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Renewable Energy and Electric Transmission Women Managing the Farm, February 14, 2020
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Page 1: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Renewable Energy and Electric TransmissionWomen Managing the Farm, February 14, 2020

Page 2: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Mission

We are dedicated in providing education, informationand research that will provide the continued well-beingof all persons directly engaged in agriculture or relatedenterprises. We advocate for the agricultural industryand defend social and economic justice for farmers andranchers. We want to unlock the potential in agriculturalproducers to improve their quality of life.

Page 3: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

• Amicus briefs

• Regulatory comments

• Coordination with other state Farm Bureaus

Legal Advocacy

• Website: www.kfb.org/legalfoundation

• Ag Law Briefs – webinars for our members and attorneys

• County meetings on legal topics of local interest

• Written materials on current issues

Member Education

• Direct answers to member questions

• Financial support in legal mattersService

Page 4: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

KFB Legal Foundation Website• www.kfb.org/legalfoundation

• Current news

• Legal Resources:

Administrative Law Agritourism Business Basics

Corporate Farming Dispute Resolution Environment

Estate Planning & Taxation Food Industry Labor

Liens Litigation Livestock and other Animals

Real Property Renewable Energy Right to Farm

Transportation Other Helpful Websites

Page 5: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Ag Law Briefs

• www.kfb.org/aglawbriefs

• Topics covered:

Solar Energy (Nov 2019)

Rails-to-Trails (Dec 2019)

Wind Energy (Jan 2020)

Electric Transmission (Jan 2020)

• Future topics:

Feb 26: Ag Transportation (Hours of Service, Electronic Logging Devices)

Mar 25: Livestock Marketing under the Packers and Stockyards Act

Estate Planning

Page 6: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Renewable Energy – KFB Policy• Energy TU – 6

We support:

1. Development of a statewide energy plan that promotes the use of renewable energy and the use

of tax credits and other incentives to achieve this plan.

2. Expansion and development of transmission capacity to create opportunities for the

development of alternative energy resources across the state.

8. Increased use of nuclear and solar power generation.

We oppose:

1. The legitimization of “wind rights.”

2. The imposition of a moratorium on the production of wind energy in Kansas. Legislative or regulatory efforts should not prevent agricultural producers from voluntarily participating in this industry.

Page 7: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Renewable Energy Electric energy generation in Kansas

Coal

Wind

Nuclear

Kansas Corporation Commission

NG

Page 8: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind Energy – Kansas Facts Wind Projects 2018 Wind Generation

• Installed wind capacity (MW): 5,653 MW

• State ranking for installed capacity: 5th

• Wind projects online: 37

• Number of wind turbines: 2,996

• Under construction wind capacity: 871 MW

• % of in-state energy production: 36.4%

• 1st in the country

• Equivalent of U.S. homes powered: 1,855,300

2018 Jobs & Economic Benefits Environmental Benefits

• Wind industry employment: 5,001 to 6,000

• Wind manufacturing facilities: 4

• Total project investment: $10.5 billion

• Annual state and local tax pmts: $28 million

• Annual land lease payments: $15 – 20 million

• Annual water savings (gallons): 4.7 billion

• Equivalent bottles of water saved: 35 billion

• CO2 emissions avoided (metric tons): 9.0 million

• Equivalent cars worth of emissions avoided: 1.9

million

Source: American Wind Energy Association, State Fact Sheets (2018)

Page 9: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind Leasing – Background• 2005 (Sebelius) – Temporary moratorium in the

“Heart of the Flint Hills”

• 2011 (Brownback) – Expansion (nearly doubled) of the moratorium in the “Tallgrass Heartland”

• Zimmerman v. Wabaunsee County, 293 Kan. 332 (2011).

Holding: Interests in developing wind farms were not vested rights to support taking claim

These interests were conditioned upon discretionary issuance of conditional use permits by the county board of commissioners

Zoning regulations granted absolute discretion to the board for issuing conditional use permits

Page 10: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

2.15.2019

Wind Energy

Page 11: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Solar Energy

Page 12: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

#11

https://www.seia.org/initiatives/whats-megawatt, obtained 11.18.19

Page 13: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Solar Energy – Kansas Facts

National Ranking: 46th (42nd in 2018)

State Homes Powered by Solar: 4,174 homes

Percentage of State's Electricity from Solar: 0.02%

Total Solar Investment in State: $69.40 million

Prices have fallen 36% over the last 5 years

Source: Solar Energy Industries Association, State Factsheet, current through Q3 2019

Solar Installed: 33.72 (MW)

Page 14: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Solar Energy – Kansas Facts• Notable Projects:

Johnson Corner Solar I, 20 MW (under construction)

Midwest Energy Solar Array, 1 MW (2/2015)

City of Pratt Solar, 6 MW (3/2019)

Westar Cities Solar, 1 MW (7/2017)

Prairie Sky Solar Farm, 1 MW (2/2017)

Page 15: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wide Open Spaces

Page 16: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Limiting Factor: Transmission Capacity

Page 17: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Current electric transmission in Kansas

Source: Testimony of Mike Ross, SVP Govt Affairs, SPP, to House Energy, Utilities, and Telecommunications Committee, February 08, 2017.

