STATE OF OKLAHOMA

2nd Session of the 52nd Legislature (2010)

HOUSE BILL 2973	By:	Sanders

AS INTRODUCED

An Act relating to property; creating the Oklahoma Wind Energy Development Act; stating legislative findings; providing definitions; creating the Oklahoma Wind Turbine Decommissioning Indemnity Program; directing the Corporation Commission to operate and administer the Program; requiring wind turbines to be decommissioned; making the owner or operator responsible for decommissioning; providing time frame for decommissioning; allowing an owner or operator to rebut presumption; listing required decommissioning activities; authorizing the Commission and Oklahoma Department of Agriculture, Food, and Forestry to promulgate certain rules; authorizing the Commission to employee certain persons; providing for compensation; creating the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund; providing for administration of the Fund; prohibiting certain treatment of monies in the Fund; prohibiting certain transfers; prohibiting certain uses of Fund; stating allowed expenditures; specifying application of certain requirements; requiring certain owners and operators to make deposits to the Fund; establishing deposit amounts; providing for certain adjustments; requiring submission of a decommissioning plan; providing for approval of the plan; providing for additional deposit in certain circumstances; providing for return of deposit and interest; providing for return or transfer of deposit upon transfer of ownership; requiring forfeiture of a deposit under certain circumstances; allowing certain contracts; allowing certain claims and reimbursement against an owner or operator; requiring a statement to accompany certain payments; listing contents of a statement; establishing responsibility for statement; allowing certain landowners to have access to certain records; requiring an owner or operator to maintain certain accessible records in the state; granting a landowner certain claim; requiring certain reporting; specifying certain information; requiring certain insurance coverage; stating minimum liability coverage; requiring certain provisions; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1201 of Title 60, unless there is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the “Oklahoma Wind Energy Development Act”.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1202 of Title 60, unless there is created a duplication in numbering, reads as follows:
The Legislature finds that:
1.  Oklahoma’s wind energy resources are an important asset for the continued economic growth of the state and for the provision of clean and renewable power to both the people of the state and the nation as a whole;
2.  Promotion of the development of the wind energy resources in Oklahoma is important to the economic growth of our state;
3.  The prudent development of the wind energy resources in Oklahoma requires balancing the needs of wind energy developers with those of the landowners who provide access to the wind energy resource, including assurances that wind turbines and wind energy facilities will be properly decommissioned, that they will have access to adequate information to verify the accuracy of their payments, and that they will be adequately protected against hazards and accidents that may arise from the wind turbines or wind energy facilities;
4.  The conversion of wind energy into power for utility-scale systems frequently requires large wind energy systems consisting of wind turbines, electrical substations, electrical lines, and other supporting systems;
5.  Wind energy systems, if abandoned or not properly maintained, could pose a hazard to public health, safety, and welfare through mechanical failures, electrical hazards, or the release of hazardous substances;
6.  To protect the public against hazards, standards for the safe decommissioning of wind energy systems should be established, and adequate financial resources set aside to ensure that wind energy systems can be properly decommissioned at the end of their useful life; and
7.  Adequate financial resources may be provided by the creation of the Oklahoma Wind Turbine Decommissioning Indemnity Program and funded by deposits to an indemnity fund by those owning the wind energy systems.
