Condemning Private Property to Build Transmission
May 11, 2011 - Ken Silverstein - energybiz.com
A transmission case in Montana is getting ensnared in both the state capitol and in the local court house. It’s centered on “eminent domain” -- whether state law allows energy developers to take private property for public use.
It’s a classic situation of trying to strike the right balance between the “public good” and “property rights.” The decision reached here could have ramifications for how other cases around the country are resolved. And it’s vitally important that such disputes are remedied in a way that does not inhibit the development of green energy sources that rely on new wires to carry those electrons.
While Montana’s state legislature and court system take up the issue, it will also be debated on Capitol Hill where a bill to limit eminent domain rights is gestating. Generally speaking, the common solution is for the two sides is to work out an amicable agreement -- one that will require companies to use circuitous routes that deviate from the original plans.
Without the ability to exercise their right of eminent domain, developers say they won't do business in a jurisdiction and the people will therefore suffer. Property owners counter that many of the projects are unnecessarily intrusive and that the laws don't give either transmission or pipeline companies the right to profit at their expense -- a proposition that oftentimes gives them inadequate compensation for their troubles.
As for Montana, it would be home to a 215-mile power line that would reach into Alberta, Canada. The developers of the so-called Montana Alberta Tie Limited project have been trying to use eminent domain to take one landowner’s property so that they can build. But the property owner is balking.
A district court agrees with the landowner. Now the private builder has appealed to the Montana Supreme Court, although the state legislature there has been debating the issue. A measure now pending would nullify the lower court’s ruling but that bill has come to standstill in the state senate’s energy committee, which is split.
It all comes atop a 2005 U.S. Supreme Court ruling involving a Connecticut case called Kelo versus City of New London in which the High Court decided that government could condemn private property for the public good and even if it involved private development such as hotels and shopping centers.
That diverged from previous interpretations of the law, which said that eminent domain rights could be exercised if such things as roads, schools and hospitals were built. In response to that 2005 Supreme Court 5-4 decision, 34 states have passed laws to try and limit those rights.
Now, two U.S. lawmakers have introduced a bill that would chip away at eminent domain rights. It would do so by eliminating federal funding for any municipality that would condemn an individual’s property for private use.
“This would finally provide some federal protection for the property rights of all Americans, especially the poorest and most-vulnerable, from the alliance of land-hungry developers and tax-hungry government officials,” says the Castle Coalition, which is dedicated to protecting property rights.
Here’s the dilemma: According to the American Wind Energy Association and the Solar Energy Industries Association, $50 billion to $60 billion of new investment is needed to build out the transmission infrastructure over the next decade. That would accommodate the expected 260,000 additional megawatts of renewable power to come on line.
All that is jeopardized, the groups say, because the existing regulatory structure provides little incentive to invest in transmission. That’s because one state can reject a permit to build a line in its territory even though such wires would traverse multiple states. The groups want the Federal Energy Regulatory Commission (FERC) to approve and permit all multi-state electric transmission projects -- just as it does those for natural gas pipelines.
“For green power superhighways, the extra-high-voltage facilities ... would be subject to FERC approval and permitting,” say the associations in a white paper. “Separate siting approval at the state level would not be required. FERC would act as the lead agency for purposes of coordinating all applicable federal authorizations and environmental reviews with other affected agencies.”
It’s tough to accommodate more green power without alienating the property owners who don’t want to sacrifice their land. Policymakers are working to hit the right chord and the decisions they reach will provide a roadmap for others.
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