Over the past years many landowners In Douglas County have been approached by Nextera Energy for lease and easement agreements on their land. Some have signed, most have not.
Many people in the County have not even been aware that solicitation has been occurring for building industrial scale wind turbines. Often people are distressed that this could even be a possibility. Many of us who have been approached by the company for lease agreements have been very concerned about less than professional company tactics, misinformation to land owners, & refusal to answer even basic questions about dangers and risks to the public of these commercial wind turbines.
If you, a family member or friend have been given an agreement to sign we encourage you to consult your personal attorney first. Below is a review of the agreement by an attorney.
A review of NextEra’s Wind Farm Lease and Easement Agreement
for Douglas County, Kansas
Reviewing NextEra’s Wind Farm Lease and Easement Agreement [hereafter Agreement] is a tedious challenge, even for an attorney experienced in negotiating contracts. This summary discusses issues a landowner should consider when deciding whether to sign the contract. The Agreement has many problems; only a few topics are discussed below. We hope this discussion will illustrate to landowners what they will encounter when working with NextEra Energy Resources [hereafter NextEra]. Landowners are encouraged to hire an attorney who can explain how these terms will impact them directly and who can negotiate a more favorable contract. This discussion references NextEra even though its Agreement lists one of its affiliates, “Boulevard Associates, LLC,” as the party signing the Agreement offered in Douglas County. NextEra has advocated for its wind project when appearing before the Douglas County Commission to obtain approval to install MET Towers and SONAR systems[1] and by submitting extensive comments on draft regulations.[2] Therefore, NextEra’s name is used here to avoid confusion about which entity seeks to install a wind project in Douglas County. Topics below refer to numbered paragraphs NextEra’s Agreement, which should be reviewed when reading this review.
- An oral statement by a representative or a written statement in NextEra literature must be specifically written into an Agreement provision to be part of the contract.
When signing a contract, one must remember that written contract language controls every term of the parties’ agreement. This means the contract must state – or incorporate by reference – any term the parties agree upon. Oral or written statements that are not in the written contract do not count as an agreed term. This is important to remember because the Agreement at ¶ 20.3 Entire Agreement states:
This Agreement and the attached Exhibits shall constitute the entire agreement between the Parties and supersedes all other prior writings and understandings.[Italics emphasis added.]
Sales representatives for NextEra have made many oral statements not recorded in the written Agreement. Also, NextEra has circulated brochures discussing wind turbines and their impact on landowners. NextEra’s brochures titled Affordable home-grown energy for Kansas [hereafter Kansas Brochure] and Our Wind Energy Business[3] [hereafter Business Brochure] contain lovely pictures and extol virtues of wind energy – and NextEra’s role in creating these images. But NextEra’s Agreement offered in Douglas County makes no commitment to fulfill the brochures’ assertions. For example, NextEra asserts one benefit of wind energy is that “no hazardous cleanup [is needed] at the end of a project’s productive life.”[4] But the Agreement clearly states that hazardous materials will be brought onto landowner’s property and that cleanup of these materials will be needed. ¶ 15. Hazardous Materials. The Agreement commits Operator to remove or take remedial action for “any material violation” of an environmental law for Hazardous Materials, and to “indemnify, defend, protect and hold Owner harmless for any liability” Operator causes. Landowner will likely have to file a legal claim to find out if Operator has violated a law or what cleanup or remedial action is needed. Few landowners are qualified to remove hazardous materials or to know what remediation should be performed.
