"No person shall ... be deprived of life, liberty or property, without due process of law; nor shall private property be taken for public use, without just compensation," says the Fifth Amendment to the United States Constitution.
Article 1, Section 17 of the Texas Constitution also provides, "No person's property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person..."
Over the years, courts and legislatures have developed a body of law that allows states to use eminent domain to take private property for public use. But in cases such as this, several issues arise, including what constitutes "due process," what is "public use," and what is "adequate compensation"? Further, which property is considered "taken"? Questions also arise regarding the "necessity" of the taking, the public need and benefit, as well as the constitutionality of the state's delegation of the powers of eminent domain under governing statutory provisions. Equal protection under the laws also becomes a concern.
Certain areas, like the Texas Panhandle, have abundant wind and, therefore, wind farms seek to locate in these regions. But serious questions, such as those above, arise when distant grids, along with wind developers, utility companies and their consultants, enact a plan to connect certain private wind farms in these wind-rich areas to export wind energy to these distant grids using their own exclusive easements and infrastructure obtained under the threat of eminent domain. In relation to the Texas Panhandle, the proposed CREZ lines will essentially belong to the ERCOT grid, south of the Panhandle, but will extend deeply into the Panhandle's Southwest Power Pool ("SPP") grid in a loop for the purpose of connecting to certain private wind farms that may be built in certain wind zones identified in the area.
In cases such as this, utility companies selected to design and build these lines have no experience in the wind-rich region and, in the case of the Texas Panhandle, callously and flippantly approach the project and citizenry, while designing routes that are the most beneficial to the distant grids served but are the most costly to the ecology, the landowners, the citizens, and the wildlife along the line, who receive no benefit therefrom. Such projects lead to the forcible and unwelcome taking of multiple easements through grids and areas that won't benefit from the lines.
Even more troubling is the scenario where these easements could have been integrated into planned expansion and upgrades to the local grids in wind-rich areas. In the case of the Texas Panhandle, the SPP has a planned grid expansion, as well as planned upgrades. Grid "highways" and "byways" are on the near horizon. ERCOT's CREZ lines, which will be dedicated strictly to ERCOT's use, ignore these highway easements. This begs the question as to why aren't SPP and utility companies such as SPS within the SPP territory overseeing and building highway easements that will serve these needs? If utility companies within SPP had been chosen to build highway easements to serve these needs, the costs of the highways could be shared and new and existing easements could be coordinated, thereby lowering the cost to ratepayers of both the SPP and the ERCOT grids, saving Panhandle viewsheds and saving Panhandle landowners thousands of acres.
From a fairness and constitutional standpoint, if reasonable options are available that are much less costly for landowners in wind-rich regions, requiring far fewer acres, with benefit to all ratepayers involved and the public in the regions, both from an expense as well as a land and viewshed conservation perspective, shouldn't the government be required to use them? Under the CREZ scheme, several lines will be located deep within the SPP grid but will be a part of and used exclusively by and for the benefit of the ERCOT grid, to the south. The lines will not in any way serve the SPP grid. Is it fair to place such an unequal and unnecessarily heavy burden on the citizens of wind-rich areas when much less costly alternatives are available? Along these lines, shouldn't outside grids seeking access to wind-rich areas be required to use the grid highways within the wind-rich grid? Otherwise, if an outside grid such as ERCOT, which consists entirely of customers and electric service providers outside of SPP, is allowed to obtain multiple CREZ line easements deep within the SPP grid, which are not integrated into or a part of the SPP grid and do not serve the SPP grid, doesn't this place an unequal, unreasonable and unfair burden on private property owners in the Panhandle’s wind-rich SPP grid, violating their fundamental constitutional, property and other legal rights?
