State beats locals on wind project siting in Washington state supreme court

Nice write-up from the attorneys of Stoel Rives who handled the Washington State Supreme Court case, Residents Opposed to Kittitas Turbines v. Energy Facility Site Evaluation Council, No. 81332-9 (Wash. Nov. 20, 2008). Renewable Energy World, 12/15. The case was a (9-0) victory for wind developers who saw vindicated the state law allowing state oversight of energy project siting even over municipal objection.

Such an energy project siting law does not currently exist in New York state. (New York’s state-oversight law, known as Article X (“Ten”), expired a few years ago.) Whether Washington state’s law will be modeled here or elsewhere remains to be seen. In New York the issue is a political hot potato, as supporters of municipal autonomy view such laws as an abominable encroachment on local authority (called “home rule” in New York), while many developers would tend to prefer an overarching state oversight scheme to the existing patchwork of (potentially inconsistent) local regulation.  As of today, a majority of respondents to the highly unscientific poll question posed by this blog favor mandatory state oversight.

As the Stoel Rives attorneys note, the case also may stand for the proposition that an appropriate turbine setback from non-participating land owners is four times the maximum vertical blade height. Such a setback in New York state, home to landholdings generally smaller than those commonly seen in the western United States, would clearly inhibit the siting of large wind farms.

Albany Law’s Patty Salkin also blogged the case. The opinion is available here.

New study examines rural landowner concerns regarding wind energy production

While abundant, wind resource locales on land in the United States are finite. The location of these resources is relatively easy to determine. With the push to develop green energy alternatives such as wind, it is perhaps not a surprise that a rush by developers over recent years has attempted to shore up these resources. If anything it seems there will be even more pressure to develop as the Obama administration comes into office with its green agenda.

The “rush” undeniably has produced some controversial if not questionable practices. Where the line is between unscrupulous development activity and unreasonable landowner expectations will need to be drawn by someone else. What developers and landowners alike can do, however, is get educated about the other side’s position.

In this context, a new academic study coming out of Iowa cites concerns that landowners may have regarding the leases and agreements necessary to develop a large scale wind project on rural landholdings.

The study concludes that:

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 large-scale 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, wind farming has the potential to provide significant economic benefits for rural landowners. However, substantial peril exists that landowners who don’t carefully evaluate proposed agreements with developers can be taken advantage of significantly. Landowners should have any proposed agreement evaluated by legal counsel and attempt to negotiate any unfavorable terms. Failure to do so could result in many years of dissatisfaction for landowners.

The study also discusses various state and federal wind siting court cases. “Wind Energy Production: Legal Issues and Related Liability Concerns for Landowners in Iowa and Across the Nation“, by Roger McEowen, was released by the Iowa State University Center for Agricultural Law and Taxation in October 2008.

As an addendum, it is worth noting that the New York Times reported last week that some rural landowners in Wyoming are forming groups to increase bargaining power while negotiating agreements with wind developers.  It will be interesting to see the extent to which such a model may replicate elsewhere, including New York state.

More information on the landowner – wind developer relationship and leasing may be found here.

New York wind energy siting updates

Iberdrola carries out purchases of Energy East Broome County real estate as part of acquisition transaction. Binghamton Press & Sun Bulletin, 11/22

Setbacks and sound issues examined by Town of Cape Vincent (Jefferson County) wind committee. Watertown Daily Times, 11/21

Towns of Clayton and Orleans (Jefferson County) forming wind committees to propose draft siting regulations. Watertown Daily Times, 11/20

Village of Fair Haven (Cayuga County) considers local law regulating wind energy conversion systems. Auburn Citizen, 11/21

Anti-wind development group grows in Town of Hammond (St. Lawrence County). Watertown Daily Times, 11/24

North Harmony (Chautauqua County) resident obtains zoning approvals, raises 100kw wind turbine for home use. Post-Journal, 11/21

Towns in Orange County confronting small scale wind projects without zoning in place. Times Herald-Record, 11/20

General-interest wind stories

Generic article on how economic challenges are impacting wind development in New York state. Associated Press, published in Newsday, 11/23

Ithaca Journal editorial favors more state, county guidance in wind energy facility siting. Ithaca Journal, 11/18

GE ships its 10,000th wind turbine, capacity sold through 2010. Bloomberg News in Albany Times Union, 11/18

The American Wind Energy Association has announced a New Wind Agenda for the new President and Congress. It includes a plank on siting (with an emphasis on federal issues):

Policy recommendation: Proposals for responsibly-sited renewable energy projects on federal lands (including offshore waters) should be prioritized and federal agencies should create review processes that are streamlined, transparent and timely, with permitting and review capabilities that are scaled up as needed to meet demand.