Page 18: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Transmission Easements – KFB Policy• Energy, TU-6

We support:

Expansion and development of transmission capacity to create opportunities for the development of alternative energy resources across the state.

Agriculture land with utility easements should be taxed at agriculture use value.

Property rights of all landowners in areas developed for wind power energy generation and transmission should be protected. Decisions regarding siting guidelines and other potential zoning or restrictions are best made by state government after public input and comment.

Landowners should be annually compensated at comparable rates as similar structures for property condemned by utilities for new transmission lines or any other below-ground utility equipment. Transmission lines and other utilities should be situated on section lines or property lines when practical. Further, landowners and/or tenants should not be liable for unintentional or inadvertent damage to utility structures.

Page 19: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Electric Transmission – GBX

• What is the Grain Belt Express Line?

800-mile,

600-kilovolt

high voltage direct current (HVDC)

• Plans to deliver up to 4,000 megawatts (MW) power from western Kansas and the surrounding area to customers in Missouri and states farther east.

• Picking up some regulatory steam

Page 20: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Electric Transmission - GBX• Grain Belt Express Line Kansas / KCC timeline

2011 – Clean Line’s Application for Certificate of Convenience (transmission only) – granted 2011

Docket 11-GBEE-624-COC

Eminent domain authority

2013 – Clean Line’s Petition Initiating Docket for transmission line siting application – siting permit granted 2013

Docket 13-GBEE-803-MIS

Original sunset to start construction was November 7, 2018, and approvals in Missouri, Illinois, and Indiana must be obtained first

Litigation delays in other states, and the purchase of the Grain Belt project from Clean Line by Invenergy Transmission LLC, resulted in extension of deadlines

Invenergy’s acquisition of project approved June 18, 2019 (closed January 2020) (Docket 19-GBEE-253-ACQ)

Extension of sunset, initially temporarily, then permanently on September 26, 2019

Page 21: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Electric Transmission - GBX• Grain Belt Express Line - Current status in other states:

Missouri

August 2017 – Missouri Public Service Commission declined to issue Certificate of Convenience and Necessity, but that was reversed by Eastern District Appellate Court in February 2018

Certificate of Convenience granted April 19, 2019

Acquisition approved September 21, 2019

2019 and 2020 legislative efforts to block project

Illinois

Certificate of public convenience granted by Illinois Commerce Commission, but that was reversed on March 13, 2018, by Illinois 5th District Appellate Court

Indiana

Transmission-only public utility status granted May 22, 2013

Acquisition of project by Invenergy approved January 2, 2020

• More information at www.grainbeltexpressline.com

Page 22: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing– Is it right for you?

• Big picture Impact to land

Land where project is located (now and long-term)

Wind turbines could be an enhancement to agricultural income, whereas solar leases would be agricultural income replacement

Effects on non-leased/adjacent land (access, shade or wind flow (existing structures?), dust control, aerial applications, burning, development of mineral interests)

USDA program compliance – talk to your local FSA office Energy company may buy out government program participation

Solar - Not considered agricultural land

Page 23: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing– Is it right for you?

• Big picture Consult with your legal and tax advisors

Attorney with a lot of real estate experience (wind/solar experience preferable)

Is this the right company?

Is the landman working directly with the developer or independently?

Internet research

Business name, BBB, Secretary of State business entity search

Existing leases (farm, hunting)

Page 24: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions

• Lease term – pretty similar for wind and solar

Option term (feasibility period) – 2-5 years

For the owner, the shorter the better

Access, surveys, environmental studies, maybe panels placed for data collection, developer working to get regulatory approvals

Construction term – ~1 year

Lease term – 20-30 years

Initial term, plus renewal options (incrementally for 20 more years?)

