Analyst probes wind farm contracts

Easement analyst Julie Morton appeared by Zoom video at meetings August 9 and 10 in Berryville held by a group opposed to the Nimbus Wind Farm in eastern Carroll County. Morton said she has 42 years of experience in easements for oil and gas pipelines and electrical transmission lines and has never seen an easement as long and lopsided in favor of the industry as the easements from Scout Clean Energy for the Nimbus project. She said a current LNG pipeline easement she is working on is 12 pages long, plus exhibits. Some easements are only two pages, particularly electric transmission line easements.

The unsigned easement she reviewed from Scout was 30 pages long with exhibits. Some of the provisions shocked her, including the leaseholders, their family members and attorneys being forbidden from discussing the project, including terms of the agreement.

“These people who leased to Scout Clean Energy ceded more rights than any other easement I have seen,” Morton said. “What I found most egregious is the provision about tax credits. They claim this project is green, but what it is really about is greenbacks. They are rushing to get the federal tax subsidies for wind generation projects before the subsidies expire in December 2024. If they don’t get the tax subsidies before the expiration date, all the terms in the contract can be changed except for compensation and the length of the term of the easement.”

Morton said leaseholders may have been misled about the amount of compensation, which is based on the turbines generating 100 percent of the time. Wind is not constant, and turbines don’t generate all the time. She said the truth is that the actual amount received based on the amount of power generated could be reduced by 60 to 85 percent. Or, there is a minimum $7,500 payment per turbine each year.

She is concerned about a lack of regulatory oversight. In Arkansas, the fossil fuel industry has its own regulatory agency, the Arkansas Oil and Gas Commission. The electric utility industry is regulated by the Arkansas Public Service Commission.

“Both of those agencies have rigorous procedures that must be followed before drilling or installing facilities,” Morton said. “I have been through those processes and, contrary to what the public may think, the landowner’s rights are protected in that process. Those industries also used standardized forms, which include clauses that resulted from landowner litigation. Even if this is the wind industry standard, it is a completely lopsided agreement biased in the company’s favor. Without state regulation, it is a free-for-all for the company. And, the landowner’s only recourse is litigation. If they lose, they pay the company’s attorneys’ fees.”

Another thing that concerns her is the lack of a customer for the power generated.  “Scout has no customers,” Morton said. “So, all the destruction could be completely unnecessary.”

Morton, who lives in Crawford County, was one of the leaders of the effort to stop another wind project, Clean Line Energy, that proposed to put a high-voltage transmission line through Arkansas for wind power generated in Oklahoma for sale in other states. Morton said it took eight years and opposition by hundreds of people to stop Clean Line.

Morton said that in the contracts, leaseholders waive the right to sue because of potential impacts from noise, shadow flickering, electromagnetic frequencies, vibration, air turbulence, lights or “other effect of any kind or nature whatsoever” directly or indirectly from the wind project. Morton said it also disturbs her that the leases are as long as 43 years and encumber the heirs to the property and any future buyers of the property.  

She said that the easement she reviewed “runs with the land.” In other words, this easement will remain in place until it expires or is abandoned. “So, whatever terms the owner is agreeing to now will bind all subsequent owners of the property, including their waiver of various health rights,” she said.

In another clause the landowner with the lease agrees to grant additional transmission and electrical easements. “That includes transmission lines and substations, among other things,” Morton said. “And, they will receive no additional compensation for these easements. An electrical substation can encumber a number of acres, and the owner will be paid nothing for it. This is not usually how this is done.”

Morton said some people might question why she is involved in opposing the project when she doesn’t live in the area. She said she loves all of Arkansas, including the Ozarks, and doesn’t like seeing people taken advantage of.

“I resent it when slicksters are trying to sell a pig in a poke,” Morton said. “All other utilities are required to have numerous permits to operate, including from the Arkansas Public Service Commission. Somehow the wind industry thinks it can pass on getting the same permits as other electricity generators, but your public is at risk. These tall wind turbines are falling down all over the U.S. because of substandard manufacturing of turbine blades. If one of these fell on your head, I guarantee it would be a safety issue.”

Morton said her biggest worry about construction of the project is that foundations for the turbines would be 14 to 16 feet in diameter and 20 to 45 feet deep. Some of the areas are solid bedrock.

 “I have never seen anyone able to excavate forty feet into bedrock without using dynamite,” she said. “I am worried about how this will affect wells in the area. Be sure that you document what your water flow is today, including by taking pictures, so you can prove it if the well stops working after the turbine foundations are put in.”

Scout has said the county would receive $25 million in taxes during the 30-year life of the facility, and landowners would receive $14 million in lease payments. Morton said the JPs need to make sure that they get that promise of $25 million in writing, and she predicted the company will do all it can to pay the least amount of taxes possible.

“Your JPs need to understand that if nothing is in writing, you got nothing,” she said.

The meetings presented only one side of the issue, that of the opponents. Scout spokesmen did not respond to a request for comment prior to deadline. The company has reportedly been circulating a petition in favor of Nimbus to present at the quorum court meeting August 16. At that meeting the QC is also expected to take up an ordinance that would regulate some elements of wind projects, such as minimum setbacks from homes.

Scout Clean Energy has earlier indicated that the project is needed to combat global climate change, that the wind regime in the area is good for generation of electricity, and there will be numerous benefits to the environment and financial benefits to Carroll County and leaseholders.

It would be the first industrial-scale wind facility in Arkansas.