In Australia, the wind industry is designed to be the beneficiary of $3billion a year in subsidies, paid for by a Federal Tax on all power consumers. Here’s some of what it does with that money.
Wind funds used to buy neighbours’ silence
29 March 2016
Wind farm developers are offering tens of thousands of dollars in one-off and annual payments to neighbouring properties in a new bid to silence objectors and help break the funding drought for renewable energy investments.
Developers claim the offers are an attempt to combat jealousy between neighbours over personal cash benefits but affected residents claim it is an offer to “share and shut up”.
Landowners who accept the lengthy contracts must agree to allow the wind farm projects to exceed their permit conditions on noise levels, shadow flicker and other potential impacts.
Neighbours must give up their rights to make formal objections to wind farm company planning applications and agree not to talk to the media about the contracts without the written permission of the wind-farm company.
WestWind has confirmed it is offering “neighbour agreements” to residents near its Moorabool Wind Farm in Victoria. The company denies the contracts are an attempt to gag complaints.
But landowners who have been offered upfront payments of $25,000 and $8,000 a year say they have been told to keep the existence of the contract and its details secret.
Sue Dean said she had been given to the end of this month to sign an agreement with WestWind, but had decided to blow the whistle instead.
“No amount of money would make me want to sign that agreement,” she said. “That agreement is like stealing your property from under your nose.”
Ms Dean moved into her double-glazed property with its own renewable energy system about nine years ago. But she now wants to leave the property, half-way between Ballarat and Bacchus Marsh, because of the wind farm development that will put a turbine within 1km of her house.
If a property owner signs a neighbourhood agreement they will not be able to sell their property unless the purchaser also agrees to accept the conditions.
“You are signing away all of your rights,” Ms Dean said. “If you sign this agreement you will not be able to complain at all about them exceeding any limits, nothing under the Health Act, the Planning Act, you can’t write objection letters.
“You are signing away an awful lot of rights and it allows them to exceed every permit condition that they have.”
WestWind managing director Tobi Geiger said the company was frustrated by the level of objections to its $600 million project, which is expected to generate more than 843,588 MWh of electricity a year.
“They treat us like we are proposing a nuclear power station in their back yard,” Mr Geiger said. He said the agreements were seen as a way of overcoming perceived jealousy between landowners who received a direct benefit from turbines and those who did not.
“We have been criticised as an industry and a company about how we spread the benefits of our projects,” Mr Geiger said. “We have always had a community fund that spent money in the community, but immediate neighbours have complained that is not enough. Often they will not see the benefit because they are not active community members.”
Mr Geiger said the amount of money offered to neighbours would depend on how close they were to the wind farm and the amount of disruption they could expect. Offers are expected to be made to residents up to 2km from the wind turbines.
WestWind makes the wild claim that its planned project “is expected to generate more than 843,588 MWh of electricity a year”. The question is when? Every other day? In the middle of the night, when there’s no market for it? When, precisely?
Whatever the nominated capacity is, there will need to be 100% of that capacity installed somewhere as dispatchable power: ie coal, gas or hydro. With total and totally unpredictable collapses in wind power output, coal and gas is constantly burnt to keep spinning (and/or thermal) reserve available to keep the grid from collapsing whenever the wind stops blowing.
WestWind’s Tobi Geiger sneeringly asserts that it’s not as if they were proposing a nuclear power plant.
Tobi might like to do a little background work before he starts making comparisons between a Medieval power source abandoned Centuries ago, for obvious reasons (see above); and a safe, secure, reliable and affordable power source that provides the French with more than 75% of their power; and has some 436 reactors humming away around the world, with dozens more under construction in China and India.
As for the risk to life and limb, the wind industry has been flapping about for not much more than 20 years (producing a trickle of unreliable power, even today) and has killed more than 160 people; nuclear power has been a serious contender for over 50 years and (in a single accident at Chernobyl) killed 56, most of whom were fire or rescue workers (see our post here). There has never been a death recorded in relation to any civil nuclear plant, ever: Chernobyl was a Soviet Military installation.
