Thursday, March 13, 2014

 
 
 
WIND ENERGY

WHAT ARE YOUR WIND ENERGY ROYALTY RIGHTS REALLY WORTH?

How to Sell Active Wind Turbine or Solar Rights to Third Party Investors!
    • This Blog site is where the sellers meet the potential energy buyers from all over the world. 
    • Landowners can offer their seller information on line to attract competitive bids. 
    • Seek fair market value by selling your royalty rights to the highest bidder.
    • Find out how much your energy rights are worth in today's market.
    • There is NO obligation to sell!  All deals are confidential.
Recent activities for 2014:

1.  Fowler, IN         4 Wind Turbines     (Sold royalty rights for $292,000)
2.  Van Wert, OH   2 Wind Turbines     (Sold royalty rights for $340,000)
 
This Blogsite (traffic) averages 1,800 hits per month as more and more investors are searching for active wind and solar opportunities.  Many energy investors are enthusiastically looking for sellers of wind turbine, solar, and cell tower projects listed all over the world.   
 
EHS Energy is a management firm which specializes in helping landowners deal with the full impact of wind energy projects related to project development, land lease agreements and financial issues worldwide.

Looking for Capital Investors outside the U.S. for two other projects (in the UK).
 
If you’d like more information, please contact EHS Energy at 260-582-9046 or email (Rodeagleson@gmail.com.).

Sunday, February 2, 2014


CASHING IN ON WIND ENERGY ROYALTY RIGHTS

When Selling Active Wind Turbine Leases to Third Party Investors.

Wow. What a market whirlwind for the 2014 American Farmer with commodity prices downgraded and global competition on the rise.  Where can “Joe Farmer” make a sound profit in this weakening producer market, and bring home the bacon if he is expected to lose money at the start of this planting season? 

With major wind farm development and build-out in most states, some landowners just need to look out the back door and strategize.

Over the years, I have written numerous articles on wind energy and land lease subject matter.  And as this energy market continues to mature in the U.S. and abroad, a growing number of investment companies are now offering lump sum cash payments to acquire wind turbine royalty rights.

These transactions largely mirror what happens in the oil and natural gas industry when a landowner is selling his/her royalty and/or mineral rights to a third party investor. 

Typically, this is how it works.  Most wind turbine buyout offers are solely based on the gross annual income as paid to the property owner by the wind farm developer. 

The potential buyer will review your wind energy lease and annual royalty payment income structure to determine its present value.  The investor will then offer a specific amount for the transfer of all ground lease/royalty rights that remain with the existing wind farm agreement.  Note: This is the time when the seller (wind turbine host) should negotiate additional rights for monetary value.  

Upon agreement, all wind lease royalty rights are released to the buyer when the contract agreement is fully executed after seeking verifiable receipt of annual payment stubs.  

These types of buyout offers are payable in the form of a lump sum cash payment to the landowner normally within 30 days. 
 
I have recently dealt with a property owner that sold his royalty rights to the highest bidder.  His property had three turbines and he sold his remaining rights to an investment firm that offered $73,000 per turbine (a total of $219,000).

Now lets strategize!  Why should one want to sell their royalty rights?  Because...business management decisions always boil down to risk verses reward, which are as follows:

·       (REWARD) Reinvestment Option:  Cash out and buy  more land tax-free using a 1031 like kind exchange.  Invest in  additional real estate, stock options, or farm equipment to avoid paying capital gains tax (as applicable).
 
·       (REWARD) Selling the Farm: Cash out and collect all royalty rights upfront before selling off the farm, land and other assets.

·       (REWARD) Increase Royalty Rights:  Increase fair market value by putting royalty rights out for bid to multiple buyers. 
 
·       (RISK) Bankruptcy:  Flower Ridge Wind Farm (Benton Co., IN) is currently suing Duke Energy over a contractual dispute for trying to back out of buying its power.

·       (RISK) Life Expectancy:  Wind farm agreements pay out over the long term (20 to 60 plus years) which usually out live the landowner.

·       (RISK) Market Liquidity:  The Consumer Price Index (CPI) that is written into the wind farm land lease doesn’t adequately increase with actual inflation over time. 

·       (RISK) Weak US Dollar:  Our government is broke, tax rates will increase and the dollar will be worth less over time.

·       (RISK) Loss of Income:  Tornadoes can wipe out turbines which may not be rebuilt; no more royalty checks.

EHS Energy is a management firm which specializes in helping landowners deal with the full impact of wind energy projects related to project development, land lease agreements and financial issues.

If you’d like more information, please contact EHS Energy at 260-582-9046 or email (Rodeagleson@gmail.com.).