An example of how the allowance of multiple easements through wind-rich areas can create enormous and unfair burdens on private property owners and citizens in those areas is the fact that proposed CREZ lines in the Panhandle region cross the Palo Duro Canyon three to four times. Combining these proposed easements with SPP expansions plans which include yet another Palo Duro Canyon crossing, the total easements across the Canyon will be four, possibly even five. If SPP's utility companies were in charge of the lines and SPP highways were used, could the crossings of the Canyon be reduced considerably, possibly to one corridor? What will happen when the next outside grid or other regional public entity wanting access to Panhandle wind seeks to build their own dedicated easements and infrastructure into the Panhandle in similar fashion? Will the Panhandle and the Palo Duro Canyon be reduced to a pointless tangle of easements?
The next logical question is where is the law that purports to allow this to happen? A glance at the statutes governing the CREZ lines, as well as the law governing Certificates of Convenience and Necessity (CCN) for transmission lines gives some insight. The historical Texas law applicable to CCNs for transmission lines easements can be found under PURA §37.056. Typically under Texas law, legislative deference is given under applications for certificates of convenience and necessity granted pursuant to provisions of §37.056 of PURA, which read, in pertinent part, as follows:
Provisions such as these are enacted to protect the public from the abuse and misuse of the powers of eminent domain, providing first and foremost that the certificate is necessary for the service, accommodation, convenience, or safety of the public.
However, CREZ transmission projects identified in Docket Nos. 33672 and 35665 are completely exempt under PURA Sections 39.203(e) and 39.904(h) and P.U.C. Subst. R. 25.174(d)(2) from the requirement of proving that the construction ordered is necessary for the service, accommodation, convenience, or safety of the public and need not address the adequacy of existing service, the need for additional service, the effect of granting the certificate on the recipient of the certificate and any electric utility serving the proximate area, and the probable improvement of service or lowering of cost to consumers in the area if the certificate is granted. Sounds more like a Certificate of Inconvenience and Needlessness than one of Convenience and Necessity.
The first serious question that comes to mind under these statutes is whether the legislative grant of the power of eminent domain to utilities is valid under such certificates that appear to omit the protections of necessity, public need and public purpose. Some argue that the public need for each line was established under P.U.C. Subst. R. 25.174(a)(5)(B), which required the PUC to specify the "major transmission improvements necessary to deliver to customers the energy generated by renewable resources in the CREZ, in a manner that is most beneficial and cost-effective to the customers." General line locations were specified under that mandate in Docket 33672 by the PUC. However, it has since been determined that at least one of the specified CREZ lines is not in fact needed by the public and this line has been dropped. (See Docket 38577.) Circumstances change and clearly the "public need' requirement was not met in Docket 33672. The Order on Rehearing under Docket 33672, dated October 7, 2008, applied to only the facts and circumstances known at that time. A public needs or necessity determination should have been required for each CREZ line throughout the CREZ CCN process. The legislature does not have the authority to grant the powers of eminent domain to entities for unconstitutional purposes. It follows that any statute purporting to grant powers of eminent domain to entities for unconstitutional purposes would be likely be held facially unconstitutional and the eminent domain powers null and void.
Even if the statute was held to be facially constitutional, any attempt to apply such eminent domain powers in a condemnation proceeding under a statute that omits public use protections and considerations would be vulnerable to attack under the takings clause of the Constitution. As pointed out in the PURA Sections 39.203(e) and 39.904(h), utilities need not prove that the lines are necessary for the service, accommodation, convenience, or safety of the public. In addition, the PUC need not consider the adequacy of service or need for additional service.
As to necessity for service, accommodation of the public or need for lines due to inadequacy of service, the lines are not necessary for these purposes as they will not serve the public in any way within the SPP grid. The only effect they may have on the customers in the SPP grid will be due to the negative interference of the CREZ lines with lines in the SPP grid that serve SPP customers. As for ERCOT, ERCOT has already achieved 9,117 MW of nameplate wind capacity. (See ERCOT Press Release dated 5/12/10.) The maximum goal for renewable energy contemplated under PURA §25.173(a)(1) and PURA §39.904(a) for installed renewable energy is 10,000 MW by January 1, 2025. ERCOT has already almost met that maximum target and has already exceeded the 2011 target of 5,256 MW, the 2013 target of 5,880 MW and 2015 target of 5,880 MW. Therefore, the lines are not necessary to meet the goals for renewable energy contemplated under the CREZ statutes. This fact was acknowledged by the PUC in Order on Rehearing under Docket 33672 in the statement that the renewable-energy potential being developed thus far has allowed the State of Texas to meet and surpass the statutory renewable-energy goals.
