Todd: Welcome to Current’s Norton Rose Fulbright podcast. I’m Todd Alexander, host and a partner in Norton Rose Fulbright New York office. Today, we’re recording with Kimberlee Centera, CEO of TerraPro Solutions. TerraPro Solutions is a Renewable Energy Project Development Consultancy.

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Todd: Kimberlee, welcome to the podcast.

Kimberlee: Thank you, Todd. I’m thrilled to be here.

Todd: All right. So, I know you’re saying you’re a consultant, but can you tell people a little more? What is it that you actually do?

Kimberlee: Right. We are a risk mitigation firm. So, our focus is to work with our clients to identify and de-risk, if you will, is much around the projects as they can for financing purposes with an emphasis. Looking at real estate and title, we’re project people. We’ve all developed projects. So I think rather than just being siloed and really just focusing in on singularly the real property or the land that comprises the project, we’re going to be looking at the totality of the project and the timelines and what it is that we want to achieve the business model, and then we make it our business to help our clients really understand what it is that they’re facing, you know, jurisdiction wise, county, that type of thing. So, we want to make sure that our clients are really educated around their projects so that they can make a well-informed decision in order to be able to manage costs and timing that that type of thing.

Todd: Are you working on all types of renewables, just solar or just utility scale solar or, you know, how would you define the type of clients that you represent?

Kimberlee: We are wind, solar, battery storage. We’re working across the United States. Typically, most of our projects are what I think of as utility scale. So, you know, 50 megawatts above. It doesn’t mean that we don’t work on smaller projects. It doesn’t mean that we don’t work on portfolios of projects. So, you know, singularly, we seem to work on projects in the 100 to 500 megawatts, but we have worked on smaller projects, too.

Todd: So, then I’ll have you break this up, I guess, because I’m sure the land issues related to a wind project are very different than a battery storage project. What are some of the biggest challenges faced by renewable energy developers in each of those types of fields that you’re consulting on?

Kimberlee: Well, yes, certainly it depends on the technology. I mean, that’s going to be a gating item as far as understanding the project. Also, we always look at jurisdiction county, you know, things really vary. The view of projects really changes. The landscape of a project really changes depending upon where you are. We have cases where we’re working in Colorado and we know that in some instances on the permitting side for some of the renewable projects they’ve given standing to mineral holders. And they’ve required as part of the permitting process to have the mineral holder sign some kind of an affirmative agreement with regard to development of the minerals. And obviously, you know, if you’re sitting in the seat of a developer, you know, that’s huge leverage for a third party stakeholder to have to be given standing, if you will, as part of the permitting. So, you know, we try to understand, you know, what jurisdiction we’re in. We know if we’re in the southeast and we’re trying to get title insurance issued, it’s very common to have, you know, no title policies in the chain of title. And so, when we come in to try to write title for a renewable project frequently, that’s the first time that the title is going to be scrutinized from the standpoint of lender and tax equity financing. And so, you know, getting the parties comfortable with that understanding all that is really important. So, it does depend on the jurisdiction and can depend on the technology. You know, we do a lot of work around title curative and looking at surface rights, huge issues around that. And the perception and the way that you’re going to solve it on wind versus solar is going to be very different.

Todd: So maybe to get more specific, you know, can you give us some of the biggest mistakes you’ve seen people make so that other people don’t can learn from them and not make the same things like, you know, not securing accommodations from people who have mineral rights or trying to develop projects where some governmental authority has the right, you know, whether it’s a city or the federal government or somebody to just revoke a license or something like that or revoke the entire use of it, or I’m just giving ones that I’ve seen or taking rights through some other entity. And you don’t have any other control of the sublease from some other entity in your own control over that other entity. Maybe you can give us kind of your laundry list of horrors so that other people can learn from them, right?

