Tag Archives: wind farm leases

You’re not listening to us: IESO publishes comments on renewable power bid process

31 Tuesday May 2016

Posted by in Renewable energy, Wind power

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“Overwhelmingly fraudulent”; “we were ready with a team of lawyers”; “property values are decreased because of forced wind turbine projects” … and more.

Ontario community groups, municipal representatives and individual citizens responded to the Independent Electricity System Operator (IESO) request for feedback on its renewable power bid process.

The IESO published a summary of comments received in its online survey, yesterday.

Ottawa Wind Concerns was among the community groups responding to this survey.

Key issues were the fact that the process was difficult to understand, unfair to individuals and communities, and that so-called “community engagement” was a false promise, given that community support (or lack of it) was just one of the rated criteria in the bid process, not a mandatory requirement.

Municipal governments are forced to determine whether they support a power project with very little information, representatives said. The rated criteria activities to indicate community support were ineffective, said most of the municipal government representative responding: 70 percent said the activities prescribed were “somewhat” or “very” ineffective.

The mandatory meeting was set up in a format that was to leave everyone with the least amount of say as possible. There were large displays set up showing the project. There was no intention for any real interaction with the participants. We had to basically demand a question and answer period. Questions and answers in a public format is the way these mandatory meetings should be set up to ensure that the correct info is actually being presented.
The mandatory community engagement requirements and optional rated criteria community support activities were neither clear nor successful in raising awareness within the Project Community. How can a requirement to consult members of a community (and having owners sign a support form) on an existing line that had already been fully and duly permitted and that represents no new or additional impact for them be considered mandatory and successful in raising awareness or support for the project? The Rated Criteria points associated with obtaining a support resolution from the municipal council gives too much negotiation leverage to the Municipalities. Rated Criteria points should also be allocated following a prorated basis instead of a all or nothing basis, especially the ones associated with abutting landowners support.

Some respondents questioned the municipal support process, saying that councils ignored community wishes and/or had pecuniary interests in the proposed power projects.

I was part of the General Public who attended meetings and proposal meetings. Our elected officials were not responsive to the general public opinion which was 80% plus against the proposal so we had to fight our representatives. The process was very poor and at least 1 of our political persons refused to withdraw from voting and would directly benefit from the projects if approved. I felt like I lived in a 3rd world country.

Other respondents decried the loss of good Ontario farmland for power projects, and the social impact on communities when some landowners took out leases or accepted payments for support of abutting power projects.

Another concern was the communities and neighbours to power projects had no idea the bid was coming until it was put together.

Very simple. Let communities decide whether they want these projects or not. Let neighbors know from the very outset that their communities are being considered. Holding a propaganda session once the project is ready to be submitted is not community involvement.

The IESO document is available here.

ottawawindconcerns@gmail.com

House and wind turbine at Brinston, just south of Ottawa. Propaganda meetings are not 'community engagement' says an Ontario citizen

House and wind turbine at Brinston, just south of Ottawa. Propaganda meetings are not ‘community engagement’ says an Ontario citizen

 

 

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Wind power contracting process trounces democracy in Ontario

19 Thursday May 2016

Posted by in Ottawa, Renewable energy, Wind power

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No one is forced to have wind turbines on their land, and communities shouldn’t be forced to have them, either.

Ontario Farmer, May 17, 2016

By Jane Wilson and Warren Howard

Recently, a Mitchell, Ont. resident wrote to Ontario Farmer saying that the wind turbine siting process seems fair to him: “no one [has been] forced to have a wind turbine.”

We beg to differ: with almost 2,600 industrial-scale wind turbines now operating or under construction, the fact is thousands of Ontario residents have been forced to live with wind turbines, without any effective say in the matter.

The decision to host wind turbines should not rest with the few individuals who lease land for the project, but also with the entire community; many people can be affected by this decision.

The Green Energy Act of 2009 removed local land-use planning for wind power projects, at the same time as it overrode 21 pieces of democratically passed pieces of legislation, including the Planning Act, the Heritage Act, the Environmental Bill of Rights — even the Places to Grow Old Act.

