AEEOK
Meeting
Presentation
Jim Roth
Jim Roth
• Director and Chair of the Phillips Murrah Law Firm’s
Clean Energy Practice Group. As a former
Oklahoma Corporation Commissioner, Jim helps his
energy clients navigate the regulatory and business
environment encompassing new and existing
energy technologies so they can accomplish their
business and policy goals.
• Jim has served as board member of various energy
companies. Presently: TexCom, Inc. (TEXC –
OTCMKTS).
OKLAHOMA
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Oklahoma is a national leader in wind resource potential.
Oklahoma currently generates the 3rd most electricity from wind
energy nationwide. This wind energy translates into savings for
electricity customers. The state lies in the Southwest Power Pool
(SPP) and for a short period this year, wind energy provided more
than 50% of electricity to the grid of the entire SPP – something
many never thought possible. Oklahoma’s investor-owned utilities
predict wind energy will save ratepayers over $2 billion over the
lives of their purchased power agreements with wind energy
companies.
Economic Boost - Developing Oklahoma’s incredible wind
resource will provide additional economic development. Major
players in the wind industry, such as Trinity Structural Towers, are
recognizing the wind potential in Oklahoma and are locating
manufacturing facilities in the state; today there are 7 such
facilities. Expanding wind power will create even more
opportunities for manufacturers and service suppliers down the
supply chain.
Jobs & Economic Benefits
• An investment in wind power is an investment in
jobs, including jobs in operations and maintenance,
construction, manufacturing and many support
sectors. In addition, wind projects produce lease
payments for landowners and increase the tax base
of communities.
• Direct and indirect jobs supported: more than 8,000
• Total capital investment: $10 billion
• Annual land lease payments: $22 million
Wind Projects
Installed wind capacity: 6,645 MW
State rank for installed wind capacity: 3rd
Wind projects online: 41
Current Wind Generation In 2016, wind energy
provided 24.5% of all in-state electricity production
(as compared to 23.8% from coal).
• Equivalent number of homes powered by wind: 1.8
million
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Wind Generation
Potential
• Land based technical wind potential at 80 m hub
height: 390,592 MW
• Land based technical wind potential at 110 m hub
height: 367,984 MW (Source: NREL)
• Environmental Benefits Generating wind power
creates no emissions and uses virtually no water.
• Annual state water consumption savings: 3.7 billion
gallons
Wind Quality
Oklahoma Quality
Wind: Setbacks
• Generally
o Section 160.20 of the Oklahoma Wind Energy Development Act (17 O.S.
sec. 160.11–160.22):
• Prohibits wind turbines from being erected within 1½ nautical miles of
an airport, public school or hospital; and
• Creates a procedural path which permits allegation(s) of alleged
harm to be addressed in District Court.
• In addition to setback requirements, the Oklahoma Wind Energy
Development Act requires notification of potential wind facility
construction be submitted to Corporation Commission, Board of
County Commissioners, and the affected public citizenry prior to
construction (17 O.S. sec. 160.21);
• The Act also outlines decommissioning requirements for wind turbines
(17 O.S. sec. 160.14).
Wind: Setbacks
• Public School
o Pursuant to Section 1-108 of Oklahoma Statutes Title 70 , “[a] school district
is defined as any area or territory comprising a legal entity, whose primary
purpose is that of providing free school education, whose boundary lines
are a matter of public record, and the area of which constitutes a
complete tax unit.”
o According to the Oklahoma State Department of Education there are
1,806 public schools ranging from elementary to high school.
• To verify whether a school is a public school
o Is the general public allowed to attend at no charge to the student(s);
o Is the school facility part of a legal school district; and
o Are both the school and the school district supported by public taxation?