May want to tie this to the life of the project

Developer needs: duration of power purchase agreement (PPA), loan payment demands, maximum return on investment

Decommissioning period – 1-2 years

Page 25: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions

• Compensation

Signing bonus

Option period payments

Wind: Lump sum ($500-$1000, $1-10/acre)

Solar: Fixed per acre/year ($10-40 during feasibility, construction)

Payment for easements separate from leases

Page 26: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions• Compensation

Lease compensation Wind: Fixed per turbine ($2,000-10,000 annually) or production

capacity ($2,000-10,000/MWh annually), royalty ($1.30-3.50/MWh, or 2-6.5% of gross revenue, what goes into gross revenues?)

Solar: Most often, fixed per acre/year ($500-800 during operation – up to thousands of dollars per acre in the U.S. depending on location) Typically unlike wind leases, which can include fixed per

megawatt capacity or royalty Automatic inflation annual increase to base rents Timing

Ultimately, a landowner must figure out what makes a lease a good deal for them

Page 27: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions

• Taxes Solar - Likely lose agricultural classification

Can get developer to pay the additional taxes.

Require reserve or bond if a party challenges taxes without payment

• Operations Maintenance of roads, vegetation clearance, drainage

(erosion/flooding), buffer zones, fire safety, and wildlife

If developer is responsible but fails to maintain, can landowner maintain and be reimbursed for expenses?

Installation of livestock fencing, gate procedure/cattle guards for adjoining ag operations?

Page 28: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions• Indemnification – one of the most important contract provisions!

Make sure to have strong requirements for indemnification from developer

Does it cover environmental impacts/regulatory violations?

Look for this term in other sections, too, like hazardous materials

If required from landowner, make sure insurance policy covers it

Will it apply to negligent and willful acts, or grossly negligent and willful acts?

• Mechanic’s Liens

Require developer to keep land free of liens

Require a reserve or bond if challenged

Page 29: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions

• Preserve landowner’s rights

For agricultural, recreational, and other desired uses (to maximum extent possible)

To mortgage or sell property

Plus, consider a blanket reservation for all other rights not granted to the lessee

Page 30: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Wind and Solar Leasing – Lease provisions

• What happens to the improvements at the end of the lease (decommissioning)? Make sure remediation obligations apply no matter how lease ends

(termination, release, surrender, cancellation or forfeiture in bankruptcy, condemnation, casualty, etc.)

Remove and return land to original state (regrade and restore) – be even more specific

Remove turbines/panels and footings to 4’ depth below surface

Topsoil replacement

Drainage restored

Don’t just require seeding, but require replacing vegetation (seeding and care until established). What type of seed or who selects it, application rate?

Expensive – require a performance bond of the energy company

Page 31: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

•Zoning Approximately 1/2 of Kansas counties have

zoning regulations

Common provisions

Safety (access, proof of insurance), height (minimum and maximum), function (e.g. braking)

Siting and installation (location near and connection to existing roads and facilities if possible), wiring under or aboveground, environmental impacts, setbacks (e.g. 1 ½ times the height of the system)

Permit requirements (permit or conditional permit),

Nuisance (noise limits, minimize impacts with radio/phone/tv signals)

Removal after no longer in operation (e.g. 6 months)

Renewable Energy –

County Considerations

Page 32: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Renewable Energy - County Zoning

Counties with: Wind (16), Zoning, Wind & Zoning (17)

Data compiled from 2019 list of Zoned Counties in Kansas from the Kansas Association of Counties, and the Wind Resources of Kansas map and list from the Kansas Corporation Commission (15 Feb 2019).

Page 33: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Renewable Energy –

• Taxes

10-year tax exemption on new projects (wind, solar, transmission)

Means loss of tax revenue for counties

• PILOT Payment in lieu of taxes

Agreements reached with County Commission

• Road, bridge maintenance

• Disposal of waste at end of useful life

County Considerations

Page 34: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Disclaimer• This presentation is intended for informational and educational purposes

only and NOT provided as legal advice. Information contained in this

presentation is limited by considerations of time and the industry conditions

and laws that exist at the time of its recording. The renewable energy

industry is ever-changing, and our laws are subject to change yearly through

legislative procedures, regulatory rulemaking, and judicial determinations.

Additionally, this presentation does not and shall not be construed to

establish an attorney-client relationship. If you have legal questions, you

should contact a private attorney with experience in this area for advice

relating to your specific facts and circumstances.

Page 35: Renewable Energy and Electric Transmissionwomenmanagingthefarm.com/sites/default/files/women...2020/02/14  · Solar Energy –Kansas Facts National Ranking: 46th (42nd in 2018) State

Any Questions?

Contact information:Wendee Grady

785-587-6101

[email protected]

https://www.kfb.org/legalfoundation


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