This Blogsite (traffic) averages 1,500 hits per month as more and more investors are searching for wind royalty buyout deals.  These firms are enthusiastically looking for sellers.

 

Saturday, October 5, 2013

 
Capitalize on the value of your wind turbine lease.
 
A new industry trend is that there are companies offering wind lease buyouts.
  
Selling wind leases to Third Parties offering lump sum payment.
 
Why Landowners Sell Their Wind Turbine Lease?
                   
By converting your lease to a lump sum payment you maintain ownership and the right to sell your property at any time but also eliminate the risk that your lease may be cancelled or your rent decreased due to any number of factors.
 
Freedom of investment and elimination of day-to-day site management hassles are also major benefits of converting your lease into a lump sum. A transaction can also create an opportunity for favorable tax treatment and quick cash. 
 
Normal exchange offer for a wind lease buyout include the following:
  • Lump sum payment is paid 100% in cash within usually 30 days.
  • All legal and closing costs are paid by the buyer.

To entertain an offer the seller must provide:
  • Copy of lease
  • History of lease payments
This is what a landowner could do prior to selling their land.  Sell the value of the leases first then the land and other assets.
 
If this interests you, contact R Eagleson at 260-582-9046 or email: Rodeagleson@gmail.com.
 
 

Thursday, September 6, 2012

Find out how much wind energy companies make in your area.

See sample pilot study for Indiana and Michigan, as a wind resource for electric power.

Wind Resource Studies can show how much wind power is produced and at what operational efficiency; and how much revenue is generated quarterly and annually; and what price utility companies are paying for wind power in your area.  Wind studies like this can be performed anywhere in the U.S.

Email rodeagleson@gmail.com and request pdf wind study file document or click on
Wind Resource Marketing Utility Co. PDF .


Tuesday, March 13, 2012

Major Wind Power Development and Obstruction Issues

Wind companies wasted no time in securing land acquisitions near existing power transmission sources with ample grid capacity. However, the lack of major transmission line access is causing a back log for other “Wind Energy” projects waiting in the wings. Another drawback of rapid acquisitions is eminent domain consequences. For example, in Michigan’s thumb area, there is currently an uproar as viable farm land is being taken by the state through the use of eminent domain to provide the wind companies with access to major grid lines.

Added renewable energy development for future wind projects is solely dependent on utility right-of way easements for simple power transportation to retail markets. These issues are just the beginning of big problems that spell trouble for landowner’s because many planned projects awaiting consent need appropriate infrastructure to attract investment capital.

Market analysts’ project that over 17,000 miles of additional heavy duty power lines are needed throughout the Midwest region to build future wind projects. This interstate-like superhighway system for portable power commerce is needed so that electrical power may supply other areas unable to meet their own peak energy demand.

MISO, the electric grid operator for the Midwest, is responsible for maintaining our current system. It is responsible for directing and balancing power load issues, where necessary, in order to meet real-time market supply and demand conditions. However, mismanagement of excessive power supply or not being able to transport it to other regions of the country is a major hit to any energy developer’s pocketbook.

This means that wind turbine farms or high-power line structures are very important to the developer for economic reasons. Conversely, the placement of turbines or high-powered electric line structures can quickly become a major obstruction or payment issue to the landowner.

Most of the time landowners are kept in the dark as to where the structures will be placed on their property. Initial site layout maps always seem to come after the property owner sign the contract which, of course, is always subject to change unless circumvented prior to signing with adequate legal review.

Therefore, knowing the exact placement of coordinates and relative structural information given to the landowner may provide a temporary advantage. Especially if the landowner finds out through appropriate government agencies that no turbines or structures were ever intended to be placed on their farmland. This can quickly change the dynamics for lease signing opportunities.

Wind developers are required by the Federal Aviation Administration (FFA) to submit a site layout plan for final review. FAA regulatory obstruction rules require a minimum of 8 to 12 month lead-time before the agency may grant final approval for development. This official information can be used to map out and pinpoint the exact geographic coordinates for each turbine or structure many months before construction commences. All recorded coordinates are accurate to within the nearest second or hundredths of a second and changing any initial site locations would require re-approval.

FAA site layout plans are the quickest and easiest way to gain access to knowing the exact coordinates of a proposed wind turbine or high-powered line structure location. Landowners must understand that hosting these structures can impact farming operations for a long time to come and can actually be somewhat cumbersome to farming practices. Consider your options carefully! These obstructions may also cause additional problems related to personal safety and landscape views relative to quite enjoyment of your property.

