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Shell says it will pay landowners’ legal bills

Payments would cover attorneys’ fees in aborted wind-farm plan

By LARRY RULISON, Business writer
First published in print: Saturday, November 8, 2008

RENSSELAERVILLE — Shell WindEnergy Inc. has offered to pay legal expenses for landowners in the Albany County hill towns who had considered leasing their land to Shell for two large wind farms.

Shell, a subsidiary of oil giant Royal Dutch Shell, told landowners this week it was abandoning the project for various reasons, including “insufficient” response to its offer and “potential permitting issues.”
Over the past several months, Shell had been outlining for landowners in Rensselaerville, Berne and New Scotland terms for option and lease agreements it was offering.

The Houston-based company wanted to build two 50- megawatt wind farms that would have produced enough electricity for 25,000 homes.

The option agreements offered landowners $30 an acre for a seven-year option on leases that could last as long as 60 years.

The lease agreement would have paid annual royalties, a minimum of $6,000 per turbine.

The option agreement also had a provision that paid up to $2,000 in legal fees for a landowner’s attorney to review the contracts.

Shell hadn’t faced outright opposition to its plans, although some landowners and public officials had accused the company of misrepresenting the project by saying that it had already secured permission to build on state-owned land, making the wind farms’ construction appear inevitable. Shell repeatedly declined to address the accusations.

Also, most of the hill towns do not have zoning regulations that would allow such large-scale wind farms, although some of the towns are drafting new laws that would allow them, with conditions.

A letter sent by Shell to landowners on Nov. 4 says that all contracts and documents it has sent to shareholders are “null and void,” although Shell will still reimburse landowners for up to $2,000 in documented legal expenses.

Shell spokesman Tim O’Leary wouldn’t say how many local landowners — if any — had signed options on land that are now worthless or whether any local landowners had received money from Shell.

At least one other company — Rhizome Integrated Energy of New York City — has expressed interest in developing a project in the hill towns, which have abundant wind resources because they sit atop the Helderberg Escarpment. Rhizome’s plan would include smaller and quieter turbines than the 2-megawatt machines Shell had proposed, the company said.

Larry Rulison can be reached at 454-5504 or by e-mail at [email protected]

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