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Marci Jacobs/MEDILL

The Lee County Board has approved a special use petition for wind farms to plant an increasing number of wind turbines.

Lee County turbines: financial windfall or just hot air?

by Marci Jacobs
June 14, 2013

Some things are not just gone with the wind.

Like wind turbines.

Lee County, Ill., where the state’s first wind farm broke ground in 2003, is now skewered with over a thousand turbines. Its lolling hills and uninterrupted swathes of farmland are an X-marks-the-spot for wind power companies prowling for gusts and eager to contract with landowners to rent their pastures.

The turbines create an incessant background buzz and a mind-numbing shadow flicker like lights blinking on and off at all hours. It’s a small price to pay for the tax revenue, local income and new jobs wind farms could mean for the county, say the wind companies.

Don’t bet the farm on it, say the locals.

“The wind farm people came to rural America. They knew what they were doing. None of us did,” said Robert Logan who has served as mayor of Franklin Grove, a village of 1,000 in Lee County, for two decades.

Ten years after welcoming their first wind turbine, Lee County residents question whether the future of sustainable wind energy is itself, well, sustainable – and, if not, whether they’ll be left with the cleanup.

“I think they’re pushing them too fast and we’re going to have a lot of obsolete equipment down the road,” said Louis Vaessen, a resident of Sublette, a town of 500 in Lee County. Vaessen has lived in Sublette for over 42 years.

Wind farm companies are heavily subsidized by federal and state grants, without which residents, like Vaessen, fear they would not be profitable.

“I was all for it when they started coming in,” Vaessen said. “But I’m on the fence now.”

On any given day, Vaessen sees a handful of turbines north of town not running, which tells him either the operators can’t afford to make the necessary repairs or simply don’t need to because they are flush with taxpayer-financed subsidies.

This worries both participating landowners and residents.

“The concern is that if the windmill itself or the company operating the windmill is not a profitable entity without government subsidies, if they go bankrupt you could get left with a big windmill on your land that they’re not paying you for and that they’re not going to dismantle,” said Brad Faber, a Chicago-based lawyer whose family operates a farm in Sublette. “If the companies continue to be supported by state or federal grants or a combo, and continue to be kept alive, then great. Nobody’s going to go to war about it.”

Lee and surrounding county ordinances require that wind farm companies have decommissioning plans in place to hedge against such an event. Edison Mission Energy, owner of Big Sky Wind, a wind farm located in Lee and Bureau counties, has a permit that requires a $5 million bond for decommissioning.

Susan Olavarria, the director of communications and government affairs for Edison Mission, explained in an email that this amount “should be enough to cover the cost of decommissioning.”

Colin Mahoney, a spokesman for the Shady Oaks Wind Project in Lee County, similarly responded that, "Shady Oaks has a decommissioning report in place that complies with all regulatory requirements. The report was prepared by an engineer that is licensed in Illinois."

And Vince Green, a project manager for the Green River wind farm proposed for Lee and White Side counties explained that the company is currently finalizing a decommissioning plan that would create an escrow account payable over 15 years to finance take down at approximately $35,000-$45,000 per turbine.

“Decommissioning is an interesting topic for wind farms these days and I think it’s becoming more and more popular. A lot of people point to California and say look at all those turbines that were up there in various places throughout the state and they’ve been left up and nobody’s done anything with them,” Green said. “But we’re probably the only industry in the country or the world that has to put all the money up up-front to decommission a project in 20 years, for a project that’s trying to get off the ground and get up and make money. That’s a pretty hefty cost to put on a project in the first couple years.”

Illinois Wind Watch spokesperson Carolyn Gerwin explains while decommissioning plan requirements afford some level of protection, they tend to be vague and vary across projects and counties.

“The cost of decommissioning is unknown and in some cases far exceeds the amount posted. It’s based on a lot of projections or estimates,” she said, adding that companies have more incentive to take down turbines if they can resell metal parts. “Twenty years from now, no one knows what the value of the scraps will be. It, of course, ages.”

Rick Porter, an attorney who represents area counties and residents opposing wind farm applications, believes the county needs an independent takedown plan in case wind farm companies go under.

“From the residents’ perspective, we want to be sure the county is protected and that neighbors are protected,” he said. “So if this turbine company goes bankrupt and disappears the county will have a fund they will use to remove the turbines.”

Porter says the short-term windfall from rental fees tends to distract participating landowners from longer-term realities.

“I think what happens is that landowners negotiate with a wind turbine company and they get paid each year for having a turbine on their property,” he said. “And because of that, what they forget is that if the company goes under, they’re going to be stuck with a turbine on their property.”

The nightmare is becoming a reality in some parts of the county.

Falmouth, Mass., a town of 30,000 on Cape Cod, drew national attention in April when the fate of two area wind turbines fell to a town vote. Residents blamed the turbines for a litany of health problems, including sleep deprivation, vertigo, nausea and earaches, and pushed for the turbines’ removal.