In another example, the Business Brochure notes NextEra “has a carefully designed plan for turbine placement [] but works closely with landowners to ensure the turbine location is compatible with other land uses.” [Italics emphasis added.] [5] But the Agreement contains no written commitment to “work closely with landowners” in siting or constructing Turbines – or in any other aspect of the Project. The Agreement, in ¶ 2 Project, explains that Operator will provide a legal description of the wind farm boundaries in Exhibit A, but Operator also has “the unilateral right to add to, subtract from, modify or otherwise amend the description . . . at any time during the term of this Agreement” by giving written notice to landowner. [Italics emphasis added.] Operator is not obligated to work closely with landowner. In ¶ 4.1 Construction Right, Operator has the right to use any part of landowner’s property covered by the lease “when Operator deems it necessary or advisable to do so to perform the activities for which this Construction Right is granted, including, without limitation, staging areas and parking for Operator’s employees.” ¶ 4.1.1. [Italics emphasis added.] Landowner input is not required when NextEra decides where to site Turbines.
Under ¶ 5.1 Wind Non-Obstruction Easement, landowner grants Operator the free and unobstructed flow of wind currents over and across landowner’s property. But before landowner can build a structure taller than 40 feet within 1,000 feet of a Turbine or MET Tower, landowner “must consult with and obtain Operator’s written agreement” that will be based on Operator’s “sole judgment.” ¶ 5.1.1 [Italics emphasis added.] Operator can work with a landowner, but the Agreement does not require it. To require NextEra to work closely on where Turbines, roads, and other Improvements are placed, landowner should reject this Agreement and negotiate a new contract with an attorney representing landowner’s interests.
- NextEra’s Agreement attempts to create a right to convert Leases to Easements, which changes landowners’ rights from a temporary to permanent obligation.
The Agreement’s last paragraph states that landowner grants Operator an option to convert any Lease in the Agreement to an Easement – and vice versa. ¶ 20.11 Option to Convert. This provision is significant. A “lease” is a contract in which one party conveys to another party the right to use real estate, equipment, or facilities for a specified term and a specified rent. This means a lease is not a permanent encumbrance on the Owner’s Property. When the term ends, the lease expires and is void. For real estate, the lease can no longer be enforced but continues listed on Register of Deeds records until removed. In ¶ 4. Lease, the Agreement identifies seven leases: 4.1 Construction Right, 4.2 Access Right, 4.3 Turbine Site, 4.4 Collection Facilities, 4.5 Telecommunication Facilities, 4.6 Overhang Right, and 4.7 Met Instrument Sites.These impose rights to install and operate the wind project during construction and its useful life.
An “easement” imposes an interest in land owned by another that entitles the holder of the easement to a specific limited use or enjoyment. An easement is tied to the land and not limited in time. Easements are commonly used to designate an area for utilities, such as pipes, cables, etc. Easements can also provide access to a parcel of land that cannot otherwise be reached, for example a road across a third-party’s land. Easements are recorded at the Register of Deeds. In ¶ 5. Easements, only two rights are defined: 5.1 Wind Non-Obstruction Easement, and 5.2 Effects Easement. The first creates an “irrevocable, exclusive” right to capture the flow of wind currents over landowner’s property. The second creates a “non-exclusive” easement to impose effects of the wind farm on landowner’s property.
Although these leases are unusually long, as discussed below, they end on a specific date. But if NextEra or its successors can convert leases to easements, the incumbrance on landowner’s property will continue with no expiration date. Kansas Courts have not addressed whether a lease can be converted to an easement without specific approval by the property owner and without payment of additional compensation to landowner for NextEra acquiring this increased right. But challenging this provision would involve a lengthy and expensive legal proceeding, with a trial and possibly an appeal. It is not clear how ¶ 20.11 impacts initial descriptions of “Lease” and “Easement.”. A landowner can try to strike this provision by drawing an X through ¶ 20.11 and having NextEra’s representative initial it, but NextEra likely will not agree to this. Landowner should reject the entire Agreement and, with the assistance of an attorney, negotiate a new contract that omits this paragraph.
- A landowner should not waive a right to a trial by jury in a contract without first consulting with the landowner’s attorney about the consequences.
In ¶ 20.6 Waiver of Jury Trial, both parties waive the right to a jury trial. Perhaps to distract from this waiver’s importance, the provision also states that any lawsuit will be tried “in a court of competent jurisdiction” – which is true of any lawsuit. If a trial is needed, a landowner could be disadvantaged if a jury trial is not available. This provision should be stricken. The Agreement only highlights this provision – emphasizing how important it is.