Mr. Jeff Stephens, Attorney, and Mr. Rod Eagleson, Wind Energy Advisor, co-authored this article and represent EHS Energy located at 1413 Garden St., Kendallville, IN. EHS Energy can be reached at 260-582-9046 or email rodeagleson@gmail.com for additional comment.

Tuesday, July 19, 2011

Eminent Domain, Landownership and Transmission Line Structures

As wind energy businesses are still knocking on doors to pursue potential wind farm investment opportunities, the next knock on your door might be from a company trying to obtain a utility easement for wind power transmission lines and structures.

Future wind farm projects, located in the north and south central region of the U.S., need to link up to the national electric grid in order to supply wind power to major energy markets east of the Mississippi River.

As wind power corridors from western states lobby for transmission line projects, a National Electric Grid Expansion Plan is starting to unfold for the eastern U.S.

It is projected that over 17,000 to 22,000 miles of newly built transmission lines will cross the eastern half of the country within the next 3 to 5 years.

As we speak, regional planners are mapping out the routes on where to run these large power lines (at the cost of over one million dollars per mile to install).

However, the problems associated with these types of utility easements (rights-of-way) crossing private land for public purpose are bringing to light the battle over land rights verses eminent domain.

Texas is a prime example - as major area transmission projects for new wind are being planned to carry the electricity to the marketplace. A total of 2,334 miles of transmission lines, totaling 56,581 acres of land, are needed to carry an additional 18,456 Megawatts of wind power across parts of the state.

Whether you are for or against utility easements, you need to know how to negotiate a deal or how to try to legally fight it in court.

The goal of a company utility agent is to go out and capture the right to use land for the placement of high-powered electrical energy structures and/or lines.

Agents will try to negotiate a simple lease agreement by initially offering some type of payment for land use that is normally priced under fair market value.

If that doesn’t work, the company will exercise their right to pursue eminent domain actions through the condemnation of your property as part of the legal process.

There are a lot of questions about proposed utility easement rights-of-way for public purposes.

Far too many landowners tend focus on the amount of the payment and not the property rights being taken for that payment.

Inevitably, existing wind farm leases & proposed utility easement conflicts are going to cause huge legal issues.

Who will get the transmission line royalty payments if the project crosses leased land under the authority of the wind developer - the property owner or the developer?

Wednesday, September 22, 2010

The Wind Energy Developer Question

In today’s U.S. wind energy market, business models and work practices are changing daily as many wind developers (big and small) are in a scurry to buy up as many wind farm land leases as possible for future expansion. These developers like to lease land in continuous 10,000 to 40,000 acre plots.

This is due in part to the world’s interest in the North American continent. Many major Wind Company’s know that Canada and the U.S. have the greatest capacity for generating wind power as compare to any other part of the world. We are known as the Saudi Arabia for wind power potential. We are, afterall, part of “Tornado Ally.”

In the political arena, the recent push for renewable energy polices in America have lead to the current economic boom for the wind industry. This has also lead to the onslaught of large overseas energy companies entering our wind market. They are eager to develop wind farms for monetary gain with the intent of also capturing the generous federal and state subsidies that make wind energy farms very profitable.

Wind farm development is solely dependant upon the issuance of government assistant programs such as production tax credits (PTCs) and the federal stimulus monies (located in the 2008 Resource and Recovery Act) for wind energy projects. Without these programs, annual wind energy growth decreases by 70% to 90% as profitability levels and the return-on-investment (ROI) basically become flat-lined.

Most commercial-scale wind projects need large capital investment and the right business environment to make it happen. The big European players (like EON Climate and Renewables, Gamesa, Siemens, TradeWind, and Iberdorla Renewables) are here in the U.S. for wind farm build out and massive investment opportunities.

Therefore, the American landowners must be keenly aware of the difference between a top wind power developer (like an Iberdorla, who has 6 billion dollars to spend in the US on wind energy projects) verses a small pioneer developer that doesn’t have the appropriate resources to develop a wind farm project.

For a successful wind project, a landowner may have to avoid the smaller domestic wind players since they constantly struggle to compete against the big companies and lack the practical experience, financial abilities and human resources necessary to develop a wind farm.

Know who you are dealing with before signing a wind energy deal. Favor the companies that have a good track record for wind farm development, key personnel and financial abilities. A missed step between a large or small wind company can lead to the loss of land rights and future development opportunities.

Mr. Jeffery J Stephens is an Attorney and Wind Energy Advisor for EHS Energy located at 1413 Garden St., Kendallville, IN 46755. EHS Energy can be reached at 260-582-9046 or re109@aol.com for additional comment.