Property Rights Foundation of America®

from PRFA's Twelfth Annual National Conference on Private Property Rights
October 18, 2008

Wind Power Meets Zoning

Alan J. Knauf, Esq.
Knauf Shaw LLP, Rochester, New York

Thank you very much, good afternoon. I did have a lengthy speech prepared but I don't have that much time. I'll try to get through my topic fairly quickly. Again, my topic is "Wind Power Meets Zoning." Across New York and across the country in zoning boards, planning boards, and in courts, landowners and developers are fighting town officials, NIMBY's and somewhat hypocritical environmentalists to utilize an abundant natural resource that we really have here in upstate New York, in particular, the wind. I'm going to outline the current status of what's going on with wind power and zoning regulation, particularly here in upstate New York.

Now I'm sure you all know there's a big push in this country for alternative energy. Both presidential candidates favor it. So I think it's something that we're going to see. General Electric in nearby Schenectady is in the process of building nearly 900 1.5 megawatt wind turbines, many in upstate New York. One of these turbines can supply power for 400 homes. And New York State has adopted a policy of encouraging renewable energy, with a goal of 25 percent renewable energy in the state. Typically this is done through wind farms, use of wind turbines, windmill-like structures that are on a large tower. Often twenty to eighty towers, often 300-ft. tall are spread across a community, obviously ideally located in areas of strong wind. Near Lake Ontario, the Finger Lakes, and the Southern Tier mountain areas are prime development sites in this area. In fact, some of those area, like the Southern Tier, also happen to be prime areas for natural gas resources. So if you're a landowner on a hilltop in the Southern Tier you might hit a daily double and get a wind tower and be able to sell your gas rights.

One other need is sufficient electric transmission lines. You really need the infrastructure to be able to handle the power. I'm told that for one of the developments in upstate New York, the transmission lines weren't big enough and the wind power they were making was going for naught at some point this summer. And I've heard that GE and some manufacturers are actually on back order; they can't make the turbines fast enough.

Typically a developer approaches a community, wants to buy easements for windmills, and offers a host community agreement to the town. Also, you may want to have a windmill at your own house. You could have a 50-ft. to 70-ft. tall windmill if you want to be self-sufficient; you could put a windmill at your house and you may have enough power. You could hook up to the grid. New York just passed a new net metering law that somewhat liberalizes your ability to sell power back to the grid, so that you actually may have the power company paying you instead of you paying the power company. That is true across the country; a lot of states have better arrangements with the net metering.

Obviously, there are many advantages. The price of oil as it goes up makes other alternative energy more feasible. However, as we know, there are a lot of subsidies, so I don't think wind is the same as ethanol, but it remains to be seen whether it's really economically feasible on a mass scale. But right now we're moving forward with it. Certainly from a national security standpoint, it makes sense for all of us to be energy independent. And it does have big environmental benefits. There are no emissions to the air or water and it doesn't cause greenhouse gases.

However, across the state you will see environmentalists opposed to windmills because of aesthetics, even though wind power has such huge environmental benefits. It's a big economic development benefit, particularly in some rural areas that don't have a lot of other opportunities, and it's a great use for brownfield properties. I spend a lot of my time working on brownfields. As you know, those are contaminated properties where the EPA and DEC under the laws have said, "You've got to clean up your property," even if there's a very small amount of contamination. You can't get a bank loan, you're strictly liable, and it's difficult to develop. New York State has a new brownfield clean up program, but they've been very stingy allowing people into the program. I actually won the first case to force a site into that program. But windmills are a great application for brownfields. If people are terrorized by relatively small levels of contamination on the ground, well, you can put a windmill or solar power on a site and you don't have to worry so much about kids playing. You've used the land and made a beneficial use. In fact, I'm affiliated with a company called Future Energy and we're trying to put solar and wind on different sites.