So, if you compare the volume of power reliably supplied by nuclear plants (they don’t need any back-up) with the piddling, erratic and heavily subsidised rubbish produced at the whim of the Wind Gods. And then calculate the number of actual fatalities per GWh delivered, you’ll find that wind power equates rather favourably with ‘Christian Day’ at the Roman Coliseum.
Which leaves a burning paradox: if 50m, 10 tonne blades can be thrown hundreds of metres (or parts thereof up to a mile – 1.6km – see our post here), then why do nuclear plants that present no threat to life nearby have to jump through regulatory hoops, but wind farm operators get to write their own ‘rules’ and worse still, to contract out of them in the manner described above.
It’s an observation well-made by Rosalind in the Comments to Graham’s article:
Having dealt with a wind farm developer who descended on our neighbourhood, I would prefer a nuclear power station built next door. At least it would be providing reliable, continuous power generation unlike wind energy which will only produce electricity when the wind blows at the right speed. And given that the nuclear industry would be under the most intense scrutiny, unlike WestWind (and every other industrial wind installation) they would not need to offer money to neighbours so they can flout the conditions of their license.
The activities of WestWind blow the lid on the untruths told by the wind industry. They deny that their turbines are noisy, cause illness, flickering and a blight on the neighbourhood. Now here we have WestWind trying to buy off the neighbours so they won’t complain about these things. If they didn’t exist, why the need to buy silence?
Mr Geiger’s asinine statement that the neighbours complaining are not active in the community must be challenged. When an industrial wind developer goes into a neighbourhood they set out to divide the community. It is no accident that it ends up as neighbour vs neighbour. It is a strategy that the wind industry deploys to silence opposition. It happens EVERYWHERE they operate. If it is true that opponents don’t participate in community events it is because they are fed up with fighting with their neighbours and just want to be left alone. It happened here and the community has never recovered. It is incredibly stressful. Geiger says that the neighbours are suffering from “perceived jealousy” when what is going on is actual inequity. And if Geiger is frustrated by the number of complaints, tough luck. He is making a fortune by dividing a rural community that don’t want his wretched wind turbines in their neighbourhood.
When Tobi Geiger talks about “perceived jealousy” as the cause of WestWind’s ‘troubles’, he’s tapping into the ol’ chestnut about the only people who complain about incessant turbine generated low-frequency noise and infrasound are those who aren’t getting paid. Again, Tobi should get out more: starting with the evidence given to the Federal Senate by Clive and Trina Gare.
Clive and Trina Gare are cattle graziers with their home property situated between Hallett and Jamestown.
Since October 2010, the Gares have played host to 19, 2.1MW Suzlon s88 turbines, which sit on a range of hills to the West of their stately homestead. Under their contract with AGL they receive around $200,000 a year; and have pocketed over $1 million since the deal began.
On 10 June 2015, the Gares gave evidence to the Senate Inquiry into the great wind power fraud during its Adelaide hearing: [Hansard from the hearing is available here as HTML and here as a PDF (the Gare’s evidence commencing at p63)].
That evidence completely contradicts the wind industry lie that turbine hosts never, ever complain; a piece of propaganda cooked up by its media manipulators – including a former tobacco advertising guru – who – like Tobi Geiger above – run the story that it’s only “jealous” wind farm neighbours who complain about wind turbine noise, “jealous” because they’re not getting paid.
The Gares pocket $200,000 a year for the ‘pleasure’ of hosting 19 of these things; and, yet, make it very clear that it was the worst decision of their lives.
In their evidence they describe the noise from turbines as “unbearable”; requiring earplugs and the noise from the radio to help them get to sleep at night; and the situation when the turbines first started operating in October 2010 as “Crap, to put it honestly” – evidence which is entirely consistent with the types of complaints made routinely by wind farm neighbours who don’t get paid, in Australia and around the world; and as detailed in the examples below.
