Bacon's Rebellion

Democracy Thrives in Sunlight

Dominion and Eminent Domain

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by

James A. Bacon
in ,

In a recent post, “Transmission Lines and Electricity Imports,” I wrote that I wouldn’t have a big problem with regional electric transmission lines if Dominion (or any other electric power company) purchased its rights of way through voluntary negotiations with the landowners whose land the transmission line crossed. My problem was Dominion’s use of eminent domain to compel people to settle.

Jim Norvelle, director of media relations for Dominion Resources Services, responds as follows: “We negotiate with individual property owners all the time. In fact, we have been successful 96 percent – 97 percent of the time in reaching an agreement with those landowners on transmission line rights of way. We only use our eminent domain authority as granted by the state as a last resort.”

I also stated that eminent domain recompenses the landowner for the right of way only, not the loss in value to the surrounding land, such as a farm or estate, when its viewshed is wrecked.

Norvelle responds: “True, the compensation does not cover what someone may perceive to be ‘visual blight.’ But in many hearings before the State Corporation Commssion on previous transmission lines we have successfully presented witnesses and studies that have shown any loss of property value is limited to about the first four years after the line is built. After that time the value returns to its pre-line level.”

Fair enough. Here are my follow-up observations.

(1) Negotiations may appear to be voluntary, but the threat of government-backed coercion lurks in the background. Surely, the power of eminent domain shifts the negotiating advantage to Dominion. I would hypothesize that many landowners would settle for less than they think they deserve knowing that Dominion can acquire the land through eminent domain anyway. They know they can push only so hard on price before the case gets turned over to the eminent domain litigators.

Furthermore, I would surmise, the burden of legal costs weights heavily. Landowners must pay the legal expenses spent negotiating or fighting eminent domain out of their own pockets. To them, the payments represent a dead loss. For Dominion, legal expenses are a cost of business. If the enterprise is regulated — Jim Norvelle, please tell me if I’m wrong — Dominion can incorporate the legal expenses into its rate base and be recompensed by rate payers.

(2) I’d like to see those witnesses and studies regarding visual blight. I can imagine that some properties — woodland, remote farm fields — may well return to pre-line level in time. But it’s hard to believe that properties where a line crosses the viewshed of a home or estate would ever recover their value.

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6 responses to “Dominion and Eminent Domain”

  1. Anonymous Avatar
    Anonymous

    Most people “settle” because they have no real choice. I wonder, how many times a group of owners have assembled a right of way and voluntarily offered to sell it?

    What you say about expenses is true: it is a dead loss to the owner. And Dominion attorneys do this all the time, so they have plenty of experience. In some states, if you sue and receive a larger settlement, the condemnor pays the legal fees.

    If the line takes only a portion of the land, the owner may be stuck living with the power line. And he gets to pay taxes on the right of way.

    In some states the owner can demand that the power company take the entire property. Then the power company is faced wth accepting the loss in value. If what the Dominion rep says about value is true, then that shouldn’t be a big issue.

    The value never returns. In fact, the loss may become greater over time. That remote farm field may eventualy be in the middle of a developed area: except for where the power line is.

    RH

  2. Larry Gross Avatar
    Larry Gross

    I’d like to differentiate between ED that needs a parcel for something like a school or fire station…

    .. and ED that needs a continuous right of way – like a powerline, a pipeline, a rail or a road, etc.

    The bar for a single parcel should be very high in terms of condemnation for that specific parcel.

    I’d like to see justifications that essentially prove that there are no alternatives to that specific location.

    For right-of-ways – usually the Feds require an Environmental Process (which is much more comprehensive that just environmental as it does include the “built environment”.

    Part of that process is explicitly designed to look at alternatives – and then to compare in a matrix the cost/benefits of all alternatives studied.

    AND – the public has the right to be part of that process. For instance, they can challenge assertions… subjective judgements AND provide facts – not initially included.

    and this would include the Purpose and Need of the project.

    Environmental Impact Statements are required for any project that “touches” Fed money – and to a certain extent Fed rules.

    A document like this.. if done correctly would show clearly the cost of underground verses lines and/or a corridor through Piedmont verses another path.

