In the development and operation of a wind farm, several issues enter the discussion quickly, issues that are critical to determining project costs. These issues include availability of wind, siting of the wind farm and its turbines, land use in the area, transmission of the electricity to the power grid, access roads, and power generation capacity of the turbines.
But there is another issue that gets little attention outside the wind industry world. Managing lease and royalty payments to landowners can be a time-consuming, labor-intensive task. Absent an effective strategy and the right technology, wind companies struggle with this necessary aspect of doing business.
Wind companies employ various means to meet ongoing payment obligations. Some still work from paper records. Others rely on computer calendars. Spreadsheets are commonly used. In each case, manual tweaking of the data is necessary, raising the likelihood of erroneous or inconsistent information. Emails or memos with supervisors or payment administrators must be exchanged. These traditional approaches to calculating and issuing payments are clunky, inefficient, slow and wrought with the possibility of error.
Technology now exists which can help wind companies avoid the pitfalls of traditional methods of meeting ongoing payments. geoAMPS offers an industry-specific, Web-based software product called altAMPS that is designed to help companies within the rapidly growing wind energy industry operate more efficiently. Such technological advancements help facilitate the continued growth of the young industry which, in turn, helps combat climate change.
After the wind farm is built and operating, the company must ensure ongoing lease and royalty payments are issued accurately and on schedule. Wind companies need a version of online banking. Without such technology, the companies face manual calculations that require at least two weeks of staff time, with multiple staff members involved each month. Despite this commitment of time and resources, payments can be late or wrong.
Navigating multiple variables
As the above illustration shows, there are many variables in meeting ongoing payments for a wind farm. Lease and royalty payments go out to multiple landowners. The amounts might have to be divided into percentages for multiple owners of one tract. Some payments are adjusted by the Consumer Price Index, others by the Gross Domestic Product Implicit Price. Some payments are adjusted by simple interest, while others are compounded annually.
Landowners can be individuals, married couples, corporations or trusts. Landowners can change address. Married couples might get divorced. Ownership can change by reverting to the estate or going into probate upon a landowner’s death. Corporations are bought out or close.
Inputting and changing data manually on paper, computer calendars or spreadsheets do not work well for the speed and accuracy that is required. It is complicated and time-consuming to track all the triggers that determine the timeline for payments and the amounts to be issued.
Missing payments or issuing incorrect amounts can cause major problems. Landowners, understandably, get upset when payments are late or wrong.
altAMPS increases efficiencies
Wind companies can manage outgoing payments entirely through altAMPS. The software automates the complex process of meeting ongoing payment schedules, such as lease and royalty obligations. geoAMPS’ expert development team configures the software to meet each individual client’s specific needs.
All landowner and payment information is entered once into the altAMPS, or changes made once, and the system manages and tracks payments on an ongoing basis. Rather than relying on hundreds of manual calculations each month, the Web-based software, operating from a central repository of project and company information, conducts automatic calculations, factoring in the myriad of variables that may exist. altAMPS’ robust Web-based tools include lease management, royalty calculator, payment tracker and automated reminders.
In much the same way that online banking has made it easier to manage household budgets, technological advancements like those developed at geoAMPS are simplifying the process of meeting ongoing wind farm payments.
Want to learn more about how geoAMPS can streamline the process of calculating and issuing ongoing payment obligations for your wind energy company? Call 614-389-4871 or visit www.geoamps.com. See altAMPS in action by scheduling a demonstration.
Dan Liggett is Communications and Public Relations Manager of geoAMPS.