The Gare’s evidence is also entirely consistent with the experience of David and Alida Mortimer, also paid to host turbines for Infigen at Lake Bonney, near Millicent in SA’s South-East (see our post here).
Despite AGL spending tens of thousands on noise “mitigation” measures – double glazing, sound deadening insulation and the like, the noise from turbines continues to ruin their ability to sleep in their own home, as Trina Gare put it:
No, they were waking me up on the weekend. You wake up to the thumping. This is with all the soundproofing in the house. As I said, I sleep with the radio on every night. If they are really cranked up I have to turn the volume up, so I will probably just go slowly deaf.
In her evidence Trina Gare stated, in the same terms as her husband Clive, that:
In my opinion, towers should not be any closer than five kilometres to a dwelling. If we had to buy another property, it would not be within a 20-kilometre distance to a wind farm. I think that says it all.
For more on the Gare’s experience, see our post here.
Not much room for “jealousy” there, “perceived” or otherwise: the Gares have collected over $1 million in licence fees from AGL since their nightmare began.
Now, to the gag contracts themselves. They’re a standard form and provide for the same result: you the neighbour are paid around $5-8,000 per year in exchange for which you relinquish every statutory and common law right you possess (including the ability to sue for noise nuisance) and are bound to never, ever talk about the agreement, or your eternal self-inflicted suffering.
At a distance of 1,000m to 2,000m from 3MW turbines, your home will be practically uninhabitable (and, therefore, worthless), outside that distance your home will still be uncomfortable and you’ll still face long-term sleep deprivation: high levels of low-frequency noise and infrasound have been measured inside homes out to 8.7km from 3MW Vestas V90s at Waterloo in SA (see our post here). The Gares, who would know, wouldn’t buy a house within 20km of a wind farm.
An example of a developer’s gag contract is available here: Wind Farm BS Deed_DI_opt
What follows is a detailed dissection of the example linked above and just what the so-called “Good Neighbour” agreements mean for the people stupid enough to enter one.
Wind farm “benefit sharing” contracts are disastrous traps for anyone foolish enough to sign up. Once in you can’t get out and you basically sign away your rights for an indefinite period, making your property less saleable, exposing yourself to legal claims from the wind farm, for revenue that may never come.
If you are offered a “benefit sharing contract” or “neighbour deed” by any wind farm, DO NOT SIGN ANYTHING BEFORE YOU CONSULT WITH A COMPETENT LEGAL ADVISOR and have him or her explain why no-one in their right mind would ever sign such an agreement.
Here are some points you should raise with your lawyer to confirm the above.
EPYC has refused to provide the Jupiter Community Consultative Committee with a copy of its draft “benefit sharing (BS) contract” or “neighbour deed”. Thus we do not know the exact content. However, we have a draft wind farm “neighbour deed” provided by someone to a resident in this locality. The following comments relate specifically to that document, for Wind Farm X.
Anyone receiving a “benefit sharing contract” or “neighbour deed” for Jupiter should compare it with the attached deed for Wind Farm X and determine how many of the contract pitfalls for Wind Farm X apply also with the document for Jupiter.
You should also seek independent legal advice. Showing them a copy of the comments here may help the advisor and you with a careful review of the risks involved in any contract as a neighbour of Jupiter.
What do I sign away?
Basically all your rights to protect yourself and your family, or to make any claim for harm to yourself and your family. And you sign away those rights for anyone who might buy your property in future (which of course will make it harder to sell your property).