Can’t say NO

The result is a process in which citizens and their elected governments now have no “say” whatsoever. Ontario Minister of Energy Bob Chiarelli said this past March that it would be “virtually impossible” for a power developer to get a contract in a community that did not support turbines, but that’s exactly what happened.

It's 'impossible' to get a wind power contract without community support, Minister Chiarelli said. Turns out, it wasn't.
It’s ‘impossible’ to get a wind power contract without community support, Minister Chiarelli said. Turns out, it wasn’t.

Even a community that held a formal referendum, in which 84 per cent of residents said “no” to wind power, is now being forced to have turbines.

Compare this to the procedures for other forms of development: they are relatively open, in which the community is presented with detailed information and opportunities to comment on the type and scope of development proposed.

The opposite is true for industrial-scale wind power projects. Municipalities are asked for support with very little information on environmental, economic, or social impacts. In some cases, where the developer has determined formal municipal support is unlikely, the company simply files a document saying it “tried” to get municipal support but failed — the truth is, municipalities will meet with anyone. Failure to meet on such an important project should be a red flag to contracting authorities about the nature of the development and the degree of opposition to it.

The public information meetings held by developers often occur after municipal support is requested. A paper produced by a team of academics published this year termed these meetings “dog-and-pony shows” which is an indication of how much real information is offered.

Municipal support must be mandatory

Wind Concerns Ontario submitted a series of recommendations to the Independent Electricity Systems Operator (IESO) on the contracting process, which included: a requirement that all documents related to the project should be released prior to any public meeting or municipal consultation; the precise location of turbines must be revealed as well as a broader set of site considerations; there must be a process through which municipal government, community groups and individuals can comment on these documents and their accuracy; and last, municipal support must be a mandatory requirement of any contract bid.

It may be true as the letter writer suggests: no one is forced to have a turbine on their own property, but communities and neighbours should not be forced to have them either.

Before people sign for lease turbines, they need to talk to their neighbours (because the whole community will be affected by the decision to lease) and learn from the experiences in other communities where turbines are operating. They may discover that the small lease payments offered are not worth the impact on the community, and on their friends and neighbours.

The fact is, wind turbines result in high impact on communities for very little benefit. The Ontario government needs to respect the right of Ontario citizens to make decisions on wind power developments for themselves.

Jane Wilson is president of Wind Concerns Ontario. Warren Howard is a former municipal councillor for North Perth.

 

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OTTAWA WIND CONCERNS NOTE: The City of Ottawa is among the 59 municipalities to date which have passed resolutions demanding that municipal support be a mandatory requirement for wind power contracts.

Wynne government ‘stealing our future’ says Kemptville resident

16 Wednesday Mar 2016

Posted by in Ottawa, Renewable energy, Wind power

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The wrong people profit from wind farms, says homeowner. ‘Grossly unfair’ for government to steal our futures, says Kemptville letter writer

Nowhere near Toronto and Queen's Park: wind power projects reduce rural property values
Nowhere near Toronto and Queen’s Park: wind power projects reduce rural property values

Ottawa Citizen, March 16, 2016http://ottawacitizen.com/opinion/letters/your-letters-for-wednesday-march-16-water-windmills-women

Re: New Eastern Ontario wind farms a betrayal, mayors near Ottawa say, March 11.

Home ownership is the biggest investment a person can make.  Many people depend on the value of their homes to underwrite their futures, whether it be generating capital for their kids’ educations, serving as a stepping stone to a better home, or even financing their retirement. Folks who choose to live in rural areas already face challenges in marketing their properties, compared to their city cousins.

With the looming prospect of giant wind farms in their backyards, they are now told they must accept unanticipated decreases in their property values without complaint because “the needs of the many outweigh the needs of the few.” Rural dwellers also pay comparatively huge electricity transmission costs – and, ironically, will likely continue to do so even with the gargantuan structures towering over their homes. It is also likely that their municipal tax burden will not be adjusted to reflect the decrease in their property values.

