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DAVID KRUSE

RICL’s intransigence

July 11, 2014
Farm News

Anyone who has driven the rural highways of the Western Corn Belt could not help but notice all of the wind turbines materializing like a growing forest of renewable energy generators in the region.

They build these wind farms where the wind records dictate. There is more wind power being generated than there is local regional demand to consume all of the energy they produce.

Wind companies entice farmers to allow them to place turbines on their property by making payments each year. All the turbines dotting the horizon are there with the landowner's approval having reached a commercial accommodation with the company.

No one that didn't agree to have a windmill on their property has one.

That means that the wind power companies had to agree to a commercial value that the farmers who own the land decided represented fair compensation and the wind companies had to meet that expectation.

Given the surplus of wind power generation capacity in the Western Corn Belt and the demand for this power further east in metropolitan areas such as Chicago, there are now plans underway to build a transmission line from the energy source in western Iowa to deliver it to Illinois consumers. To me this makes logical sense.

The power transmission company, Rock Island Clean Line, has begun the process of negotiating commercial agreements with the land owners along the chosen route.

It has held informational meetings, made offers and have reportedly consummated contracts for construction and easements with an estimated 10 percent or so of the landowners along the intended route.

As of June 24, the Iowa Utilities Board reported that 127 of the necessary 1,247 private easements had been acquired by RICL.

I am one of the landowners, as are a number of family members that the company seeks easements from, but have not negotiated an agreement with the company.

I attended the first meeting of the RICL opposition organization, but I am not a member, deciding to step back to observe what the sentiment of the local neighborhood was.

I frankly respect my neighbors and I am not interested in committing to an easement until it has become local consensus to accept this.

Here is where I start listing all of the problems that I have with RICL:

They are there forever. This is an easement that will span generations so this decision made will impact the next generations to come.

This is unlike wind turbine contracts that produce annual revenue for the landowner. The payment will be made and the money will be gone and the poles will be there forever.

While RICL claims to negotiate, it is only on the other minor terms, not the size of the payment. I think that its monetary offer is a fraction of what it should be and there also should be additional payments adjusted for inflation every 40 years (the structural lifespan attributed to the poles) that they maintain the power line in order to retain the easement.

Most farms will have as many transmission towers as they would wind turbines and the comparative revenue paid to the landowners for the transmission lines is far short of what it should be.

I think that the payment to landowners is small when amortized out over the life of the project. When you divide the payment offered by "forever" the resulting amortized cost of the easements have very little impact on the economic viability of the venture.

Larger payments would actually represent a greater economic boost to the local areas.

It is not that easy. They have applied to the IUB for the franchise to proceed, which, if obtained, then gives them the right to use eminent domain.

That decision will come later in the year. Between now and then they need to make commercial deals with at least a majority of the landowners to get a favorable ruling from the IUB.

Eminent domain was not created so that a company can take rights from 90 percent of landowners. Eminent domain was created so that 5 percent intransigents can't stop something for the public benefit that the vast majority has agreed to.

RICL is caught in a Catch 22 here. I believe that it won't get IUB franchise approval without first having secured a majority of easements from landowners voluntarily and they can't use eminent domain until it gets the franchise.

There is nothing inevitable about that. Eminent domain is a more expensive, cumbersome process, and impractical for them to use on the majority of the easements they need.

RICL, at some point, is going have to get more landowner cooperation or t will look pretty stupid to the IUB.

My perception is that its public relations campaign is struggling, it can't get people to informational meetings, and it's going to have to reset its entire approach if it expect to get landowners to come along.

I went to the first RICL informational meeting and decided it was trying to push a bandwagon with underinflated tires.

I wasn't interested in getting on board for what was offered. Go ahead ... if RICL can get their franchise from the IUB ... eminent domain me.

My children and their children will have to look at these monstrosities of power lines looming over our fence lines and someday they will wonder what granddad got from RICL to allow them the eternal easement.

When I look at what RICL has offered to date, I would have to say, "not that much."

If RICL is going be intransigent on the amount and terms of compensation, then it's going to have to force the issue if it can.

I think that my opinion is widely held by the landowners impacted.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

 
 

 

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