You sign away the right to object to:
- the construction and operation of the wind farm [4.1(b)(1)]
- any impact from the wind farm, be it noise, visual impact, or anything else [4.1(b)(2)]
You sign away the right to bring legal proceedings to:
- enforce any conditions of the planning approvals given by the government [4.1(c)(1)]
- make any legal claims against the wind farm or its associates in relation to impact on you from construction or operation of the wind farm [4.1(c)(2)]
- make any complaint to any government agency in relation to impact on you from construction or operation of the wind farm [4.1(c)(3)]
You waive any right you might otherwise have under planning consent conditions to require the company or its associates to:
- acquire some or all of your property, under planning conditions [4.3(a)(1) and 4.3(b)(1)]
- provide any acoustic treatment to reduce noise in your dwelling [4.3(a)(2) and 4.3(b)(2)]
- provide any landscaping to minimize visual impact [4.3(a)(3) and 4.3(b)(3)]
You release the company and its associates from all claims related to:
- construction and operation of the wind farm [4.4(a)(A)]
- any impact of the wind farm on this property or any other land you own whether from noise, visual impact, or anything else [4.4(a)(B)]
- any breach of planning conditions for the wind farm [4.4(a)(C)]
The only apparent protection is you may have some right of action if the company or its associates create noise levels which exceed “the WHO Guidelines”. In practice this provides you no protection at all, as is discussed later.
Note that you sign away the ability to claim for any effect on you or your family, whether they are effects known now or ones that may be discovered in future, and even if after discovery the wind farm goes on doing whatever is harming you.
The National Health and Medical Research Committee, and many other bodies around the world, are investigating adverse health effects due to both audible sound and infrasound (which you normally can’t hear). There are certainly many people living close to wind farms in Australia and around the world who claim to be suffering from noise disturbance, sleep deprivation, and serious health effects which disappear when they travel away from the wind farm.
There are also farmers who have reported severe impacts on stock, including high mortality rates.
How will you feel if those investigations provide conclusive evidence of harm, when you have signed an agreement preventing you from ever taking any legal action against the wind farm to protect yourself and your family?
Spurious Use of WHO Noise Guidelines
The contract claims that the Company must comply with any noise limits in the Planning Approval and the Environment Protection License (EPL) which apply to any dwelling located on the Property [3.1]. Sounds fair doesn’t it? However, the sneaky details in the contract prevent you from taking legal action or complaining to the government if the developer doesn’t abide by those limits.
The first thing to notice about the noise restriction on the wind farm in this contract is that, so far as any action you can take, it is specified in terms of 1999 WHO guidelines. Since the wind farm is seeking approval under NSW guidelines and NSW noise conditions, wouldn’t you expect all noise constraints in this contract with neighbours to require noise limited by the NSW conditions?
In fact, the NSW noise conditions introduced as recently as 2011 are much more stringent and well defined than the WHO guidelines of 1999. In addition, the WHO guidelines are general, rather than specific to wind farms. Consequently they do not deal with aspects of wind farm noise that have been found to be particularly important.
These include aspects like tonality and amplitude modulation (what the NSW Wind Farm Guidelines refer to as ‘swish’ or ‘thump’ heard from wind turbines) and for which the NSW Wind Farm Guidelines prescribe a penalty.
Perhaps more importantly, the WHO guidelines do not refer to infrasound, which is emitted by all wind farms and which generally cannot be heard but evidence indicates can cause headaches, very uncomfortable sensations and harm to health.
There is another trick hidden in the contract’s reference to complying with consent conditions. It is common for such consent conditions to explicitly exclude limitations on noise experienced by hosts or other associated properties.
The second thing is how would you know if the noise you are hearing from a wind farm exceeds WHO guidelines (leaving aside the fact that those guidelines are ambiguous)? There is no simple measuring device you can use to determine it. The process of measuring wind farm noise is quite complex and expensive. Departmental and legal determinations typically require the use of benchmark comparison data accumulated before the wind farm started operating, which is data you will not have. So are you actually going to hire an acoustician yourself to conduct this expensive process?
You might think you can get a government agency to determine whether noise exceeding the WHO guidelines is occurring. Not likely. Government agencies rarely, if ever, actually do anything about noise complaints from people who have not signed agreements such as this, so the chance of getting them to act for someone who has done so is non-existent.
