Saturday, August 30th, 2008
Wind energy - is it this area's new cash crop?
By Shelley Grieshop
Local and state officials are urging area landowners to "do their homework" before signing land lease contracts for wind turbine projects.
In the last year, at least three renewable energy companies have talked to area residents - mainly farmers - and held local meetings to persuade them to sign land leases for deals padded with up-front cash. The companies seek to build commercial-sized wind turbines on the local farmland.
Last Tuesday, approximately 100 area residents attended such a meeting at the Eagles Lodge in Celina, with a follow-up meeting set for this Tuesday.
But before local landowners sign on the dotted line, officials are asking them to educate themselves, consult an attorney or consider other options.
"Folks need to look at other ways of doing this that could help them keep the profits in their own pockets and tax dollars in their communities," said John Ellerman, of the Ohio Farmers Union.
Ellerman said a group of farmers in Payne in Paulding County already have formed an LLC - a small corporation - and plan to "bypass the middle man." They intend to purchase their own turbines, use expert consultants to build and maintain them on their farmland, and directly reap the profits from the electricity generated.
Grants, low-interest loans and subsidies from the government help make the venture possible and keep the profits from going out of state or, in many cases, out of the country, Ellerman said. Farm equipment supplier John Deere Inc. is one of the key financial backers currently helping LLC's and co-ops dive into the wind energy market, he added.
"It's a no-brainer investment," Ellerman said. "You can make it work and make some real money. The potential profit is great."
Earlier this month, a Chicago, Ill.-based company called Invenergy made a presentation before Mercer County Commissioners, saying they were in the area to get farmers interested in leasing land for wind turbines. The commissioners expressed a positive interest but agree residents need to know what they're getting into before committing to a contract.
The company making the presentation at the lodge last week is Wesco. Company representatives reportedly asked interested attendees to bring copies of their land deeds to the next meeting. Wesco representatives also are asking landowners to sign an initial agreement with an immediate cash payout, and regular payments for land use and shares of electricity profits to follow, according to area residents who attended Tuesday's meeting.
Wesco officials, who have dubbed the local project "Grand Lake Wind LLC," did not answer phone calls left on Friday by The Daily Standard. Their Web site at www.wescowins.com lists supporting information about wind energy but does not state where the company is based or give any specifics on its operations.
Joseph Logan, also of the Ohio Farmers Union, is urging farmers not to sell their wind rights but consider teaming up with other farmers - even city and county officials - to capture the profits and keep the money and electricity produced circulating back into the local communities. That scenario has proven successful in Bowling Green, where the city co-owns a turbine farm with nine other cooperative members.
"I believe communities like Celina and the county there have the leadership it would take to successfully do this," he said.
Logan believes farmers and local governments can team up with local lenders and capital contributors to create their own turbine farms. The big investors, such as area industries, would be eligible for the renewable energy credits, unlike the farmers, he added.
Profits vary depending on the circumstances, but six-figure profits per turbine, per year, aren't unusual, Logan said.
The Ohio Farmers Union is supporting these "community-based energy development" projects and has tapped consultants like Dan Juhl of Minnesota, who offers workshops on the subject. Juhl operates his own successful wind farm and uses his in depth knowledge on the subject to guide start-up groups. He has helped write legislation in his own state regarding wind energy operations.
Logan said farmers shouldn't be in a rush to commit their land to anyone, especially companies "who convey a great sense of urgency." Some, he believes, are rushing to secure land in order to be first in line for available funding, he said.
Logan invites anyone with questions to contact him at the Ohio Farmers Union at 614-221-9520.
All the officials who spoke to The Daily Standard were skeptical of the companies currently scanning the local landscape for project sites. Many said they fear the agents giving the presentations are representatives of large companies located off shore in foreign countries.
"These companies take the big profits and most of that money goes out of the area. Sure there's some taxes paid locally, but in the end the farmer doesn't get much," Ellerman said.