Growth and urbanization throughout the country create unprecedented demand for all types of energy and infrastrucutre projects. Utility companies typically have the power of eminent domain to acquire property for their infrastructure projects (pipeline projects, transmission lines) if negotiations with landowners cannot be reached.
Property owners affected by a pipeline project or high transmission power line project should consider the following:
Pipeline Easement FAQ
Few issues evoke such strong opposition as the taking of private land through eminent domain for a public use. The eminent domain conflict deepens when the condemning authority is a private company acquiring land for a utility project. If you’re a property owner impacted by a pipeline or other utility project, you likely have questions regarding your rights in the process. Below are frequently asked questions to address your concerns.
If the proposed pipeline is transporting materials for interstate or intrastate commerce and is defined as a common carrier, then the pipeline operator will usually obtain the right to use eminent domain to acquire property.Generally, once the project is approved by the local state utility commission or the Federal Energy Regulatory Commission (FERC), the utility company can proceed with eminent domain to acquire property and construct the project. Without special circumstances, you won’t be able to stop the project during the eminent domain process.
For some projects, property owner coalition groups are formed at the onset of the project. These groups work with environmental groups and focus their efforts on stopping the project through the regulatory process, before the process gets to eminent domain.
Although there are some situations where a company may not have eminent domain authority, generally, private utility companies have the authority to condemn property for projects such as pipelines, high transmission power lines, natural gas storage facilities, etc. Without special circumstances, you will generally be unsuccessful at preventing them from acquiring your land. However, you are entitled to just compensation under eminent domain law.
Utility companies are required to study various alignments and select a preferred alternative based upon environmental impacts and feasibility. Property owners can propose alternate routes, but without special circumstances, you can’t force the utility company to change their preferred alternative.
If the pipeline is a common carrier, property owners have no legal recourse to compel the utility company to change the easement terms. Where utility companies have eminent domain authority, they have very little incentive to negotiate a change in terms.
During eminent domain, the focus is not on changing the easement but instead making sure the property owner is fully compensated for the easement language contained in the eminent domain filing papers. The more ambiguous the easement, the more compensation a property owner should obtain.
Generally, utility companies determine the value of easements by analyzing the impact to the surface of land with the easement in place. Unless surface use is dramatically impacted by the easement, this analysis invariably leads to low levels of compensation. Utilities usually fail to compensate property owners for the value of the easement itself. When determining just compensation for utility and pipeline easements, the largest value probably will not come from the impact to the surface of the property; it will come from the value of the easement.
Yes, you are entitled to compensation for the easement itself and compensation for damages to your remainder parcel (severance damages). In some cases, severance damages are greater than the value of the easement itself.
Will the easement impact your ability to develop your property? Will it restrict the current use of your land or any future use of your land? If so, then you are entitled to severance damages under eminent domain law.
If you choose not to settle and instead pursue your full claim, you will probably need a lawyer to obtain just compensation under eminent domain law.
Many eminent domain lawyers will work on a contingent fee basis, depending upon the size of the potential claim. With this fee structure, the lawyer only receives payment if they obtain more money than the offer made by the utility company. In that event, the standard fee equals one-third of the additional money received for the property owner.
Property owners are generally responsible to pay costs, with the primary cost being an appraiser. In some states, attorney fees and costs are recoverable from the condemning authority if the property owner is successful at pursuing their eminent domain claim. In these states lawyers will often take your case on a contingent fee basis even if the claim is small.