Success Stories: Energy without Abuse

There is much precedent for private energy and utility companies acquiring easements for mass transmission pipelines, high-voltage power lines, and other projects without abusing landowners through the use of eminent domain. Here are only a few success stories:

Florida Power & Light High-Voltage Transmission Lines – Texas

Florida Power & Light (FP&L) claims to be the third-largest electric utility in the United States. One of FP&L’s recent projects is a high-voltage transmission line that carries wind-generated electricity from the Texas Panhandle to central Texas. This FP&L line runs parallel to another high-voltage transmission line about 30 miles away constructed for the same purpose. The second line was built by the Lower Colorado River Authority (LCRA). LCRA used eminent domain to take landowners’ property for the easement. Not only did landowners not have the option of refusing LCRA an easement, they also could not even contest LCRA’s refusal to indemnify (compensate) them for hazards associated with the transmission lines, failing to wash equipment to prevent transporting invasive weeds onto their property, or failure to ground gates on their land to prevent shocks – not to mention dozens of other risks and losses imposed on them by LCRA.

Contrast LCRA’s behavior with that of FP&L. Because FP&L did not possess the power of eminent domain in Texas, it had to negotiate with landowners. FP&L made concessions that landowners would more readily agree to, such as opting to use more-attractive monopoles over unattractive towers. FP&L also willingly agreed to indemnify (compensate) landowners for problems caused by their transmission lines and construction. Finally, FP&L made offers to landowners three to four times what LCRA offered. Of course, landowners along the FP&L route feel quite differently about the FP&L transmission lines than landowners along the LCRA route do about that transmission line.

The comparison of these two projects that traverse the same region to provide the same service to the same markets is an invaluable demonstration of how free-market negotiations are not only financially feasible but are required to prevent corporations from transferring rights from landowners to themselves using eminent domain.

Spread Networks Fiber Optic Cable – Chicago to New York

In June 2010, Spread Networks unveiled its first dark fiber cable line running 827 miles from Chicago to Carteret, New Jersey and built without a single exercise of eminent domain. The line, which connected the Chicago Mercantile Exchange with the NASDAQ data center, was meant to provide ultra-low latency connectivity for high-frequency trading. Whereas existing networks tended to follow railroad lines and were designed to serve population centers, Spread Networks’ cable was meant to provide a point-to-point link for traders, and it was imperative that the cable go in a straight line to decrease latency. The nature of Spread Networks’ project required that they purchase an easement in a straight line. In contrast, Dominion Resources has a great deal of flexibility in choosing both the Atlantic Coast Pipeline’s general route and in routing around specific landowners who do not wish to sell. Dominion is also able to reduce conflicts with landowners by collocating in existing easements, although it seems unwilling to do so.

Guardian Pipeline – Chicago to Wisconsin:

The Guardian Pipeline project was built by CMS Energy Corporation in 2001. This project was a 36-inch diameter, 142-mile long pipeline that transports natural gas from Chicago to Wisconsin. When CMS sought to build the project, they did not have the power of eminent domain in Illinois. They were able to successfully complete the project in 3 years from filing to operation.

Bluegrass Pipeline – Kentucky

The Kentucky Bluegrass Pipeline is a joint-venture, mass-transmission pipeline project that proposes to build a 24-inch diameter underground pipeline, which would transport liquid natural gas to Louisiana from the Marcellus and Utica shale regions in the Northeast. This project, proposed by Williams Co. and Boardwalk Pipeline Partners, would require a 100-foot wide temporary easement for construction and a 50-foot wide permanent easement. The companies initially threatened landowners with eminent domain; however, a Franklin County circuit court judge ruled last year that the companies could not take land using eminent domain because “Bluegrass is a private, for-profit unregulated entity… not acting ‘in public service.’” After the ruling, Tom Droege, a company spokesman, said that the companies would continue purchasing easements through face-to-face negotiations with landowners and have already acquired nearly 70% of the route needed in Kentucky. 

Dulles “Greenway,” State Route 267 – Virginia

State Route 267 in Virginia is approximately 30 miles long and consists of two end-to-end toll roads – the Dulles Toll Road and the Dulles Greenway – as well as the Dulles Access Road, which lies in the median of the Dulles Toll Road. The eight-lane wide Dulles Greenway was privately-built following the enactment of the Virginia Highway Corporation Act of 1988, which authorizes the construction of new toll roads without the use of eminent domain under rates set by the state. This highway was constructed by a private company without a single exercise of eminent domain, although it faced many restrictions that the Atlantic Coast Pipeline does not, such as a single acceptable route, construction in a densely-populated region of the state, and a requirement that it follow the existing Dulles Access Road.