And in any case you face “Catch 22”. The contract forbids you to complain to a government agency unless your dwelling is experiencing noise that exceeds those vague WHO guidelines, but without action by government agencies, which is itself unlikely, you almost certainly will not be in a position to prove an exceedance – so just by lodging the complaint you would be in breach of the contract.
So the one “protection” introduced to give a pretence of reasonableness is actually a sham. It uses guidelines that are not only far more lax than applied to non-associated properties in NSW wind farm consent conditions, but which do not cover the most harmful aspects of wind farm noise. In addition, it makes it impossible for you to make any complaint to government unless you first spend tens of thousands of dollars on acousticians to analyse your situation, and even then that may be fruitless since both those acousticians and the government will lack the background reference data controlled by the wind farm operator.
How does it affect my mortgage and sale of my property?
If you have a mortgage, the contract requires you to get the mortgagee’s agreement to the property being encumbered by the contract and you must warrant this agreement has been obtained [6.2(a)].
The same requirement applies if you subsequently take out a mortgage on the property [6.2(b)].
If you fail to get such agreement from a mortgagee, and the wind farm becomes aware, then [6.3]:
- The wind farm will stop making annual payments to you; and
- You will be contractually liable for all costs the wind farm may consequently incur [For instance, were a mortgagee to take action that caused part of the wind farm to be temporarily shut down, those costs could be hundreds of thousands of dollars.]
Sale of property
If you wish to sell your property, you must notify the wind farm and you must get the buyer of your property to sign a deed similar to the one you signed. Think about what that means. You or your agent find a prospective buyer and then you tell them:
- They will need to sign a very detailed contract absolving the wind farm of any harm to them;
- They really need to go and pay a solicitor to provide them with advice on this contract before going any further;
- If they are seeking a loan to buy the property, they will also need to get the agreement of their prospective lender to the contract with the wind farm;
- The bank may reject that idea outright or, if not, will almost certainly require them to pay the bank’s costs in determining whether that is acceptable to the bank.
All of this is additional to the potential buyer’s normal costs and process in buying a property and inevitably will extend the time required for them to get certainty about buying your property. They will have to be spending money on legal and professional advice, and potentially on bank costs, during a period where they do not know whether someone else will buy the property in the meantime or their bank will agree.
How many prospective buyers do you imagine will actually be prepared to go through that process and risk unless you are offering a really large discount on what otherwise would be the value of the property? Aside from the costs, delay and additional uncertainty for the buyer, how many buyers do you think would be prepared to sign up for these conditions?
The likelihood is that your property will simply become unsaleable at anything other than a large loss.
What do I get and how much?
You receive an initial payment and, if the wind farm is built and starts commercial operation, an annual payment, which ceases when the wind farm stops commercial operation, even if the wind turbines remain for many years after.
The initial payment
There is a small initial payment, typically something like $2,000, which the contract refers to as “both a sign-on-fee and a contribution towards expenses including any legal fees, costs and disbursements” [3.3(b)].
Note that reference to a “sign-on-fee”. This is actually the primary purpose of the initial payment. It is to lock you into the contract because you have taken the developer’s money.
So far as legal expenses are concerned, how likely is $2,000 to cover them, particularly if your lawyer rightly says the contract is totally weighted to the developer and not in your interests, and then suggests amendments which the developer’s lawyers will dispute? How much are you going to pay for legal time trying to amend the contract, which the developer will be resisting?
But your legal fees may not end there. If you have a mortgage, you are obligated to get the mortgagee’s agreement to the contract. The contract itself says so [6.2] but that requirement would apply in any case, since the contract places a restriction on the property which changes its value and the mortgagee has a right to prevent that.
Even if the mortgagee is ultimately willing for this contract to be enacted, it is going to cost them time and money to understand and to get their own legal and professional advice. They are not going to absorb that cost. You will have to reimburse them.