SECTION 3.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1203 of Title 60, unless there is created a duplication in numbering, reads as follows:
As used in the Oklahoma Wind Energy Development Act: 
1.  “Administrator” means the Administrator of the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund;
2.  “Commercial generation date” means the date on which the wind turbine in question first generates electrical energy in commercial quantities;
3.  “Commercial quantities” means an amount of electrical energy sufficient for sale or use off-site from a wind turbine or wind energy facility, and shall not include amounts of electrical energy used only for the maintenance or testing of the wind turbine or wind energy facility itself;
4.  “Decommissioning deposit” means the amount deposited into the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund by the owner or operator of the wind turbine;
5.  “Decommission” means the disassembly of equipment and restoration of the site upon which a wind turbine or wind energy facility is located pursuant to the decommissioning plan and decommissioning standards established in Section 6 of this act;
6.  “Useful life” means the time during which a wind turbine or wind energy facility is generating electricity in commercial quantities.  For the purposes of the Oklahoma Wind Turbine Decommissioning Indemnity Program, a wind turbine or wind energy facility is presumed to be at the end of its useful life if it has not generated electricity in commercial quantities for a continuing period of twelve (12) months.  The presumption may be rebutted by submitting a plan for returning the wind turbine or wind energy system to service pursuant to Section 5 of this act;
7.  “Wind turbine” means a wind energy conversion system which converts wind energy into electricity through the use of a wind turbine generator and includes the turbine, blade, tower, base and pad transformer, if any.  A wind turbine shall only be subject to the requirements of the Oklahoma Wind Turbine Decommissioning Indemnity Program if the wind turbine has a nameplate capacity of five hundred (500) kilowatts or greater, or if the wind turbine is not located on land that is owned by the owner or operator of the wind turbine; and
8.  “Wind energy facility” means an electrical generation facility consisting of one or more wind turbines under common ownership or operating control, and includes substations, meteorological data towers, aboveground and underground electrical transmission lines, transformers, control systems, and other buildings or facilities used to support the operation of the facility, and whose primary purpose is to supply electricity to an off-site customer or customers.
SECTION 4.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1204 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  There is hereby created the Oklahoma Wind Turbine Decommissioning Indemnity Program as set forth in Sections 4 through 9 of this act.
B.  The Corporation Commission shall maintain, operate and administer the Oklahoma Wind Turbine Decommissioning Indemnity Program and is hereby authorized to employ personnel to carry out the requirements of the Program including the collection of decommissioning deposits, approval of decommissioning plans, inspection of decommissioning operations, and disbursement of decommissioning funds.
SECTION 5.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1205 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  All wind turbines and wind energy facilities shall be decommissioned at the end of their useful life.
B.  The owner or operator of a wind turbine or wind energy facility shall be responsible for the decommissioning of the wind turbine or wind energy facility and for all costs associated with the decommissioning of the wind turbine or wind energy facility at the conclusion of the useful life of the wind turbine or wind energy system.
C.  The decommissioning of a wind turbine or wind energy facility shall commence within six (6) months of the end of the useful life of the wind turbine or wind energy facility.  Decommissioning shall be complete within eighteen (18) months of the end of the useful life of the wind turbine or wind energy facility.
D.  The owner or operator of a wind turbine or wind energy facility may rebut the presumption of the conclusion of the useful life by submitting a plan to the Corporation Commission clearly outlining the steps for the owner or operator and schedule for returning the wind turbine or wind energy facility to service.  The Commission shall find the plan to be feasible and commercially reasonable before approving the plan.  The Commission may require the posting of an additional decommissioning deposit as a condition of approving the plan.
SECTION 6.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1206 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  The decommissioning of a wind turbine or wind energy facility shall include those activities necessary to return the property to a condition as close to the original condition of the property as commercially possible.  The activities shall include, but are not limited to:
1.  Dismantling and removal of all towers, wind turbines,  generators, transformers, and overhead cables; 
2.  Removal of underground cables, foundations, buildings, and ancillary equipment to a depth of forty-eight (48) inches;
3.  Removal of surface road material and restoration of the roads and turbine sites to substantially the same physical condition that existed immediately before construction of the wind turbine or wind energy facility;
4.  Restoration and reclamation of the site to the same general topography that existed just prior to the beginning of the construction of the wind turbine or wind energy facility and with topsoil spread over the disturbed areas at a depth similar to that in existence prior to the disturbance;
