the Public Service Commission) or conditional use permit (issued by a local government) has not been issued and a transmission interconnection request is not in process. In other words, if a wind developer enters into an agreement with a landowner, that developer must obtain the required regulatory permits within five years, or the agreement will be void.
Unlike mineral interests, North Dakota law restricts the ability to sever the wind resource from the surface estate. As many in oil country know, the severance of the surface and mineral estates can lead to significant conflicts when development occurs.
The statute also contains a list of specific provisions intended to protect the landowner.
For example, the law requires the wind developer to carry general liability insurance for claims arising out of the wind development project, and the developer may include the property owner as an additional insured on the policy. It does not, however, require that the property owner be listed as an additional insured, and it is precisely this type of provision that should be negotiated for by the landowner.
Although North Dakota has such laws protective of landowners it is always crucial for landowners to hire an attorney to review the proposed agreements. There is also an excellent guide produced by the Farmers’ Legal Action Group which can be found at www.flaginc.org/topic/alternative-energy/.
North Dakota law also requires the developer to include a cover page with its agreement, which states the developer will give you enough time to study and thoroughly understand the agreement, and encourage you to hire a lawyer to explain the agreement.
The developer must also state on the cover page that you may talk with your neighbors about the wind project, find out if they also received a proposed contract and that you and your neighbors may choose to hire the same attorney to review the agreement and negotiate changes on your behalf.
It is extremely beneficial for landowners to discuss wind agreements, oil and gas leases, surface damage agreements and other such energy development contracts with each other. Frequently, a landowner will receive a better offer simply by telling an energy developer that her neighbor received a better offer. Additionally, when a community of landowners joins together and hires an attorney, the legal expenses become very affordable because everyone is sharing the cost and the attorney representing the landowner group has a great deal more leverage in attempting to negotiate on behalf of the community.
The right to talk to your neighbors and hire an attorney should be self-apparent and no law is required to give you that right. The fact that the North Dakota Legislative Assembly chose to require wind developers to tell the landowner that he has these rights is a strong indication of how important they are.