Even if the mortgagee is willing to approve the contract over the property, they may want changes to your mortgage that protect them. This might be additional collateral that you pledge (e.g. a charge over another property), or increased periodic fees, or an increase in the interest payable.
If you are going to protect yourself, your expenses do not end there. The contract requires you to certify that you have informed yourself about all potential impacts on you from the wind farm [4.1(a)(3)] and that you are satisfied those impacts will not adversely affect your use and the amenity of your property [4.1(a)(4)].
Unless you happen to be an expert on wind farms, any legal advisor should advise you to obtain professional advice about the potential impact of the wind farm. If they don’t do so, they would be exposing themselves to a later claim of negligence. You are not going to get that professional advice for free. In fact if they are advising you in knowledge of this contract, they will be very careful to do a thorough job and you will have to pay for it.
The annual fee
You get paid an annual fee but only while the wind farm is operating, which may be a long time away.
Typically that fee is some thousands of dollars per annum, adjusted for CPI increases. However, there is a trick with those CPI increases. They don’t actually start until after you have received the first payment [3.4(a)]. So if it takes, say, 10 years for the wind farm to be commissioned, you will not receive the first annual payment until then, and thereafter that amount will be increased by the CPI.
So if you signed up imagining you were going to start to receive payment in a few years, in reality your first payment may be a decade or more in the future, at which time, allowing for inflation, it would be worth about 70% of the current value and perhaps less. The CPI adjustment would keep it at that level but not at the level you thought you had agreed to.
If the idea of a delay of ten years or more seems surprising, you should be aware there are many approved yet unbuilt wind farm projects in Australia. It usually takes a few years from the start of building a wind farm until it is actually commissioned and operating.
To take a couple of location projects, Capital 2 wind farm, near Bungendore, was approved in November 2011. It has yet to start construction. So it will be at least 6 and a half years from approval to commissioning, even if construction were now imminent. In addition, it took a year between public exhibition of the EIS for that wind farm and approval (and that time is getting longer as more well researched objections are lodged). So Capital 2 will have at least 7 and a half years between EIS exhibition (which has yet to occur for Jupiter) and commissioning.
Crookwell 2 was approved in June 2005. It has yet to start construction. So it is coming up on 11 years since approval, and allowing two years for construction, that project will have taken, at the very least, 13 years between approval and commissioning. It may turn out to be even more than that.
On the basis of past experience, it would be surprising if you started to receive annual fees in less than 5 years from signing the contract, and not at all surprising if it takes more than 10 years before payment starts.
When does it start and end?
The contract comes into force as soon as you and the developer sign it. Aside from the small initial payment, you then receive no other payment until the wind farm is actually operating.
The contract ends when the developer tells you the wind farm has been decommissioned. However, payments to you stop when the developer tells you it has started decommissioning. So there will be a period of time, which may be years, during which you are getting no income but you will be getting visual and other impact from the wind farm.
The important term “decommissioning” is actually not defined in the contract. So the developer could interpret it as starting at the point at which they take the first wind turbine out of service, even if others are still operating and producing income for them. Thus you could be living alongside an operating wind farm but getting no further income to compensate you for its impact.
Or they might interpret the start of decommissioning as being when all the turbines are turned off, even though the turbines may be left in place for many years.
The State Government claims wind farm operators are responsible for decommissioning the wind farm, by which the Government means removing the turbines. However, the State Government has also stated it has no power to cause wind farm operators to set aside the money to do this. Therefore, if the company is broke when the turbines are turned off, which is highly likely, decommissioning could potentially never happen.
In that case, aside from the turbines left looming over your property, what would that mean for whoever then owns your property. They would be bound by a contract which prevents them taking legal action against the prior owners of the wind farm or their associates, with no clear way to get out of that contract which hasn’t ended because the wind farm has not been decommissioned.
What happens if they don’t pay when required to?
If the wind farm operator fails to make an annual payment, you appear to have no option except to sue. Since the contract would still continue in force, you would appear to be still bound by its provisions about not complaining or suing over any impact the wind farm has on you.