It is grossly unfair for an all-powerful government authority to callously steal rural homeowners’ futures so that a corporate entity can profit from huge government subsidies and distant cities can meet their rapacious energy consumption needs. At the very least, these folks should be compensated for their loss.

Perhaps a good starting point would be to waive the “welcome tax” levied by the provincial government on home sales for those located within a set radius of wind farm installations, thus boosting the marketability of affected properties. Another measure would be to give these homeowners a discounted rate on their electric bills, or even the same remuneration provided to the farmers who profit from having such installations on their lands.

Burton Blais, Kemptville

Economic, social disaster: Wynne government green energy policy

09 Tuesday Feb 2016

Posted by in Renewable energy, Wind power

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Higher electricity bills, manufacturing being driven away, social costs of huge wind power plants

Shoreline Beacon, February 8, 2016

By Jim Merriam

Premier Kathleen Wynne (Antonella Artuso/Toronto Sun)

Photo Toronto Sun

It’s to be hoped the Fraser Institute didn’t spend much money on its recent study of the fiscal performance of Canada’s premiers.

Every resident of Ontario able to sit up and take nourishment — probably including Wiarton Willie last week — has known the study’s conclusion for a long time: Premier Kathleen Wynne is doing a lousy job of managing Ontario’s economy.

Wynne, with the help of her predecessor Dalton McGuinty, has reduced Ontario from a powerhouse to an empty house.

On almost every file Wynne’s government is found wanting if not severely under water, to borrow a phrase from the mortgage industry.

The worst is energy. The cost of power in the province has forced industries to close and some families to choose between heat and groceries.

A columnist in a Toronto newspaper recently suggested the heat-vs.-food statement is an exaggeration. He should spend a few minutes listening to clients at food banks in rural areas. But I digress.

Much of the high cost of power is associated with renewable energy production.

A new study from the University of Ottawa confirms what we’ve been saying all along: Ontario brought in wind energy with a “top-down” style that brushed off the worries of communities where the massive turbines now stand.

Stewart Fast, who headed the study, said, “It was a gold rush, basically.” Since those involved kept details secret to avoid giving their competitors an edge, residents didn’t know what their neighbours were planning.

“That is really the worst way to go about something that you know is going to have a big impact on landscape and people,” he said.

In defence of renewable energy, we keep hearing from our urban cousins how much money farmers are earning by allowing turbines on their land. Although true on the surface, there’s much more to that equation, said Jane Wilson, president of Wind Concerns Ontario.

Just one question is the impact of the presence of a turbine on the farm owner’s financing.

Read the full story here.

Who pays for turbine take down? Not clear says lawyer

14 Thursday Jan 2016

Posted by in Renewable energy, Wind power

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Who pays for wind turbine teardown? Not clear, says lawyer

"No pocket to go to in 20 years": wind turbine teardown can cost thousands
What goes up must come down

“No pocket you can go to in 20 years”: Environmental lawyer says taxpayers and landowners could be responsible for costs

Farmersforum.com , January 2016

By Brandy Harrison

Toronto- With more wind turbines coming to Eastern Ontario, there has been a lot of talk about what happens when it comes time to take down the towers. While the provincial government may put the onus on wind project developers to pay for teardown, it’s far from certain they’ll be able to collect if a company goes bankrupt — which could mean taxpayers are on the hook, says a Toronto-based environment and municipal lawyer.

“Many of these companies are relatively small, or based outside of Canada, and that creates what appears to be a real risk as there will be no pocket you can go to 20 years from now when a cleanup is actually required,” says Eric Gillespie, who has represented landowners and municipalities with wind turbine concerns.

It’s anybody’s guess who would end up paying for decommissioning — the landowner, the municipality, or provincial taxpayers, he says.

Farmers shouldn’t underestimate what it takes to remove a single turbine, Gillespie warns. The nacelle — the central hub containing the generator — is 80 to 100 metres in the air and weighs as much as 70 tonnes. “It’s not something where you just call your neighbor and ask him to bring his tractor over.”