Wind: Setbacks
• Public-Use Airport
o Public-use airport is defined as “a structure or an area of land or water
that is designed and set aside for the landing and taking off of aircraft, is
utilized or to be utilized by and in the interest of the public for the landing
and taking off of aircraft and is identified by the FAA as a public-use
airport. Public-use airport shall include any military airport operated by a
branch of the armed services of the United States government. Public-use
airport shall not include any privately owned airport for private use as
identified by the FAA, or any airport owned by a municipality with a
population exceeding five hundred thousand (500,000) according to the
most recent Federal Decennial Census.” 3 O.S. § 120.2
Wind: Setbacks
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Hospital: the statute (17 O.S. sec. 160.20) uses the general term “hospital.” Hospital is actually defined in
multiple ways in Oklahoma.
o Section 1-701 of Oklahoma Statutes Title 63 defines a hospital as meaning any institution, place,
building or agency, public or private, whether organized for profit or not, devoted primarily to the
maintenance and operation of facilities for the diagnosis, treatment or care of patients admitted
for overnight stay or longer in order to obtain medical care, surgical care, obstetrical care, or
nursing care for illness, disease, injury, infirmity, or deformity. The term "hospital" includes general
medical, surgical hospitals, specialized hospitals, critical access and emergency hospitals, and
birthing centers.
o Section 139.102 of Oklahoma Statutes Title 17 defines hospital as meaning a healthcare entity that
has been granted a license as a hospital by the Oklahoma Department of Health for that
particular location. The Oklahoma Department of Health further defines hospital as meaning “any
institution, place, building, or agency, public or private, whether organized for profit or not,
devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment, or
care of patients admitted for overnight stay or longer in order to obtain medical care, surgical
care, obstetrical care, or nursing care for illness, disease, injury, infirmity, or deformity. All places
where pregnant females are admitted and receive care incident to pregnancy or delivery shall be
considered to be a "hospital" within the meaning of this publication regardless of the number of
patients received or the duration of their stay. The term "hospital" includes general medical surgical
hospitals, specialized hospitals, critical access and emergency hospitals, and birthing centers.”
OAC 310:667-1-2
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Satellite Hospital Facilities
o We use the Oklahoma Department of Health Definition. The Oklahoma Department of Health’s
Medical Facilities Services Division has compiled a list of the Hospitals in Oklahoma, however it is
worth noting that while the list is as extensive as it is long, there is a possibility that one or more of
the entities might have satellite facilities that are not listed. Complicating matters is the fact that
neither the Oklahoma State Department of Health, the American Hospital Association, nor the
Oklahoma Hospital Association maintains a compiled satellite facilities list(s).
Wind: Setbacks
Partial Repeal by SB 593
Wind: Setbacks
• Private-Use Airport
o Now that the statute requiring a setback from private-use airports has
been repealed, the question arises whether setbacks continue for privateuse airports established prior to the repeal. Is the setback protection
grandfathered for preexisting private-use airports?
o The term “private-use airports” encompasses such airports as defined in
Section 157.2 of Title 14 of the Code of Federal Regulations and for which
“a notice to the Federal Aviation Administration (FAA) has been filed
under Section 157.3 of Title 14 of the Code of Federal Regulations prior to
the notification of intent to build a facility with the Corporation
Commission pursuant to subsection A of Section 3 of this act, and . . . an
airport determination has been issued by the FAA with a determination of
no objection or a conditional determination or the airport determination
remains pending [.].14 FR § 157.2 defines Private use as meaning
“available for use by the owner only or by the owner and other persons
authorized by the owner.”
Wind: Real Estate
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What does this mean for Real Estate Law Practitioner?
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Wind Energy can be viewed as involving competing interests of landowners. On one hand, there
are landowners receiving compensation from the placement of wind facilities or turbines on their
property. Conversely, other landowners, whose property is within close proximity of the turbines, do
not get compensation but are arguably impacted by the wind turbine placement. The natural
question is how to balance this interest while respecting the rights of both landowners.
Presently, the Oklahoma Legislature has stopped short of mandating setbacks from residential
structures, however municipalities and counties could impose zoning restrictions, similar to recent
Stillwater drilling restrictions. The Wind Industry has shown a willingness to aggressively fight any
residence-based (or other) legislative bill or municipal or county zoning law.
