EARNING TEN TIMES MORE FROM YOUR WINDY LAND
Craig Mead - August, 2009

Part I

This article is a class series for readers of the Wyoming Livestock Roundup and Land Owners registered with Gold Pact Power

My background in Livestock, Roundup and Rodeo:

Reality Check: I have never roped a steer, hog-tied a calf or thrown a chain bridle over a stallion who jumped into a corral to snuggle up to a mare, or repaired a fence after the mare had kicked all the planks out attempting to get away through the new back door she was making.

I do know folks who do that sort of work every day. I've written software for rodeo, team penning and 4-H organizations for kids, and I learned to ride at a very young age. I studied horse care and have worked at fair grounds caring for horses. I am not as green as some city slickers when it comes to tossing hay or shoveling road apples, but I am not as smart as you: the hard working ranchers and farmers of America.

What I did do is build a company designed to help you keep your land in your families for generations to come. My friends are your friends and neighbors. My heart is in America's heartland and when we formed Gold Pact Power, we did it with the intent of helping Land Owners in rural America earn the highest royalties from wind farm leases possible, and keep their land in the family. We believe that when rural America is doing well, the rest of America will find its way, and if rural America is suffering, all of America suffers. That's our philosophy at GPP.

This class and series of articles will teach you HOW to look at a wind farm lease and HOW to educate your community in securing the highest royalty payments for land owners, get green power for schools and community centers at the lowest possible price, HOW to form Teams with your neighbors and HOW Land Owners can earn Ten Times what the average wind farm lease pays.

A Little History:

Before I entered the wind industry, I had worked for a Retired Federal Judge during college and after that, worked as an auditor for the Medical industry. My job was to make sure patients got the best care possible within the budgets HMOs and Hospitals could afford. I saw a lot of abuse by Doctors and Administrators 'working' the system. Healthcare is a big topic in Washington D.C. and frankly, I doubt they'll be able to fix that mess. If you want good healthcare, you need to have sufficient cash flow in your family to pay for it yourself. That's the best way Americans can insure their children will be covered by a good plan. Asking Washington D.C. to fix it is like asking a thief to fix the broken window they used to get into your house: good luck.

After working for the Medical industry, I worked as an auditor in the banking industry and saw more abuse of average Joe and Jane Homeowner and Depositor there. The fees banks charge customers for petty little transactions that cost the bank less than 5 cents to perform just blows my mind. The fees credit card companies charge is even worse and the points and loan origination fees mortgage companies charge clearly explains why America experienced a 'housing bubble': mortgage companies were getting so fat on all those fees everyone was jumping into the game to get a piece of the pie - your pie - and eventually the system collapsed and we have the mess in Manhattan and across America that has threatened the standard of living of every single one of us.

Again, we've asked Washington D.C. to fix the mess and they did a fine job of sending hundreds of billions of dollars - our money - to European Banks overseas. We asked the thief to fix the broken window and instead they came back in the house after stealing all of our jewelry and then sold all of our furniture. We have no one but ourselves to blame for the tent cities springing up across America.

After working in the banking industry I worked in the nuclear industry as an auditor and system designer. I was responsible for 'stopping the fines' when nuclear power plants ran outside of the Federal NRC guidelines. I made sure the plants ran right and enjoyed the feeling that somehow my work helped keep millions of people safe and fed them inexpensive power.

Pretty soon I found out that in reality, no nuclear facility is really safe. Whenever a plant "burps" its called "an event" and plants have events all the time. Engineers are scrambling almost every single day to keep those facilities running right and if you knew what really happens at a nuke plant, you'd never let one be built within 500 miles of your community.

When I entered the wind industry my friends said "You can run a nuclear plant: do you think you can run a wind farm?" and I felt I could. It is certainly much easier and less complicated. By that time I had spent six years designing blades and drive trains for wind turbines and decided that if I was going to become a wind farm developer, I would figure out how to put the lion's share of the profits into the hands of the Land Owners and communities where the turbines were located. At that time the average wind farm lease was paying 1/2% to 1 1/2% of gross revenue.

Off I went to Manhattan to train under GE Wind and the AWEA, bringing my "Bright Idea" of paying Land Owners more to a room full of 400 bankers and other wind farm developers. I said "You know, you could at least pay Land Owners 3%, like they earn with a strip mall." This is called Triple Net in real estate, or NNN. They weren't too happy about that idea. That's ok. I replied "You know, we're going to pay them 5 % of gross and double it to 10% after the turbines are paid off." and to this day, GPP still pays the highest royalties in the industry. If you look at a wind farm lease today, compared to those signed a few years back, you'll notice a dramatic increase in the royalty payments. I'd like to think we were part of that: in fact I know we were.

Lets do it again:

We had increased the royalty payments Land Owners receive by a factor of TEN TIMES and in this series of articles, we're going to do it again. If you follow this set of instructions, instead of earning 5% of gross revenue, you'll be making about 50% of gross revenue. Let's use a realistic example:

• A wind farm is located on 2500 acres of flat land.

• At an average turbine density of 1 turbine every 25 acres, that's 100 turbines.

• While each turbine will only cost $1.8M - $3.5M, by the time you get done with the permits, roads, concrete, copper and substation, you can figure a price tag of $4M - $5M and sometimes more. Lets go with the $5M price.

• So 100 wind turbines will cost about $500,000,000 to build. It could be as little as half this much or even more than this, but this is a conservative figure.

• Depending on the price per KWH, a wind farm usually earns about 1/10th of its job cost per year, so this project would earn about $50M per year.

• Under a GPP lease, at 5% of gross, the Land Owners of this 2500 acre spread would earn about $2,500,000 per year. Not bad.

• Under our TEN TIMES plan, that same Land Owner could be earning $25,000,000 per year. How do you like them apples?

In our next article, we're going to explore the financial mechanics of extracting TEN TIMES the revenue and in the article after that we're going to explore how to organize your "TEAM" to develop your personal plan with others in your community, as well as partner up with folks like you in surrounding areas who are thinking along similar lines. "Why should everyone else be having fun and earning a profit, when it can easily be YOU and your neighbors and community?!?"

That's the first question we want you to ask yourself before signing a standard wind farm lease: why shouldn't you and your family earn ten times more and why shouldn't your community be benefiting from programs like Free Power for Schools, grants and funding for football uniforms, wood shops, auto shops, 4-H programs, Boys and Girls clubs, senior centers and other programs to help you help your community and provide a sustainable future for your children and grandchildren.

GPP was formed to help Land Owners keep their farms and ranches in the family for generations to come. We hope you'll check back next week for our next article. Meanwhile, we hope you'll spend some time at a local diner with your friends and neighbors and talk about what you're learning: teach others and spread the word - there's plenty of profit out there for everyone involved in the wind industry and the revenue for you and your family are a lot more than you've been told.

Thanks for stopping by.

Craig Mead
Founder and CEO
Teacher and Student
Gold Pact Power, Inc.
www.goldpactpower.com

(download this class as a PDF)