How much might you be willing to spend in legal fees to get annual payments reinstated, assuming of course that the company is still solvent at the time.
Even if failure to pay somehow caused the contract to lapse, it is then too late. The whole purpose of the contract is to make you an associate of the wind farm [4.1(a)(6)] and therefore, at the time the government is deciding on the application, prevent you from objecting to the wind farm or seeking government imposed consent conditions, such as acquisition rights, that benefit you.
What if the people involved have misled me?
The contract is very clear. You cannot rely on anything the company or its agents have said to you. All that matters are the terms of the contract.
Thus [7.6] says:
This Deed constitutes the entire agreement between the parties with respect to its subject matter. It supersedes all previous agreements between the parties with respect to the matter the subject of this Deed.
And the deed requires you to agree that:
- the construction and operation of the Wind Farm may impact on the Property including, but not limited to, noise and visual impacts [4.1(a)(1)]
- you have informed yourself in relation to the potential impacts of the Wind Farm on your property [4.1(a)(3)]
- you are satisfied that any potential impacts of the Wind Farm will not adversely affect your use and amenity of the property [4.1(a)(4)]
If you sign the contract, you are stating that you have done whatever was necessary to fully inform yourself of all potential impact and you knowingly agree that there will be no adverse effect on you and your property.
Are you actually in a position to claim to know the full potential impact of the wind farm on you, your family, the property, or anyone who may buy the property in future? If not, why would you sign an agreement that then prohibits you from any future claim if in fact you discover there are significant impacts on you?
What happens if the wind farm is not approved, or not built?
That’s a good question for your lawyer. The contract makes no provision for this eventuality. The contract comes into force once you sign it and, under the terms of the contract, ceases only once the developer notifies you that it has completed decommissioning.
So if the project is approved but the developer sits on its hands indefinitely (as has occurred with many other wind farm projects), you are bound by the contract even though you will be receiving no income.
If the wind farm project is rejected by the government’s planning process, it does not necessarily mean that the matter ends and the contract lapses. It is not uncommon for wind farm developers to go away, make some modifications to their proposal and resubmit it. There is not a clean, final, rejection in the process as currently conducted by the NSW Government.
And since the contract imposes no obligations on the developer until the wind farm actually starts operating, the developer has no reason to terminate the contract. For them, it is what is called a free option.
The contract [7.2] prohibits you from disclosing any details of the contract to anyone except a very small group of people (immediate family, insurers, accountants, legal and professional advisers). You are certainly prohibited from disclosing any details to your neighbours.
You are also prohibited from disclosing details to government agencies, however, the company is allowed to share details with government agencies if it suits the company to do so.
Since the contract does not explicitly mention lenders as allowable parties with whom you can disclose details of the contract, it appears that strictly speaking you are prohibited from doing so, even though you are required to get their agreement to you signing the contract.
Do you suppose the gag clause, including preventing you sharing the contract with government agencies, is there to benefit you? Or to benefit the developer?
Who are you contracting with?
It is common for wind farm operators to have a company structure that includes multiple companies. For instance, EPYC Pty Ltd has established a subsidiary company called Jupiter Wind Farm Pty Ltd, for the specific purpose of allowing EPYC to sell the wind farm [stated in EPYC’s 2015 Annual Report to ASIC].
How can you be sure that the company with which you have an agreement is actually going to be the company receiving future income from the wind farm and therefore in a position to pay your annual payment?
The contract [6.4] gives the company the right to assign the benefit of the deed to any person without your consent and, if it does so, you are required to enter into a similar agreement with that other person if they wish, and the company is then absolved of all its obligations to you.
It appears [3.5(d)] you are required to submit a tax invoice to the wind farm company to get your annual payment. This is not an insuperable problem but it is one more hassle and risk for you. If you collect GST you are required to submit advice and make payment to the ATO. Unless you are quite familiar with the matter, you are likely to spend more money on professional advice to ensure you do not fall foul of the ATO, as well as more of your time.
