Lessons From the 2008 UTCLE Wind Energy Institute Conference

Friday, February 22, 2008
Contributed by: Thomas Clayton Feighny

On February 19-20, 2008, I had the pleasure of attending the 2008 Wind Energy Institute Conference in Austin, Texas hosted by the University of Texas School of Law. The conference covered the latest wind energy issues, including development, turbine purchasing, landowner issues, and transmission.

I left the conference with the following conclusions about West Texas wind:

  1. Everybody is selling a dream. The Texas wind industry is in the middle of a land grab, and landowners must look carefully at the terms of a wind lease and the developer's overall goals before entering into a lease. There are two types of developers driving the West Texas farm roads looking for deals. The first type, the speculator/flipper, is looking to sign up leases and sell the lease packages to larger developers. The second type, the owner, is looking to sign up landowners, place turbines, and own the project for the long term. Both of these developers can provide a great chance for wind energy income to landowners, but it is important for landowners to understand a developer's financial status, development history, and long-term project goals before signing on with any particular wind company.
  2. It is all about transmission. Good wind abounds in Texas. What is lacking is transmission. There are already enough planned wind sites to plug up current transmission facilities. Unless the competitive renewable energy zones (CREZ) process is resolved timely and new transmission lines are laid in the next few years, many wind farms will never come to fruition, as a lack of transmission will serve as a fatal flaw. The Texas Public Utility Commission will play a pivotal role in bringing these transmission lines to West Texas, and a long term administrative set back could destroy the wind energy dream.
  3. Understand the market. Lease terms vary widely from county to county and understanding the local wind lease market is vital to negotiating a fair lease. Landowners are well served by asking their neighbors if any other developers have approached them or if they know of any other wind developers leasing land in the area. Let competition serve you, and leverage your position.

The conference was ripe with bright ideas and smart people. These projects are coming to our area, and I believe the wind industry, as a whole, will find a solution to the transmission problem. If you are a landowner and considering granting a developer a wind lease, take some time to understand how your land's use will change and make sure to sign a lease that best protects your interest.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.