Ranchers band together to work wind farm deals
ALBUQUERQUE, N.M. (AP)--Most of the 150 people who live near Corona in the heart of New Mexico raise beef on hilly wind-swept landscapes, but cattle prices and Mother Nature have not always been fair to them.
So when wind developers came searching for land to lease a few years ago, rancher Leon Porter and his neighbors figured the soil under their cattle's hooves could provide more than forage.
It was the economic chance of a lifetime, but the locals didn't know much about wind energy or the consequences of leasing their land. They'd heard stories about ranchers who signed less-than-ideal contracts with developers that tied up their land for nearly a century.
"It's my kids and grandkids that are going to be dealing with it. You're making a decision that will impact generations," Porter said. "We've tried to develop our crystal ball as best we could."
So instead of signing the first contract that came along, the group decided to do something rare for ranchers, who generally relish their privacy.
About 25 landowners teamed up in August 2006, pooled their acreage and created the Corona Landowners Association--which covers 200,000 acres--to ensure the best contracts from wind development companies.
While the Midwest is the hotbed for wind energy development, wind-land associations are springing up across New Mexico, Wyoming and Colorado as more developers rush westward to lease property with wind energy potential.
Wind energy in the U.S. grew by a record 8,358 megawatts in 2008. Wind energy generating capacity now stands 25,170 megawatts nationally, producing enough electricity to power nearly 7 million households, according to the American Wind Energy Association.
Associations create power by using a collective bargaining strategy to negotiate for the best deals, said Grant Stumbough, resource and development coordinator for the Natural Resource Conservation Service in Wheatland, Wyo.
"We have a tremendous wind resource here, and developers are recognizing that and knocking on doors. I was talking to some of these ranchers and they said, 'These guys are coming and we have no idea what our wind resources are worth,"' Stumbough said.
He brought Wyoming ranchers and farmers together to talk about an association to consolidate large chunks of land to make it more marketable.
Stumbough said "ranchers felt they were getting picked off one at a time" when they were on their own.
Ranchers can't help but be attracted to the steady income from leasing to wind developers, given low calf prices and drought.
In New Mexico, farmers and ranchers receive about $2 million a year for leasing land for wind farms, said Robert Foster, program manager at the Institute of Energy and Environment and an associate director for the agriculture college at New Mexico State University in Las Cruces.
Landowners can profit from royalties or a flat rate based on wind farm production. Before a wind farm is built, developers also pay on a per-acre basis for land leased for initial evaluations.
"They can make an average of $3,000 to $5,000 a megawatt by leasing land with a wind farm, and you don't have to do anything but pick up the check," Foster said. "If you have 100 cows or 100 wind turbines, you can make more with wind turbines, that's for sure. It's definitely helping some of these farmers and ranchers survive."
The land where Stanley and Diane Owen run 80 head of cattle south of San Jon, N.M., is now part of the Caprock Wind Ranch.
"It's been a blessing for us," Mrs. Owen said. "If (other ranchers) can find a company that is good and they can work with, we think it's a good deal. It helps a whole lot more than our income from ranching."
But ranchers shouldn't be wooed by promises of big money, said Frank Falen, an attorney and rancher in Cheyenne, Wyo., who has helped create several landowner associations.
Landowners must sign contracts with wind developers to allow access. Contracts, often lasting 25 years or more, outline the use of land and placement of everything from roads to turbines--and developers don't always have landowners' interests at heart.
Falen said he encourages ranchers to avoid letting "potentially making a lot of money have an impact on your short-term judgment."
Falen also warned that just because a company leases land doesn't mean it will build a wind farm. Only about 10 percent to 15 percent of landowners who lease their land get a wind farm because there are few transmission lines in low-population areas, he said.
In Corona, Porter's group sent out requests for proposals to about 20 companies instead of waiting for companies to come to them.
The effort paid off. The association split into two groups, with the North Corona Landowners Association signing with Shell Wind Energy and the South association starting negotiations with other developers.
Stumbough said land associations also benefit developers, who save time and money through one-stop shopping with landowners.
"It's creating a win-win situation for the rancher and the developers. Instead of knocking on 50 to 60 doors, they knock on one door," he said.
The associations also reconnect landowners with their communities as they work together toward a common goal to improve rural life.
"You're starting to see neighbors talking to neighbors again. These (association) meetings are filling that niche of the old barn dance, bringing communities together," Stumbough said.
Although the wind farm hype is spreading in the agriculture community and most are prepared to take the risk, Stumbough said some ranchers just don't want wind turbines on their property.
"They don't like the way it changes the landscape," he said. "... But I would rather look at a wind farm than a subdivision."