While Ontario costs are yet unknown, world-wide decommissioning has ranged from $30,000 to $80,000 per turbine.

But the worst case scenario can be avoided if funds are set aside as part of the approval process, suggests Gillespie.

Decommissioning plans are required to get renewable energy approval but they don’t have financial strings attached.

There is already a good model in place, says Gillespie. Under the Environmental Protection Act, the government will ask for financial assurance if there is a risk of adverse effects that could require remedial work. A letter of credit or security is required up front.

“Anything other than that might keep lawyers busy for a long time but won’t help communities. It’s about addressing the issue now rather than waiting for the end and crossing your fingers. It should be the companies that are earning the profits that have to pay the bill.”

Money lures Nation Twp farmers to lease land for wind turbines

30 Tuesday Jun 2015

Posted by in Renewable energy, Wind power

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“If I didn’t sign, I would see the windmills without revenue”: cash crop farmer Marc Bercier

Not too many years ago, cash cropper and seed grower/processor Marc Bercier was actively opposed to green energy projects being proposed and built in his area, but this February he signed for a potential five windmills* and one substation to be located on his 1,700 acres.

“If I didn’t sign I would see the windmills without revenue,” said Bercier.

Pointing to the 29 pages of documentation involved for his portion of the 10,000-acre proposed windmill project, Bercier noted how the negotiated sections on soil compaction, erosion and overall environmental protection were vital to him, considering that his farm is only just over the requires 500 meters from this village. [Editor: what? Do you mean from the project?]

The documentation showed that Bercier was promised $15,000 per windmill per year as a base price, with incentives for more power and compensation for anything that affected the surrounding land. The substation lease was $20,000 per year.

Township Council passed support motion

It’s a massive community project that seems to have the support of Nation Township Mayor Francois St. Amour. A January 20, 2014 council motion passed, stating it [council] “supports the application under the Ontario Power Authority’s Large Renewable Procurement Program.”

… Ontario Farmer obtained documentation showing that, as of March, 2015, 165 landowners had been approached by the EWG windmill company, of which 128 had signed agreements and 37 were in discussion.

“They are all farmers,” said St. Amour, noting that the required setback distances from the windmills meant that a lot of land was involved per windmill.

As of mid-June, almost everyone of the former holdouts had signed up and joined, said Bercier.

OFA ‘incredibly helpful’

The company had persuaded and signed up a local, prominent farmer who then went up and down the concessions promoting the project to individuals, said Bercier.

… “yes, there are liens on the project,” said Bercier. However all lien documentation has been passed by his lawyer, alleviating all concerns as to affecting the farming operation, he said.

The OFA has been incredibly helpful in promoting the project, noted Bercier.

Spending $42,000 a year of hydro costs for his farm, “double what it would cost if I was in Quebec,” Bercier is well aware of the extra hydro costs the public pay to finance such green energy projects.

“We had an election, the Liberals won. The voters chose to pay for more electricity,” said Bercier.

By Ian Cumming

Ontario Farmer

June 23, 2015

*They’re NOT “windmills”!

Wind farm tax revenues “chump change”

19 Tuesday May 2015

Posted by in Wind power

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A recent news report stated that South Dundas council was rethinking its position of not supporting a proposed wind power generation project, partly because of the tax revenues that would come to the municipality.

Council need to reads this.

No windfall in tax revenue for Ontario communities hosting wind farms

With a cap on assessments for wind turbines, Ontario municipalities are limited in tax revenues on the multi-million-dollar power projects. Revenues work out to less than 1% of what the developers have in their money bags
With a cap on assessments for wind turbines, Ontario municipalities are limited in tax revenues on the multi-million-dollar power projects. Revenues work out to less than 1% of what the developers have in their money bags

Revenues no more than “Chump Change” for municipalities

Wind power developers bringing projects to Ontario’s municipalities offer various inducements to persuade politicians they will benefit from millions of dollars.  Like the landowners signing leases for turbines, money is frequently the reason municipal politicians support wind power development and locating projects locally.