Now what are the disadvantages? The opponents' big argument is aesthetics. They say you've ruined the viewshed. As an earlier speaker said, there are viewsheds everywhere. But sometimes people will stand up and say, "You're going to ruin our town by putting these windmills in." And it is true that some of the best locations are at the top of the hill or the top of the ridgeline, and they can be seen a long distance away. One of the court decisions quoted from Don Quixote:

"At this point they came in sight of thirty or forty windmills that were on that plain, and as soon as Don Quixote saw them, he said to his squire, 'Fortune is arranging matters for us better than we could have shaped our desires ourselves. For look there, friend, where thirty or forty or more monstrous giants present themselves, all of whom I mean to engage in battle and slay.'"

Whether you see them as monsters, giants, or a great thing for your area, people have a different viewpoint on the aesthetics. But, frankly, I was kind of skeptical. I thought some of these arguments had some merit. And then I saw a couple of these windmill developments and I thought they looked great, they really looked cool. You're going down 390 south of Rochester, you see the windmills, it just looks so neat. Today, I guess I'm one of the few people who does ride the train, I took the train that left at 5:30 this morning from Rochester and I kind of snoozed and woke up when the sun rose, and I looked out at the Fenner windmill development and it's just beautiful. You see in the distance on the hill, you see windmills. So I really think it's a real positive.

Maybe it doesn't belong in every neighborhood but to me the environmental benefits and the other benefits far outweigh the arguments that we shouldn't have this sort of development, particularly in rural areas.

Some of the other arguments: The birds are gonna die. Well, yeah, but I think that the evidence has been that not many birds are crashing into the windmills. I understand there was a higher number, they were kind of surprised at the number of bats that ran into the windmills and that is a concern. Ice throw. This concern is about whether your windmills are going to be throwing ice off into your neighborhood. Noise. This is another issue that is raised. The fall zone, if the windmill ever falls over in a hurricane. I haven't had any hurricanes in my area, but maybe you have. We almost had one in Long Island, that's a concern. The flicker effect, which I don't put a lot of stock in, but the flicker from the blade with the light shining through it. Wear and tear on the roads, which I think is a little bit of concern as far as whether your municipality makes plans for that to make sure your roads aren't ruined by these giant towers when they're doing the construction project. And then financial responsibility if these companies go the way of some other energy companies and go bankrupt. Or if this technology is outdated, what's going to happen? And, of course, loss of property value. People always throw that out, saying, "You're hurting my property value by using your property."

How these are addressed by zoning? Many communities, many of the rural areas that are favored for wind power, actually don't have zoning. So you'll see that in some of these cases in some rural areas where a windmill company will come in, there may not be existing zoning. Of course, as our previous speaker indicated, once a project comes forward they may hurry up and try to put zoning in effect, or put in regulations, so certainly that's an issue. If a zoning law or a particular wind energy law is proposed, it's got to be consistent with a comprehensive plan. So usually a town can't just enact a law, they've got to go back to their plan and make sure they've got a basis for it. Generally, zoning for aesthetic purposes has been upheld by the courts. There's a model local ordinance and if you look on E-Codes, you can see all kinds of towns with ordinances on this sort of thing. Generally they regulate a "wind energy conversion system," WECS.

One issue I ran into is that you may have an ordinance that permits this but they don't permit test towers because nobody thought about it. Often these developers want to come in with test towers and measure the wind before they actually commit to the real windmills. And it's important that if your community does have an ordinance that they allow for that, or you may find yourself in a quagmire.

Some of the ways of control: Some of these ordinances permit as of right, some allow as accessory use, some require a special permit, some require variances. Often the controls in the ordinance are things like setbacks. New York State ERDA (Energy Research and Development Authority) suggested overlay zones where you pick one area of the community. Height restrictions. Sometimes minimum blade heights are required so if you're walking under the windmill it's at least 30-ft. to 50-ft. above you and you don't trip into it. Fencing, so that kids don't ride their bikes around them. Insurance responsibility, noise limits, avoiding certain environmentally sensitive areas, landscaping.