Further, in the Order on Rehearing in Docket 33672, it is clear that there is a maximum of 18,456 MW contemplated by the PUC under Order on Rehearing in Docket 33672, but the GE Ancillary Services Study concluded that only 15,000 MW could be integrated. One of the PUC Commissioners actually dissented from the Order on Rehearing on the basis that the megawatts contemplated under the PUC’s chosen CREZ Plan, i.e. Scenario 2, exceeded the maximum which can be reliably integrated into the grid. Given that almost 10,000 MW are already on the grid, it is not even clear that by the time the lines in the Texas Panhandle are built in 2013, that ERCOT will be able to accommodate any further wind farms on the grid in a reliable, cost-effective manner given these limitations. (See Cities Second Motion for Rehearing, Docket 33672-1425 and Docket 33672-1426.)
The plans to loop dedicated transmission lines and 175-foot-wide easements thousands of miles into the Panhandle's SPP grid to connect a few private wind farms to the ERCOT grid are also very inconvenient. Multiple wind-rich zones have been identified within the ERCOT grid. (See GE Ancillary Study in Docket 33672 and Full CREZ Zone Map.) Why unnecessarily go to such costly lengths to connect to wind farms hundreds of miles away when more cost-effective local energy options within ERCOT, both wind-generated and otherwise, are available? In addition, any needs arising in various locations throughout the ERCOT grid due to inadequacy of service can be met more cost-effectively within the ERCOT grid. Lines hundreds or thousands of miles away in the SPP grid are not necessary for this purpose.
Also, the lines are not necessary for public safety. The lines within the SPP grid will actually raise public safety concerns, such as those that crisscross over the Palo Duro Canyon, due to the risks of aircraft collisions and fire.
As stated earlier, the legislature apparently justified the omission of the typical CCN requirements by requiring the PUC, under P.U.C. Subst. R. 25.174(a)(5)(B), to specify the "major transmission improvements necessary to deliver to customers the energy generated by renewable resources in the CREZ, in a manner that is most beneficial and cost-effective to the customers, including new and upgraded lines identified by voltage level and a general description of where any new lines will interconnect to the existing grid.” Because the usual factors for siting the lines do not apply, this language seems to indicate that at least the customers will benefit from the energy, the reduced cost or interconnection to the existing grid. But for those customers in the SPP, none of that will occur. The lines do not connect to the SPP grid.
In PUC Docket 33672, the docket whereby the PUC carried out the legislative mandate referred to above, the customers referred to were ERCOT customers, not SPP customers, as the lines will not serve SPP. The lines will be ERCOT lines, solely for the benefit of ERCOT. In fact, the Order on Rehearing in that proceeding contains numerous references to the ERCOT Study and ERCOT information as a major part of the justification for its findings. (See FOF 3,30, 43-47, 52-53, 55, 96-99, 101-104, 110-114, 116, 121, 129, 141, 145, 149, 151, 153 , 156 and 169 and ordering paragraphs 1, and 6-8.) There is no indication that the needs of, or effects on, the SPP, or any other non-ERCOT customers were considered. The only reference at all is to the FERC/jurisdictional issues of the generators (pages 23-24). Subsequently, the FERC jurdisctional order that followed requires that the CREZ lines within the SPP grid exclusively serve ERCOT. (See FERC order.)