What is my position if I don’t sign?
Consent conditions recommended for wind farms by the NSW Department of Planning & Environment include specific conditions for individual properties which the Department believes will be most affected. Those conditions include:
- Acoustic treatment for dwellings, to reduce noise impact.
- Landscape work to hide turbines.
- Voluntary acquisition rights (for the landowner, where the landowner can, at their discretion, require the developer to buy their property at fair market value without the wind farm, and including transaction costs and payment for disruption, if the wind farm refuses to make a payment the landowner considers acceptable. Importantly, voluntary acquisition rights take effect soon after approval of the wind farm, i.e. long before the wind farm will be built.)
- A right to prevent nominated, nearby, turbines from operating (thus preventing the wind farm from receiving any income from those turbines unless it reaches a financial agreement with the landowners concerned).
The contract requires you to sign away all rights to have such beneficial conditions imposed by the NSW Government.
Wind farm developers naturally attempt to get BS agreements signed with the people they think will get the most expensive (for the wind farm) consent recommendations from the Department. Of course in doing so, they attempt to offer “benefits” much less than the Department will recommend.
So if a developer is offering you a BS agreement, it tells you they believe the Department will impose specific conditions, related to your property, which will be much more expensive for the wind farm.
Aside from the Department’s planning recommendations, if you do not sign a BS agreement, you retain all your common law rights in relation to suing for nuisance and harm. The BS agreement, however, would have you sign those rights away.
Who does the contract protect?
Who does the contract not protect?
YOU AND YOUR FAMILY
The company is well protected:
- For all practical purposes you can neither sue them nor complain to the government about any harm they do to you.
- You become an “associate” so that in the planning process the government will not even consider any possible harm to you.
- You are required to get any future buyer of your property to sign a similar contract and to get your mortgagee to agree to you signing the contract – and if you don’t you are legally liable for damages.
- Aside from the initial payment, the developer will not pay you any compensation until the wind farm is actually operating, many years hence.
- The developer can get out of its payment obligations to you by assigning the benefits of the deed to anyone it wishes, irrespective of their ability to make your payments, and the developer is then absolved of all responsibility to you.
- Any misleading comments or lies the company or its agents have told you in order to get you to sign the contract are irrelevant under the terms of the contract.
- Since there is no actual end date, unless the wind farm is actually built, your property is effectively tied up forever allowing the developer as much time as it wants.
- You are prevented from sharing the contract with other parties such as neighbours, government agencies, or the media, so the iniquitous nature of the developer’s contract is concealed from public view and discussion.
You, your family and your property are not protected at all:
- The developer may breach development consent conditions and you cannot take any action.
- There is no penalty on the developer for causing harm to you or your family.
- Your property will become much less saleable.
- Even if the wind farm is approved, the developer can defer construction as long as it likes and you receive no payment during that period.
- The real value of your payment, after inflation, is not what you signed up for but a value watered down by inflation over however many years it takes to get to the operating stage.
- If you fail to get a future buyer to sign a similar contract, or fail to get your mortgagee to approve your contract, you are personally liable for any costs to the developer.
- The developer can assign the contract to anyone it likes, including your ongoing obligations and the responsibility to make payment, and you have no say in the matter, even if it appears doubtful that new party will be in a position to make your payments.
- Even if the developer or its agents have lied to you about things like noise impact on you and your family, including health risks, or how visible the turbines will be, or the effect on the value of your property, under the contract it makes no difference. You are held to be responsible for determining those impacts and state the effects are acceptable to you.
The contract is structured wholly to the benefit of the developer and to your disadvantage, with hidden costs for you. A developer offering such a contract has absolutely no concern for your welfare. They are simply attempting to exploit you for their own enrichment.
So, if, after all that you’re still keen to sign up, STT strongly suggests you obtain help from a mental health professional.