5.  Agricultural areas shall be decompacted to a depth of at least eighteen (18) inches with a deep ripper or heavy-duty chisel plow.  In areas where topsoil was stripped, soil decompaction shall be conducted prior to topsoil replacement;
6.  Subsoil compaction shall be tested using an appropriate soil penetrometer or other soil compaction measuring device.  Compaction tests will be made for each soil type identified on the affected agricultural fields.  The subsoil compaction test results within the affected area will be compared with those of the adjacent unaffected portion of the site.  Where representative subsoil density of the affected area exceeds the representative subsoil density of the unaffected areas, additional shattering of the soil profile will be performed using the appropriate equipment.  Deep shattering will be applied during periods of relatively low soil moisture to ensure the desired mitigation and to prevent additional subsoil compaction.  Oversized stone/rock material which is uplifted to the surface as a result of the deep shattering will be removed;
7.  Areas disturbed by the construction of the facility and decommissioning activities shall be graded, topsoiled, and reseeded according to United State Department of Agriculture Natural Resource Conservation Service technical guide recommendations and other agency recommendations, unless the landowner requests in writing that the access roads or other land surface areas be retained;
8.  All debris shall be removed from the site; and 
9.  The owner or operator of the wind turbine or wind energy facility shall work with the owner of the site to conduct a monitoring and remediation phase of two (2) years following the completion of the decommissioning activities.  The monitoring and remediation phase will be used to identify any remaining agricultural impacts associated with construction that are in need of mitigation and to implement the follow-up restoration:
a.	general conditions to be monitored include topsoil thickness, trench settling, crop production, drainage and repair of severed fences, etc.,
b.	topsoil deficiency and trench settling shall be mitigated with imported topsoil that is consistent with the quality of topsoil on the affected site.  Excessive amounts of rock and oversized stone material will be determined by a visual inspection of disturbed areas as compared to portions of the same field located outside the construction area.  All excess rocks and large stones will be removed and disposed of by the owner or operator of the wind turbine or wind energy facility, and 
c.	when the subsequent crop productivity within affected areas is less than that of the adjacent unaffected agricultural land, the owner or operator of the wind turbine or wind energy facility, the Corporation Commission, and the site owner will determine the appropriate rehabilitation measures to be implemented.
B.  The Corporation Commission, in cooperation with the Oklahoma Department of Agriculture, Food, and Forestry, is authorized to promulgate rules for the implementation of the decommissioning requirements set forth in this section.
C.  The Corporation Commission is authorized to employ inspectors to oversee the decommissioning of wind turbines and wind energy systems and to verify the proper completion of the decommissioning activities, with the compensation paid to the inspectors by the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund.
SECTION 7.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1207 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  There is hereby created within the Corporation Commission the “Oklahoma Wind Turbine Decommissioning Indemnity Program Fund".  The Commission may hire an Administrator to administer the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund or may assign responsibility for the administration to an existing Commission employee.  The compensation for the Administrator shall be paid by the Fund.
B.  The monies deposited in the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall at no time become monies of the state and shall not become part of the general budget of the Commission or any other state agency.  Except as otherwise authorized by the Oklahoma Wind Turbine Decommissioning Indemnity Program, no monies from the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall be transferred for any purpose to any other state agency or any account of the Commission or be used for the purpose of contracting with any other state agency or reimbursing any other state agency for any expense.
C.  No monies from the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall be used to pay or reimburse the Commission for the salary of any employee, except for the decommissioning inspectors and the Administrator while that employee is performing work involved in the administration of activities pursuant to the Oklahoma Wind Turbine Decommissioning Indemnity Program.  The Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall pay for all costs associated with administering the Oklahoma Wind Turbine Decommissioning Indemnity Program including, but not limited to, automobile and travel costs, computer software and equipment, the cost of decommissioning activities undertaken by the Fund pursuant to Section 9 of this act, and other costs incurred in administering the Oklahoma Wind Turbine Decommissioning Indemnity Program. 
SECTION 8.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1208 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  The requirements of this section shall apply to the owner or operator of any wind turbine construction which commences on or after June 1, 2011.  The owner or operator of any turbine constructed before that date may be allowed to opt into the provisions of the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund by complying with the requirements of this section.