Kimberlee: Yeah, great question. Right. Because we always we want to know what those gotchas are before they show up on the on the negotiating table. Certainly, I think looking at, you know, investing and understanding, investing is commonly overlooked. And there’s this idea of site control and what I like to think of as perfected site control. And so typically on our transactions, as we know from a debt and equity standpoint, they’re looking for some kind of perfected site control. So, when we think about that, we might be thinking about a prior mortgage that might exist on a piece of property. And certainly, when we have our financing parties coming in, we’re looking at that title. They’re going to want to make sure that there’s some kind of documentation in place to address the rights that may attach to the property versus the rights that are that are going to accrue for the benefit of the lender under nonrecourse financing, which we know is the subject of most of our transactions. And so, you know, our rights are going to attach just to the rights that the project holds. And so, we want to make sure that there’s this idea of perfected site control. You know, a lot of times just looking at title and understanding, taking a look at chain of title, we’ve seen cases where there’s a break in the chain of title. We do a lot of Fatal Flaw analysis, which is early analysis on projects to try to understand the scope of what we’re going to be facing. And we had a case where we had this break in the chain of title determining that the original patent that was issued was flawed. It wasn’t done correctly. And so in order to be able to reach that insurable title threshold that we know that, you know, folks like you are going to require when you come in and take a look at our due diligence, we were going to have to go back and not only get have the patent reissued, but we were also going to have to perform a quiet title action in order to clear that title. So, it was going to be a twostep process in order to be able to get to that point where we were going to be able to meet the financing standard. And, you know, we know our clients accept different levels of risk that might be acceptable in certain cases. You know, a developer might say that’s manageable. We don’t mind our project. You know, NTP is out far enough that, you know, this is achievable even if we have a two- or three-year issue that’s going to cost us a couple hundred thousand dollars. But in most cases, our clients want to be able to make those kinds of informed decisions. Right. They want to understand what is it that we’re facing and then they can decide how they want to proceed and be more educated around that.

Todd: So, on what point in the diligence process do usually get involved and what type of work product do you provide to the client?

Kimberlee: You know, in a lot of cases we probably work in different areas. I think on the M&A side, if we have a client that is looking at acquiring a project, then we may get involved very early in doing kind of a commercial overview of the project. We’ll take a look at the leases from the standpoint of project development from construction. We will take a look at the title and make sure that we may not have that perfected title today, but that it’s achievable. There’s a lot of things that are sometimes subtleties in our agreements. We have cases where we’ve got a solar project and we’ve got to make sure and connect to areas of the farm so that our, you know, our feet owner can maintain their farming activities. And so, on the face of it, that can seem like a very innocuous agreement, right? Not a big deal. But when you come to the project design and the reality of starting to put all that together, it can be a very expensive proposition to develop an access road or something of that sort. So, I think really taking a look at all those pieces we do a lot of. Negotiations around title insurance and we as opposed to just negotiating around the land, we negotiate around the project, so we will take a project scope to a title company and we’ll say, here’s our project, here’s our transmission interconnection, your point of interconnection. Here’s all the different pieces, our access. You know, we’re going to need to get that standard group of endorsements that the lenders like to see. Tax equity likes to see, you know, what are your requirements going to be? How are we going to, you know, are we going to be able to get there? And what are some of the issues? I, I see a lot around, you know, access. And a lot of times I find myself explaining that you can have physical access to a property, but it may not necessarily be insurable. I mean, I I’ve had cases where we’ve ended up in very heated conversations with public works around dedication’s you know, because all of a sudden, the project is in there. They’re trying to get permitted. You know, they agree to some kind of a dedication. It might be an extra 60 feet. Doesn’t seem like a big deal. But when you start to look at your design and the impacts around your design, having to find an extra 30 feet on either side of an access road that needs to be dedicated can be a big deal. So, you know, again, we’re making sure that we’re looking at it from the standpoint of the project, the totality of the project, and ultimately what, you know, the lenders and the tax equity are going to expect in terms of due diligence.

Todd: So how much of your job is really once you spotted the issues, communication? Because it sounds like what you really have to do is figure out if there’s an issue and then try to bring everybody to the table to figure out what the best way to resolve it is.

