TREIA Profile: Stewart Title
Imagine you are a developer eyeing the potential for a renewable energy project in Texas, a state with an astounding 80,000 MW of wind and solar in grid operator ERCOT’s interconnection queue. However, before you can shuffle into that long line at ERCOT, some critical tasks lie before you. Among other things, you must get access to the land that will host your acres of shining solar panels or towering turbines. And you have to know with certainty that you have clear title to that land, so that you can develop your project and plug it into the grid without fear of some unexpected complication that could be quite costly or even kill the deal.
TREIA member Stewart Title takes that uncertainty off the table, underwriting title risk so developers can get on with the other complex elements of the renewables business. In recent years, the company has become the biggest underwriter in the Texas renewable energy market. In a recent conversation TREIA board member Jeff Whetzel (Senior Vice President of National Commercial Services) and his colleague Ilene Eckert (Vice President and Commercial Services Business Development Officer) walked me through the complexities of their business and explained the critical nature of the work they do to move the renewable industry forward.
If You Want To Build Anything, You Need Clear Title To The Land
Based in Houston, and with a strong national presence - as well as activities in Canada, Mexico, Dominican Republic, and Puerto Rico - the Stewart Title organization plays in multiple commercial markets where title ownership is critical. The company covers a wide range of projects, from office towers and industrial parks, to oil and gas development (it even did work for the earliest domestic LNG terminal) and renewables.
The Houston team is some 20-strong, and Whetzel covers the business development, production and financial side of the renewables portfolio, while Eckert does the important work of dealing with clients and staying with the transactions from initiation through to completion.
During our conversation, Whetzel commented that title work in Texas can be complex and intensive, especially in energy, where the sites – whether for oil and gas, or wind and solar – are often in remote locations. The very remoteness often means that the land in question may never have changed hands since the original patent or land grant was issues. The paper is old, he says, and “It could be the first time geography is being looked at in very long time.”
Add to that the fact that there is generally ownership of both surface rights and underlying mineral rights to clarify. “That can complicate things in getting necessary waivers or acquiring those rights going forward,” he observes.
For renewable development, the mineral rights constitute a bigger issue for solar than for wind, since solar panels blanket the surface of the land. Regardless of whether wind or solar (or even storage – a new class of emerging client), Whetzel asserts, “the deal cannot happen without title insurance to make sure all the ducks are in a row.” Stewart Title’s job is to allow developers to outsource those headaches, underwrite the risks, and assume the liability for any unexpected surprise that may arise.
Tracking An Occasionally Obscure And Centuries-Old Trail
Eckert’s works with the individual clients (usually developers, but in some cases landowners) and builds a relationship while walking them through the process. She also coordinates the company’s network of local agents that have “boots on the ground in pretty much every county.” These examiners – partners, agents, or third parties – venture out to the county offices to pore through aging documents in the critical search for title clarity. It’s an exacting game of detail and patience. Finding out who sold what to whom, and tracking a centuries-old and sometimes obscure trail can take six month to as long as two years.
Once the land and mineral rights are clear, Stewart Title will do the underwriting, issuing an insurance policy so the project can proceed on sound legal footing. Whetzel notes that the company enjoys a comparative advantage in the underwriting area, “we can get through these deals a little quicker than most folks.” The results speak for themselves and Eckert comments that to date, the company has “underwritten 143 turbines, representing 662.5 MW of capacity. In solar, we’ve done 1,500 acres and 236 MW in Texas.” The company also underwrote the first U.S. offshore wind farm, a five turbine, 30 MW project off Rhode Island.
Positioned at the early stage of the development pipeline, the Stewart Title team has a good view of the industry trends playing out in the near future. Today, the company is seeing a big uptick in solar in ERCOT, with battery storage projects beginning to enter the scene as well.
The Value Of A TREIA Membership
Whetzel and Eckert commented that the decision to join TREIA was an easy one for both of them, as they share a passion for renewables. “Part is business, but part is also our personal passion and agenda. We decided to kind of work it together, and we thought it would be a good fit for Stewart Title,” says Whetzel. “It helps us keep a finger on the pulse of the industry. We like the people, and we have a passion for it. We wanted to know what was going on on in the renewable space and TREIA has helped us do that.”