Federal agencies have a key part to play in developing our renewable energy potential because of their role in the siting of wind projects and new transmission lines, especially on federal lands. Proposals for responsibly-sited renewable energy projects on federal lands (including offshore waters) should be prioritized and federal agencies should create review processes that are streamlined, transparent and timely, with permitting and review capabilities that are scaled up as needed to meet demand. In addition, the President should direct the Department of Defense, the Federal Aviation Administration, and the Department of Homeland Security to adopt a cooperative approach to resolving possible conflicts between wind projects and radar operations. Each federal agency should be asked to plan how it will use its authority to facilitate the growth of wind power and other renewable energy sources.

Town of Howard wind court case: Local official not removed from office

While New York Attorney General Andrew Cuomo considers allegations of impropriety in the context of wind farm siting, the courts are addressing the issue as well.

In an appeals court decision, a member of the Town Board of the Town of Howard (Steuben County) was not removed from office after a resident alleged improper behavior in the approval of an Everpower wind project.

The case, In The Matter of Gerald S. Hedman, et al. v Town Board of Town of Howard, Howard Wind, LLC, Everpower Global Corporation, Town Planning Board of Town of Howard and William O. Hatch (1393 Tp 08-00986, Nov. 21, 2008), was decided by the Supreme Court of New York, Appellate Division, Fourth Department.

Petitioners in the case commenced an Article 78 proceeding seeking, among other things, removal of William O. Hatch as a member of respondent Town Board of Town of Howard (Town Board) pursuant to Public Officers Law § 36. According to petitioners, Hatch had attempted to conceal his relationship with respondent Everpower Global Corporation (Everpower) and disregarded a conflict of interest that arose when he voted to approve a wind energy facility proposed by Everpower that included a wind turbine on Hatch’s property.

The Supreme (trial) Court transferred to the Appellate Division that part of the petition seeking Hatch’s removal from the Town Board and dismissed the remainder of the petition. The lower court’s dismissal was not before the appeals court.

The appeals court noted that

removal of an official from office under Public Officers Law § 36 “generally will not be granted absent allegations of self-dealing, corrupt activities, conflict of interest, moral turpitude, intentional wrongdoing or violation of a public trust[,] . . . [and a]llegations of minor neglect of duties, administrative oversights, or violations of law . . . do not, in general, warrant removal.”

The court determined that the sole remaining petitioner, Gerald S. Hedman, failed to establish that Hatch had an actual conflict of interest that would warrant his removal as a Town Board member.

Hedman’s evidence had consisted solely of Everpower’s proposal for a wind energy facility identifying Hatch as a proposed participating landowner on whose property a wind turbine would be located. Hatch, in contrast, established that he had not entered into any agreement with Everpower with respect to the wind turbine at the time of his vote on the proposal, and petitioner presented no evidence to the contrary. The court found, then that on the record before the court it cannot be said that Hatch was affected by a conflict of interest by virtue of his vote in favor of Everpower’s proposal for a wind energy facility.

The court also concluded that petitioner’s allegation that Hatch intentionally concealed his relationship with Everpower was based on pure speculation and so entitled to no evidentiary weight.

Lastly, the court found that the alleged impropriety of Hatch in failing to make a public disclosure of the potential conflict of interest did not warrant his removal as a Town Board member (see Public Officers Law § 36).

Gas and Oil v. Wind: Who Wins?

As New York wrestles with development (or not) of the Marcellus Shale to extract its bountiful but hard-to-reach natural gas reserves, and struggles with the siting (or not) of multi megawatt wind farms, a natural questions arises: Who wins the right to develop, wind or gas, if the resources are above and below (respectively) the same piece of turf? Not exactly Godzilla v. Megalon, but a provocative concept nonetheless.

Fortunately, the current Editor-in-Chief of U.T. Law’s Texas Journal of Oil, Gas and Energy Law, Becky Diffen, has written a Note on the issue. While focusing on the situation in Texas (obviously also rich with fossil and renewable fuel sources), New York-focused readers will want to learn about the issues presented.

