Can they take private property for a for-profit project?

Iroquois Gas Transmission Co. and Energy East / New York State Electric & Gas (NYSEG) are proposing to use private property to run their natural gas pipelines to fuel the two Merchant power plants proposed by Vermont Energy Park Holdings. The reaction VCE hears most often from Vermonters is "Can they do that?"

Yes. Federal law allows the taking of private property for for-profit enterprises. However, this law is currently under litigation in Federal Court, and VCE is tracking the progress of the case. We are told to look forward to a decision within a month or two.

"To exercise the power of eminent domain, the government must prove that the four elements set forth in the Fifth Amendment are present: (1) private property (2) must be taken (3) for public use (4) and with just compensation."

Nationwide, natural gas pipeline companies are coming under scrutiny for using eminent domain to run their pipelines through private property for the profit of private enterprise, for failure to provide adequate landowner notification, and for failure to provide adequate compensation:

• In Tennessee, a natural gas pipeline runs through private property to provide natural gas to a gypsum/wallboard factory. Outraged property owners said, "It's just like communism."
  
  
• In Alabama, a natural gas pipeline runs through private property so the natural gas company can increase its market share and two cities can have multiple gas suppliers. "Big business is taking over," say protesters' signs. Opponents are trying to halt or reroute the pipeline, saying that the opportunity to enhance corporate profits is not sufficient reason to make landowners provide rights-of-way against their will. Landowners along that route "have not been consulted and have not been offered anything resembling adequate compensation," according to pipeline critic Anne Marie Mueser.
  
  
• In Ohio-Pennsylvania, landowners testified before the Federal Energy Regulatory Commission (FERC) about "incidences of trespassing to obtain surveys, lies of gaining certain certification and threats of landowners."
  
  
• In New Hampshire, land agents of Portland Natural Gas Transmission Systems (PNGTS) told landowners to sign, or their land would be taken by eminent domain. The releases were very comprehensive and allow them to come back and lay another pipe without any compensation. "A significant number of landowners settled for peanuts," said landowner attorney David King.

The U.S. Congress and FERC are proposing to deal with the issue of landowner notification, requiring landowners to be notified of the potential taking of their land within a fixed time of filing their application with FERC. But pipeline critic Anne Marie Mueser, whose GASP Coalition has argued that eminent domain has no place in a deregulated energy world, said notification requirements don't do much to address landowners' concerns. She says, "Telling victims that you're about to rape them or rob them, even if you do it by certified mail, isn't sufficient."

Mueser contends that in a deregulated environment, gas companies shouldn't expect the same level of government protection that they received when they were subject to strict state and federal regulation. She says gas companies don't need eminent domain in order to build new lines. "Most landowners have their price, and those that don't, you go around," she said.

Providing adequate compensation to property owners is the issue Vermonters need to ask our legislators to address in the upcoming legislative session. In meetings with property owners in May and June, Energy East / New York State Electric & Gas representatives talked about using the open trench of the natural gas pipeline to put in conduit for fiber optic cable, which the gas company would put out for bid. Property owners objected to the potential for the gas company to make money from their land. More recently, in September, gas company officials said the fiber optic cable conduit easement would be negotiated separately from the natural gas pipeline easement.

Fiber optic cable easements could be a lucrative source of income for property owners. The Massachusetts Turnpike is "reaping cable windfall" according to an article in the Springfield Union News on 9/25/99. Fiber Optic companies are paying the turnpike $2 million in up-front fees in addition to yearly rental fees. It "allows us to talk about getting rid of tolls," says the turnpike authority. "Railroad line owners, the power company and even gas pipeline companies are cashing in." Vermont property owners should be prepared to cash in, too.

Danby property owners also need to be aware of the possibility of yet another pipeline being put in the open trench by a third party for the purpose of transporting the product of a for-profit mining operation from the Danby Four Corners valley to the railroad next to Route 7. Property owners should receive just compensation and an annual lease.

This column was compiled from the following sources:

• Build It and We'll Fight, Property Owners Tell Energy Companies. Energy.com News, May 13, 1999
• New Procedures May Prevent Rows over Energy Rights-of-Way. Energy.com News, May 14, 1999
• Pipelines Dig Opportunity to Use Rights-of-Way for Fiber-Optic Networks. Energy.com News, Sep 10, 1999
• Power to the People: Not in My Back Yard. Energy.com News, Nov 12, 1999
• Opposition group holds protest of gas pipeline July 22. Cullman Times, Jul 22, 1999
• Landowners 'betrayed' on Gypsum permit. Chattanoga Times, Jul 30, 1998
• Commissioners Officially Oppose Pipeline. Wooster Daily Record, Apr 16, 1998
• Property Owners' Rights Are Focus. Wooster Daily Record, Dec 10, 1998
• Eminent Domain, as defined in the West Legal Directory
• Pipeline Job was More Nightmare than Dream