UPDATES & ANALYSIS

Iowa Supreme Court: Developer’s investment in windfarm project does not exempt it from new Worth County windmill restrictions

by Rox Laird | May 4, 2026

The developer of a wind energy project planned in Worth County did not have a “vested right” to continue with the project after the Worth County Board of Supervisors enacted an ordinance the developer claimed doomed the project, a divided Iowa Supreme Court held in an April 24 decision.

Chicago-based Invernergy’s Worthwhile Wind affiliate invested millions of dollars and several years on preliminary planning for the project that could see up to 55 windmills generating 165 megawatts of electricity. Worth County initially supported the project, as it had supported prior projects. But after Worth County saw turnover of two of the three members of its Board of Supervisors, reflecting a change in public sentiment on windmills, it enacted a moratorium on new wind projects and then an ordinance regulating future wind farms.

Worthwhile Wind sued, claiming it had a vested right to complete the project under the law as it existed before enactment of the ordinance, and that the ordinance was unenforceable because it had been enacted in bad faith.

The Worth County District Court agreed, the County appealed, and the Iowa Supreme Court reversed the district court in a decision written by Justice Christopher McDonald joined by Chief Justice Susan Christensen and Justices Edward Mansfield, Thomas Waterman, Dana Oxley and David May. Justice Matthew McDermott filed a dissenting opinion.

The legal doctrine of vested rights applies when governments change zoning regulations after property owners have made investments under the previous rules. But courts have uniformly held that, by itself, private investment without any engagement with the local government is not enough to support a claim for vested rights, Justice McDonald wrote, and the Iowa Supreme Court has in a number of cases rejected vested rights claims where the owner or developer had not obtained a validly issued permit.

“Applying these principles here, we conclude that Worthwhile’s vested rights claim fails as a matter of law,” the Court said. “Worth County never formally approved a plat. Worthwhile never applied for or obtained a permit to construct or operate the commercial wind turbines that are the object of the project.”

As the Court explained, its precedents establish that only a “lawfully authorized project—a project for which the developer had obtained a permit or other official government authorization to proceed—can support a vested rights claim. This is because the vested rights claim is based on reliance on administrative approval of the development rather than reliance on the law or, in this case, the absence of law.”

The Court rejected Worthwhile Wind’s argument that, because some parts of Worth County are not zoned and no permit is required or available, a developer could never acquire vested rights regardless of the size of its investment.

“The vested rights doctrine protects settled expectations; expectations that crystallize when the government, through its established permitting or approval process, has signaled that a proposed use conforms with the applicable regulatory framework,” Justice McDonald wrote. “In an unzoned area, no such signal has been given. A developer who spends money in an unzoned area does so with knowledge that local government retains the full scope of its legislative power to enact zoning regulations.”

The Court also disagreed with Worthwhile Wind’s claim that Worth County acted in bad faith in enacting the new ordinance regulating windmill projects–that is, it acted illegally in creating the new windmill rules and that it acted with the intent of blocking Worthwhile Wind’s project.

First, the Court said, Worthwhile Wind failed to show that the Worth County Board of Supervisors acted illegally, as the new ordinance’s regulatory measures, such as setback distances, height limitations, noise restrictions, and shadow flicker standards, are regulations local governments routinely adopt in the exercise of their police power.

“Worthwhile presented no evidence that the substantive provisions of the new ordinance lacked a rational basis or bore no reasonable relationship to the public welfare,” the Court said.

As for the argument that the new ordinance was enacted with the improper purpose of blocking the Worthwhile Wind project, McDonald wrote, “There is a meaningful difference between a county attempting to properly regulate a proposed future use and a county passing an ordinance with the improper purpose of frustrating a particular project.”

In his dissent, Justice McDermott said the majority abandoned the Court’s precedents on resolving the question of whether a property owner has acquired a vested right by applying a two-part test asking whether the property owner made substantial expenditures toward the use prior to the zoning change and whether those expenditures were lawful.

The majority abandoned that two-part test, Justice McDermott wrote. “Instead, the opinion flatly asserts that no vested right exists unless a property holder possesses a permit at the time of a zoning change. Applying this new standard, the majority concludes that Worthwhile had no vested right because it had not sought or received a permit when the Board adopted the moratorium—even though no permit was required.”

On that point, Justice McDermott noted that the Worthwhile Wind project targeted sites in unzoned areas of the county. “The majority penalizes Worthwhile for lacking a permit that the county had made clear was never required in the first place. The majority doesn’t explain what permit was even available, let alone required.”

Beyond the effect of the Court’s decision on the Worthwhile Wind project, Justice McDermott said the decision will affect all future wind energy projects.

“Worthwhile had spent three years and millions of dollars developing this project when the Board passed the moratorium. By declaring Worthwhile’s efforts insufficient to establish a vested right, the majority leaves future energy developers completely exposed as they consider the immense cost, risk, and complexity of large-scale wind energy projects,” Justice McDermott wrote. “By turning away from our vested-rights precedents, we have severely undermined predictability not only for the developer in this case, but for all developers considering complex wind energy projects in our state.”

Tags: Iowa Supreme Court 2025-26