In Ontario, local politicians have no real power to support or deny those projects, and also, little ability to generate a real community benefit due to the Green Energy and Green Economy Act (GEA).  It doesn’t matter what the capital value of an industrial wind turbine (IWT) is, or what they levy in local realty taxes as the provincial government has set the taxable value!   Former Minister of Finance, Dwight Duncan decreed (one year before resigning) IWTs would be assessed by the Municipal Property Assessment Corporation (MPAC) at a maximum of $40,000 per megawatt (MW). That translates to tax revenue averaging $1,000/2,000 per MW, based on local industrial mill rates.

My research indicates Ontario has the lowest assessed value per/MW capacity of all provinces.

Ontario:

The 2014 3rd Quarter update from the OPA claimed they had contracted for 5,697 MW of wind capacity.  Payment per MW hour for wind generated power averages $123.50/MWh.

Using an average of $1,500 per MW for the OPA-contracted 5,697 MW of wind means Ontario host municipalities will generate about $8.5 million annual realty taxes. (5,697 X $1,500 = $8.5 million)

Those 5,697 MW will produce energy at 30% of their capacity producing cash for the developers of $1.8 billion (5,697 X 30% X 8760 [hours per annum] X $123.50 = $1.8 billion)  Eighty percent (80%) of the time the power will be surplus to Ontario’s demand.1.   Tax revenues represent less than 1% of developers’ revenue.

Nova Scotia:

Nova Scotia’s legislature set the annual price for their realty taxes at $5,500 per MW “plus a percentage of $5,500.00 equal to the percentage increase in the Consumer Price Index for Canada at the end of the calendar year ending in the immediately preceding municipal taxation year relative to the Consumer Price Index for Canada at the end of the 2005 calendar year”.

If Nova Scotia had contracted for the 5,697 MW the OPA has in Ontario, realty tax revenues would be in excess of $31 million. (5,697 X $5,500 = $31.3 million)

In Nova Scotia those 5,697 MW of wind turbines operating at 30% of capacity would be paid an an average of $100 MWh and generate $1.5 billion.  Tax revenues would represent slightly more than 2% of revenue for the developers.

British Columbia:

For British Columbia realty taxes applicable to farms are applied to wind developments which presumably means assessment of the capital cost (depreciating) of about $1.5 million per MW.  Specific information was difficult to locate; however, what I found indicates realty taxes appear to be approximately $14K/MW and the price paid for generation is $105 per/MWh.

Using the limited amount of information available and applying it to the Ontario contracted 5,697 MW of capacity; in BC the tax revenue would be $80 million annually (5,697 X $14K = $80 million) and at $105 per MWh would generate $1.6 billion annually for the developers.  Taxes would represent 5% of the revenue generated for the developers.

Alberta:

It was almost impossible to locate assessment values for wind turbines in Alberta except for one reference in a report from the Greengate Power Corporation posted on the University of Calgary site.  That report claimed a 300 MW wind development would pay municipal taxes of $5 million annually which indicates a realty tax of about $16K per MW.

Using that information and applying it to Ontario’s 5,697MW of contracted capacity, suggests annual tax revenue for municipalities would be $91 million.  In Alberta the wind developers must sell their production via the spot market and in 2013 a BNN article suggested they earned an average of $54.97 per MWh which translates to annual revenue of $820 million for the developers.  In Alberta realty taxes would therefore represent 11% of the revenue generated by the developers.

Summary:

With Ontario municipalities receiving so little for hosting industrial wind turbines it is surprising the Canadian Wind Energy Association (CanWEA) when faced with any kind of opposition would issue a press release that claims:  “Right now there are literally thousands of Ontarians participating in the province’s ground-breaking clean energy economy. Communities across this province — from Chatham-Kent to Frontenac Island, Tillsonburg to Niagara — stand to receive hundreds of millions of dollars in direct benefits from wind energy projects.”

