Montana State University

Mountains and Minds

Recommended questions for landowners from MSU Extension October 13, 2010 By MSU Extension • Published 10/13/10

MSU Extension suggests landowners ask the following questions of wind energy companies looking to buy wind rights on their property:

What is being proposed? Twenty mega-watts or 500?

Who is the company? Are they well-tested and financially backed? Serious, but not tested? Or, purely speculating? Hamlen says landowners should understand that most companies are speculative, to some degree, until transmission lines are determined. The landowner and their attorney should try to ensure that the terms of the contract are consistent with the developer's intent and abilities.

What are the terms of the lease agreement? While there are great agreements, some leases contain terms that are not friendly to the landowner. Companies can collateralize the land, meaning they can use it to secure a loan or credit. The land is subject to seizure if the company defaults on the loan.

Do the terms enable the property to be used as a transmission corridor, but only tie compensation to the number of wind turbines erected? Some proposed agreements claim the water and/or mineral rights. "Typical lease agreements are 20-40 years, and some have automatic renewals, so we are looking at at least two to three generations being affected by the development," Hamlen said. "Lease agreements with terms of 99 years have been offered in Montana."