It has never been necessary for ERCOT to extend into the SPP grid before now. Historically, customers have obtained electric service entirely from within their respective grids, ERCOT or SPP. No government agency has suggested that the boundaries of the ERCOT or the SPP grids should be changed or that such a boundary change is necessary for any public purpose. If such a change is not needed (and there is actually some indication of regulatory problems with even attempting these interconnections, see Order on Rehearing in PUC Docket No. 33672), then these takings must not really be for a public use, but rather for the economic development of a market for wind generators in the Texas Panhandle to exclusively serve the ERCOT grid.
The use of the power of eminent domain for this purpose, i.e. economic development, leads us back to the Texas Constitution. The Texas Constitution under Article I, Sec. 17, including recent constitutional amendments, reads, in pertinent part:
(a) No person's property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person, and only if the taking, damage, or destruction is for:
(1) the ownership, use, and enjoyment of the property, notwithstanding an incidental use, by:
…. (B) an entity granted the power of eminent domain under law; or…
(b) In this section, "public use" does not include the taking of property under Subsection (a) of this section for transfer to a private entity for the primary purpose of economic development or enhancement of tax revenues.
Takings for transfer to a private entity for the primary purpose of economic development are unconstitutional. It would similarly follow that a public entity condemning easements for private entities for the purpose of the economic development of a market for wind generators in the Texas Panhandle to exclusively serve the ERCOT grid, which currently does not exist, would similarly be unconstitutional.
Confounding the issue even further, it is not even certain that the lines will actually lead to the economic development of a market for wind generators to serve ERCOT. It is as if ERCOT wants to cast a long fishing line up into the Panhandle. The availability of actual wind farms in the Panhandle to connect to the lines is speculative as the farms are still in the planning stages. A minimum of financial commitment was scraped together at the last minute by certain wind farms representing only fifty percent of the capacity of the lines, i.e. 2,792 MW, but the actual construction of these wind farms has not begun. Also, as stated earlier, by the time that the lines are completed, ERCOT may not even have the available capacity left to reliably and cost-effectively add more wind energy to the grid. (See also, Docket 34577 and Docket 37567.)
Also, given the fragile economy and heavy reliance of the wind industry on subsidies, wind farm development and sustainability is speculative, at best. Alternative markets such as Tres Amigas and SPP, which offer more flexibility and possibly more profitability, may lure the wind farms interested in the Panhandle away from CREZ. The CREZ lines could potentially sit unused, now or in the future. In other words, if ERCOT gets some fish on the line, they may not be able to keep them on the line. ERCOT could potentially end up with miles and miles of Texas Panhandle high-voltage lines to nowhere. Perhaps the only certain benefit of the CREZ project will go to the line builders, such as private, investor-owned Sharyland Utilities, who will make hundreds of millions of dollars building and maintaining expensive CREZ lines deep into the SPP grid and back and forth across the Palo Duro Canyon, as well as all of the additional feeder lines necessary to connect to any ERCOT wind farms.
Another troubling aspect of this plan is that, given ERCOT's boundaries were not changed, it appears to give regional entities the eminent domain power to condemn property outside of their jurisdictional boundaries for their exclusive use and benefit with utter disregard for the rights of the citizens of the outside areas that are impacted. What kind of precedent or slippery slope does this set?
For instance, imagine that the legislature decides next to grant the City of Dallas the power of eminent domain to condemn easements throughout the City of Austin and surrounding area to exploit the Austin area's wind resources for the sole and exclusive benefit of the citizens of Dallas. Imagine the City of Dallas condemning easements over the properties along Lake Travis, putting a tower on Mount Bonnel, circling the properties around the State legislature hoping to capture the massive wind resources there, and culminating at a substation in front of the Governor's lawn. Imagine that the City of Houston is next. Houston zigzags and makes concentric circles through what is left of the Hill Country, then makes a straight line through the center of Austin back to Houston for their citizens. Then the City of San Antonio finds whatever land is left along the rivers and private parks in the Austin area for San Antonio citizens. Pretty soon, there are no natural treasures, historical landmarks or lands left untouched by massive transmission lines. All the while, the distraught and desperate citizens of Austin and the surrounding area are told that their rights do not matter as they were not contemplated or provided for by the statute and that they should be satisfied with the pittance of compensation given for their land. Clearly this is absurd!