MPAC’s 2014 annual report claims they assess and classify “more than five million properties with an estimated total value of $2.2 trillion.”  The assessed value of the contracted 5,697 industrial wind turbines at $40K per MW gives them a total value of $228 million or .0001% of total assessed values versus a likely capital cost approaching $8.5 billion, or 4% of MPAC’s total value!

So, Ontario’s wind developers walk away with an estimated $1.8 billion annually and $36 billion over the 20-year term of the contracts, while Ontario’s hosting municipalities have to make do with chump change of $8.5 million annually, and only $170 million over the full terms of those contracts.

Far from enjoying millions in cash windfall, Ontario’s municipalities got stuck with the worst possible deal.

©Parker Gallant,

May 19, 2015

1.  Professor Ross McKitrick: http://www.rossmckitrick.com/uploads/4/8/0/8/4808045/oebletter_feb2013.pdf

Social responsibility key in wind farm leasing decisions: Wind Concerns to OFA

19 Tuesday May 2015

Posted by in Renewable energy, Wind power

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Clarify position on wind farms: WCO to OFA

Land owners need to be socially responsible when deciding to sign leases for wind turbines, Wind Concerns Ontario tells Ontario Federation of Agriculture president

The following is a letter sent by Wind Concerns Ontario president Jane Wilson to OFA president Don McCabe, in response to remarks made by Mr. McCabe at a wind farm information meeting in Finch, Ontario. Several of Mr. McCabe’s comments to the audience, such as that there is no surplus of power in Ontario, were not correct, WCO said in the letter.

As well, while Mr. McCabe’s advice to landowners to “get a lawyer” is sound, Wilson said, the attitude that landowners need to concentrate only on getting everything they want in a lease is isolationist and archaic, and is helping to divide Ontario’s rural and small-town communities.

“Not one word was said about responsibility to community, and neighbours. This [attitude] does not represent the view of the contemporary and socially responsible farm operators that we work with; they are professionals who believe they are part of their communities and who are aware of—or at least consider—the effects of their actions on others,” Wilson said.

The letter was sent to Mr. McCabe, and the Board of Directors for the Ontario Federation of Agriculture.

Print

Dear Mr. McCabe:

It was interesting to meet you last week in Finch, Ontario at the Lions’ Club event, where we both spoke, along with Mr. Levy of CanWEA.

I was relieved to hear your strong advice to those attending and contemplating signing a lease with a wind power developer, to “get a lawyer, get a lawyer, get a lawyer.” This is excellent advice: as you know, these contracts typically contain dozens of pages of various clauses outlining requirements and limitations…many people do not understand what they are being asked to sign.

I was disappointed, however, in other aspects of your presentation. First, there were a couple of statements made that are not correct and may even be misleading.

Power surplus in Ontario: in my presentation I had suggested that more wind power projects were not necessary, especially not for a form of power generation that is intermittent, produced out-of-phase with demand and is expensive, causing Ontario electricity rates to rise. You countered by saying that Ontario has no surplus of power. This is not correct: the Ontario Energy Minister himself admits that Ontario has surplus power and also says that the province will have a surplus for years to come. See his quotes and the forecast for power rates in a Globe and Mail article here.

“Net metering”: you told the audience that they should arrange in their lease to share in the wind power produced by any turbines on their land. This is not correct—it is unlikely one could get power from the wind turbine on a farm, and moreover, it would be in violation of the contract the wind power developer has with the Ontario government to obtain the Feed In Tariff to do that.

Turbine noise: you suggested to the audience that if the noise from turbines were to bother them, they could make sure that there is a clause in the lease so that the power developer would have to address that. This is extremely unlikely; at present, there are thousands of noise complaints in Ontario that go unresolved by either the developer or the Ministry of the Environment.

Community input to power projects: In response to several questions from the floor, you did advise people to go to the government website on the new Large Renewable Power Request for Proposal process, but you also suggested to at least one audience member that there is nothing communities can do, if a power proposal comes forward. That is not correct: people can work with their municipal governments, members of their community, and also choose not to sign the agreement required of adjacent property owners.