    Significantly, the EIS does not REQUIRE a particular decision. It’s only purpose is full disclosure – to generate all the relevant info that supports an INFORMED DECISION that precludes (in theory) any rush to a hasty decision.

    As far as specific ED, I actually agree with full and complete compensation both for the taken parcel and the remaining parcel – and I further agree that the landowner should have the right to have his/her entire parcel acquired rather than a “nibble” taking.

    But if you want to argue what is known as “constructive” impacts – be careful what you wish for because almost any road – has significant impacts beyond the actual paved portion – to include significant visual – and NOISE.

    I pity the neighborhoods that I see adjacent to some of our urban interstates that have been cut in half or seriously damaged – and the intersting thing is that such a thing hurts ALL taxpayers because the VALUE of the remaining properties is.. lowered…and VDOT did not pay one red cent for those properties… now cheek-by-jowl next to a road with 24 hr road noise.

  3. Anonymous Avatar
    Anonymous

    The public has a right to be part of the process, but lets be real here: it is widely assumed that the Dominion project was a done deal before it was announced. And I think that when they compare in a matrix the cost/benefits of all alternatives studied, they do it according to the rules of condemnation in place, which highly favor the condemnor. Under such rules the public benefit easily outweighs the cost to individuals. For example, the taking may preclude development that might have taken place later, and there is no compensation for future losses, you only get the value of the current use – even if the current use is artificially enforced. On the other side of the coin, the right of way itself may be far more valuable and profitable in the future than now, but the owner will get no additional compensation. It is the same problem that we have when we say that housing doesn’t pay: the argument is based on one point in time, but peoples lives are not.

    Like any other project, you need to first ensure that no one is seriously hurt, and then see if the public benefit is still there.

    You are right about roads. Some farms here were cut in half when 66 went through. Some farmers on on opposite sides were able to make land swaps to reconsolidate. And then there are the all night jake brakes, some truckers seem to delight in “playing a tune” on those things when on a long downgrade.

    I see a deep irony in the fact that these farmers contributed so much to make the road possible, and endure so much because of it, only to see the benefits it provides restricted mostly to others. Here is a case where the road today is worth much more than when it was built.

    You are correct about a right of way vs a single parcel, too. The value of a single parcel is pretty easy to decide. But when a right of way is being assembled the final product is worth far more than the sum of the individual parcels. That’s why I suggested that the landowners form a corporation and sell the right of way to themselves, in the form of the corporation. Then let Dominion negotiate with the corporation for the entire package.

    I was soundly booed for that idea, for obvious reasons. For some of these people no price is high enough, and no justification is good enough.

    I have suggested that compensation ought to be high enough such that a rational person can see that his compensation, plus his share of the public benefit is worth at least as much as his value would have been otherwise. If everyone else who gets the benefit isn’t willing to pay the cost required to ensure this, then there is no public benefit, and the project amounts to stealing.

    But, if you don’t have rational people, the whole thing goes down the tubes.

    RH

  4. Anonymous Avatar
    Anonymous

    “Like any other project, you need to first ensure that no one is seriously hurt, and then see if the public benefit is still there.”

    I am truly surprised that no one from Dominion took the bait on this.

    My comment must have been close to being correct.

    Ray Hyde.

  5. Anonymous Avatar
    Anonymous

    It is reported today that officials want more time to study whether the proposed Dominion line is necessary, especially considering that one will be built in Maryland.

    If the officials delay the project for over a year, Dominion could go ahead under federal rules (Passed at the behest of the power companites last year, before the current plan was announced.) That might mean the Dominion would be free to go back to plan A: a route that goes through tracts of conservation protected land in Northern Fauquier and Loudoun.

  6. Anonymous Avatar
    Anonymous

    A nice comment from Jack, over at Waldo’s Blog.

    I’m ok with Dominion Power refusing to purchase excess power from people’s homes. So long as Dominion Power is ok with me ordering them to remove the massive set of power lines and towers that cross the side of my property and prevent me from building anything in that meadow. I make some sacrifices to allow them to do business and so they should be required to make some sacrifices to allow others to do business. This sort of thing should be the natural consequence of demanding and receiving public right-of-way that intrudes on the property rights of the general public.

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