UNIVERSITY PARK, Pa. -- Don't be too quick to sign off on any deal to lease wind or any other resource on your farm, advises an energy expert in Penn State's College of Agricultural Sciences, who points out that if the deal sounds too good to be true, it probably is.

"If you are contacted by a developer wanting to lease the wind (or any other energy resource) from your farm, don't feel pressured if they tell you 'It's now or never,'" says Dennis Buffington, professor of agricultural engineering. "Of course, you don't want to drag your feet too long, or you may loose an opportunity for an attractive cash stream coming your way each year for the next 15 or 20 years."

Buffington urges farmers to seek qualified legal advice before signing any contract they are offered. "There are numerous issues that they and their legal counsel must understand and they must make sure that certain issues are adequately considered before signing any legal documents," he says.

Buffington contends that farmers should know the answer to each of the following questions:

--Are you as the landowner liable (totally or partially) for any accidents or consequences of the company extracting, using and processing the energy? "Consequences can include such issues as increased vehicular traffic, noise, vibration, water pollution, damage to the ecosystem, impact on wildlife and migratory birds, interference with neighbors' radio and TV signals, vandalism and some rather intangible factors dealing with ambience and scenic vistas," explains Buffington.

--Will you be paid a flat annual fee or will you receive a percentage of the value of the energy sold each year? "If you will receive a flat fee per year," says Buffington, "is there an inflationary factor built into the contract?"

--What is the length of the contract? Under what conditions can you as the landowner terminate the contract? Under what conditions can the developer terminate the contract? Is there a provision for contract renewal?

--What will happen to the energy-leasing contract if/when you sell your farm or transfer it to your heirs?

--How does the proposed infrastructure affect your farm's assessed value, property taxes and resale value?

--How much right-of-way access does the developer require for the original installation of the equipment, for the day-to-day operation of the equipment and for the periodic maintenance and repair of the equipment?

--To what extent will your normal farming operations be impeded by the proposed contract? Will you be sufficiently compensated for any imposed impediments?

--Who is responsible for obtaining and paying for the necessary zoning approvals, permits and impact statements? Who is responsible for the expenses (now and in the future) associated with necessary modifications to meet zoning requirements?

--What happens to the infrastructure at the end of the contract period? Who is responsible for dismantling the infrastructure and returning the land to its original use after the contract expiration?

--What protection do you have if the developer just walks away from the project before contract expiration and declares bankruptcy? What are your likely expenses then?

"These and other issues must be evaluated before signing on the dotted line," says Buffington. "The important message is that farmers should seek qualified legal advice.”

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EDITORS: Contact Dennis Buffington at 814-865-2971 or by e-mail at deb2@psu.edu.

Writer/Editor: Jeff Mulhollem Penn State Ag Sciences News Office 814-863-2719