Contracts: I believe you also suggested to a farm owner who had signed a contract/option and was now having second thoughts that there was nothing he could do. This also is not correct, and would have been another opportunity for you to advise him to “get a lawyer, get a lawyer, get a lawyer.”

That brings me to the second area of disappointment in your presentation: the overarching theme of your remarks was that if people are going to sign a lease for a wind turbine project they should make certain that they get concessions from the power developer that benefit them. There was not a single mention in your remarks of the need for responsible consideration of other members of one’s community, including fellow farm operators, and neighbours.

This was a very narrow view that demonstrates no balance and instead indicates an archaic, “I can do whatever I want on my land” view. This does not represent the view of the contemporary and socially responsible farm operators that we work with; they are professionals who believe they are part of their communities and who are aware of—or at least consider—the effects of their actions on others.

Our concern with this isolationist view of farm ownership is that it will further divide Ontario’s rural and small-town communities.

OFA needs to clarify its position on this matter, and further, consider advising your membership that when it comes to deciding whether to participate in a wind power project, the responsible course of action is to balance their financial opportunities with the economic, health and social needs of others around them.

We would be pleased to meet with the OFA Board to discuss our concerns.

Thank you very much.

Jane Wilson

President

Wind Concerns Ontario

Farm owners’ property used as security for wind farm financing: what property owners need to know

07 Thursday May 2015

Posted by in Renewable energy, Wind power

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Farm owners’ property as security for wind farm financing: what owners need to know

Wind developers can use farm leases as security for financing the power project
Wind developers can use farm leases as security for financing the power project

Ontario Farmer, May 5, 2015

by Garth Manning and Jane Wilson

It came as a surprise to many in Ontario when it was revealed that the multi-national power developers behind the K2 wind power generation project near Goderich had secured $1 B in financing, and that this arrangement is now registered on title for the 100 farm properties involved as lessors.

The arrangement is between K2 Wind Ontario Inc. and Mizuho Bank Ltd. Canada Branch. It secures a revolving credit facility of up to $1 billion at 25% on a number of items, including the contracts between landowners and K2 for land and road agreements with municipalities.

Another, smaller example has also come to light: a wind power project south of Ottawa in Eastern Ontario, where the five landowners leasing land for a 30-megawatt, 10-turbine project now have charges on their properties for $70 million.

Immediately, questions arise as to what would happen if the power developers were to default on their loans: would the lender then own the farm properties? How would that affect road use agreements with municipalities?

The fact is, this is a common practice. Property owners can refer to the leases imposed by the developers to review this potential situation, and many others that may affect operation and ownership of their land while leasing land for the power projects.

In an Invenergy standard contract, for example, is this clause: “In connection with the Lessee’s financing of the Project, the Lessee….is hereby given the right by the Lessor…to mortgage its interests in the Lease…and to assign this Lease, or any part of parts thereof, and any subleases as collateral security…”

The proper term for this is a “Charge of Lease” but may also be referred to as a “Demand Debenture.” What it means is, the present value of the wind power contract (i.e., the Feed In Tariff or FIT contract with the Ontario government) is greater than the present value of the lease amount. The difference between those two amounts is security for the loan to the power developer. It is a charge against all contracts favourable to the wind power developer, which may also include road use agreements.

It is like a line of credit for the developer and typically, advances against the amount are tied to certain milestones such as stages of construction.

The critical factor, however, is what it means for the lessors, in other words the farm owners who have leased their land for wind turbines, access roads, substations, transmission lines, etc. The importance lies not so much that the farmer lessors might on default lose their land (the farm land itself is not mortgaged, just the turbine contract on that land) but the damage it does to that property owner if he/she wants to sell, or to renew an existing mortgage, or place a new one, or in any way borrow money for which the lender would want security on his/her land.

Let’s assume a farm owner wants financing for farm operations or improvements. That might now pose difficulty: lenders do not like to be second in line, as they would be where a charge of lease is in place.