- The Agreement restricts use of Owner’s Property for up to 90 years, which will prevent a landowner from being able to adjust to changing times.
If Operator exercises its Option under the Agreement, an initial 50-year lease will encumber landowner’s property. Then Operator can opt to exercise two consecutive 20-year leases, making this a 90-year lease unless terminated under the Agreement. ¶ 6.1.1. Initial Lease and Easement Term. Also, Operator can extend the 90-year term further under ¶ 6.1.3. Delays During Lease and Easement Term if operation of the Wind Farm is delayed or suspended due to: (a) a government enacting a law that delays, interrupts, or suspends production, sale, or transmission of electricity from Turbines, or (b) “Force Majeure.” The legal concept of “Force Majeure” excuses a party’s performance under a contract if the event is beyond the reasonable control of the party and, as a result, the party cannot meet contract terms. Such events include an act of God, like a flood, earthquake, worldwide pandemic, etc., that a party cannot foresee or overcome with due diligence. But NextEra greatly expands its definition of “Force Majeure” by referring to vandalism, theft, cutting of lines, and similar events; it even includes delay caused by government action that it did not foresee and cannot overcome by using due diligence.
A landowner wanting to preserve a family farm should consider impacts of a lease this long. If landowner has a 5-year-old grandchild when the Agreement is signed, the lease might not expire until the child is 95 years old. Even if the initial 50-year lease is not extended, the child will be 55 when the lease ends. The Agreement will incumber the land until the wind project ends. NextEra’s long lease terms and extensions clearly favor NextEra, not landowner. A court might reject NextEra’s definition of “Force Majeure,” but landowner would have to challenge the provision, which could take years. How long will a grandchild wait to for a clear land title?
- The Agreement’s non-disclosure clause is questionable in claiming that it contains “confidential and proprietary information related to Operator and Wind Farm.”
The provisions in ¶ 17 Confidentiality do not specify what information is “confidential and proprietary” to justify prohibiting landowner from sharing the “Agreement or Additional Information” with other people, except as articulated in ¶ 17. The Agreement does not detail descriptions of secret manufacturing techniques, marketing strategies, trade secrets, etc., that might justify confidential treatment. Nor is a time limit set for non-disclosure. Landowners can give copies to family and professionals (such as an attorney, accountant, or financial advisor) and to “any existing or prospective mortgagee, lessee, or purchaser” if they too agree not to disclose. [Italics emphasis added.] The Agreement’s language is very broad and does not explain why any information should be treated as confidential or proprietary. Also, ¶ 17does not describe how landowner will be compensated for giving up the right to share a contract proposal with others, such as friends or neighbors. For these reasons, this clause could be unenforceable, but a challenge would require filing a lawsuit. Also, because ¶ 17is a written term in the Agreement, if landowner fails to meet this obligation, Operator could claim default and give landowner a 30-day notice to cure. If landowner does not meet this requirement, Operator could exercise remedies listed in ¶ 18.3 Owner Default, including pursuing an action or remedy to cure the default and charging landowner the Operator’s costs plus interest. ¶ 18.3 (ii) and (iii).
- Landowners should consult with their banker, accountant, and attorney about how the Agreement impacts operation loans, mortgages, taxes and other contracts.