Usually these ordinances have fairly complex application requirements, requiring the developer to pay all of the legal consultants and engineering consultants for the town, which doesn't create a great incentive for them to be cost-effective. Normally you have to comply with FAA (Federal Aviation Authority) requirements. A lot of these are very similar to the cell tower regulations you've seen. Above 200-ft. or so you may need the lighting. A common tactic is to impose a moratorium while the town gets its act together. And generally these ordinances have been upheld. But in the municipalities where they have granted permits, they have been allowed to move forward.

Often they require an environmental review. One suggestion I have, that I've seen in some of the articles, is a suggestion that maybe there should be state or federal legislation to supersede local ordinances. Because again, everybody says "Not In My Back Yard," but we all know it's good for our society to have alternative energy. So maybe the best thing would be to say that you can't outlaw these things, or somehow have some supersession of local authority so that local officials don't just go along with the people who show up complaining at the town meetings.

The moratorium, you've heard about that, so I won't go into any detail. The Supreme Court in the Tahoe case indicated that yes, you can have moratoria. It's not clear how long. Generally they're for a year, but, again, they have been upheld for many years. In the case of Ecogen v. Town of Italy, which is just south of Rochester near the Finger Lakes area, the town put on a moratorium, kept extending it and Judge Larimer said, in effect, "Well, there's no bright line rule as to how long a moratorium can last. I'm going to let you continue but enough is enough, and you'd better end this moratorium in ninety days and if you're going to pass a law you better pass it." In that project there were about 53 windmills that were proposed, and I think that's one of the projects that has gone forward.

Generally the zoning ordinance will be upheld but you've got to have the zoning ordinance in place. Many years ago, I represented a landowner who wanted to put a 100-ft. windmill on his property. He just thought it was the greatest thing. This is ten years ago, and he was kind of ahead of the curve, and the town wouldn't give him a permit. So he called me and I looked at the law and said, "I don't understand why you can't get a permit. There's nothing in the ordinance about windmills, and there's no height restriction." So I talked to the building inspector and he just said, "Well, just rationally, we don't allow anything higher than 30-ft. in the town." So we went to the zoning board and they upheld the inspector.

Then we went to the court and of course we won, because you can't have an imaginary restriction; it's got to be written at least in the code. And he was allowed to go forward.

Again, typically you will see that a developer comes to a town and proposes a big windmill development and town leaders will rush to try to throw an ordinance in place. As has been said earlier, if you don't have vested rights, you don't have the shovel in the ground, constitutionally you may not be able to say that you're grandfathered.

There is something called the special facts doctrine, and that's where the administrative agency, the town, the building inspector, just doesn't follow the rules, and purposely delays things and doesn't go forward with procedures, doesn't process your application, postpones the hearing in an effort to go into a four corners defense so that the town can change the law. That is a situation where you can say that the new law doesn't apply. But unfortunately that's a rare case.

There is a doctrine called the public utility doctrine, and the phone companies and electric companies have used that over the years. It says there's really a lower threshold for public utilities when they appear in front of zoning and planning boards. The standard is lower. In a recent court decision, the Third Department here in Albany decided in the West Beekmantown Neighborhood Association case, in the Windhorse Power windmill development, that they were a public utility and they were entitled to a lower standard when they were going to get a variance or a permit.

Over centuries, windmills have been associated with farming and agricultural uses. They've been a traditional use. Those of you in farming know areas of the state are designated as agricultural districts. The New York State Department of Agriculture and Markets law says that localities can't unreasonably restrict or regulate farm operations unless public health or safety is threatened. They have taken the position that if you have a windmill on a farm that doesn't serve any more than 110 percent of the needs of the farm, in other words it's not there to sell electricity off site, it's to meet the farm's needs, that windmill is covered by that restriction and therefore local governments can't stop you from putting up a windmill for your farm. So I think that's an important thing for people in the agricultural industry.