B.  The owner or operator of a wind turbine or wind energy facility shall deposit with the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund a decommissioning deposit for each turbine owned or operated.  The deposit shall be in the amount specified below:
1.  If the deposit is made on or before the commercial generation date, Seventy Thousand Dollars ($70,000.00) per turbine;
2.  If the deposit is made after the commercial generation date but on or before the fifth anniversary of commercial generation date, Eighty-five Thousand Dollars ($85,000.00) per turbine;
3.  If the deposit is made after the fifth anniversary of the commercial generation date One Hundred Fifteen Thousand Dollars ($115,000.00) per turbine.  Any turbine construction of which commences on or after January 1, 2011, shall make its decommissioning deposit on or before the tenth anniversary of the commercial generation date for the turbine; and
4.  The owner or operator may opt to pay a fee of sixty-three one-hundredths of one cent ($0.00063) per kilowatt-hour of power  generated by each turbine.  The fee shall be remitted to the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund commencing on the one-month anniversary of the commercial generation date and shall be remitted annually thereafter on the anniversary of the commercial generation date.  Each remittance shall be accompanied by a statement showing the gross electrical generation of the turbine or turbines for which the fee is remitted.
C.  If the owner or operator of a wind turbine or wind energy facility opts into the provisions of this section, the Administrator shall adjust the deposit amounts required in this section by taking into account the estimated remaining useful life of the wind turbine or wind energy facility in question.
D.  The Administrator shall review the deposits required by this section on an annual basis, taking into account factors like prevailing interest and inflation rates and research-based information regarding decommissioning costs.  The Administrator may adjust the deposits required in this section; however, in no circumstance shall the required deposits be reduced below the amounts specified in this section.
E.  The owner or operator of each wind turbine or wind energy facility subject to this section shall, on or before the commercial generation date, submit to the Administrator a decommissioning plan that shall set forth the anticipated useful life of the wind turbine or wind energy facility, a detailed plan for the activities that will be undertaken to satisfy the decommissioning requirements set forth in Section 6 of this act, and an objectively verifiable estimate of the decommissioning costs for the wind turbine or wind energy facility.
F.  Each decommissioning plan shall be examined by the Administrator.  If the Administrator determines that the decommissioning plan indicates that the decommissioning costs for a wind turbine or wind energy facility would exceed the decommissioning deposit, the Administrator may require an additional deposit sufficient to cover the decommissioning costs.
G.  Upon the successful completion of the decommissioning of the wind turbine or wind energy facility pursuant to this act, the decommissioning deposit shall be returned to the owner or operator.  Upon successful completion of the monitoring and remediation phase of the decommissioning activities, the interest accrued on the decommissioning deposit shall be returned to the owner or operator.  In no case shall interest exceed three percent (3%) on an annualized basis.
H.  If a wind turbine or wind energy facility is sold, leased, or otherwise transferred to another party other than the owner or operator that filed the decommissioning deposit, the decommissioning deposit and interest accrued thereon shall not be returned to the owner or operator unless and until the new owner or operator shall have made the necessary deposit or deposits for the wind turbine or wind energy facility.  Alternatively, a decommissioning deposit may be transferred upon written notice to the Administrator of the transfer of the wind turbine or wind energy facility and a statement from the new owner or operator that it will assume responsibility for the decommissioning of the wind turbine or wind energy facility in question.
SECTION 9.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1209 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  In the event that the decommissioning activities are not complete pursuant to the requirements of Section 6 of this act, the decommissioning deposit and any interest accrued thereon shall be forfeited to the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund.
B. If an owner or operator has failed to complete the decommissioning activities pursuant to the requirements of Section 6 of this act, the Administrator is authorized to contract for the services necessary to complete the decommissioning activities using funds from the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund.
C.  In the event that the cost of the decommissioning activities exceeds the decommissioning deposit posted by the owner or operator of the wind turbine or wind energy facility in question, the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall have a claim against the owner or operator for any remaining amount.
D.  In the event that the Administrator is required to pursue a claim pursuant to subsection C of this section, the Oklahoma Wind Turbine Decommissioning Indemnity Program Fund shall be entitled to reimbursement of any expenses, attorney fees, and other costs from the owner or operator.