Recent cases and rulings:
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Landowners in Canadian and Kingfisher counties suit against Apex Clean Energy Inc. Requested
protection from the loss of use and value of landowners’ property. Ultimately the U.S. District Judge
Timothy D. DeGiusti dismissed a claim of anticipatory trespass, but allowed a claim of anticipatory
nuisance to progress against Kingfisher Wind LLC, a unit of Apex Clean Energy Inc. Subsequently,
Judge DeGiusti dismissed the anticipatory nuisance claim as well, saying the alleged harms over
shadow flicker and low-frequency sound presented by the group and its experts was "speculative
at best." He also said aesthetic concerns without any significant evidence of adverse health
effects were not enough to constitute a nuisance.
Laubensteinv. BoDeTower, Case No. 112, 105 (Muskogee Co., October 9, 2015) – Dispute
concerned nuisance claim against Muskogee County cell tower. Petitioner, who owned more
than 100 acres near the tower, claimed the tower was a nuisance. Obvious parallels are drawn
between a cell tower and a wind turbine given their height, flashing lights, etc. In 2016, in
Laubenstein v. Bode Tower LLC, 2016 OK 118 (Dec. 6, 2016), the Supreme Court of Oklahoma
noted that the claim was grounded entirely on the petitioner’s dissatisfaction with the tower’s
appearance (referencing the federally mandated warning lights). The court held that Oklahoma
case law prohibits nuisance claims based entirely on aesthetic concerns.
Solar: Distributive
Generation
• 17 O.S. Section 156, provides in relevant part:
o “No retail electric supplier shall increase rates charged or enforce a
surcharge above that required to recover the full costs necessary to serve
customers who install distributed generation on the customer side of the
meter after the effective date of this act.”
o “No retail electric supplier shall allow customers with distributed
generation installed after the effective date of this act to be subsidized by
customers in the same class of service who do not have distributed
generation.”
o “Higher fixed charge for customers within the same class of service that
have distributed generation installed after the effective date of this act,
as compared to the fixed charges of those customers who do not have
distributed generation, is a means to avoid subsidization between
customers within that class of service and shall be deemed in the public
interest.”
o “Retail electric suppliers shall implement tariffs in compliance with this act
no later than December 31, 2015.”
Solar: Distributive
Generation
• Governor’s Executive Order 2014-07
o On April 21, 2014 Governor Mary Fallin signed Senate Bill 1456 into law.
Pursuant to the Governor’s Executive Order 2014-07, the Commission is
directed to “strictly” comply with Section 156 of Title 17 of the Oklahoma
Statute “in accordance with the goal and intent of the Oklahoma First
Energy Plan and [SB 1456].”
Solar: Comprehensive
Benefits & Costs
• Costs
– Lost retail revenues
– Incremental metering and
billing
– Integration costs
– Incentives
• Benefits
– Energy
– Generating Capacity
– T&D
– Capacity
– Line losses
– Environmental
– Criteria pollutants
– Carbon
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Avoided Renewables (RPS)
Hedging / price mitigation
Reliability / resiliency
Societal
– Employment
– Health benefits
Solar
Solar PV Trends
Real Estate Issues
• For owner installed systems, a home’s value will
often appreciate, especially if the net-metering
system in place if that State allows for a fair value
for the exported power.
• However, in situations where a home-owner is
merely leasing them, there are a number of
incidents around the country where a discount is
suffered upon the sale of the host home. Terms with
the Utility matter.
• If a new homebuyer wants to keep the leased
system, a good credit rating will be needed to take
over the lease and there may be a Lien on the
home.
Questions?
• Jim Roth
Chair, Clean Energy Practice Group
PHILLIPS MURRAH P.C., Director
101 N. Robinson Ave, 13th Floor
OKC, OK 73102
(405) 552-2417 direct
(405) 235-4133 office
[email protected]