Wind energy production: Legal issues and related liability concerns for landowners
In this comprehensive document, Professor Roger A. McEowen provides a background perspective behind the current emphasis on wind-generated electricity, addresses taxpayer subsidies that support the wind energy industry and details the legal issues surrounding wind energy production and landowner agreements.
The conclusion of Professor McEowen's report is excerpted below. His complete paper can be accessed at the links at the bottom of this page.
Wind energy development has been spurred in recent years by political support and public subsidies. When compared with other energy sources, wind energy production is incredibly inefficient. In addition, wind energy will do little to nothing to address the concerns that some have over "global warming." While there are landowners that have undoubtedly benefitted
financially from the placement of aerogenerators on their property and are pleased with their lease agreements, legal issues abound.
On that issue, from a landowner's perspective, many wind energy leases and/or easements are inadequate, unfair and offer limited economic benefits when compared to the revenues generated (and tax subsidies received) by largescale wind energy developers. The most common shortcomings of such agreements include: (1) contractual terms extending too long into the future; (2) contractual language that binds landowners to unilateral amendments; (3) inadequate compensation clauses (and compensation clauses that are difficult to understand); (4) provisions that are the result of unequal bargaining power. While some landowners are reporting better experiences in recent months - better contract terms and compensation levels - that may be the result of greater competition among wind energy developers, greater education on the part of landowners and lawyers, and increased oversight by state regulators (the vast majority of wind energy developers are not subject to the regulatory rules that most utilities are subject to).
Clearly, a wind energy agreement is an important, long-term business agreement, and must be viewed as such by landowners. Wind energy companies are in the business first and foremost to make profit, and landowners must always keep that fact in mind. Remember, some oil companies are also invested in wind energy for business reasons. So, entering into an agreement out of a sense of protecting the environment or because of "eco-guilt" can lead to an unfair agreement with impacts lasting for many years.
The fact remains, substantial peril exists for landowners who don't carefully evaluate proposed agreements with developers. That lack of scrutiny can result in landowners being significantly taken advantage of. After review by a lawyer, any unfavorable terms should be subjected to negotiation. Failure to do so could result in many years of dissatisfaction for landowners.