SECTION 10.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1210 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  The owner or operator of any wind turbine or wind energy facility shall provide a statement accompanying any payment made to a landowner in consideration of the use of the property of the landowner to generate electrical energy from the conversion of wind energy.  The statement shall provide, at a minimum, the following information:
1.  The legal description of the property where the wind energy facilities in question are located;
2.  A designation that allows the landowner to readily identify the wind turbine or turbines or other portion of the wind energy facility serving as the basis for the payment;
3.  The fractional interest of the landowner in the property, if less than fee simple absolute;
4.  The total amount of electrical power generated by each wind turbine located on the property of the landowner (gross generation), expressed in kilowatt-hours (kWh);
5.  The net amount of electrical power sold from each turbine located on the property of the landowner (net generation) expressed in kilowatt-hours (kWh);
6.  A detailed statement of the electrical losses that account for the difference between the gross generation and net generation of the wind turbine or turbines located on the property of the landowner, with any references to amounts of power expressed in kilowatt-hours (kWh);
7.  The gross sales price received by the owner or operator for electrical power sold from the wind turbines located on the property of the landowner, expressed in dollars per kilowatt hour ($/kWh);
8.  The value of any renewable energy credits, carbon credits, or any other environmental attributes of the electrical power generated by the wind turbine or wind energy facility that are or may be sold or monetized by the owner or operator.  The values shall be expressed on a per-turbine basis and in dollars per kilowatt hour ($/kWh);
9.  A detailed itemization of any taxes that were deducted from the payment made to the landowner, expressed in dollars per kilowatt hour ($/kWh);
10.  A detailed itemization of any other deductions from the payment made to the owner, expressed in dollars per kilowatt hour ($/kWh); and 
11.  Any other information reasonably necessary to provide the landowner an understanding of the basis for the payment to the landowner and a means of confirming its accuracy.
B.  In the event that the owner or operator of the wind turbines or wind energy facility sells its electrical power through an affiliate or other entity, the owner or operator shall remain responsible for obtaining the information necessary to provide the statement set forth in subsection A of this section.
SECTION 11.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1211 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  Any landowner who has, through a lease, easement, or other arrangement allowed a wind turbine or any portion of a wind energy facility to be placed on the property of the landowner shall have the right to audit the records of the owner or operator of the wind turbine or wind energy facility for the purposes of confirming the accuracy of any payments made or due to be made to the landowner.
B.  The owner or operator of any wind turbine or wind energy facility any portion of which is located in Oklahoma shall maintain within the state all records, documents, data, and other information, or copies, as is necessary for a landowner to conduct the audit specified in subsection A of this section.  The records shall be made available in a location and manner that afford a landowner reasonable access to the records during normal business hours.
C.  Should a landowner discover that the payments made by the owner or operator to the landowner are deficient by an amount of three percent (3%) or more relative to the actual amount that should have been paid, the landowner shall have a claim against the owner or operator for the deficiency and for the reasonable costs incurred by the landowner in conducting the audit.  The costs shall include, but are not limited to, mileage, copying costs, time, and accounting, auditing, and legal services.
SECTION 12.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1212 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  The owner or operator of any wind turbine or wind energy facility shall report to the Corporation Commission the power generated from the wind turbine or wind energy facility, the nameplate capacity of the wind turbine or wind energy facility, and the location of the wind turbine or wind energy facility.
B.  In the event that a wind energy facility contains wind turbines with different nameplate capacities, the information required in subsection A of this section shall be separated by generation from each nameplate capacity.
C.  The information required by this section shall be reported on a calendar month basis, with the information due on the last day of the immediately following calendar month.
SECTION 13.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1213 of Title 60, unless there is created a duplication in numbering, reads as follows:
A.  Prior to commencing construction of a wind turbine or wind energy facility, the owner or operator of a wind turbine or wind energy facility shall obtain and keep in effect a broad form comprehensive general liability insurance policy with a limit of no less than Five Million Dollars ($5,000,000) of combined single limit liability coverage per occurrence, accident or incident, with a commercially reasonable deductible. 
B.  The owner or operator shall cause the owner of the land where the wind turbine or wind energy facility is located to be named as an additional insured in such policy.
C.  The owner or operator shall deliver to the landowner a certificate of insurance evidencing the policy, which certificate shall provide that:
1.  The landowner shall be given at least thirty (30) days prior notice of any modification, cancellation or termination of the insurance; and
2.  The insurer waives all rights of subrogation against the landowner in connection with any loss or damage covered by such policy.
SECTION 14.  This act shall become effective November 1, 2010.

52-2-8742	KB	01/13/10