Several Agreement provisions can impact landowner’s ability to borrow money against real estate and other property. Under ¶ 9 Ownership and Title Matters, except as Owner discloses to Operator or as is disclosed by a title search, Owner must warrant several items regarding the property, including that Owner is the sole owner of the property and holds a marketable and insurable fee simple title. ¶ 9.1 Authority. Owner’s Property must not be subject to any other agreements or any other prior right of any party to purchase, lease or acquire leases and easements or to create a claim or right that would preclude or interfere with Operator’s rights and interests. ¶ 9.2 Other Agreements. NextEra claims that a wind project allows landowner to continue ranching and agricultural uses to the extent it does not “unreasonably interfere” with Operator’s use of the property, ¶11.3.1 Ranching and Agricultural Uses. However, the prohibition against other agreements in ¶ 9.2 appears to prohibit Owner from contracting with a third-party to farm the property even if landowner has historically entered into a lease with a farmer to do this. Even more puzzling is how a third-party farmer raising crops on landowner’s property can recover compensation for any crops lost or destroyed by Operator exercising the right to construct Improvements. Exhibit D Lease and Easement Compensation, ¶ (9).
If an Owner has a mortgage and a payment becomes overdue, landowner must notify Operator. Then Operator has an option to pay the overdue amount and credit any payments against Owner’s next Annual Installment Payment. See ¶ 9.4.1. Also, Owner must deliver from each Owner Mortgagee an executed “Subordination, Non-Disturbance and Attornment Agreement” written by NextEra in which Owner Mortgagee agrees not to disturb Operator’s possession and use of Owner’s property. ¶ 9.4.2. A bank would not sign NextEra’s document without the bank’s attorney approval. It is unclear what happens if the bank refuses.
Taxes are discussed in ¶ 12 Taxes. Landowner must pay all delinquent and current taxes and assessments. ¶ 12.1. Landowner must give Operator a timely, relevant tax statement. Operator must then timely pay landowner the amount of any increase levied against landowner’s property due to the tax value of Operator’s Property. Alternatively, Operator can receive the tax statement directly. Then Operator can choose to pay all taxes and either have landowner pay taxes directly to Operator or offset landowner’s taxes against payments due to landowner. ¶ 12.2.
Operator is allowed to mortgage, assign, or otherwise encumber and grant a security interest in Operator’s Property without landowner’s consent. ¶ 13 Mortgage of Operator Property. Operator should give landowner notice of a mortgage but failure to do so does not constitute default. ¶ 13.2. Before alleging Operator default, landowner must give written notice to each Operator Mortgagee, specifying in detail the alleged default and the required remedy. Each Operator Mortgagee has a right to cure Operator’s default. ¶ 13.2. Operator Mortgagee may extend time to cure the default, ¶ 13.3, and has no obligation or liability under the Agreement until succeeding to absolute title to the Property. ¶ 13.4. Operator Mortgagee’s rights are defined in ¶¶ 13.5-13.8. Under ¶ 13.6, each Operator Mortgagee has the right, “in its sole discretion,” to assign its Mortgage to enforce its lien and acquire title to the Operator Property, including by taking possession of and operating the Property under the Agreement or having a receiver appointed to do so. Also, Operator Mortgagee can acquire Property by foreclosure or assignment in lieu of foreclosure; thereafter, without Owner’s consent, Operator Mortgagee can assign or transfer the Property to a third party. Any party acquiring Property by foreclosure or assignment in lieu of foreclose is not liable to perform obligations imposed under the Agreement. Under ¶ 14. Assignment and Sublease, Operator has the right, without Owner’s consent, to sell, convey, lease, or assign the Property to one or more person or entity but only for uses set out in the Agreement. Operator is required to notify Owner, but failure to give notice is not a default under the Agreement. Assignment releases Operator from its obligations as of the date obligations are assumed by the Assignee.
- When the life of the wind project ends, Improvements should be removed from the land at Operator’s expense, but remnants will remain under the Agreement’s terms – and landowner may end up responsible for paying reclamation costs.
