Proactively protecting landowners if a wind turbine on their property were abandoned is the crux behind Senate Bill 16.
SB 16 establishes financial security for the far-in-the-future decommissioning of wind turbines. Introduced at the request of the Public Utilities Commission, SB 16 made it through the Senate Commerce and Energy Committee with a 6-1 vote, and then through the full Senate 29-4.
The House Commerce and Energy Committee voted 11-2 to send the bill with a “Do Pass” recommendation to the full House. If the House approves, it’ll be sent to Gov. Kristi Noem’s desk for a signature.
The bill would add a line to state law 49-41B saying that; “All financial security required by the PUC for the decommissioning of wind turbines shall be controlled by the commission through a bank with a nexus in South Dakota. The financial security is not an asset of the person providing it, and may not be cancelled without commission approval. The security shall be a proper amount approved by the commission. It could be a surety bond, escrow account, letter of credit, trust, guarantee, or cash deposit.”
PUC Commissioner Chris Nelson said the state needed a narrow fix in law to protect landowners who lease land to wind power facilities. The bill would concern only 100-megawatt or greater wind power facilities. Developers must already provide a decommissioning plan with their applications to build wind turbines. Because of existent guarantees in the applications, security for decommissioning a wind turbine is not a concern for most investor-owned utilities, Nelson said. There are concerns with other companies, such as out-of-state and even international companies. Wind farms are their own entities, their own Limited Liability Company (LLC), and could go bankrupt with no further obligation to a parent company, Nelson said.
Nelson said, if decommissioning of a tower is completed by the company, the full escrow would be returned to it. Otherwise, the escrow is used and the landowner gets the towers taken down.
Nelson stressed that the escrow cannot taken by creditors in bankruptcy proceedings. And, the funds could not be raided by the state to help with future budgeting shortfalls. Rates going into the escrow accounts would be raised or lowered accordingly through scheduled reviews with wind turbine owners. Not counting refurbishings over time, an average wind turbine is anticipated to have a lifespan of 25-30 years.