Though Gov. Deval Patrick and Energy Secretary Rick Sullivan assured Falmouth officials in December that the town would not be left holding the bag for decommissioning costs, Falmouth was granted no financial assistance from the state. In fact, the town is on the hook for $1.9 million in state prepaid Renewable Energy Credits, more than $5 million in debt and federal stimulus funding and the cost of dismantling, which collectively ring up to $14 million.

Residents ultimately voted down authorization to borrow that sum to tear the turbines down. Had they voted in favor, Falmouth would become the first community in the U.S. to remove its turbines.

Back in Lee, board members still see wind farms as a bonanza for the county budget.

In May the Lee County Board voted 12-9 to overturn a Zoning Board of Appeals’ recommendation to deny special use of additional county land for wind farming. The board, in effect, cleared the way for Green River wind farm, a Mainstream Renewable Power Ltd. project, to erect 53 turbines in the county.

“I was shocked when they reverted back on the zoning commission’s report,” Sublette resident Chris Leffelman said. “They’re supposed to vote on the good of the people. It’s not supposed to be about money, ever. But they’re pushing for the tax money off these turbines and sometimes it gets down to the almighty dollar.”

Lee and nearby counties take in over a half million dollars per wind farm from special use application fees and building permits, on top of tax revenue which, for the Green River project. The company plans to put up 53 2-megawatt turbines, and annual real estate taxes could total roughly $1.4 million, said Wendy Ryerson, Lee’s chief county assessment officer.

Marilyn Shippert is one of the nine Lee County board members who voted against the petition. She feels the board overturned the zoning committee’s recommendation simply because the county needs money.

“Primarily I said it was an insult to the zoning committee for all the time they put in to not go with their recommendation,” she said, citing the 27 meetings and more than 4,000 pages of data the zoning committee generated in formulating their recommendation.

“The big thing that would actually benefit the county would be the building permit money. That would go directly to the county. With real estate taxes, a lot of it goes to the school districts. The county does not get that big of share of real estate taxes,” Shippert said.

Application and building permit fees are a one-time expense paid exclusively to Lee County, while annual tax revenue would be distributed across several tax districts -- 65-75 percent going to the grade school/high school consolidated district and the remaining disbursed across Lee County proper, the fire district, junior college district and the six-square-mile township.

Lee County board member Tim Deem believes the potential tax revenue will be a boon for the county, heavily outweighing the costs. He voted in favor of the petition.

“Both sides brought up health, safety and life as issues. But of course what neither side gave the other side is the understanding that a lot of times the things we need for health, life and safety, we have to have funds to be able to do that. For safety we have to be able to pay for police officers, for health we have to fund the health organizations, and the list just goes on,” Deem said. He added that wind farms have brought in more than $7 million to Lee County coffers since 2005.

Logan, who once served on the Lee County Board, still questions the vote. “I’ve been 30 years in government and I do not approve of the manner and method the county has used,” he said, describing a hurried voting process and lack of community input. “I’m not saying it was illegal, but [the Lee County Board] took the unusual step of circumventing the Zoning Board of Appeals.”

The board would typically send a denied petition back to the Zoning Board for reconsideration or refinement, Logan explained.

“The hardest thing for me to accept in all of this is the fogginess, the outright lying,” he said.

It is not just the turbines’ towering physical presence, but wind farm companies’ outside agendas that worry residents.

“You basically sign a contract and you more or less sell that particular acreage to them, and then they can do what they darn well please,” said Sublette landowner Mary Henkel.

What’s more, Mainstream Renewable Power, like other wind farm operators in the area, is foreign-owned yet it still receives federal and state subsidies.

“This one out here,” Leffelman said, pointing to a wind turbine behind his auto-mechanic shop, “a company in Ireland came in and bought it. So how’s that making us self-sufficient in energy when a foreign company owns it?”

European wind energy companies are currently buying U.S. wind farms with fervor, as austerity measures dry up the generous subsidies that were available to Europe’s wind energy sector prior to the debt crisis.

“If you look at Germany and Spain and other places, like England, they’re talking about reducing subsidies. So now these companies are coming over here looking for our money,” spokesperson for Illinois Wind Watch Cynthia Ihrke said. “A lot of them have a base in Chicago so they can say ‘Mainstream out of Chicago.’ But it’s an Irish company, and that’s where the money’s going back to.”

And the contracts’ timeframes mean troubles may be here to stay for a long time.

“These leases are generally 20, 50 or 70 years,” Logan said. “That gives foreign companies lease rights for that whole time. And they usually turn around and sell to another foreign company.”

The personal toll is hard to estimate, residents say. “People who got them aren’t happy with them. Neighbors aren’t happy with them. There’s a father and son who farm together who aren’t talking to each other over them. It’s sad,” Leffelman said.

Still, wind farm projects create local jobs and pump money into the local economy.

“We’re a global society. If a Honda dealership or a Toyota dealership came into Dixon, I can’t imagine there’d be two people who’d be up in arms about that,” Green River project manager Vince Green said.

“We’re paying taxes into Lee County. Neighbors and people hosting turbines are receiving payments. We can’t argue that money wouldn’t be going back to Dublin, but we’re all here working in the U.S. We’re essentially employees and I think everybody in the county is benefiting from these funds.”