Kimberlee: Yeah, that’s you’re spot on. I mean, a huge amount of what we do is even though it seems intuitive, getting everyone together seated around the table. And a lot of times it’s the Alta surveyor, it’s the design team, it’s the construction team. You know, it’s our group looking at the title and the real estate and making sure that we’re looking at the totality of the project. You know, we had a project, a solar project where from a constructability standpoint, the EPC went out there. Everything is great. All of a sudden, they got to construction and realized that the area where they wanted to run the medium voltage was underwater and they said not going to work, going to have to move it. And so, a lot of times, you know, the danger is the APC just give them free rein. Sure. Move the move the undergrounds. Well, we need to make sure that we’ve got rights there. Right. We’ve got to make sure they’re going to move it to another part of the project is that under our lease that under an easement, you know, has it has the title been looked at, you know, so making sure exactly that that communication happens and that all these different parties are talking and make sure that things aren’t done siloed because that’s where especially where we see gaps and issues that cause problems.

Todd: So beyond bringing everybody to the table early on, are there other techniques that you found to be successful in terms of getting everybody to resolve things or find a mutually acceptable solution for people?

Kimberlee: You know, if somebody comes to you and says, you know, I got an issue, whatever you pick, whatever you want, you got somebody got an easement running through here or are you and you want to move the mineral.

Todd: Right. What are the types of techniques that you use to try to resolve it?

Kimberlee: Yeah, another great question. I mean, first of all, we’re going to look at the design, right? I mean, it’s really important to understand the design. We have a project where we have a very large utility that has a transmission line in the middle of our project. They happen to be in the process of widening that transmission line up and doubling it from one hundred and fifty feet to three hundred feet. So, they have a prior. Right. So, we need to work with them. But, you know, we also have lease rights, so they’re amending their easement rights. So, this amendment now it comes after our lease. So, there’s a conversation that has to happen there. So sitting down and making sure that we’re looking at all the different pieces, you know, we don’t want to end up with the property to the north, being isolated from the property, the south not having access. So I think making sure a lot of times just sitting down, looking at the map and making sure that you’re talking to the design team, to the different teams and that all these different things are taking taken into account. You know, we also do alter survey work and we found that putting all these pieces together and making sure that it’s streamlined and that there’s really great communication happening, even being involved throughout the process of construction because things come up during construction, we’re agreeing to crossing agreements with utilities. There’s Terry. Nicole, requirements that need to be followed and sometimes you get out to the field and for sometimes, you know, those technical requirements are difficult. So and we’ve had cases where we’ve tried to go back to utilities and amend agreements, and they’ve been really difficult because they said, you know, you guys agreed to these specs and they weren’t followed. So, making sure that communication is happening and those relationships, I think a lot of this business is relationships. You know, we’re coming back to the same entities, the same groups all the time. And so that communication is super important because, you know, it’s usually not a onetime deal. You know, there’s tech, you know, usually there’s a lot of conversations that are happening. And, you know, and we’ve got to make sure that everything is followed.

Todd: Let me ask a more simple question in these types of disputes. At the end of the day, how much of this is really just comes down to paying money to somebody to get them to say yes?

Kimberlee: You know, certainly that’s something that can be put on the table. The interesting thing, too, is, is I think it depends really on where the project is and the project cycle. Right. I mean, if you’re earlier in development, there might be a little bit more latitude. But I’ve seen, too, that once you get to construction, then a lot of times you’re your numbers are really hard wired. And so especially your project proforma and all those commitments are hard wired. And so, you know, you start having to going back and you start asking for 10, 15, 20 thousand or even 5000 dollars. And, you know, that adds up. So, I think that’s the other thing that we, you know, we try to avoid because as we move, you know, it’s all about the money. And certainly as we get further and further through the process, you know, being able to manage that super important, super important for our clients, you know, we have utilities right now that might normally have 50 crossing agreements on their desk. And right now, they’ve got one hundred and fifty. And so, you’re one of many people making phone calls. And so, we work really hard to build those relationships so that we’re getting the return calls. You know, we’re able to come together and agree on terms. And even during COVID, we’ve seen some interesting things happen with bridge documentation where normally everybody comes in with EPC’s is you’ve got to have that crossing agreement done. It’s got to be perfect. But COVID has allowed for some flexibility where there’s an interim consent that allows for construction to proceed, meaning that there’s some understanding between the parties on the beginning requirements so at least construction can commence while they work through the legalese on the agreements.

