Oct 16 - McClatchy-Tribune Regional News - Elizabeth Ahlin Omaha World-Herald, Neb.

The sight of 40-ton blades turning in the wind means different things to different people.

To some, wind farms are a boon for rural economic development. For others, they are a sign of hope for renewable energy. And, as area farmers are finding out, they can mean thousands of dollars in the pockets of rural landowners each year.

But, experts say, read the fine print. Under some contracts with wind developers -- contracts ranging from 30 to 180 years -- rural lands could be affected for generations to come.

Wind farms are relatively new in Nebraska and southwest Iowa. As the industry grows, more and more landowners in the region are being asked to lease their land and wind rights to wind energy companies.

Susan Williams Sloan, outreach manger for the American Wind Energy Association, said there is great opportunity for landowners.

"I know there are quite a number of landowners who are very happy with what they have done, because they're making new revenues they haven't had before," she said. "It frees them up to do other things with that money."

Indeed, there is big money at stake -- from $2,000 to $5,000 per wind turbine per year, on average, although some landowners report getting as much as $10,000 per turbine.

But, without an accepted industry standard, farmers wonder: When is a contract a good contract?

About 20 times each week, that question is asked of John Hansen, president of the Nebraska Farmers Union. And it's what Iowa farm officials were trying to address at a community meeting in Hamburg, Iowa, last week.

More than 170 people from southwest Iowa went to Hamburg High School looking for answers from a two-hour meeting, sponsored by the Iowa State University Extension and the Iowa Farm Bureau offices in Fremont County.

Rural advocates and farmers groups have hosted other informational meetings around Nebraska and Iowa this year. Wind energy contracts will be discussed at the 2008 Wind Power Conference in Kearney, Neb., Nov. 11-12.

It's a hot topic because both Nebraska and Iowa have a lot of wind. Nebraska ranks No. 6 and Iowa No. 10 nationally in the potential to generate electricity from wind, according to the American Wind Energy Association.

Norma and Tom Troxel, of rural Farragut, Iowa, farm about 1,200 acres of corn and soybeans. A wind energy company approached Tom's father, who owns much of the land they farm.

They came to Hamburg to find out if selling the wind rights is a good option for the family and how it could affect the farm.

Agricultural attorney Roger McEowen covered a myriad of problems common among some wind energy contracts offered to farmers. But the answer boils down to this: Read the fine print and hire a knowledgeable lawyer, said McEowen, director of the Iowa State University Center for Agricultural Law and Taxation.

Too often, landowners hear a sales pitch and sign a contract without reading it.

"If the wind blew at your place yesterday and it blew there today, it's probably going to blow there tomorrow," said Hansen, who urges farmers not to let wind developers rush them.

Iberdrola Renewables, a Spanish energy company, has planned a 73-turbine wind farm near Tarkio, Mo., just across the border from Fremont County, Iowa. Many farmers being contacted in southwest Iowa have been approached by Iberdrola.

"Certainly we feel like the leases that we offer are, in all cases, fair," said Paul Copleman, Iberdrola spokesman. "We don't feel like we have anything to hide in these leases we've signed."

The company, which has leased wind rights from thousands of landowners all over the country, doesn't try to dissuade landowners from getting more information or legal counsel, Copleman said.

But that can be difficult. The newness of the industry in Nebraska and southwest Iowa means most area lawyers don't have extensive knowledge of wind rights contracts.

Nebraska Sen. Annette Dubas said she has heard from Nebraskans on this issue in recent years.

She sponsored legislation last year that would have put parameters on wind rights contracts, limiting the length of leases, among other things. It was similar to a South Dakota law that limits the duration of wind rights leases to 50 years and requires the wind energy company to begin operation of wind turbines within five years of signing.

The Nebraska legislation was put on hold, but Dubas is working on a version she could introduce in the 2009 session.

"I just want to make sure we have protections in place, so people won't be taken advantage of," Dubas said.

A wind energy company approached Greenfield, Iowa, farmer Clark BreDahl and his neighbors in Adair and Union Counties last year. They initially were offered 50-year contracts with a 2 percent annual increase in the lease payments -- less than the average inflation rate. The lease could be terminated by the wind company with three months' notice but not by the landowner.

And, to top it off, the contract contained a confidentiality clause, ensuring that neighbors couldn't compare offers.

"We had no bargaining power," said BreDahl, who opted not to take that offer.

Confidentiality clauses have kept many wind farm contracts under the radar, but both Hansen and McEowen have seen their fair share of offers.

Farmers and landowners need to spend time researching what they could lose by signing.

Landowners can be asked to sign over more than a little land for a wind turbine. The company will need roads to get on and off the land to maintain the turbine. And the company could propose other conditions.

Because of potential damage to turbines, hunting on farmland could be prohibited, causing farmers to lose out on money earned through eco-tourism, and landowners could be prohibited from erecting new buildings that could disturb the wind in the area.

Roads to access the turbine sites could cause erosion or other problems that could jeopardize participation in federal farm programs that have environmental requirements.

Landowners should anticipate those possibilities and ask for compensation in their contracts, McEowen said.

The questions seem endless.

How and when will payments be made? Is the amount fair? What are the tax consequences? Can the wind developer sell or transfer the lease? Who is responsible for dismantling and removing the turbine? (It takes a semi to haul just one blade.)

"People get excited about these things, and they'll sign them before realizing the rights they've given up and what they've agreed to," McEowen said.

BreDahl eventually decided to form a collective with his neighbors and hire an attorney to negotiate with the wind companies. Some neighbors were worried about losing the opportunity and signed contracts. Most did not, and after negotiating with three different companies, the group of almost 60 landowners found a contract they thought was fair.

"They (wind developers) are not doing anything illegal. They're not doing anything unethical," BreDahl said. "They're protecting and looking out for their own interests. They're not going to protect and look out for yours. If you want that done, you'll have to do it yourself."

444-1310, elizabeth.ahlin@owh.com

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