California Eminent Domain Report

Next week, I'm speaking at the IRWA Chapter 67 Spring Seminar, which is focused on renewable energy issues.   So it was pretty timely when I came across an article this week involving efforts in Wyoming to curtail eminent domain power to address that state's push for increased renewable energy. 

According to a Casper Star-Tribune article by Dustin Bleizeffer, Wind boom inspires another look at state's eminent domain laws: Crossing private property, Wyoming has seen a wave of efforts to use eminent domain to acquire right of way for "collector lines," used to connect wind turbines to the electrical grid.  And, these efforts have not been limited to connecting built turbines to the grid:

[T]he recent realization that this power can be used to acquire easements for "collector lines" to connect yet-to-be-installed wind turbines to the electrical grid has raised concern among Wyoming politicians.

Wyoming's governor signed a one-year moratorium on the use of eminent domain to acquire collector-line easements, but the state is considering a more permanent ban.  According Governor Dave Freudenthal, "because the potential scope and impact of the collector line build-out affects so many Wyoming citizens, the issue deserves to be at the top of the state's legislative agenda."

One problem legislators face is that they appear willing to consider restricting the use of eminent domain for the collector lines, but fear that openly discussing the issue will lead to a push for restrictions on other uses of eminent domain.  This is not surprising, given broader attitudes about eminent domain since 2005's Kelo decision.

Aside from discussing the basic right to take property for collector lines, Wyoming is also confronting how one establishes fair market value if such condemnation is allowed.  Mr. Bleizeffer's article mentions concerns about valuation. 

He addresses problems involving highest and best use, as the property condemned for collector lines is typically valued at an agricultural highest and best use, even though it is being acquired for an industrial use.  He also raises an issue that has appeared in various states over the past few years:  whether it is fair for owners who have collector lines through their properties to receive only a single payment, even though neighboring owners who have actual wind turbines on their property typically receive annual payments in perpetuity. 

It's a complicated issue, and one that will undoubtedly play out across the country as we push to meet increasing renewable energy targets.