Todd: How about the inverse or the sort of the opposite where it’s not a question of money. You just run up against NIMBYism, you know, either an interest group that just doesn’t want this project being built in the way that your client wants to build are being built at all. How frequent is that?  Or you know, and I’m sure it depends on the part of the country and where you’re building. But did you run into that frequently or is that kind of just a horror story that happens very occasionally?

Kimberlee: Yes, it’s interesting, this idea that when I talk to people and I say, you know, I’m in the energy business and renewables and they say, oh, great, that’s really an up and coming industry. And for a lot of us, you know, we’ve been working in this field for a really long time. So, I think there’s still a little bit of a disconnect, right, between, you know, how viable renewables, wind and solar is. It’s really a part of the energy mix. It’s feasible. It’s cost competitive. And a lot of cases it’s proven. There’s a lot of legacy that you can look to and understand. So absolutely, I think we see that we worked on a battery storage project where our client really underestimated the idea of the ultimate jurisdiction was in the county. But the city was allowed to weigh in and the city was having meetings and a lot of the local folks showed up and they had concerns about transmission lines and all these different things and viewshed and everything. And it didn’t even make sense. You know, it was a battery storage project that was going to be in containers. I mean, but still their perception of its impact in the community, you know, they were concerned. And so, we were able to come in. We do we do a lot of work with the local communities and get everyone help them to understand so we can kind of be that bridge between the developer and some of the other stakeholders to facilitate that conversation. And a lot of it can be just around our experience. Right. We’ve worked in a lot of different areas. We know what works and we can talk to people about how. Here’s how these projects work. Here’s how they benefit, you know, and I think it helps to be able to have that legacy perspective to be able to share that with people. But a lot of times people just need to be heard. They need to be they need to know that they’re understood and that their concerns are going to be listened to. And that’s a large part of what we do.

Todd: In closing, wanted to ask you kind of what where you see things going in the future. You’re going to answer that however you like.  But one thing I’m interested in, because you’re seeing a lot of different deals and a lot of different types of deals is how you see the deal mix changing. Do you see a lot of new battery storage projects coming on?  Because it seems like they’re really building momentum in the market compared to where they were two or three years ago. Do you see more solar or do you see fewer wind? You know, whatever. I’m interested to see what you what you see is a mix and just where you see things are going in the future.

Kimberlee: Well, you know, it’s interesting because there’s always just this competition between California and Texas and so, you know, Texas is determined to, I think, exceed California in terms of solar. And I think they’ve exceeded us in terms of wind. So, there’s always that friendly competition going on. Certainly, you know, Texas is going to be, I think, a huge market for solar. I think we’re going to continue to see solar advance. We’re seeing probably more solar, a little bit less wind. I think, although we’re seeing these larger projects, a lot of it depends on the jurisdiction and where you are. If you’re on the East Coast, I think we’re going to see smaller projects that are going to advance. I think we need policy. You know, we really need more policy. You know, I talked about this disconnect between the city and the county and, you know, we see a lot of disconnects and a lot of jurisdictions and coming in as developers, you know, we’re trying to read the tea leaves in terms of understanding, especially when you think about battery storage, which is so new. And in a lot of cases, there’s no precedent for battery storage. So, we really have to educate, and we face opposition around fire and how do we get entities comfortable? There’s a lot of misinformation out there about batteries and, you know, that possible exposure. So, but I think we are continuing to see, and we will see more storage. We’re still trying to understand how it plays and the cost benefit. Right. For solar. But I think you’re going to see a lot of solar and storage. We certainly see that coming up. And a lot of people are interested in seeing that advance. So, we’re excited to see I mean, working across the U.S. and seeing even areas open up that traditionally maybe there weren’t a lot of opportunities. So that’s kind of exciting, too.

Todd: All right. Well, I think that’s about all for today. Thanks for joining us today, Kimberlee.

Kimberlee: Thank you, Todd. I appreciate it.