Still more issues regarding fairness and constitutionality arise in the context of takings and condemnation cases. For instance, what about the tens of thousands, if not hundreds of thousands, of dollars required from landowners seeking to protect their properties in wind-rich areas who must hire counsel and experts for the hearings before the PUCT in Austin, Texas? Very few landowners can afford to pay those expenses, forcing them to move forward without representation. Is this fair? With representation costing from $50,000 to $100,000 per case, imagine the cost of defending private property rights against multiple easement acquisition attempts from outside grids? Is this fair? These costs in one case alone often exceed property values.
And further, is it considered fair to allow utility companies to make bad-faith, lowball offers for easements, forcing landowners into condemnation proceedings that cost tens to hundreds of thousands more dollars for legal counsel and expert witnesses in their county's district courts and state appellate courts? Utility companies boast about their history of not having to resort to condemnation often. But is this because they have negotiated a fair and acceptable compensation with the landowners, or is it because the landowners have been forced to accept the company's offer given that seeking a fair remedy under the law is cost-prohibitive?
Not only is the compensation offered for the easement low, but landowners are often forced to consider offers that do not include the entirety of the property that is "taken." Utility companies often offer a pittance of compensation for easement area alone when the true damages caused as a result of such easements are far greater. For example, consider the real short- and long-term damages caused by proposed lines that cut across natural sight-seeing treasures such as the Palo Duro Canyon. The damages extend far beyond mere compensation for the easement area.
And what about owners of neighboring property with views of the lines, especially those along the canyon whose businesses and property values are based on the canyon's historical and uncommonly unique viewsheds; what about the current and future uses of their property that will be permanently taken? Shouldn't they be given notice and offered just compensation for their current and future losses, as well?
And as to the money spent in these cases attempting to defend against the abuse and misuse of the powers of eminent domain and to recover for uncompensated takings, shouldn't this money spent on defending private property rights be considered a government "taking" as well? How could it not be considered a government taking?
Who will protect those whose private property is being unjustly taken, who will not receive fair offers for their losses, who must pay exorbitant amounts of money for hearings and condemnation lawsuits they have been forced into on the defensive, and who have nothing to gain directly or indirectly from the lines?
Perhaps a better question is: What could our legislators, our governor Rick Perry, our Texas Supreme Court, and our U.S. Supreme Court, have been thinking when they developed this body of law?
When the Texas Supreme Court decided that good-faith offers on property need not be made in condemnation proceedings, thereby effectively forcing landowners to accept lowball offers who can't afford the exorbitant expenses of a condemnation case, they might as well have abolished the "just compensation" clause altogether.
And what about the "public use" clause? The U.S. Supreme Court effectively rubber-stamped the diminution of private property rights in the Kelo case. Why continue this assault on private property rights? Adding insult to injury, why was reactive legislation in Texas aimed at preserving protections from takings for private rather than public use, vetoed in earlier years by Governor Rick Perry? Thankfully, the recent Texas constitutional amendment addressed this issue again and passed in November, but why didn't the amendment also address the issue of just compensation?
Bottom line: Is a body of law that allows this kind of abuse of eminent domain, theft of property, and dismissal of private property rights representative of Texas? Or of its citizens?
Rumor has it, there's nothing Texan about it.
Even more concerning are the bills currently introduced by U.S. Senator Harry Reid and others (Senate Bill 539, for example) that would give the federal government unprecedented eminent domain powers to take private property for transmission lines. Lawmakers reason, if the states don't procure the easements the federal government wants, or if so-called NIMBYs delay the lines, the federal government will just step in and take the property.
How much more convenient could that be?
So much for private property in America, state's rights, and the Constitution. And so much for our beautiful, historical and irreplaceable landscapes in this country, to be forever destroyed in the name of "green energy."
We can, and we must, do better than this.
