WIND ENERGY LEGAL ISSUES

1. WIND ENERGY LEGAL ISSUES Jeffrey A. Easterday Barrett, Easterday, Cunningham & Eselgroth, LLP 7269 Sawmill Road, Suite 100 Dublin, OH 43016 614 210-1840 jeasterday@farmlawyers.com

2. Outline of Discussion Ohio Legislative Objectives/Mandates for Wind and other renewable Energy Utility Scale Wind Regulation Small (Home) Scale Wind Regulation Contract Considerations for Wind Leases or Easements

3. STATE OF OHIO MANDATE Ohio Revised Code 4928.64 25% of electricity shall be provided from Alternative Energy Resources by 2025 Half of the 25% may be advanced energy resources (improved process or equipment, or clean coal technology) At least half of the 25% renewable energy resources including 0.5% solar

4. Renewable energy resources and solar energy mandate steps up gradually from 2009 to 2025 Renewable energy resource includes solar photovoltaic, solar thermal, wind, hydroelectric, geothermal, fuel derived from solid wastes, biomass, biologically derived methane gas, fuel cell, etc

5. UTILITY SCALE WIND Ohio Revised Code Chapter 4906 � Power Siting Board Power Siting Board is within Public Utilities Commission Power Siting Board is one-stop shop for utility scale wind projects Power Siting Board certificate required for construction of economically significant wind farm

6. Power Siting Board Members Chairman of PUCO Director of environmental protection Director of Health Director of Development Director of Natural Resources Director of Agriculture Public representative engineer appointed by Governor

7. Power Siting Board Members 4 legislative members as nonvoting members Members of the Board may designate a representative to attend when he or she is not available A quorum is a majority of its voting members

8. CERTIFICATE APPLICATION Application for Certificate must include: Description of facility and its location Summary of studies of environmental impact Statement explaining the need for the facility Statement why location best suited for facility

9. Statement of how facility fits into applicant�s forecasts as reported in ORC 4935.04 Other information considered relevant or required by the Board�s rules Application must be filed between one and five years prior to commencement of construction.

10. Application must be served on each municipality, county, and head of each public agency charged with protecting environment and land use planning in the area in which any portion of the facility is to be located. Provide public notice in each municipality and county within 15 days of filing

11. Public Hearing shall be set between 60 and 90 days after receipt of application.

12. CERTIFICATION CONSIDERATIONS Project Description Project Area Location � acres, owners Wind Turbines � number, type, capacity Turbine Foundations Electric Substations Buildings, Staging Areas Access roads, Electric Collection Systems

13. Application begins process and results in an administrative case similar to a court case with filings and orders Public Information Meetings Public Hearing

14. CRITERIA FOR CONSIDERATION Finding of basis of need for facility Nature of environmental impact Finding that facility represents minimum adverse environmental impact Finding that facility is consistent with regional plan for electric power grid Finding that facility will comply with applicable Ohio laws

15. Finding that facility will serve public interest, convenience & necessity Determine impact on viability of agricultural land or agricultural district Finding that facility incorporates maximum feasible water conservation practices, considering technology and alternatives.

16. EXAMPLE OF STAFF REPORT One year construction phase Emissions type and volume during construction Wetlands Impact on Streams � nature of crossings Access Roads Areas to be cleared of trees/vegetation

17. Nature of land use in project area Threatened or endangered species in area (plants, birds, reptiles and amphibians, mammals, aquatic species) Construction Best Management Practices (silt fencing, reseeding, straw bales) and Storm Water Pollution Prevention Plan Adverse Traffic Impact

18. Literature review and evaluation of cultural resource surveys, visual impact assessment on cultural resources Cultural resources, National Register of Historic Places Impact of height of turbines 400 ft on cultural resources Ohio Historic Inventory Sites

19. Dwellings or structures to be removed Noise study (50 dBA goal at property lines) Number and proximity of residences Minimum set back for turbine is 1.1 times maximum height of turbine to blade tip Minimum 750 feet from horizontal extended blade tip to nearest residence

20. Identify recreational use sites Employment created by project Effect/conflict on known local or regional development projects or land use plans One project addressed Indiana Bat � Habitat Conservation Plan

21. Blade shear considerations (blade breaks and is thrown) Ice Throw considerations Shadow flicker considerations Communication System Interference Radar interference Traffic Impacts

22. Status of landowner leases (cost, term) Decommissioning (financial assurance) Issuance of Certificate and Conditions

23. SMALL SCALE WIND POWER Major constraints on small (home or farm) scale wind projects are financial, physical, social, and regulatory Connection to Power Grid (Public Utility Regulatory Policies Act of 1978 generally require utilities to connect with and purchase power from small wind energy systems)

24. ZONING Many Zoning codes may not specifically address Windmills Permitted Use, Conditional Use? Often all other uses are prohibited unless exempt. Is small wind an agricultural use? Is small wind an accessory use? Telecommunications towers are often addressed Height Limitations

25. WIND LEASE/EASEMENT A lease or easement will affect title of real property � rights and/or encumbrance A lease or easement may also affect personal rights � confidentiality

26. LEASE/EASEMENT CONSIDERATIONS Parties � authority to sign Effective Date Property subject to Lease Use of property Location of facilities Ingress and Egress - maintenance Retained Uses

27. Is easement exclusive? Who holds title? Compensation � rent, royalty Payment for damage Term of lease or easement Renewal of lease or easement Termination of lease or easement

28. Warranties and representations Title warranties � title insurance Conditions and contingencies Arbitration Property tax Construction Insurance, Indemnification,

29. Mechanic�s liens Compliance with laws and regulations Environmental Effect of title encumbrances � tenants, mortgages, other easements, etc Rights to assign or sublet Leasehold financing

30. Right of property owner to mortgage Effect on existing mortgage � subordination, agreement to restrictions Default and remedies How to document termination Removal of facilities - decommissioning Reversion of rights to owner

31. Sound restrictions/limits Confidentiality Payment to brokers/agents

32. Recent Licking Co Appellate case held that certain rights that are outside the period covered by the marketable title act are effectively terminated.

33. Jeffrey A. Easterdayjeasterday@farmlawyers.com This material and presentation is for education and general information purposes only. The presenter is not providing specific legal advice and no attorney-client relationship is established with any person who attends the presentation or views the materials. You should consult with your professional advisor on all matters related to this subject.