No spoilers here. Ms. Diffen’s answer to the question may be found in: ENERGY FROM ABOVE AND BELOW WHO WINS WHEN A WIND FARM AND OIL & GAS OPERATIONS CONFLICT? 3 TEXAS JOURNAL OF OIL, GAS, AND ENERGY LAW 2 (2008)

More wind projects in NYISO queue

Since last reporting on the NYISO interconnection queue, four more wind projects have requested to join New York’s electricity grid. These are:

  • Stone Church Wind in St. Lawrence county, a project of Atlantic Wind, LLC (Summertime generation rating of 150 MW)
  • Gateway Wind Energy, Schenectady, RP Wind NY, LLC (79.2 MW)
  • Hamlin Wind Farm, Monroe, Hamlin Wind, LLC (80 MW)
  • Barre Wind Farm, Orleans, Barre Wind, LLC (120 MW)

Seventy-seven wind-related projects accounting for nearly 9,000 MW in nameplate generation (summer) are now in the NYISO interconnection queue.

Summary of Ecogen v. Town of Italy 2006 wind zoning case

While somewhat dated, this case, Ecogen LLC v. Town of Italy, 438 F. Supp. 2d 149 (W.D.N.Y. Jul. 2006),  is worth mentioning at least because it is a New York state case in federal district court (these are rare) and offers some guidance on the ins and outs of wind zoning in New York towns, particularly where wind projects are contentious.

Ecogen LLC, interested since 2001 in developing a wind project in and around the Town of Italy (Yates County), filed suit to obtain relief from a wind energy (and related) development moratorium enacted in 2004 in the Town of Italy (Yates County) which was preventing Ecogen from constructing a substation in the town. The substation was for turbines to be constructed in Italy and neighboring Prattsburgh. The court indicated that while Prattsburgh was supportive of the project, Italy extended the six-month moratorium multiple times. The moratorium allowed a “hardship” exception, to be granted only after review of an application for such exception. Ecogen did not apply for such exception.

Ecogen claimed six causes of action: deprivation of due process; unconstitutionality of the moratorium; violation of 42 U.S.C. § 1983; the seeking of injunctive relief; and two state law claims. The town moved to dismiss, stating that Ecogen had failed to state a claim, in part because it failed, by not seeking a hardship exception, to obtain a final decision from the town concerning the application of the moratorium to the proposal to build a substation.

The court looked to whether the moratorium “on its face” was deficient or whether “as applied” to Ecogen it was. Regarding the facial challenge, the court indicated that to prevail Ecogen would need to show that the moratorium, at least to the extent it prevented construction of the substation, bore no rational relationship to any legitimate government purpose. The court found no valid claim that the moratorium was invalid on its face, because, under federal law, it was not “so arbitrary or irrational as to violate [Ecogen’s] substantive due process rights.” The court declined to apply state law standards advocated by Ecogen.

While Ecogen insisted that it was not challenging the moratorium as applied to Ecogen, the court nevertheless took it upon itself to consider such a claim. It found such a claim “not ripe for review.” Ecogen had argued that should the court so construe its claims, that the claim was ripe, because applying for the hardship exception would have been futile. The court disagreed. While a plaintiff need not “jump through a series of hoops, the last of which it is certain to find obstructed by a brick wall,” the court said there did need to be evidence that the town had no discretion to grant the exception, or had “dug in its heels and made clear” that it would not grant the exception. The doubtfulness of the grant of an exception, or the town’s hostility to the project was not enough. The court left for another day what an adequate showing of futility would be. (Considering what was happening here, one wonders how much heel digging is necessary to make such a showing before this court.)

The court found the length of the moratorium (two years running) needed to draft wind regulations “curious and suspicious”, but did not order the end of the moratorium, contingent however upon the town developing a comprehensive plan within ninety days of the court’s order or rendering a decision on a hardship exception application (if filed) within ninety days of filing.

Relatively recent press reports indicate that the town subsequently drafted a comprehensive plan that was relatively anti-wind development. Per the reports, Ecogen sued again, but agreed to put that lawsuit on hold provided the town consider incentive zoning, which would permit turbines provided the developer make certain payments.

A subsequent decision in the case, 461 F.Supp. 2d 100 (Nov. 2006) denied attorney’s fees to the defendant town.

Tip of the blade to Adam Kingsley, a land use attorney in the Chicago office of Holland + Knight, for bringing the case to our attention.