The language in ¶ 8.9 Removal of Improvements sets out Operator’s obligations to remove Improvements when the lease ends. In this provision, Operator agrees to remove “all physical material pertaining to . . . a depth of [36] inches beneath the soil surface.” Turbines over 600 feet – like those NextEra plans to use – will require platforms at least 54 feet six inches wide and 8 feet deep and use 330 cubic yards of concrete and 53,200 pounds of rebar, resulting in a foundation 18 feet in diameter.[6] Removing a platform’s top 36 inches will leave at least 5 feet underground. Also, the Lawrence-Douglas County Metropolitan Planning Commission Staff’s Draft of Reg. 12-306-44 WIND CONVERSIONS SYSTEMS, dated 12/14/2022, at Reg. 12-306-44.03.07.c.4) Reclamation, requires landowner to remove any Improvements an Operator fails to take away when the wind project ends.[7] If landowner cannot afford to remove the remnants and the county pays for removal and reclamation, the county can place a lien on the land.
If landowner decides to contract with NextEra and signs the Agreement, landowner should consider investing all payments received from NextEra during the lease to pay for removal of any remnants of the wind project. If landowner invests wisely, this amount may cover costs to remove the remains of turbines, platforms, blades, telecommunications cables, etc. In that situation, landowner will be fulfilling NextEra’s commitment – omitted from language in its Agreement – “to leave the land in as good or better condition than [NextEra] found it.”[8]
Conclusion: This summary has pointed to problems in NextEra’s Agreement that Douglas County landowners have been asked to sign. Many landowners have chosen to reject the contract. If a landowner, after reviewing the Agreement, still wants to contract with NextEra, landowner should hire an attorney to negotiate a contract protecting landowner’s interests, including those discussed here and others the attorney may identify. Contracting to allow an industrial wind project to be installed on owner’s property is a long-term commitment that should be approached with caution.
[1] Douglas County, KS, Commission Board Meeting, Nov. 30, 2022, Agenda Item 3.1 Temporary Business Use Permit for 60.26-meter MET Tower approved, pp 99-134; Douglas County, KS, Commission Board Meeting, February 1, 2023: Agenda Item 3.2 Temporary Business Use Permit for 60.26-meter MET Tower approved, and Agenda Items 3.4–3.6, Temporary Business Use Permits for three sonic detection ranging systems (SONAR) approved. These materials can be accessed at:
https://www.douglascountyks.org/services/government/public-meetings.
[2] Lawrence-Douglas County Planning Commission Meeting Jan. 23, 2023, Agenda E. 6, Agenda Item Report 22-986-Pdf, Attachment: Communications (Updated 12/19/2022) [hereafter Planning Commission Comments], See (a) email exchange between Alan Anderson, Polsinelli, and Commission Staff scheduling meeting, pp 1047-51 of 1235 pages, and (b) Letter and Comments submitted on behalf of NextEra to Lawrence-Douglas County Planning Commission from Alan Claus Anderson, Polsinelli, pp 1143-82 of 1235 pages. These materials can be accessed at: https://lawrenceks.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=1246.
[3] NextEra Energy Resources, Affordable home-grown energy for Kansas [hereafter Kansas Brochure],; NextEra Energy Resources, Our Wind Energy Business [hereafter Business Brochure], found at Planning Commission Comments, pages 507-20 of 1235 pages. [The map of all NextEra wind and solar operations shows none in its home state of Florida, p. 513 of 1235 pages.]
[4] Business Brochure, page 2; also see Planning Commission Comments at page 508 of 1235 pages.
[5] Business Brochure, page 5; also see Planning Commission Comments at page 511 of 1235 pages.
[6] Planning Commission Comments, NextEra Energy Resources Wind Farm Process Overview, pp. 1052, 1056, and 1065 of 1235 pages.
[7] Douglas County Planning Commission Meeting Jan. 23, 2023, Agenda E. 6, Agenda Item Report 22-986 – Pdf, Attachment: PC Staff Report – 12/19/2022, DRAFT Reg. 12-306-44 WIND WNERGY CONVERSION SYSTEMS, Dated 12/14/22, especially Reg. 12-306-44.03.07.c.4) Reclamation, pages 39 and 66 of 1235 pages.
[8] Business Brochure, page 5; also see Planning Commission Comments at page 511 of 1235 pages.
