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.

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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

Net zero: the newest term in Ontario politics

The term “net zero” has appeared recently in Ontario politics, used by the Premier and others.

Up to now, “net zero”  has been used for home building and energy use; according to the U.S. National Renewable Energy Laboratory (NREL) net zero means “the amount of energy you use equals the amount you produce.” Similarly, CMHC says “a Net Zero Energy house integrates high-performance, energy-efficient passive solar design and commercially available on-site renewable energy systems such as solar water heating, electricity and ground-source heat.”

No definition could be found in traditional dictionaries.

In Ontario, however, land of the inexplicable, “net zero” has been used by Premier Wynne, Energy Minister Chiarelli, Finance Minister Sousa, and Deb Matthews, Minister Responsible for the Poverty Reduction Strategy, to describe the salary/benefit offer on the table for the Power Workers Union/PWU members at Hydro One and OPG.  Apparently, handing out shares in the still publicly owned Hydro One, along with an annual salary increase, reduces the future commitment to contribute to their pensions. It will be interesting to see the cost/benefit analysis on this one.

Liz Sandals, Ontario’s Education Minister can probably be credited as the first Ontario Liberal using the term “Net Zero” politically when quoted a year ago about expiring teacher contracts:  “That doesn’t necessarily mean there’ll be no wage increases. Net zero means if you can find saving in one part of the collective agreement that you can have an increase in another.”

In the case of the contract now offered for Hydro One and OPG to their PWU members it appears that Energy Minister Chiarelli and the other Liberal Cabinet Ministers regard handing out free shares in a company they plan to privatize along with wage increases that will, in all likelihood, track inflation rates as a net-zero accomplishment.  Translating the latter term from a building/house that produces as much energy as it consumes into a wage settlement package, in the eye of this former banker, is an analogy that any sane economist would have trouble accepting.

Somehow I suspect that the “net zero” settlement will not stop the continuing climb in electricity prices, it will simply allow the Liberal government to claim labour peace.

Perhaps next, Premier Wynne and her government’s actions will result in “net zero” electricity price, increases caused by “net zero” wind turbines and solar panels added to the grid!

©Parker Gallant,

May 15, 2015

 

 

Wind farms: turbines assessed at fraction of value

Low tax assessments just another wind power subsidy

May 13, PostMedia Network

by Peter Epp

Among the incongruities found within the Green Energy Plan is the way in which wind turbines are assessed by the Municipal Property Assessment Corporation (MPAC). In a word, the assessment is low.

The Ontario government’s purpose, when the plan and its accompanying legislation were approved in 2009, was to encourage the development of wind energy in this province. Developers would be given incentives, including generous subsidies. They would also be modestly taxed, which was just another form of subsidy.

For those rare municipalities that actually welcomed wind turbine development (Chatham-Kent, for one), the relatively low assessment on turbines wasn’t seen as a hurdle; it was viewed as new-found tax revenue, even if that revenue was modest when compared to what other developments might generate.

But for those municipalities that called themselves “unwilling hosts” to turbine development, the lack of sufficient assessment has become just another irritant.

In Plympton-Wyoming – which has been on the forefront of those municipalities that have been actively and vocally campaigning against wind turbine development – Mayor Lonny Napper says wind turbines worth an estimated $5 million have been assessed at a mere fraction of their value, by an estimated $60,000. Indeed, Napper suggests that every time a new turbine is erected in Plympton-Wyoming, his municipality loses tax revenue.

Speaking to a representatives of MPAC last week at Lambton County council, Napper said he finds it unfair that wind turbine developers get such a sweetheart deal – especially when it comes at the expense of local taxpayers, many of whom don’t even want the wind turbines in their community.

“Everyone else has to pay their own way,” he told the MPAC representative. “All we’re saying is pay your way upfront.”

Napper’s judgment is correct. If any other industry or commercial enterprise wanted to set up shop and do business in Plympton-Wyoming, they would have to abide by the assessment schedule of the province. They would, to use his word, pay their own way. There would be no sweetheart deal. In fact, such sweetheart deals are illegal in this province, at least according to the Ontario Municipal Act.

But the wind turbine industry gets a pass. Not only is the electricity that’s produced by the industry heavily subsidized, but so is the industry’s tax obligation to its municipal hosts, most of whom – ironically – don’t want the industry there in the first place.

Proof of association between turbine noise and poor health: public health doctors

caduceus

Drs Ian Arra and Hazel Lynn have now published a peer-reviewed report of their review of international papers and studies on wind turbine noise and health impacts.

Abstract

Background and Objectives: The proximity of wind turbines to residential areas has been associated with a higher level of complaints compared to the general population. The study objective was to search the literature investigating whether an association between wind turbines and human distress exists.

Methods: A systematic search of the following databases (EMBASE, PubMed, OvidMedline, PsycINFO, The Cochrane Library, SIGLE, and Scirus) and screening for duplication led to the identification of 154 studies. Abstract and full article reviews of these studies led to the identification of 18 studies that were eligible for inclusion as they examined the association of wind turbines and human distress published in peer-review journals in English between 2003-2013. Outcome measures, including First Author, Year of Publication, Journal Name, Country of Study, Study Design, Sample Size, Response Rate, Level of Evidence, Level of Potential Bias, and Outcome Measures of Study, were captured for all studies. After data extraction, each study was analyzed to identify the two primary outcomes: Quality of Study and Conclusion of Study Effect.

Results: All peer-reviewed studies captured in our review found an association between wind turbines and human distress. These studies had levels of evidence of four and five. Two studies showed a dose-response relationship between distance from wind turbines and distress, and none of them concluded no association.

Conclusions: In this review, we have demonstrated the presence of reasonable evidence (Level Four and Five) that an association exists between wind turbines and distress in humans. The existence of a dose-response relationship (between distance from wind turbines and distress) and the consistency of association across studies found in the scientific literature argues for the credibility of this association. Future research in this area is warranted as to whether or not a causal relationship exists.

Read the full paper here.

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

fineprint

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.