I did find a case out of Michigan, which went to the federal Sixth Circuit Court of Appeals, where farmers wanted to put up 300-ft. wind towers on their property. They argued that wind farming was farming. Unfortunately they lost, but wind power is a real benefit for farmers because my understanding is that in a lot of applications you can farm around the wind towers and it just gives you some extra income when your operation is financially tight, that may make it feasible when it otherwise might not have been.

There is an environmental review process but generally the courts in New York State under SEQRA have upheld negative declarations where the local government said you didn't have to do an environmental impact statement.

Constitutional challenges generally are pretty tough. You have to show under section 1983 of Article 42 of the federal law that there's been a deprivation of equal protection, due process, and if you don't have vested property rights or a permit it's kind of hard to show.

If I can tell one more story, I had a case of a woman who bought ten houses that had been part of the School of Industry south of Rochester. They were staff housing and had been built in the 1920s. She bought the houses at an auction, and she thought it was going to be her retirement. She was going to live in what was the headmaster's house and then rent out the rest. And what happens, the town comes in and their building inspector says, "You need a site plan review, you've got to bring these into compliance with the building code of today and you're in violation." And so on and so forth. And he posted all the houses and said, "You've got to evacuate." Of course that didn't do much for her efforts to rent out the houses.

So when she finally called me, she had already been convicted in town court of violating the law. She told me about it and I said, "I don't understand, these houses have been there since the 1920s. I thought that was a non-conforming use." We eventually got her off the criminal charges and brought a 1983 case. We went up to the Appellate Division, and said we did have a claim for equal protection and due process. We went to trial last year. We had a week-long trial under 1983 in Rochester and we won on a substantive due process claim that the town had taken her constitutional rights by imposing restrictions, posting her house. In one case they actually cited the wrong building code. The building inspector used some model building code that had not been adopted in New York State, and I had pointed that out and they continued in their prosecution, which to me was pretty amazing. But we were very happy. But that's the kind of situation where there's vested rights. If you are doing a new project, I think it's pretty difficult.

There are some incentives from New York State ERDA. I heard that the federal bailout bill included a little bit of everything, that it included something for alternative energy. There are tax breaks under the real property tax law and you can qualify so that you're not taxed on the value of the windmill. The school district can opt out. Actually in Fenton there was some litigation over that, over whether they did it correctly.

Two issues that come up in these cases. Host benefit agreements. It's questionable whether they are all valid. The windmill company comes to the town, makes a deal, says we'll pay you a certain amount of the profits, they don't really define how they figure out what the profits are, as long as you agree you're going to let us in and maybe not let any other companies in. And the Attorney General has now subpoenaed some of these companies and is investigating, so I don't know what's going to happen there. But there is some question as to the validity of these agreements, whether the town board can sign a contract and bind the next town board, who may not like the deal.

And there are some ethical issues that actually come up, when, for an account I represent, two of the town board members were farmers and opponents came forward and said, "Well, you're going to benefit from this." It wasn't like they had a contract. If they had signed a contract with a windmill company, then they probably couldn't participate. But where they are just a representative of the community and it's a farming community, it's two people on the town board, they're farmers, they're just representatives, and it's hard to say it's a conflict. They're just looking out for that sector of the town, but I didn't feel that it was a conflict. But in some of these cases that has been an issue. There was a case in Wyoming County where they decided there was no conflict.

So my overall conclusion is that I think wind energy is a great thing. Whether it's economically feasible or not I think remains to be seen, but it's certainly good for the environment and good from the national security standpoint. But there are NIMBY's fighting it on environmental grounds, which, again, doesn't make a lot of sense to me. And I think that one way to go may be to try to have legislation to pre-empt some local authority.

One thing I suggested to one of the towns I represented was, why don't you take the bull by the horns and go out and instead of reacting to wind developers, get together with landowners and let's try to get proposals from different wind energy companies and see what they have to offer. I say this because I find a lot of these situations are where wind companies just show up at the door, and here's what they're offering and you don't necessarily see what the best thing is for the town or the landowners.

But anyway I really think it's a real natural resource that we have here in upstate New York that should be utilized for everyone's benefit. Thanks.

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