If the farm owner wishes to sell, similar difficulties arise: the lawyer for a purchaser in the case of an agreement to purchase will do a title search and discover the Charge of Lease on title, then immediately advise his or her client that the client is entitled to get out of the deal unless the registration of the Charge is removed from title. A purchaser is not expected to assume any risk of this nature.

In the case of renewing an existing mortgage or placing a new one, the lawyer for the bank or other lending institution would take the same position — no renewal or new mortgage unless the customer sees that the Charge disappears from title.

This is one of several important characteristics of signing a lease to have wind turbines, and needs to be thoroughly considered. Other legal issues to be carefully considered may include potential liability for the substantial cost of “decommissioning” turbines at the end of the lease, difficulty obtaining insurance on property with wind turbines, loss of autonomy over building on the property and carrying out regular farming practices, and, last, the potential for nuisance suits from neighbours affected by noise or property value loss.

Property owners should consult with a lawyer before signing any agreement.

Garth Manning is a retired lawyer and former president of the Ontario Bar Association, who lives in Prince Edward County. Jane Wilson is president of Wind Concerns Ontario; she lives in North Gower.

Wind farm questions at info night in SDG

07 Thursday May 2015

Posted by in Health, Renewable energy, Uncategorized, Wind power

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“Why us?” was one of the questions raised, as more than 125 people gathered in the North Stormont Community Arena Hall in Finch on a fine spring evening in the middle of busy planting time, to hear a panel discuss various aspects of wind power in Ontario.

Speakers for the Lions’ Club event were:  Tom Levy, Director of Technical and Utility Affairs, for the Canadian Wind Energy Association/CanWEA, the industry lobby group;  Jane Wilson, president, Wind Concerns Ontario; and Don McCabe, president of the Ontario Federation of Agriculture.

Tom Levy went over the numbers for wind power in Canada and showed wind power development is growing as a source of power; Ontario currently has over 4,000 megawatts of installed wind power. Wind is cheaper than other forms of power generation, he said, fast to build, emissions-free, and–because power contracts are for 20 years–provides price stability whereas prices for other forms of “fuel” such as natural gas, can fluctuate, he said.

Wilson called for balance in the approach to wind power development in Ontario communities: “If a community wants a wind power project, that’s fine,” she said, “but you have to be assured that no one single person is going to be harmed by it.” Wilson said the recent Health Canada study showed health impacts (“annoyance” is a medical term meaning distress, she said) and called the Ontario setbacks of 550 metres into question.

Quoting a document from CanWEA, Wilson said, “You have a right to ask questions, you have a right to have concerns, and –based on what you learn–you have the right to oppose.” Wilson also mentioned the charge of lease possibility in wind power contracts which meant developers can obtain financing based on the leases on farm properties for turbines.

OFA president Don McCabe pounded the lectern with his fist on the contract issue, saying, Get a lawyer, get a lawyer, get a lawyer. It is up to each property owner to obtain proper legal advice before signing contracts, he said. His view was that farm owners contemplating leases need to get an agreement that will get the most benefit for them.

Mr McCabe made no mention of farm communities, or the effect of farmers’ decisions to lease on their neighbours.

The issue of Ontario’s power supply and electricity bills came up through the evening as Wilson asserted Ontario does not need more power, and has already sold off surplus power cheap in the first quarter of 2015, for a $450-million loss for ratepayers.

McCabe joked that he didn’t think there was excess surplus power at night, and that there was no real surplus of power, only mismanagement “in Toronto.”

The question, “Why us?” was answered by Levy and Wilson. Levy said it was a number of factors that motivated developers to choose an area for power development, including access to the power grid, willing landowners, available wind resource. “Mr Levy hit the nail on the head,” said Wilson; “willing landowners. The real question is, why are power developments not located closer to cities like Toronto where the power is being used?”

The power developer proposing a project for Stormont Dundas and Glengarry, EDP Renewables, will be holding an open house tonight in Crysler at the Community Centre, between 4 and 8 PM.